NCUA Issues Guidance on Third-Party Providers of Digital Assets
February 1, 2022
The National Credit Union Administration issued Letter to Credit Unions 21-CU-16 to provide clarity about the already existing authority of federally insured credit unions (FICUs) to establish relationships with third-party providers that offer digital asset services to the FICU’s members. This includes third-party provided services to allow FICU members to buy, sell, and hold uninsured digital assets with the third-party provider outside of the FICU.
Introducing members to third parties that may provide members with services related to digital assets is permissible as it: (1) is useful in carrying out an FCU’s business because it facilitates member services that allow an FCU to serve as their members’ primary financial institution; (2) is the logical outgrowth of an FCU’s business, including its role in serving as its members’ primary financial institution; and (3) involves risks similar in nature to those FCUs already assume in serving their members, including referring members to various third-party service providers of other non-deposit financial products and services.
FICUs must comply with applicable laws and should follow safe-and-sound business practices in the provision of digital asset services through third-party arrangements. FICUs should fully evaluate the risks involved with digital asset activities, including legal risks, reputation risks, and economic risks. In light of the rapidly changing technological environment and the variety of digital asset products and services available, FICUs should actively monitor that they, and the third-party service providers they facilitate member relationships with, remain in ongoing compliance with all laws. FICUs should ensure that effective risk measurement, monitoring, and control practices are in place to successfully manage such third-party arrangements once established.
The Letter to Credit Unions also provides guidance on:
- Due Diligence,
- Credit Union Policies, Procedures and Agreements, and
- Advertising and Conduct in Third-Party Arrangements
Question of the Week
Q. Is there a limit on how many direct deposits an account can receive from the IRS for tax refunds?
A. Yes. In order to combat fraud and identity theft, the Internal Revenue Service (IRS) limits the number of tax refunds that can be deposited to a single financial account to just three direct deposits. If the IRS receives refund requests beyond the limit for the same account, the IRS will issue a notice to the taxpayer informing them that the account has exceeded the direct deposit limits and that they will receive a paper check in approximately four weeks.
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Questions? Contact the Compliance Hotline: 1.800.546.4465; firstname.lastname@example.org.