Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
New services proposed for CUSOs
WASHINGTON (4/18/08)—Credit Union National Association (CUNA) President/CEO Dan Mica said Thursday that CUNA has concerns about proposed provisions to extend federal regulators’ access to the books and records of federally insured state credit union CUSOs, and to allow state regulators to inspect the books and records of a federal credit union's CUSO if a state chartered credit union also participates in that CUSO. “However, at the same time, we commend the agency's effort in proposing expanded authority for CUSOs. We look forward to working with NCUA to enhance the ability of credit unions to participate with CUSOs,” Mica said following a National Credit Union Administration (NCUA) open board meeting. At that meeting, the agency also proposed an expansion of services for (CUSOs) to conform with broader powers granted to credit unions by the 2006 Financial Institutions Regulatory Relief Act. The agency's plan also would add credit card loan origination and payroll processing to the CUSO list. The agency noted that the legislative history of the 2006 relief provisions indicates Congress intended to allow federal credit unions to sell to eligible members negotiable checks, money orders, and similar transfer instruments, including international and domestic electronic fund transfers. "The Board believes enactment of that law warrants a parallel expansion in the CUSO rule," NCUA said, "since a federal credit union may elect to provide some or all of these types of services through the vehicle of a CUSO." The same proposal also would permit CUSOs to originate and hold credit card loans as a principal on their own behalf or on behalf of credit unions. NCUA pointed out that generally it has permitted CUSOs to engage in loan origination "where a degree of expertise is required to be successful." It cited as examples business, student and real estate lending. "NCUA believes credit card origination also requires a degree of specialization and expertise to succeed, and the proposal will allow credit unions to collaborate and pool resources by working with a CUSO," the agency said. As for payroll processing, NCUA said the agency's general counsel has concluded that a federal credit union may provide this service for members as an exercise of its incidental powers, and that a CUSO may assist it. The proposal also would clarify that CUSOs may buy and sell loan participations that they are currently authorized to originate. HOwever, the NCUA also proposed to extend its authority to inspect a CUSO's books and records to federally insured, state-chartered credit unions involved in CUSOs. Reciprocally, state regulators also would have the authority to inspect the books and records of these CUSOs, including ones owned by a federal credit union if a state credit union also participates in the CUSO. The agency would also restrict the ability of federal credit unions to recapitalize CUSOs if the credit union is less than adequately capitalized under Prompt Corrective Action. CUNA said it will be scrutinizing the provisions on access to books and records, along with its Governmental Affairs Committee subcommittees.


RSS print
News Now LiveWire
Economic activity slowed in June, according to the #Chicago Fed's national activity index, released today #Market http://t.co/1pN6peM8my
14 hours ago
Money burns a hole in workers' pockets after payday, despite best intentions via @WSJeconomy http://t.co/A9SNiUdf9v
14 hours ago
"SAR Stats," new from #FinCEN, focuses on #bitcoin. See #NewsNow http://t.co/vS7iTwY2SW
16 hours ago
.@CFPB now accepts consumer complaints on prepaid cards, debt settlement services, credit repair services, and pawn and title loans.
16 hours ago
.@WellsFargo to process transactions in order received, not high to low http://t.co/g0jWJoegoJ
17 hours ago