Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
NCUA's new CUSO rule goes into effect today
ALEXANDRIA, Va. (6/30/14)--Today marks the start of the National Credit Union Administration's new credit union service organization (CUSO) rules. Prior to today, all federally insured credit unions must have amended their contracts with CUSOs.
 
The new rule requires any federally insured credit union with an outstanding loan to, or an investment in, a CUSO to enter into a written agreement requiring the CUSO to submit annual reports to the NCUA, as well as a state supervisory authority if the credit union is state-chartered.
 
The language of such an agreement must ensure the CUSO complies with a new section of the rule that requires "subsidiary CUSOs" to also report to the NCUA. This applies to an entity in which a CUSO has any ownership interest that primarily provides products or services to credit unions or credit union members.
 
Each CUSO will be required to provide basic registration information, which includes contact information, services offered, information about any subsidiary CUSO and names of credit unions investing in, lending to or receiving services from the CUSO.
 
A system for direct reporting by CUSOs is expected to be operational by the end of 2015, according to the NCUA.
 
Kathy Thompson, senior vice president for compliance and legislative analysis for the Credit Union National Association, wrote in this month's Credit Union Magazine about several of the rule's new requirements.
 
The NCUA has added more extensive reporting requirements to CUSOs that engage in "complex or high-risk activities" that are of particular concern to the agency, Thompson writes. These activities include:
  • Credit and lending, including business loan origination; consumer mortgage loan origination; loan support services, including servicing; student loan and credit card loan origination;
     
  • Information technology, including electronic transaction services; record retention, security and disaster recovery services; and payroll processing services; and
     
  • Custody, safekeeping and investment management services for credit unions.
In addition, the new rule stipulates that less-than-adequately capitalized federally insured, state-chartered credit unions are subject to restrictions on recapitalizing a CUSO without approval from its state regulator and notice to NCUA.
 
Thompson notes that because all states do not have the same investment and loan caps applied to federal credit unions, these rules aren't identical to those applicable to less-than-adequately capitalized federal credit unions.
 
Use the resource link below for the full article in Credit Union Magazine .

CUNA's CompBlog also recently took a look at the NCUA's recent Letter to Credit Unions and legal opinion letter regarding the CUSO amendments.  CUNA members can use the second link to access the blog article.
RSS print
News Now LiveWire
Consumer confidence surges to 7-year high #NewsNow #Market http://t.co/fMEENGuWPi
8 minutes ago
Charlotte Cash, CEO of @COFCU , is engaging members by producing videos on various subject of financial interest to members.
24 minutes ago
@CFPB today finalized a rule to promote more effective privacy disclosures from financial institutions to their customers. Watch News Now
1 hours ago
Four consumer rights you didn't have 40 years ago via @CreditExperts http://t.co/RwSocTG1q4
1 hours ago
Cascade Community #CreditUnion has granted 30 educators almost $6,000 in Chalkboard grants for the 2014-15 school year.
2 hours ago