December 16, 2021

NAFCU calls on NCUA to take action on digital asset issues

NCUANAFCU President and CEO Dan Berger wrote to the NCUA Wednesday urging the agency to ensure credit unions are not left behind as federal financial regulators move toward foundational federal digital asset regulation and legislation. Berger called on the NCUA to promptly respond to comments submitted in response to their request for information (RFI) on digital assets and proactively engage the President’s Working Group on Financial Markets (PWG) and other federal financial regulators on digital asset issues.

NAFCU responded to the agency's RFI in September and recommended the NCUA makes clear the opportunities and limitations already in place for credit unions to provide and facilitate the provision of digital asset financial service products to members.

Though the association appreciates the agency's efforts to solicit feedback through the RFI, Berger noted the NCUA has been largely silent on important digital asset issues. Specifically, Berger stated the NCUA has not provided any guidance similar to Interpretive Letter 1170 issued by the Office of the Comptroller of the Currency (OCC) that stated national banks may provide customers cryptocurrency custody services.

In later Interpretive Letters, the OCC concluded that national banks may hold stablecoin issuers’ cash reserves and that banks may use independent node verification networks and stablecoins to perform bank-permissible activities.

"As explained more fully in NAFCU’s official comment to the NCUA’s Digital Assets RFI, NAFCU urges the NCUA to promptly issue Letters to Credit Unions that confirm a credit union may host digital wallets for members and that a credit union may facilitate members’ buying, holding, selling, transferring, and exchanging of digital assets through a third-party broker-dealer," wrote Berger. "NAFCU also urges the NCUA to promptly issue a Letter to Credit Unions confirming that credit unions may hold stablecoin issuers’ cash reserves."

Berger explained the necessity for the NCUA to promptly collaborate with federal financial regulators to ensure credit unions are able to meet the increasing digital asset demands of consumers.

"I urge you to act quickly, both within the NCUA and in coordination with the PWG and other federal financial regulators, to help ensure credit unions may compete on a level digital assets playing field and are not excluded from foundational federal digital assets regulation and legislation," concluded Berger.

Read Berger's full letter. NAFCU will continue to engage the NCUA, Treasury, and other federal financial regulators to call for credit unions to be granted the ability to engage with digital assets on equal footing with banks.