NCUA Cancels Third Open Meeting, Delays CUSO Final Rule

Just one day before its sixth scheduled open meeting of the year, The National Credit Union Administration (NCUA) yesterday cancelled its highly anticipated June 21 open meeting, at which the board was to consider a rule opposed by the Northwest Credit Union Association (NWCUA) that would force credit union service organizations (CUSO), whether financial service-related or not, to file financial reports with the both federal and state regulators.

Mary Sroufe, director of compliance services for the NWCUA, said that if adopted as proposed, the rule would pile additional regulatory burden onto state chartered credit unions. It is vaguely worded, and questions remain, including whether or not credit unions would be required to file reports for each CUSO it is invested in or to wholly own subsidiaries of the financial cooperative.

The open meeting cancellation was the third of the year. The closed portion of the meeting will still take place.

“Credit unions are as concerned now as they were last July when the rule was proposed,” said NWCUA CEO John Annaloro. “This proposal adds to an already over-burdened system and steps far beyond the intended powers of the NCUA and moves to capture powers legislated by Congress.”

In a comment letter to the NCUA last September, the NWCUA made it clear that while it is generally understood why the NCUA has previously been granted expanded direct access to all CUSO books by Congressional legislation, this was temporary and centered on Y2K preparations. After preparedness was ensured, Congress let those powers sunset and did not renew them.

“Therefore, NCUA should not try to gain these powers through regulation, citing general safety and soundness principles, when that authority has been so clearly denied legislatively,” the letter stated. “Rather than reaching further and regulating beyond its legislative authority, NCUA should consider consistently implementing current regulations and utilizing such abilities to accomplish many of activities and oversight sought with this new proposal.”

The next meeting is scheduled for July 19.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in NCUA, NWCUA.