NEWPORT BEACH, Calif. (11/7/14)--Recent developments in the regulatory climate around credit union service organizations (CUSOs) have led the National Association of Credit Union Service Organizations (NACUSO) to take steps to respond. The organization announced this week that it will establish an advocacy fund, and that it is examining the possibility of a lawsuit against the National Credit Union Administration.
NACUSO says the fund will "supplement its efforts to promote and protect a collaboration/CUSO friendly regulatory climate."
As defined by the National Credit Union Administration, CUSOs are "any entity in which a federally insured credit union (FICU) has an ownership interest or to which a FICU has extended a loan, and that entity is engaged primarily in providing products or services to credit unions or credit union members."
According to NACUSO, it is concerned that the NCUA's recent rule requires CUSOs to directly report information to the NCUA, even though the agency does not have regulatory authority over such organizations.
Per its statement, NACUSO says it has not made a final decision about pursuing a lawsuit against the NCUA in response to the NCUA's CUSO rule.
"Suing the regulator is a step that should not be taken lightly. We are in the process of discussing the industry's concerns with NCUA and will evaluate their response," the statement reads.
Other concerns of NACUSO include:
"NACUSO believes that these actions will have a chilling effect on collaborative options for credit unions and adversely affect the ability of CUSOs to provide innovative, collaborative, competitive and effective solutions for credit unions," reads a statement released by NACUSO earlier this week.
According to the organization, it has hired a law firm experienced in challenging the government in rulemaking matters and has obtained a legal opinion "that called into serious question the ability of NCUA to require the direct reporting of information to NCUA as well as direct examination by NCUA of CUSOs and the procedures NCUA used in passing the CUSO regulation."