NCUA Issues Letter Regarding Approval of Corporate CUSO Activities Pursuant to New Regulations
Feb. 7, 2011 NCUA's Office of Corporate Credit Unions (OCCU) issued Letter to Corporate Credit Unions (LTCCU) 2011-01 to provide guidance for obtaining NCUA approval of corporate credit union service organization (CUSO) activities pursuant to new final §704.11(e). Beginning April 18, 2011, corporate CUSOs must limit their activities to those services preapproved in §704.11(e) or approved by NCUA and published on the agency's website. The preapproved activities include brokerage and investment services. Once NCUA publishes an additional approved activity on its website, any corporate CUSO may engage in that activities within any parameters established with publication of the approval.
LTCCU 2011-01 instructs corporate CUSOs currently engaged in non-preapproved activities to apply to NCUA for approval by March 31, 2011. If the activity is approved by NCUA, the CUSO may continue providing that service. However, after April 18, 2011, corporate CUSOs engaged in non-approved activities must either cease those activities, or any corporate credit union owners/investors must extricate themselves from the CUSO by October 20, 2011.
The guidance contains detailed instructions regarding what information must be submitted by a corporate CUSO (or its corporate credit unions) to apply for NCUA approval of a non-preapproved activity. The requests should be submitted, in writing, to the OCCU and include detailed descriptions of each activity such as who uses the service, how the service or activity supports the "normal course of business" for credit unions and the regulatory requirements related to the activity.