FSOC recommends expanding 3rd-party authorities, limiting costly regs
The Financial Stability Oversight Council's (FSOC) 2017 annual report restates the council's support for granting third-party vendor authority to the NCUA and other regulators. NAFCU continues to assert that granting such authority to NCUA is unnecessary.
"The NCUA already requires credit unions to ensure vendors they work with provide reports directly to the agency," said NAFCU Director of Regulatory Affairs Alexander Monterrubio. "Therefore, NAFCU believes this third-party vendor authority would be duplicative and would prove costly to credit unions as the NCUA unnecessarily uses resources."
The FSOC includes as voting members the top regulators at the NCUA, Federal Reserve Board, FDIC, Office of the Comptroller of the Currency, CFPB, Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
The FSOC recommends in its annual report that Congress pass legislation to grant the SEC, CFTC, Federal Housing Financial Agency and NCUA examination and enforcement powers to oversee third-party vendor services as a way to bolster cybersecurity efforts. The council also suggests federal and state regulators coordinate the oversight of such vendors.
NAFCU has been a leader in cybersecurity efforts and has urged Congress to adopt a national data security standard that would hold all entities that handle consumers' personal financial information responsible for any breaches that might occur on their end.
Also in its annual report, the FSOC recommends that financial regulators limit regulations that increase costs for institutions without achieving an equal level of benefits. NAFCU continues to advocate for five tenets of a healthy and appropriate regulatory environment that allows credit unions to grow.
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