Oct. 2, 2018

CONTACT: Shelton Roulhac, NASCUS Communications; sroulhac@nascus.org

NASCUS PRESIDENT AND CEO LUCY ITO ON THE TESTIMONY OF NCUA CHAIRMAN J. MARK MCWATTERS
BEFORE THE SENATE BANKING, HOUSING, AND URBAN AFFAIRS COMMITTEE

NASCUS supports NCUA obtaining examination authority over technology service providers that provide services to federally insured credit unions, provided that NCUA relies on state examinations of service providers where state authority exists.

ARLINGTON, Va. – This morning, NCUA Chairman J. Mark McWatters testified before the Senate Banking, Housing, and Urban Affairs Committee at a hearing titled the “Implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act.”

In written and oral testimony, Chairman McWatters requested that the Committee consider legislation to provide NCUA with examination and enforcement authority over certain third-party vendors — including credit union service organizations (CUSOs). The Chairman noted the potential systemic cybersecurity risks associated with the growth of fintech and NCUA’s need for the authority to defend the credit union system from such risks.

“We continue to support NCUA obtaining examination authority over technology service providers that provide services to federally insured credit unions. However, in states with existing vendor examination mechanisms in place, deference should be given to the state authority to supervise these vendors,” said NASCUS President and CEO Lucy Ito. 

“As far back as 2001, NASCUS has supported limited NCUA authority over technology service providers, specifically. Most recently in 2015, in view of growing cybersecurity concerns, NASCUS promulgated a public policy position, again, proscribing NCUA’s authority to technology service providers with the added proviso that NCUA defers to state examinations of these entities in those states that have authority,” continued Ito.  “Indeed, state regulators already cooperate with each other and with NCUA when examining technology service providers. Addressing cybersecurity threats necessitates a collaborative state-federal effort.”

The National Association of State Credit Union Supervisors (NASCUS) is the primary resource and voice of the state governmental agencies that charter, regulate and examine the nation’s state-chartered credit unions. NASCUS membership is made up of state-chartered credit unions, state regulators and other supporters of the state credit union system. NASCUS is the only organization dedicated to the defense and promotion of the state credit union charter and the autonomy of state credit union regulatory agencies.