Compliance CUSOs on the Rise
Regulatory compliance, invoicing and other areas that may have been under the priority radar a few years ago, have aggressively come to the forefront at many credit unions.
Keeping up with the treadmill of regulations led to the creation of several CUSOs in 2012 to help credit unions that didn’t have the financial and staffing resources to remain compliant. With no let-up in sight, the industry could seem more launches of CUSOs targeting compliance in 2013.
The same may be true for services that help small businesses manage cash flow such as invoicing arrangements. Existing CUSOs may also offer an extended line of business services that includes mobile banking and marketing tailored around social media.
Disaster recovery CUSOs can expect to see a growth in clients based on what is predicted to be an active hurricane season in 2013.
Meanwhile, it remains to be seen whether the NCUA’s controversial CUSO rule amendment will ever move forward. In September, NCUA Chairman Debbie Matz said the issue has been shelved for now.
The NCUA had proposed a rule that would require all CUSOs to file financial reports directly with NCUA and the appropriate state supervisory authority. The regulator also proposed making additional parts of the CUSO rule applicable to federally insured state-chartered credit unions as well as federal credit unions.
The NCUA Board said it was also concerned that less-than-adequately capitalized federally insured state credit unions posed serious risk to their members and the NCUSIF when investing money into failing CUSOs. To address the concern, the regulator proposed limiting these FISCUs’ aggregate cash outlays to a CUSO, consistent with state laws.