March 11, 2022

NAFCU-opposed bill providing NCUA, FHFA with additional vendor authority introduced in House

cap Representative Bill Foster D-Ill., Wednesday introduced the Strengthening Cybersecurity for the Financial Sector Act. The bill gives both the Federal Housing Finance Agency (FHFA) and the NCUA additional third-party vendor examination authority.

NAFCU has previously opposed this legislation, specifically noting concerns about the wide authority it would give the NCUA and potential costs to credit unions. The association believes that the NCUA should stay focused on regulating credit unions.

“While NAFCU appreciates sound oversight from the NCUA, we do not believe that the agency should have such wide authority over the vendors that credit unions engage with,” stated NAFCU Vice President of Legislative Affairs Brad Thaler. “NCUA’s expertise is with credit unions. The Strengthening Cybersecurity for the Financial Sector Act would grant the NCUA expansive vendor examination authority, which would likely lead increased costs not only for credit unions, but also for the NCUA as they divert time and resources away from credit unions to this new process.

“The agency has not been transparent on the costs and how they would use this new authority,” continued Thaler. “We believe they should instead focus on credit union regulation and working with the FFIEC to gain information on vendors already vetted by federal regulators.”

The bill is one of the measures under consideration to be included in next week’s full Committee markup on Wednesday, March 16th.