<p>ALEXANDRIA Va, – CUSOs may not service loans made to credit union members by other, non-credit union, financial institutions, even when that servicing might be a convenience to credit union members, according to NCUA. In a February 5 legal opinion letter to 1st United Federal Credit Union in San Jose, California, Sheila Albin, NCUA Associate General Counsel wrote: “To qualify as a permissible CUSO activity, an activity must relate to the routine, daily operations of credit unions. 12 C.F.R. ?712.5, ” she wrote. “ In this case, the servicing of the loans is a service to a lender that is not a credit union. Although arguably members derive a benefit from the lending program, the loan servicing by the CUSO is not a service to the member.” Albin distinguished between the servicing of non-credit union loans that 1st United has proposed and the referral and processing of loans for credit union members who cannot qualify for a loan from the credit union. Providing those types of referrals and processing, albin wrote, “relates to the daily operations of a federal credit union.” 1st United is a $20 million credit union with 2,999 members.</p>

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2022 ALM Global, LLC. All Rights Reserved.