Voicing opposition to the NCUA’s proposal to amend the CUSO rule, NAFCU is the latest urging the regulator to reconsider its actions.
The trade group said it does not agree with the NCUA’s previously stated concerns that CUSOs pose a systemic industry-wide risk, saying “a very small percentage of credit union assets have been invested in CUSOs but also because credit unions, under current laws and regulations are greatly limited in their ability to invest in CUSOs.”
“To increase the regulatory burden on CUSOs based on a small number of cases is both unnecessary and unfair,” wrote NAFCU President/CEO Fred Becker in a comment letter released Friday. “If the NCUA adopts the proposed rule, the benefits that credit unions and their members receive through their partnership with CUSOs would inevitably decrease, even though the arrangements do not pose undue risk.”
As others have questioned, NAFCU said it does not believe that the NCUA has the legal authority to require CUSOs to submit their financial reports to the agency.
Becker cited December 2010 testimony from NCUA Chairman Debbie Matz before the U.S. Senate Committee on Banking, Housing and Urban Affairs, in which she stated “NCUA is the only regulator subject to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 that does not have authority to perform examinations of vendors which provide services to insured institutions.”
More than 140 letters have been received by the NCUA regarding its CUSO rule proposal. The deadline to submit comments is Monday.