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CUSOs would file financials to NCUA under proposal
ALEXANDRIA, Va. (7/22/11)—Credit union service organizations (CUSOs) would be required to file their yearly financial reports directly to the National Credit Union Administration (NCUA) under a proposal released on Thursday. Financials would also need to be forwarded to appropriate state supervisors. Any CUSO subsidiary would also have to comply with the regulation if it is adopted as a final rule. The NCUA currently has the authority to inspect the financials and records of some CUSOs, but that authority is not universal. The majority of financial information on CUSOs is provided to the NCUA by natural person credit unions that obtain services from the CUSOs. NCUA staff noted that this is an “inefficient” system, and the agency added that the lack of detailed CUSO information “restricts NCUA’s ability to conduct offsite monitoring and evaluate systemic risks posed by CUSOs.” The agency in a release said that the proposal, if enacted, would “enhance protections to consumers, credit unions and the National Credit Union Share Insurance Fund (NCUSIF).” NCUA Chairman Debbie Matz said that while recognized this is a controversial change, it is needed. Board member Gigi Hyland added that this change allows the NCUA to increase its knowledge of the system without adding any new authorities. The Credit Union National Association (CUNA) said that it will work with its Examination and Supervision Subcommittee, the leagues, and the CUNA CFO Council to analyze the impact of the proposal and develop comments. The NCUA during the July open meeting also combined the roles of deputy executive director and chief operating officer into a single position and amended its rule to clarify that remittance transfers are permissible financial services for federal credit unions. Both of these changes were required by congressional actions. For more on the NCUA meeting, use the resource link.
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