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Washington
CU views sought on CUSO reporting plan
WASHINGTON (8/5/11)--The National Credit Union Administration (NCUA) last month said its proposed regulation to require credit union service organizations (CUSOs) to directly file their financial statements to the agency would be “controversial,” and credit unions can forward their own comments to the Credit Union National Association (CUNA) through a comment call released this week. The NCUA late last month released its CUSO reporting proposal, which would also subject subsidiaries of CUSOs to the same financial reporting standards. Financial reports would also need to be forwarded to appropriate state supervisors. The agency previously had the statutory authority to examine CUSOs, but that authority expired in 2001, and Congress has not moved to reinstate that authority. In releasing the proposal, the NCUA noted that its current CUSO information gathering system, which partly relies on natural person credit unions that obtain services from the CUSOs to provide the majority of financial information on CUSOs to the NCUA, is inefficient. This system, and the overall lack of detailed CUSO information, "restricts NCUA's ability to conduct offsite monitoring and evaluate systemic risks posed by CUSOs," the agency added. The NCUA does currently have the authority to inspect the books and records of some CUSOs, but that authority is not universal. Agency leaders in a release said that the proposal, if enacted, would "enhance protections to consumers, credit unions and the National Credit Union Share Insurance Fund." CUNA’s comment call asks credit unions to also comment on whether CUSO subsidiaries should be covered under this rule, and whether less than adequately capitalized credit unions should be required to seek NCUA approval before they can make any investments in CUSOs. CUNA will receive comments until Sept. 16. The NCUA has requested that all comments be submitted by Sept. 26. For the full comment letter, use the resource link.


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