PRESS RELEASE
June 30, 2008
ARLINGTON, Va. — NASCUS submitted comments to the National Credit Union Administration (NCUA) on June 30 to encourage the agency to work with state regulators to oversee credit union service organization (CUSO) issues without additional regulatory burden to federally insured, state-chartered credit unions (FISCUs).
NCUA requested comments on changes to Part 712 that would extend requirements to FISCUs for corporate separateness and grant NCUA access to CUSO books and records of state credit union CUSOs with federal credit union investments.
Regarding corporate separateness, NASCUS agrees with NCUA that it is sound business practice for credit unions to maintain corporate separateness from their CUSOs. However, NASCUS recommends that if the agency promulgates a separateness rule for FISCUs, NCUA should incorporate the requirements in Part 741 rather than by reference to Part 712.4. “The use of cross-references in Part 741 is a confusing and problematic format, creating inefficiencies for state-chartered credit unions and state and federal regulators,” stated the NASCUS comment letter.
NASCUS also focused its comments on issue of access to CUSO books and records. Many state regulators have extensive authority to examine and regulate CUSOs. NASCUS urges NCUA to consider working within the parameters of state authority before unilaterally applying the proposed rule to FISCUs. “Should NCUA choose to apply the rule to all FISCUs without considering state authority, the agency would be adding a redundant regulatory layer upon FISCUs without any demonstrable corresponding improvement in oversight,” stated NASCUS. At a minimum, in cases where NCUA’s concerns regarding the true condition of a credit union’s investment in a CUSO may be satisfied by working with the state regulator, NCUA should exempt that state’s FISCUs from the proposed requirement.
Moreover, NASCUS suggests that any provisions of the proposal that apply to FISCUs should be fully incorporated within Part 741, the insurance regulations, rather than incorporated by reference. NASCUS explains that by incorporating the CUSO provisions in Part 741, NCUA can reduce confusion and mitigate, to a certain extent, the regulatory burden for FISCUs.
To view NASCUS’ comment letter, follow this link to the NASCUS Web site.
Information
Contact:
Kate Hartig, Director, Communications and Public Affairs,
(703) 528-0669 or kate@nascus.org
The
NASCUS mission is to enhance state credit union
supervision and advocate a safe and sound state
credit union system.
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