Las Vegas, Nev. (Apr. 27, 2008) – The National Association of Credit Union Service Organizations (NACUSO) opened its 2008 Annual Conference, today, at the Wynn Las Vegas Hotel, marking the 23rd anniversary of the association. Issues discussed at the annual conference could have profound effects on how CUSOs conduct business in the future. Many of the arriving 400-plus registered attendees were treated to a CUSO 101 tutorial followed by a timely CUSO legal update and discussion of current regulatory topics presented by NACUSO general counsel Guy Messick, attorney, Messick & Weber P.C., Media, Pennsylvania, and Brian Lauer, associate, Messick & Weber P.C.
Messick and Lauer discussed the strategic uses of CUSOs, when to use CUSOs, and when to use Incidental Powers. The CUSO formation process, normal organizational structure, and the relationship between the credit union owners and the CUSO were also presented, along with examples of CUSO services that are heating up, such as youth marketing, disaster recovery/business continuity, and investment advisory services.
“For example, regulators are recognizing that CUSOs are the future of credit unions. In order to properly evaluate the CUSOs, we have to create a new model in the credit union industry, whereby credit unions not only provide the services, but we must also monitor the services. Credit unions can’t just hand over the keys of your operational services to third parties, including CUSOs, without monitoring them,” Messick illustrated. “So, NACUSO is helping credit unions and CUSOs develop a means for ensuring the proper evaluations are in place, and that we as an industry move forward in a new model.”
In a discussion relating to NCUA’s “Evaluating Third Party Relationships Letter 07-CU-13, December 2007,” Messick focused on credit union third-party relationships as part of his NCUA regulatory update. “The NCUA letter seeks to ensure that all parties understand their risks and roles of responsibility,” Messick stated. “Credit unions need someone who oversees all third-party relationships to insure consistency across all products and service lines in monitoring and managing third party relationships. Often, credit unions may not realize how dependent they are on third party relationships. One credit union told me they counted over 200 third party relationships. We have to understand that a credit union that depends upon 200 third party relationships has to have an organization structure and risk management protocols that are different than a credit union that has an internal staff providing all the key operational services.” Messick also directed attention to regulatory action on Sharing Information Between the Credit Union and CUSO “Fair and Accurate Credit Transactions Act” (FACTA), relating to the privacy and use of credit union member data with third parties. Compliance goes into effect October 1, 2008, and is one of three key privacy laws governing the sharing of member information between a credit union and the CUSO; the Gramm-Leach-Bliley Act (NCUA Part 716, FTC Part 313), and the Fair Credit Reporting Act being the other two laws.
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About NACUSO
Founded in 1985, NACUSO’s vision is to be the catalyst for instituting collaboration, innovation, and the reinvention of the Credit Union industry. NACUSO is an association of credit unions and CUSOs dedicated to helping credit unions grow through the National Center for Collaboration and Innovation. The National Center focuses on the processes of critical thinking, innovation, collaboration, and implementation. For more information, visit the new www.nacuso.org.
