NCUA Investigates Reducing Burden for CUSO Audits

ALEXANDRIA, Va.-At last week’s NCUA Board meeting, the agency issued a notice of proposed rulemaking to make the load a little lighter on wholly-owned credit union service organizations and their parent credit unions. The notice would amend part 712 of NCUA’s regulations so that wholly-owned CUSOs would not need to obtain an annual financial statement audit from an accountant if it is included in the annual consolidated audit of the parent federal credit union. According to the Board Action Memorandum, “The amendment will reduce regulatory burden and conform the regulation with agency practice, which since 1997 has been to view credit unions with wholly-owned CUSOs in compliance with the rule if the parent FCU has obtained an annual financial statement audit on a consolidated basis.” Though generally accepted accounting principles would permit a majority owner credit union to procure a consolidated audit, the agency wanted to limit the amendment’s application “to provide prospective minority investors in CUSOs with maximum disclosure of potential risks.” The notice of proposed rule making includes a 60-day comment period.