June 21, 2012 – NAFCU President and CEO Fred Becker hailed NCUA’s decision Wednesday to delay a board vote on a final rule on credit union service organizations that would require CUSOs to submit financial reports and details about their businesses directly to the agency.
“From the beginning, NAFCU’s efforts have been focused on opposing the rule as a costly and unnecessary regulatory burden proposed under questionable legal authority,” said Becker. “We are pleased that NCUA heeded our concerns and is not taking action on the rule at this time. We will continue to press NCUA on this issue and all other attempts at over-regulation.”
Writing members, Becker said the association is pleased that NCUA has heard the association's "strong objection" to the proposed rule. "NAFCU believes that regulatory over-reach is not only unnecessary in almost all cases, but can be detrimental to credit unions and their members," the NAFCU president wrote.
The CUSO rule was the only item slated for today's open NCUA Board meeting, which is canceled. Action on a final CUSO rule could be taken up at a later date.
As proposed last year, the CUSO proposal would require all CUSOs to provide financial reports to NCUA and appropriate state supervisory authorities at least once a year. It would require any subsidiaries of CUSOs to follow all applicable laws and regulations, including NCUA’s CUSO rule. Additionally, it would extend CUSO rule provisions currently imposed only on federal credit unions to federally insured, state-chartered credit unions.
NAFCU opposed the rule as an attempted overreach by the agency into authorities it lacks under federal statute. The proposal would also impose added regulatory burdens on credit unions and CUSOs when only a very small percentage of credit union industry assets – 22 basis points at the time of the proposed rule’s issuance – is invested in CUSOs. Current rules also limit credit union investments in and loans to CUSOs to 1 percent of total assets.