Posts By: Shawna

The OCC in Love with Collaboration, Why Isn’t NCUA?

Posted by & filed under Third Party Due Diligence Policies and Procedures.

It is Nice to Know Some Regulators Understand the Value of Collaboration

On February 10, the banking regulators gave testimony before the Senate Banking Committee.  The purpose of the hearing was to gather ideas on regulatory relief.  We are seven years out from the financial crisis and it is very clear that the torrent of regulation that followed the crisis has had adverse consequences on the cost and availability of financial services.   The Senators wanted to know what the regulators proposed to do about regulatory relief.   We know that NCUA instead took the opportunity to ask Congress to give them much more regulatory authority.  NCUA wants supervisory authority over every vendor that does business with credit unions and supervisory and enforcement authority over CUSOs.   How many examiners do you think they will need to supervise hundreds and hundreds of CUSOs and vendors?  

To make their case, NCUA continues to beat up on CUSOs. … Read more

NACUSO Makes Congressional Visits to Oppose NCUA’s Request for Powers to Directly Regulate CUSOs

Posted by & filed under News.

On February 10, 2015, NCUA presented testimony to the Senate Banking Committee hearing on Regulatory Relief for Community Banks and Credit Unions.   In NACUSO’s view, NCUA seemed to be out of touch with the purpose of the hearing, which was to examine means of removing regulatory burden for credit unions and fostering greater investment in local communities.

Instead of suggesting how NCUA can help meet the growing need of credit unions and credit union service organizations (CUSOs) to reduce unnecessary regulatory burdens, NCUA took the opportunity to ask Congress for additional regulatory authority.  We learned with great interest from NCUA’s testimony that the Agency’s number one legislative priority in 2015 is to obtain Congressional authority to dramatically expand the Agency’s statutory authority to enable NCUA to directly regulate and examine all CUSOs and third party vendors that do business with credit unions.  This will give NCUA new powers over thousands of non-credit union organizations. … Read more

Not a Member of NACUSO?  Join Today With This Special Offer

Posted by & filed under Third Party Due Diligence Policies and Procedures.

Between now and December 31, 2015, credit unions and CUSOs can join NACUSO at 50% off the first year’s annual membership (only $425 instead of $850).  If you are a non-credit union or CUSO service provider and qualify as a Contributory Member, you can join NACUSO at the same 50% discount between now and December 31, 2015: That’s only $675 instead of $1,350.  Click to Join NACUSO – Membership Special… Read more

NACUSO Member Update On Treatment of CUSOs in NCUA’s Proposed Risk Based Capital Rule

Posted by & filed under NACUSO.

The revised NCUA Risk Based Capital proposal’s impact on CUSOs, which was approved at the January 15 NCUA Board meeting on a vote of 2-1, with NCUA Board Member Mark McWatters voting against the revised RBC proposal, are summarized as follows:

• If the CUSO’s financials are consolidated into a credit union’s financial statement under GAAP, there is NO separate applicable CUSO investment or loan risk weight.
• If equity investment in a CUSO is unconsolidated, then risk weight is 150%, an improvement from the 250% in the original RBC proposal, but still unreasonable for CUSOs that pose little risk to their credit union owners.
• Loans to CUSOs are still risk weighted at 100% for unconsolidated CUSOs.
• Non-CUSO equity investments are risk weighted at 300% for publicly traded entities and 400% for non-publicly traded non-CUSO equity investments.

Comments on the revised Risk Based Capital rule are due 90 days after publication in the Federal Register.… Read more

CUSO Rule Implementation Clarification

Posted by & filed under Third Party Due Diligence Policies and Procedures.

To: NACUSO Members
From: Brian Lauer, Messick & Lauer P.C.

As we all know, the newly amended CUSO regulation will go into effect on June 30, 2014.  On or before that date, federally insured credit unions with investments in or loans to a CUSO must obtain an agreement from such CUSO wherein the CUSO agrees to directly report information to the NCUA.  There was some confusion among credit unions and CUSOs whether this regulatory burden extends to credit unions with only a contractual agreement for services with a CUSO.  We did not believe that it did or that it should.  The NCUA agrees.  Attached is a general counsel opinion clarifying this position and explaining the origin of the confusion.

NCUA Legal Opinion CUSO Rule Clarification 5 29 14… Read more