NEWPORT BEACH, Calif. –The National Association of Credit Union Service Organizations (NACUSO) said it is establishing an advocacy fund in response to new regulations related to CUSOs, and that it might also file suit against NCUA.
In a statement, NACUSO said the fund’s purpose is to “supplement its efforts to promote and protect a collaboration/CUSO friendly regulatory climate."
NACUSO said it is concerned over new regulations from NCUA requiring CUSOs to report information directly to the agency, even though NCUA does not have regulatory authority over CUSOs. While litigation is being considered, NACUSO did note in a statement that “suing the regulator is a step that should not be taken lightly. We are in the process of discussing the industry's concerns with NCUA and will evaluate their response," the statement reads.
NACUSO said it is stepping up its response as its concerns mount relative to CUSOs and regulatory oversight. Among those concerns:
- CUSOs are being treated as a systemic risk to the National Credit Union Share Insurance Fund even though just 22 BPs of credit union investments have been made in the 30-year-old CUSO segment of the industry.
- There has been a dramatic increase in CUSO examinations that it says have the same scope and tone as CU exams.
- State regulators have also been increasing their oversight of CUSOs.
- NCUA’s risk-based capital rule weighs CUSOs at what it termed a “punitive” 250%.
- NCUA continues to lobby Congress to provide it with direct regulatory authority over CUSO and third-party service providers.
The issue of third-party oversight has also been raised in a recent letter to NCUA from NAFCU over the agency’s budget.
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