NCUA Issues Guidance on Third-Party Providers of Digital Assets

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.


IRS Direct Deposit Limits for Tax Refunds

Compliance Alerts

National Credit Union Administration

Proposed Rule – Succession Planning: The NCUA approved a proposed rule which would require federal credit union boards of directors to establish and adhere to processes for succession planning.

Consumer Financial Protection Bureau

CFPB Launches Initiative to Save Americans Billions in Junk Fees: The CFPB launched an initiative and is requesting public to chare input on fees associated with financial institution fees. The specific items for feedback include:

  • Fees for things people believed were covered by the baseline price of a product or service
  • Unexpected fees for a product or service
  • Fees that seemed too high for the purported service
  • Fees where it was unclear why they were charged

CFPB Updates Rural and Underserved Areas List for 2022: The CFPB has updated the Rural and Underserved Areas and Counties lists published on its website to include the lists for areas determined to be “rural or underserved” and counties determined to be “rural” in 2021 for purposes of applying certain regulatory provisions in 2022.

Office of Foreign Assets Control

OFAC has updated the SDN list as of Jan. 31. The last update prior to this was Jan. 21.

Questions? Contact the Compliance Hotline: 1.800.546.4465;

Posted in Compliance News, Compliance News, Compliance Question.