December 05, 2023

NAFCU, CUNA write HFSC ahead of regulators’ innovation hearing

CapitolNAFCU and CUNA wrote to the House Financial Services Committee (HFSC) Subcommittee on Digital Assets, Financial Technology and Inclusion ahead of its hearing today on financial innovation. The hearing is focused on how regulatory agencies are using fintech to influence the financial services landscape.

In the letter, the associations wrote they “are pleased that the NCUA has taken steps, such as its recent financial innovation rule, to do more to recognize technological advances and the additional flexibility that they can provide credit unions.” However, they noted that more can be done “to ensure credit unions have the tools and mechanisms to reach new consumers who are not currently being served.”

NAFCU and CUNA pointed to the NCUA’s recent modernization of its field of membership rules and the agency’s Advancing Communities through Credit, Education, Stability and Support (ACCESS) Initiative as positive steps, but requested the committee look at ways to limit regulatory and legislative burden on credit unions and allow credit unions to use technology to serve the needs of those who have been underserved by other financial services providers. The associations remarked their concern that “credit unions will be unnecessarily and unjustifiably obstructed in their ability to invest in appropriate technology and perform in the consumer finance sector, which is increasingly competitive and innovative.”

In addition, the associations expressed their disagreement with the NCUA Board’s push for oversight authority over third-party vendors. They added that it may be appropriate, in limited circumstances, for the NCUA to have “to have authority over BSA-related service providers and cybersecurity service providers,” but requested that no legislation grant the agency authority to supervise all third-party vendors.

NAFCU and CUNA closed the letter by urging lawmakers and regulators “to work with the credit union industry to pursue an approach, both legislatively and regulatorily, aimed at ensuring credit unions can use technology to continue to serve their millions of members across the country.”

NAFCU will monitor today’s hearing, scheduled for 10 a.m. Eastern, and provide any updates via NAFCU Today.