News & Highlights

FILENE EXPANDS i3 GROUP WITH 28 NEXT GENERATION LEADERS

FOR IMMEDIATE RELEASE

CONTACT: Mark Meyer — 608-231-8554

Filene MADISON,
WI:
The Filene Research Institute and the Center for Credit Union
Innovation have chosen 28 additional rising credit union executives to
replace the 25 inaugural members of a progressive group who have fulfilled
their three-year term and have been dedicated to stimulating the development
of new ideas and innovations for credit unions.

(more…)

FILENE EXPANDS i3 GROUP WITH 28 NEXT GENERATION LEADERS

FOR IMMEDIATE RELEASE

CONTACT: Mark Meyer — 608-231-8554

Filene MADISON,
WI:
The Filene Research Institute and the Center for Credit Union
Innovation have chosen 28 additional rising credit union executives to
replace the 25 inaugural members of a progressive group who have fulfilled
their three-year term and have been dedicated to stimulating the development
of new ideas and innovations for credit unions.

(more…)

CU*NorthWest Signs Seven Washington Credit Unions!

FOR IMMEDIATE RELEASE
CONTACT: Greg Smith, CEO — 866-922-7646

CU*NorthWest Liberty
Lake, Washington
– CU*NorthWest, a wholly owned Credit Union
CUSO based in Liberty Lake, WA announced today that it has contracted
with 7 credit unions in Washington state to convert to its enterprise
CU*BASE processing system. These client additions bring CU*NorthWest’s
credit union processing relationships from 4 institutions to 11 and total
members served from approximately 8300 to over 21,000.

Eastside Credit Union, Financial Services Credit Union, Kenworth Employees
Credit Union, Westside Credit Union, Eastside Municipal Employees Credit
Union, and Pacific Credit Union are all currently under management by “The
Seattle Credit Union Center” (a credit union operational management
organization in Seattle, WA) and will convert from an existing Symitar
In-house system.

“We are so excited about what CU*NorthWest represents as a long
needed option for credit union data processing and information technology
support. We found that not only was the software far more inclusive in
base feature and function but also seemed more credit union centric in
its design,” said Seattle Credit Union Center President Wendy Larson.
Larson went on to say, “The CU*NorthWest CUSO is a perfect fit to
a business model we have been operating for almost 50 years.”

In addition to the Seattle Credit Union Center group, CU*NorthWest has
also contracted with CALCOE FCU in Yakima, Washington for core data processing
services. CALCOE FCU currently represents approximately 1600 members in
the Yakima Valley and will convert from a Fiserv Galaxy online solution.

“A credit union’s data processing solution is one of the
most critical components of credit union operations and member service
ability” said Leslie Johnson, CALCOE FCU CEO. “We truly feel
that we have moved beyond the traditional vendor/client relationship and
have found a new partner in CU*NorthWest.”

“We have an incredible story to tell Northwest credit unions and
they are responding,” said CU*NorthWest CEO Greg Smith. “Building
on the model for success demonstrated by our partner CU*Answers, we bring
an opportunity for credit unions to do business with their own industry
rather than an outside private entity. I welcome our newest credit union
partners and look forward to serving them.”

About CU*NorthWest: CU*NorthWest, an information technology
CUSO, was founded October 1st, 2005 in Liberty Lake, Washington by 4 local
Spokane Credit Unions in partnership with CU*Answers. CU*NorthWest will
target the 5 state area of Washington, Oregon, Montana, Idaho, and Wyoming,
providing a wide variety of services for credit unions including the CU*BASE
Core Processing System.

About CU*Answers (www.cuanswers.com): CU*Answers
was founded over 30 years ago and is a 100% Credit Union owned CUSO located
in Grand Rapids, Michigan. CU*Answers offers a wide variety of services
for credit unions including its flagship CU*BASE Processing System in
both an ASP and In-house environment, Internet Development Services featuring
the CU*@HOME Internet PC Banking product, Member Check Processing and
Direct Deposit processing services. . CU*Answers provides combined services
to 165 credit unions nationally representing nearly 1.5 million members
and $8.8 billion in credit union assets.

NACUSO 2006 CUSO Collaboration and Cooperation Award

NACUSO’s core purpose:

To be the catalyst for instituting collaboration, innovation and reinvention
of the credit union industry.

In keeping with that core purpose, during our annual conference at the
Wynn Las Vegas Resort on May 16th we proudly presented our 2006 CUSO Collaboration
and Cooperation Award to:

CU Direct Connect of Centennial, Colorado.

CU Direct Connect

NACUSO Chairman Tom Davis, left, and Director Judy Sandberg
present the NACUSO 2006 CUSO Collaboration and Cooperation Award to Steve
Anderson, president/CEO of CU Direct Connect.

Two CUSOs were recognized for Honorable mention. They are:

CU Business Group, LLC, of Portland, Oregon
and
Member Business Lending, LLC, of South Jordan, Utah.

Honorable Mention

Kent Moon, left, president/CEO of Member Business Lending,
and Mike Oliver, VP of operations for MBL and Larry Middleman, CEO of CU
Business Group proudly show their awards.

About the Awards

The criteria for the award is based on the following:

  • Thoughtful Leadership and Critical Thinking
  • Value Created through the use of Collaboration
  • Innovation in Organization Design
  • Implementation and Execution
  • Results, Outcomes, and Performance Measurement

The Judges were Thomas Condit, Trustee of the Trust for Credit Unions
and former CEO of the National Cooperative Bank, Tom Davis, PhD, President/CEO
of Davis and Company and newly elected NACUSO Chairman and Judy Sandberg,
VP of Strategic Direction, Gateway Services Group, LLC and NACUSO Director.

The Evaluation & Scoring Methodology was as follows:

  • All nominations scored independently by the judges using a criterion
    rating
    of 1-5.
  • Individual scores transferred to Master Scoring Matrix.
  • Results tabulated to determine the winners.

NACUSO Congratulates the Winners on their Achievement!

Click here to view 2004 award recipient

(more…)

Taxation of CUSOs and CUSO Reporting Requirements

NACUSO Regulatory Alert
To: NACUSO Members
Re: Taxation of CUSOs and CUSO Reporting Requirements
Date: April 27, 2006

The House of Representatives Ways and Means Committee has been examining non-profit organizations to determine whether their respective tax exemptions continue to be warranted. With mounting deficits, it is not surprising that the federal government is revenue conscious. Credit unions are included within the scope of the Committee’s inquiry. In the examination of credit unions, the Committee discovered credit union service organizations. The Committee became aware that CUSOs (1) provide services that credit unions cannot offer, (2) the services are often provided in limited liability companies and limited partnerships that can pass income to credit unions on an income tax free basis and (3) the services can be offered to non-members. (more…)

Keynote Speakers to Illuminate Pillars of NACUSO's National Center for Collaboration and Innovation at the NACUSO 2007 Annual Conference

Newport Beach, Calif. (Feb. 16, 2007) – The National Association of Credit Union Service Organizations (NACUSO) recently announced their four keynote speakers scheduled to address credit union and CUSO executives attending NACUSO’s 2007 Annual Conference, in Las Vegas, Nevada.  The annual conference will be conducted April 30 through May 3, at the Wynn Las Vegas Hotel.  NACUSO will officially unveil details of its new National Center for Collaboration and Innovation at the annual conference.  The National Center was created to strategically solve tough industry issues and assist credit unions and CUSOs to successfully evolve together, by turning innovative ideas into reality.  Each distinguished speaker will add clarity to one of the “four pillars” that support the National Center:  critical thinking, collaboration/cooperation, innovation, and implementation.      

To shine light on the supporting pillar of innovation, NACUSO announced that guest speaker Nicholas G. Carr will present his topic, “The Prudent Innovator,” at the May 1 general session.  Noting that innovation isn’t free, Carr argues that organizations should focus their creativity on a few critical areas – the ones capable of producing a competitive edge – and be ruthless imitators elsewhere.  He will offer NACUSO attendees a series of pragmatic and surprising strategies to increase the odds that innovation initiatives and investments really pay off, and illustrate those strategies with compelling examples.  A former editor of the Harvard Business Review, Nicholas Carr is an acclaimed business writer and speaker whose work centers on strategy, innovation, and technology.  Carr’s 2004 book Does IT Matter? Information Technology and the Corrosion of Competitive Advantage set off a worldwide debate about the role of computers in business.

Speaking on May 2, Michael R. LeGault, author of the 2006 book Think! Why Crucial Decisions Can’t Be Made in the Blink of an Eye, will deliver the morning session’s keynote address and take attendees to the heart of the critical thinking pillar.  LeGault is outraged by the downward spiral of American intellect and culture.  “If bestselling books are advising us to not think,” LeGault argues, “it comes as no surprise that sharp, incisive reasoning has become a lost art in the daily life of Americans.  Somewhere along the line, the Age of Reason morphed into the Age of Emotion; this systemic erosion is costing time, money, jobs, and lives in the twenty-first century, leading to less fulfillment and growing dysfunction.”  LeGault will provide a bold, controversial analysis of the causes of, and solutions for, the erosion of growth and market share at many established American companies.  LeGault is an award-winning National Post editor, writer, and a former columnist for the Washington Times

Business consultant Karen E. Purves will provide the final keynote address during the May 3 closing general session.  Purves will provide annual conference attendees a fresh perspective on problem solving methods, and a variety of tools to spark innovative thinking, while sustaining an innovative environment.  Known for her infectious energy and humor, Purves has conducted time-proven, content-driven seminars at a diverse list of organizations from Pfizer to Deloitte, and the United States Department of Agriculture to Motorola.  She brings a myriad of experiences to her speaking engagements, including testifying before a U.S. Congressional Subcommittee and performing improvisational comedy at “The Second City” Mainstage Theater in Chicago.

National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood will deliver the May 2 afternoon session keynote address, to illuminate the importance of collaborative and cooperative
footing for NACUSO’s National Center and the industry in general.  “The Vice Chairman was
incredibly well received at our fall Business Services Collaborative,” stated Vic Pantea, NACUSO
interim president and president/COO of Member Gateways, LLC in South Bend, Indiana.  “While he may further endorse the credit union and CUSO relationship at the annual conference, I fully anticipate that Rodney Hood will challenge all of us with his own special vision for the industry.” Delivering his keynote address to an enthusiastic membership at the second annual NACUSO 2006 Business Services Collaborative, held in Chicago this past November, Hood challenged credit unions to engage credit union-owned solutions saying, “CUSOs are the ones with the infrastructure, and because of what they’re doing, you can give them the synergies and efficiencies that they need to do business lending effectively.”

In addition, the 2007 Annual Conference will have a distinct group of industry leaders conducting
breakout sessions May 1 and 2.  “CUSOs are the ideal mechanism to do the heavy lifting for credit
unions, for the actual implementation of strategies derived from critical thinking, collaboration, and
innovation,” Pantea emphasized.  “Credit unions that utilize the National Center for Collaboration
and Innovation will look to NACUSO, and its CUSO members, for the final pillar – implementation –
and answers that lead to faster results.”

# # #

Download Adobe PDF

Keynote Speakers to Illuminate Pillars of NACUSO’s National Center for Collaboration and Innovation at the NACUSO 2007 Annual Conference

Newport Beach, Calif. (Feb. 16, 2007) – The National Association of Credit Union Service Organizations (NACUSO) recently announced their four keynote speakers scheduled to address credit union and CUSO executives attending NACUSO’s 2007 Annual Conference, in Las Vegas, Nevada.  The annual conference will be conducted April 30 through May 3, at the Wynn Las Vegas Hotel.  NACUSO will officially unveil details of its new National Center for Collaboration and Innovation at the annual conference.  The National Center was created to strategically solve tough industry issues and assist credit unions and CUSOs to successfully evolve together, by turning innovative ideas into reality.  Each distinguished speaker will add clarity to one of the “four pillars” that support the National Center:  critical thinking, collaboration/cooperation, innovation, and implementation.      

To shine light on the supporting pillar of innovation, NACUSO announced that guest speaker Nicholas G. Carr will present his topic, “The Prudent Innovator,” at the May 1 general session.  Noting that innovation isn’t free, Carr argues that organizations should focus their creativity on a few critical areas – the ones capable of producing a competitive edge – and be ruthless imitators elsewhere.  He will offer NACUSO attendees a series of pragmatic and surprising strategies to increase the odds that innovation initiatives and investments really pay off, and illustrate those strategies with compelling examples.  A former editor of the Harvard Business Review, Nicholas Carr is an acclaimed business writer and speaker whose work centers on strategy, innovation, and technology.  Carr’s 2004 book Does IT Matter? Information Technology and the Corrosion of Competitive Advantage set off a worldwide debate about the role of computers in business.

Speaking on May 2, Michael R. LeGault, author of the 2006 book Think! Why Crucial Decisions Can’t Be Made in the Blink of an Eye, will deliver the morning session’s keynote address and take attendees to the heart of the critical thinking pillar.  LeGault is outraged by the downward spiral of American intellect and culture.  “If bestselling books are advising us to not think,” LeGault argues, “it comes as no surprise that sharp, incisive reasoning has become a lost art in the daily life of Americans.  Somewhere along the line, the Age of Reason morphed into the Age of Emotion; this systemic erosion is costing time, money, jobs, and lives in the twenty-first century, leading to less fulfillment and growing dysfunction.”  LeGault will provide a bold, controversial analysis of the causes of, and solutions for, the erosion of growth and market share at many established American companies.  LeGault is an award-winning National Post editor, writer, and a former columnist for the Washington Times

Business consultant Karen E. Purves will provide the final keynote address during the May 3 closing general session.  Purves will provide annual conference attendees a fresh perspective on problem solving methods, and a variety of tools to spark innovative thinking, while sustaining an innovative environment.  Known for her infectious energy and humor, Purves has conducted time-proven, content-driven seminars at a diverse list of organizations from Pfizer to Deloitte, and the United States Department of Agriculture to Motorola.  She brings a myriad of experiences to her speaking engagements, including testifying before a U.S. Congressional Subcommittee and performing improvisational comedy at “The Second City” Mainstage Theater in Chicago.

National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood will deliver the May 2 afternoon session keynote address, to illuminate the importance of collaborative and cooperative
footing for NACUSO’s National Center and the industry in general.  “The Vice Chairman was
incredibly well received at our fall Business Services Collaborative,” stated Vic Pantea, NACUSO
interim president and president/COO of Member Gateways, LLC in South Bend, Indiana.  “While he may further endorse the credit union and CUSO relationship at the annual conference, I fully anticipate that Rodney Hood will challenge all of us with his own special vision for the industry.” Delivering his keynote address to an enthusiastic membership at the second annual NACUSO 2006 Business Services Collaborative, held in Chicago this past November, Hood challenged credit unions to engage credit union-owned solutions saying, “CUSOs are the ones with the infrastructure, and because of what they’re doing, you can give them the synergies and efficiencies that they need to do business lending effectively.”

In addition, the 2007 Annual Conference will have a distinct group of industry leaders conducting
breakout sessions May 1 and 2.  “CUSOs are the ideal mechanism to do the heavy lifting for credit
unions, for the actual implementation of strategies derived from critical thinking, collaboration, and
innovation,” Pantea emphasized.  “Credit unions that utilize the National Center for Collaboration
and Innovation will look to NACUSO, and its CUSO members, for the final pillar – implementation –
and answers that lead to faster results.”

# # #

Download Adobe PDF

Credit Union Service Organization (CUSO) Investments in Non-CUSO Service Providers

December 16, 2005

Re: NCUA General Counsel Opinion number 05-1018 dated November 23, 2005 to Stephen A. J. Eisenberg, Re: Credit Union Service Organization (CUSO) Investments in Non-CUSO Service Providers.

There has been some confusion caused by the above referenced General Counsel Opinion Letter. The letter states that “a CUSO may only invest in a non-CUSO service provider if its investment is necessary to receive the non-CUSO’s services or a reduced price for goods and services.” This statement has led some in the credit union world to believe that investments in CUSOs with non-credit union co-owners are not permitted. This is not the case.

CUSOs must primarily serve credit unions or members of affiliated credit unions. This is the CUSO customer base requirement. If an entity does not meet the customer base requirement, the entity is not considered a CUSO and credit union investment is not permitted. However, a credit union may still be able to invest in the non-CUSO if at least one of two following conditions is met: (1) credit union ownership is required in order that credit union members have access to the service; or (2) credit union ownership is required in order that credit union members receive more favorable pricing. The example of the ATM network was cited.

After speaking to both the author of the letter and the person requesting the opinion, I learned that the title insurance agency in which the federal credit union was proposing to invest did not primarily serve credit unions or members of affiliated credit unions, thus it was a non-CUSO service provider. The agency’s services to the members were not conditioned upon the credit union having an ownership interest and the agency would not reduce the price of the services to credit union members if the credit union became an owner of the agency. Hence neither of the two conditions that could excuse compliance with the customer base requirement was met. NCUA had no choice but to deny the request by the credit union to invest in a non-CUSO service provider.

If the title insurance agency primarily served credit unions or members of affiliated credit unions, the proposed investment would have been a permissible CUSO investment. There are many CUSOs that are legally co-owed by entities other than credit unions, including CUSOs that provide title insurance services. As long as the CUSO regulations are met, there is no prohibition of a federal credit union investing in a CUSO with a non-credit union investor. I have confirmed this with NCUA and this is the case.

Advocacy Updates

Report on Advocacy Fund spending… NACUSO Working for You

Through the support of our members and partners, NACUSO raised approximately $273,000 in contributions toward its Advocacy Fund (and predecessor Legal & Litigation Fund) over the past 3 years.  The goal of the two funds together are to enable NACUSO to conduct crucial advocacy work on behalf of CUSOs and their credit union owners / partners.

In keeping with our commitment to be fully transparent and to regularly communicate our usage of these dollars (we provided detail of how the funds were spent from 2014-2015 last year, which is also included in the attached Report), we would like to provide you with the following information, which was provided in detail to each contributor in the first quarter of 2017.  NACUSO spent the following amounts from the Advocacy funds during 2016:

$24,000     Dollar Associates, LLC - paid for advocacy work with Congress and NCUA on CUSO issues
$24,000     Messick & Lauer, P.C. - paid for advocacy work with NCUA and meetings with Congress on CUSO issues
$   718     Travel to Washington DC for meetings with Congress and NCUA
$48,718    Total amount spent influencing Congress and NCUA for favorable CUSO environment

The remaining funds, out of the total $273,000 in combined contributions, equal $110,323.  This represents the balance in Restricted Cash as of 12-31-16, as per the NACUSO Advocacy and Legal Fund Analysis report (click link below).

The NACUSO Board and its Legislative & Regulatory Advocacy Committee is continuing to prioritize the advocacy of a regulatory environment that is pro-CUSO and pro-collaboration within our industry.  NACUSO needs your support for this initiative and to accomplish its purposes.  While strategies may change over time based upon circumstances and opportunities to advance the cause of CUSOs, the necessity for funding of such initiatives is essential if NACUSO is going to remain in a position to impact the decision-making process for CUSOs and the credit unions that invest in, or utilize them.

Click to Contribute

For a summary of how NACUSO has worked to maintain an environment that is supportive of collaborative investment, the following report entitled NACUSO Working For You (see below) provides a summary of the work we have done on your behalf.  To capsulize some of its key points, a summary of what we feel are the NACUSO “wins” this past year are:

  • Effectively opposing the costly extension of Vendor Authority to NCUA.
  • Worked with NCUA on the revised MBL Rule.
  • Advocating for the expansion of CUSO powers to originate loans credit unions are authorized to make, to help bring scale and expertise benefits to credit unions in all loan categories.
  • Encouraged NCUA to be transparent in its budget and rule making including the OTR calculation.
  • Working with NCUA to minimize adverse impact of the CUSO Registry and to correct the acknowledgements initially in the Registry.

To emphasize the last bullet above, initially, in its first version of the CUSO Registry documentation that CUSOs were required to submit with their data to NCUA in 2016, the agency’s acknowledgement form required CUSOs – when submitting their data – to accept responsibility under regulations that only apply to credit unions but were not intended to, apply to CUSOs.  These acknowledgments, if left unchallenged and signed by CUSO officials, could have exposed CUSOs to potential penalties under regulations that do not, and were never intended to apply to CUSOs.  Upon becoming aware of this inappropriate acknowledgement requirement, NACUSO worked directly with senior NCUA staff to bring our concerns to their attention.  NCUA agreed to the NACUSO position and made the needed changes to the acknowledgements for the CUSO Registry data submission process.  In addition, for those CUSOs who had already submitted their registration and signed the acknowledgements, NACUSO developed a letter with the appropriate wording for those CUSOs to send to NCUA to clarify this acknowledgement concern.

Effective advocacy requires ongoing diligence in following every aspect of regulatory requirements impacting CUSOs and the credit unions that invest in them and benefit from them.  It necessitates prompt response at times and the ongoing resources to interact positively on behalf of the CUSO community on issues and requirements of all types.  With a new Congress now in session, educating them on the benefits of credit unions and the collaborations that enable them to cost effectively serve their members, as well as invest in innovation, through CUSOs that help spread and minimize risk, is an important message we are delivering.  We hope that you agree such diligent advocacy initiatives are crucial to the long-term viability of the collaborative movements within the credit union community.

We hope this report helps you see how we have carefully managed the funds entrusted to us, for Advocacy purposes.  We would be happy to answer any questions that you may have.  Thank you for your support, and for giving NACUSO the opportunity to support you as you serve your members.  Please consider adding your support to our advocacy efforts by contributing today.

View NACUSO’s 2016-17 Advocacy Plan 

View NACUSO’s Advocacy & Legal Fund Analysis

 

Best Regards,

Jack M. Antonini
President & CEO
NACUSO
Jack@nacuso.org

NACUSO Working For You

Legislative & Regulatory Advocacy Update

Vendor Authority

Knowing that obtaining vendor authority was the number one legislative issue for NCUA in 2015-16, Jack Antonini and Guy Messick met with key Congressional representatives in January to tell Congress why credit unions and CUSOs oppose the extension of this expansive, costly and unnecessary authority to NCUA.  When NCUA made their official request for vendor authority, Congress was not persuaded by their arguments.

We continue to monitor the situation to ensure that the Senate and House recognize that such an unwarranted extension of regulatory and examination authority beyond the current statutory mandate of NCUA is both controversial in the industry and potentially damaging to an industry that is dependent upon third party relationships because of their smaller size in comparison to many of their competitors.  Credit unions need third party support and collaborative innovation to continue to effectively meet their members’ needs, and a burdensome regulatory and examination regime for anyone who does business with a credit union will not foster that support and innovation.

NACUSO is focused on protecting credit union collaboration through CUSOs, but we need your help, so we can continue to be vigilant in monitoring legislation in Congress, please contribute to NACUSO’s Advocacy Fund today – click here to contribute.

NCUA’s MBL Rule

NACUSO was supportive of the positive changes in NCUA’s revised MBL Rule, including the greater authority to waive personal guarantees, a more balanced approach to construction loan limitations, enhanced flexibility on counting loan participations against the MBL cap and the improved treatment of 1-4 dwelling rental property.  NACUSO also, in consultation with our business lending CUSO members, recognized that the Conflict of Interest provisions in the new MBL Rule could be misconstrued by examiners, so we have engaged with NCUA Board members and senior NCUA staff about the issue, and sent a letter to explain our concern and our recommended solution (see NACUSO’s MBL Conflict of Interest Letter to NCUA ).

Expansion of CUSO Authorized Powers

NACUSO wrote to the NCUA Board in 2015 requesting an amendment to NCUA Regulations Part 712.5 to add to the list of authorized CUSO powers to help facilitate a competitive solution to the growing Internet and peer-to-peer lending competitors for car loans and unsecured loans faced by credit unions in today’s environment (see NACUSO’s letter).  Chairman Matz responded that she was not opposed to reconsidering new authorities for CUSOs, indicating “if CUSOs can legally provide additional services to benefit credit unions and their members without compromising safety and soundness, I would strongly support those efforts.”  Chairman Matz went on to say that she had asked NCUA staff to review the policy and safety and soundness considerations relative to our request, and this review is already underway (see Chairman Matz response).

NACUSO has since asked the NCUA Board to consider updating the CUSO powers to align CUSO loan support with the loans credit unions are authorized to provide to their members  (see NACUSO’s 2017 Expansion of CUSO Authorized Powers Letter to NCUA), so CUSOs can bring scale, risk mitigation and expertise benefits to credit unions in all loan categories, not just those listed in the regulations.  While we explained the reasons for updating the NCUA Rules and Regulations Part 712.5 defining the permissible pre-approved activities a CUSO may provide, we also referred to our advocacy efforts to have auto loans and consumer loans added to the list of CUSO activities over the past two years, and the support that NCUA has communicated regarding those efforts.  We respectfully submit that now is the time to update the CUSO regulations to clarify that CUSOs are authorized to assist credit unions with any loan type that credit unions are authorized to make.

Update on CUSO Rule Implementation

Pursuant to the CUSO Rule the NCUA adopted in November 2013, CUSOs have been required to report certain information directly to NCUA pursuant to the agreement with their investing credit unions.  NCUA built an on-line reporting system that went live in the first quarter of 2016, and CUSOs updated their CUSO Registry information in the first quarter of 2017.

NACUSO continues to work with regulators minimize the regulatory burden on CUSOs and to help credit unions realize the maximum benefit from collaboration through CUSOs.  We work to ensure regulations affecting credit unions and CUSOs are as favorable as possible, but we need your help to continue this regulatory advocacy work, please contribute to the NACUSO Advocacy Fund today.

NACUSO Supported Transparency on OTR

NACUSO has long expressed its concern about the growth of NCUA and its extension of its regulatory arm, both directly and indirectly, into areas of questionable statutory authority such as the de facto regulation and examination of CUSOs through the 2013 CUSO Rule.  The extension of regulatory authority by NCUA comes with increased costs, costs that are paid for ultimately by credit union members.

NCUA takes money from the insurance fund to pay for its operations through the Overhead Transfer Rate (“OTR”).  The OTR currently funds approximately 70% of NCUA’s budget.  NCUA does not have to justify its expenses or ask permission from anyone to take as much money as it deems appropriate from the share insurance fund for its operations.  Fortunately, under new leadership, NCUA has decided to be more transparent as part of its budget process and publish details of how it calculates the OTR.

NACUSO 2016-17 Legislative & Regulatory Advocacy Plan

As we explained when we announced the formation of the NACUSO Advocacy Fund two years ago, the regulatory climate that enabled credit unions to maximize the benefits of CUSOs and collaboration is under siege, and as an industry, we need to respond.  NACUSO established an Advocacy Fund to supplement its efforts to promote and protect a collaboration/CUSO friendly regulatory climate.

At the 2016 NACUSO Annual Conference, we shared our 2016-17 NACUSO Advocacy Plan, based upon the four basic precepts upon which our advocacy work is based.  Those four pillars are designed to support an environment that:

  • Encourages credit unions to deliver a better member experience and improve the financial well-being of members
  • Encourages credit unions to seek new collaborative ways to serve members needs
  • Rewards investment in innovation and collaboration
  • Supports the use of CUSOs as the incubators for collaboration and innovation so that credit unions can reap the benefits of entrepreneurialism without direct risks

The Advocacy Plan also identifies the key associational positions that NACUSO is focused on, for the benefit of CUSOs and their credit union owners, which are summarized as follows:

  • Supports the development of clear examination guidelines that recognizes that NCUA has review powers and not examination powers over CUSOs. Such guidelines would inhibit de facto regulatory creep that would treat CUSOs as regulated entities that would discourage innovation and collaboration. NACUSO will intervene with NCUA in the more egregious cases if the CUSO or the investing credit unions request NACUSO’s assistance.  NACUSO opposes any legislative efforts by NCUA to gain statutory authority to directly regulate and examine CUSOs through an unnecessary expansion of the agency’s examination authority over credit union vendors
  • NACUSO supports the modernization of the permitted CUSO Services list to include all loan types that credit unions can originate to help bring scale benefits as well as risk mitigation and expertise benefits to credit unions
  • NACUSO will encourage regulators to view innovation and collaboration as an essential part of a revitalized credit union model and adapt their regulations and supervision to encourage the responsible and prudent development of the collaborative model

Key strategies for accomplishing the NACUSO 2016-17 Legislative and Regulatory Advocacy Plan are detailed in the Advocacy Plan.  In order to have a maximum impact upon the regulators and the industry, CUSOs and their credit union owners must stand united as we promote the unique collaborative opportunities and risk sharing benefits that our CUSOs provide.   Together, our participation in collaboration advocacy efforts through NACUSO will be our most effective way of impacting the future regulatory environment under which CUSOs operate.

NACUSO will focus its advocacy efforts on those issues most critical to the CUSO community as a whole and will attempt to avoid watering down its message on key issues by taking public positions on all issues that may impact CUSOs or credit unions in a more indirect manner.

In the current environment it has become increasingly important for credit unions to find new sources of non-interest income in order to enhance earnings, build capital, and support member growth.  Thus, collaboration and innovation are more critical now than ever before to create sustainability for the credit union movement.  NACUSO educates the industry as a whole (CUSOs, credit unions and other providers) on the benefits of collaboration and innovation, facilitates cooperative business opportunities, and provides leadership on how to implement these strategies within a favorable legislative and regulatory environment.

It is the desire of NACUSO to be recognized as an effective organization in support of building a favorable legislative and regulatory environment through what we consider the four pillars of future credit union success – collaboration, innovation, growth and entrepreneurship.  NACUSO will be balanced in approach, but bold in action to aggressively promote this agenda and will seek to join with other like-minded organizations, when appropriate, to work in collaboration with NACUSO to see these key agenda items accomplished.

All of the organizations associated with the NACUSO Board of Directors have already made contributions to the NACUSO Advocacy Fund.   We urge you to add your collaborative voice to NACUSO’s advocacy efforts.  Please complete the commitment form today, and send your contributions to NACUSO so we can help you.  Please share with your friends in the industry who want to ensure a bright innovative, collaborative future for our industry and our members.  If you or your industry friends are not yet members of NACUSO, now is the time to join, and be part of the collaborative solution.  If you have questions about the NACUSO Advocacy Fund, click the link to go to the NACUSOAdvocacy Fund FAQ’s.

Thank you very much for your support, and for giving NACUSO the opportunity to serve you as you serve your members.  It is a privilege that we truly appreciate.

Sincerely,

Jack M. Antonini
President & CEO
NACUSO
Jack@nacuso.org

Jack M Antonini
President & CEO – NACUSO
jantonini@aol.com  (713) 208-0989
NACUSO’s 2018 Network Conference April 16-19 at Disneyland Resort in Anaheim, CA
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NCUA Meeting Provides CUSO Guidance 6/16/16

NACUSO Visits NCUA to Discuss the CUSO Registry and CUSO Reviews

On June 14, Jack Antonini, NACUSO President and Guy Messick, NACUSO General Counsel met with NCUA Staff on the results of the CUSO Registry and the thinking on how CUSO Reviews will be handled.

The CUSO Registry sign-up period and the follow-up by NCUA found there were approximately 900 CUSOs.   NCUA believes that there are more CUSOs that have not reported.  Under the NCUA Regulations (Part 712.1(d)), “A CUSO also includes an entity in which a CUSO has an ownership interest of any amount, if that entity is engaged primarily in providing products or services to credit unions or credit union members.”   So these subsidiary CUSOs are considered CUSOs and required to make annual reports to NCUA.   The NCUA staff believes that many CUSOs were not fully aware of this requirement and there are a number of subsidiary CUSOs that have not reported.   NCUA will be following up with CUSOs to obtain these filings.   NCUA is also scrubbing the data and asking for clarification if the data is indicating that there may have been a reporting error. (more…)

Report on Advocacy Fund spending…NACUSO Working for you

Through the support of our partners, NACUSO raised approximately $63,000 in contributions toward its Legal and Litigation Fund in 2014 with a primary purpose to develop strategies for the most effective way to seek the repeal and/or mitigation of the impact of the CUSO Rule that NCUA had adopted in November 2013.  Subsequently, NACUSO established an Advocacy Fund to supplement the Legal and Litigation Fund.  The goal of the two funds together were to enable NACUSO to coordinate legal decision making, with a crucial advocacy component that will have more impact than the always risky option of legal action.  In total, $190,600 was contributed to the NACUSO Advocacy Fund.  Combined these two related initiatives received total contributions from NACUSO partners of approximately $253,600 in 2014 and 2015.

In keeping with our commitment to be fully transparent and to regularly communicate our usage of these dollars, we would like to provide you with the following information.  NACUSO spent the following amounts from the two funds during 2014 and 2015:

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CUSO Registry Clean Up Period 4/22/16

As most of you know, all CUSOs are obligated under the NCUA Regulations to register certain information directly with NCUA on an annual basis.   Over 800 CUSOs did so in February and March.   NCUA is now in the process of making sure all CUSOs have registered.   Their new deadline is April 30.  They are taking CUSO information from the credit union 5300 call reports and sending out letters reminding “CUSOs” that they have to register.   Some credit unions may have incorrectly listed a company as a CUSO.  Other credit unions list their CUSO but use an acronym for the CUSO instead of the CUSO’s full name.   NCUA, not knowing better is sending letters to any and all companies listed on the call reports. (more…)

Regulatory Update 3/15/16

Letter to NCUA regarding CUSO Registry Acknowledgement: Yesterday, NACUSO informed you of a change we negotiated with our General Counsel (Messick & Lauer) with the NCUA regarding the CUSO Registry Acknowledgment each CUSO is required to agree to when submitting their CUSO registration in the NCUA’s CUSO Registry system.  As we pointed out in our Regulatory Alert yesterday, the acknowledgment required CUSOs to agree to be bound by statutes that only apply to credit unions and which imposed penalties that are not applicable to CUSOs.

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Change to the CUSO Registry Acknowledgement 3/14/16

During the process of assisting with CUSO Registry questions, it came to our attention that in order to complete the CUSO Registry, CUSOs were required to agree to be bound by statutes that apply to credit unions and which imposed penalties that are not applicable to a CUSO.  On behalf of NACUSO and the many CUSOs in this industry, Messick & Lauer (NACUSO’s General Counsel) have advocated and negotiated to revise this acknowledgement to more accurately describe the duty of CUSOs to respond to the CUSO Registry.  It is a contractual duty with the credit union and not a direct regulatory obligation to NCUA.   As NCUA continues to pay more attention to CUSOs, NACUSO will continue to take action to be the voice of CUSOs and to resist any attempts at regulatory overreach.  The NCUA has changed the acknowledgement text.  For your reference, the text of the previous and current CUSO Registry acknowledgments are below. (more…)

Regulatory Update 2/26/16

NCUA’s CUSO Registry Training & Demonstration webinar held on February 11 is now available to be viewed.  If you missed the webinar, or want to view it again, to help you in completing the CUSO Registry, you can watch it by clicking on the following link:  View 2/11/16 Webinar. You have until March 31, 2016 to complete your initial registration of all CUSOs.