News & Highlights
When I first heard the news that Wells Fargo employees fraudulently opened two million unauthorized or fictitious customer accounts in an effort to meet sales goals, I could hardly believe that such a fraud could occur. Then as I learned that this happened over a period of several years, dating back to at least 2011 and that Wells Fargo continued to pressure employees to “cross-sell” (i.e. open new accounts), even after they became aware of these egregious acts, I was outraged.
At the Senate Banking Committee hearing this week, The Wall Street Journal reported that Senators “accused [Wells Fargo CEO] John Stumpf of fostering a culture where low-paid branch employees were pressured to meet impossible sales quotas to keep their jobs, and so signed up customers for products without their knowledge. As the employees sold more products, Wells Fargo shares rose and bigger bonuses flowed in for the top executives.”
How could this happen? In a well written article on “How Wells Fargo’s High Pressure Sales Culture Spiraled Out Of Control” the WSJ summarized it this way: “Hourly targets, fear of being fired and attractive bonuses kept employees ‘selling’ even when the bank began cracking down on abuses.” The article went on to say: “For five years, Wells Fargo conducted investigations into improper practices, hired consultants and tinkered with sales and compensation incentives. Questionable sales tactics persisted, though, and were an open secret in Wells Fargo branches across the country … branch managers routinely monitored employees’ progress toward meeting sales goals, sometimes hourly, and sales numbers at the branch level were reported to higher-ranking managers as many as seven times a day. Tension about how to meet the sales targets was common. Former employees reported that managers asked employees who had fallen short of the targets if they could open accounts for their mother, siblings or friends.”
I learned a few things along the way about credit union collaborations that jointly supply back-office operational services, e.g. IT support, lending, collections, compliance; etc. Below are some common lessons learned.
- Scale alone is not enough. If two credit unions merge or two credit unions collaborate through a CUSO there will be an increased scale in the operation. But if there are no other changes and the credit unions continue to operate in the same manner with the same number of people, there are no savings other than perhaps through additional bargaining power with vendors. If the processes and people issues are not addressed, a merger of credit unions or a CUSO collaboration can actually add costs.
Today, let’s consider a new concept for disruption and collaboration. Let’s change the entire paradigm of the core system technology platform and build that model in collaborative CUSOs.
Core systems in credit unions have been a material advantage for credit unions over all size banks for decades. Our business developed as full service institutions at the same time significant new technologies came to the market – specifically mini computers and integrated data bases. We also had the added advantage of very centralized operations, which allowed us to have a consolidated technology platform. We entered the full service retail banking world at the same time that there were technology platforms geared toward our size institutions. Allowing us to connect all loan, savings and transactions accounts into one record and to provide online, real time operations. We leaped over banks in our use of technology and were leaders in on line ATMS, audio response systems and online banking platforms. We were the innovators and the disrupters. We had members using those services long before the average bank.
Our core vendors, companies like DNA (FiServ) and Symitar (Jack Henry) supported our tech leadership positions with integration into lending platforms, collection systems, card subsidiary systems, etc. They have been very good partners and we would not have grown to the extent we have today without them.
Let’s face it – credit unions are generally not known as innovators. At our best we are fast followers. Except when it comes to CUSOs. The CUSO model is brilliant in that it lets credit unions that have expertise in an area provide quality services to other credit unions. In other words, when one credit union “figures it out” they can share the love by bringing in other credit unions either as investors, customers or both.
I read a Forbes article written by Larry Myler recently that talks about the 4 levels of innovation and it got me to thinking about the different CUSO models and how they fit his categorization.
Each month we are highlighting at least one NACUSO member by interviewing one of their executives. The format is meant to be fun and informative. This month we are excited to share the story of our new NACUSO member HealthPlan Services, by asking Jay Mclauchlin a few questions about himself, how he came to work with credit unions and how HealthPlan Services can benefit our members.
What’s your current position and can you give me a brief overview of what it is you do in your work?
As the Senior Vice President of Consumer Sales for HealthPlan Services, I oversee the management of our multi-threaded distribution strategy that includes sales through insurance agents and brokers as well as direct to consumers via our private exchange platform.
What would you say most motivates you to do what you do? What are you most excited or passionate about?
I love working in a team environment and solving a problem. More importantly, I like an environment where the group trying to solve a problem has fun doing it. It’s not just about delivering the finished product or solution—it’s the excitement and joy of the journey that motivates me.
I want to hear the story of how you came to work with credit unions. What attracted you to work for HealthPlan Services?
HealthPlan Services developed its private exchange platform with the advent of the Affordable Care Act. We felt that by providing a robust shop/compare and enrollment tool for medical insurance, we could attract and add value to organizations that already had a strong affinity with their membership base. Providing a private exchange platform solution to members of a credit union made perfect sense.
This month we are doing something a big different for our Spotlight series. NACUSO welcomed Frenchtown Financial Opportunity Center, LLC (FFOC) to the family. This is a unique CUSO model, one we’ve never seen before so I know you’ll enjoy reading about Chuck Adcock and how he came to help build FFOC.
What’s your current position and can you give me a brief overview of what it is you do in your work?
I am the EVP of FSU Credit Union along with the COO of our CUSOs iDriveLending, LLC and Frenchtown Financial Opportunity Center, LLC. In my role for the credit union I oversee all areas of the credit union reporting to the CEO. For both of our CUSOs, I function as the Executive reporting to the CUSO Boards.
What would you say most motivates you to do what you do? What are you most excited or passionate about?
The opportunity to serve people is what really motivates me. Through my work at the credit union along with our CUSOs, I have the opportunity to serve a broad range of members along with other credit unions. I began my career as a teller more than 20 years ago and have members that still call on me today for all their financial needs. I spend an amazing amount of time teaching financial literacy at Florida State University, Tallahassee Community College, and most of the local high schools. I love helping people gain success in their financial well-being.
I want to hear the story of how you came to work with credit unions. What attracted you to work for FSU Credit Union and Frenchtown Financial Opportunity Center?
I went to work for FSU Credit Union my freshman year of college. As a kid, my father was a banker, so I literally grew up playing in a bank vault (you can’t do that nowadays.) So, going to work for a financial institution was easy. When the credit union offered to pay for the rest of my college through its education reimbursement program, I really began to love and appreciate the opportunities that the industry has to offer. As someone, who loves to learn and to teach, a university credit union has been the perfect fit. I was particularly interested in the chance to develop the Frenchtown Financial Opportunity Center because of the educational impact we are making on an underbanked group.
Now if we can go even further back, where did you grow up and what was it like living there? Where did you go to school?
I grew up in Eustis, Florida. As a kid, the town was small enough that I once was pulled over for speeding to high school baseball practice and before I could get to the field my mother was waiting on me there because the police officer called my grandfather who incidentally was a retired deputy to let him know what happened. I attended the same schools that my parents did even being taught by some of the same teachers. Then, it was a very small town.
Who were your mentors along the way? People who deeply influenced who you are, what you believe in and what you’re committed to in your work and life? Tell me about them.
My grandfather was a very well respected law enforcement officer. He was retired by the time I was old enough to fully appreciate his influence in the community. He taught me a considerable amount about serving even those who don’t make the right choices with dignity and love.
Finally can you share something interesting about you that would surprise our readers? It can be anything, a hobby, an adventure, sports, the most embarrassing thing that’s ever happened to you,
I am rather outdoorsy, active individual. I spend a good deal of time on my boat with my wife and kids fishing the Gulf waters of North Florida. When the weather gets too cold to fish, my boys and I spend many weekends in North Georgia hunting. And, when I can squeeze in the time, I love riding my Harley through the canopy roads of Tallahassee.
PART TWO: The CUSO Business Story
Tell me the story of how your CUSO was created – the early days. Tell me about some of the memorable characters in the history, some that brought your story color, drama, comedy, conflict?
Frenchtown Financial Opportunity Center was originally the idea of Bethel Missionary Baptist Church under the leadership of Rev. R.B. Holmes. Rev. Holmes hoped to create a credit union in an underbanked area of Tallahassee known as Frenchtown. Frenchtown had once been a vibrant center for African American commerce and everyday life. After desegregation, much of the affluence of the area moved to the suburbs leaving the residents and businesses of Frenchtown to support themselves. Over time pay day lenders and pawn stores became the prevalent banking means of the Frenchtown residents.
Rev. Holmes and the church decided to apply for a credit union charter after many years of unsuccessfully seeking a bank to provide financial services to the area. During the application process, the church suspended its efforts as the economy began to suffer from the mortgage crisis. Continuing to desire to bring mainstream financial services and financial literacy to the area, a principal in the initiative, Keith Bowers, approached me about the credit union moving into a church owned facility that was already constructed to be a financial institution. Initially, we were reluctant because of the proximity of one of our existing branches. However, after more fully investigating the negative impact of payday lending and check cashing services in the area, we knew we had to do something. We decided that we could make the initiative work with a partner. We looked to our long-time collaborator and CUSO partner Envision Credit Union. ECU saw the same value that we did in changing the way an entire community banks. After a year of planning, which required teaching branch staff the products, services, and systems of both credit unions, we opened Frenchtown Financial Opportunity Center on June 10th, 2016.
The Center is a CUSO run by the staff of FSUCU focused on establishing new members for both credit unions and educating these members to break the cycle of payday lending. Many members of the church and surrounding churches are supporting the measure by moving their memberships to our credit unions. The Center is located in Frenchtown and serves as the first financial institution to ever have a presence in that community. Residents and businesses of Frenchtown have a sense of ownership and pride surrounding the initiative. Additionally, both the city and county fully support the measure as it furthers their efforts to revitalize the area.
What were the key relationships that mattered most? What were the key sources of support or resistance you encountered?
Partnering with the church was a critical step in making this initiative successful. Bethel Missionary Baptist Church and other surrounding churches in the area promote the services of the CUSO as an extension of their ministry leveraging the CUSO’s expertise in financial literacy training. Additionally, having progressive Board members that strive to embody the philosophy of the industry has been paramount to this initiative. Also, gaining support from local officials has helped drive business to the CUSO. We provide not only the products and services to improve a member’s financial well-being, but we also provide the education on how to maximize the impact of our products and services.
What have been the greatest successes in your opinion?
The CUSO is relatively new but already has seen more than 50 new memberships between the two credit union owners in just the first 60 days of existence. We have helped more than 20 members break the cycle of payday lending by qualifying them for a loan to pay off the payday lender. The large majority of the members already qualified for a conventional loan, but simply either did not know that they would or had been conditioned to think that payday lending was their only option. Likewise, we have refinanced several automobiles from title lenders cutting the interest expense to these members astronomically. Because of the close knit nature of the community, we already have people walking in saying “You helped my friend…can you help me?”
PART THREE: Reflections and Lessons
If you could start your CUSO all over again, would you do anything differently? Why and what would you do?
So far, our only regret is that we did not recognize this opportunity sooner. Our credit unions have had great success in helping our members as well as our community in general, but had never really looked closely at this model and the potential impact it might have on a specific community that so desperately needs an alternative.
Finally, when you think of the future, what gives you hope and what makes you concerned?
We hope that this concept will serve as a model for credit unions all over the country to collaborate and share the risk of really reaching into and serving impoverished areas. We believe that this model could considerably reshape communities while more firmly securing credit unions as the consumer choice for banking.
When I finally retire from credit union land I always thought that I’d volunteer. I’ve always been inspired by our volunteer board of directors. For the most part the people that are elected to a credit union have little knowledge about how to run a cooperative financial institution but they have a servant’s heart and a desire to help. Many of them come from being loyal members and know what it’s like to be a member, which is super important. I have worked with some pretty impressive boards of directors at high tech credit unions that are able to draw upon their field of membership expertise and recruit CPAs, HR professionals, Technology experts, etc. Not all are that fortunate, but it’s up to us to cultivate the best talent, give them guidance and the education necessary to make solid decisions.
Rather than wait for retirement I recently was presented with the opportunity to volunteer to fight fires and provide emergency medical services for our tiny remote town of 589 residents. We were in danger of losing our ambulance and fire truck because we did not have enough residents that were volunteers. At first I thought I might be too old. Turns out I’m more around the average age of our volunteers. Then there’s the training. I will begin formal EMT Basic training winter term at the local community college. In the meantime, a lot of this is “on the job” training. Or as I like to think of it – in the truck training.
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.
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 regulatio
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.
Jack M. Antonini
President & CEO
NACUSO Working For You
Legislative & Regulatory Advocacy Update
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.
Jack M. Antonini
President & CEO
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…)
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:
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…)
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…)
As part of the launch of the CUSO Registry, NCUA is hosting a free webinar on how to use the system on Thursday, February 11, beginning at 2:30 p.m. Eastern. Participants can Register Here for 2/11/16 Webinar