The National Credit Union Administration approved an ICBA-opposed rule expanding credit union service organizations' permissible services and activities to include anything federal credit unions can currently do.
Rule: The final rule expands the powers of CUSOs to engage in business, mortgage, student, and credit card lending. It passed 2-1, over the objections of NCUA Chairman Todd Harper.
Background: CUSOs are corporate entities owned by credit unions but are not mutually owned, member owned, required to serve credit union members, or overseen by credit union laws and regulations. Instead, they're privately owned and often for-profit businesses.
ICBA Comments: ICBA earlier this year urged the NCUA to withdraw the rule to avoid dramatically deregulating CUSOs and further eroding the credit union industry's tax-exempt mission while expanding risks to consumers, the fund insuring credit union member shares, and credit unions themselves.
Supervision: The NCUA does not have supervisory or examination authority over CUSOs. ICBA supports Congress expanding oversight of CUSOs and third-party vendors, which it is advocating as part of its "Wake Up" campaign.
