Expanded Credit Union Service Organization (CUSO) lending authority will allow CUSOs to better serve credit union members, CUNA wrote to NCUA Friday. NCUA issued a proposal in February to expand the list of permissible activities and services for CUSOs to include originating any type of loan that a federal credit union may originate.

“CUNA supports the proposed changes detailed in this proposed rule and encourages the Board to implement a final rule incorporating these changes,” the letter reads. “Moreover, the Board should move quickly to propose a rule expanding FCUs’ investment authority in organizations, as CUNA members are missing out daily on opportunities to work with entities outside of the current CUSO structure.”

CUNA also notes that the proposal, rather than a major expansion of permissible CUSO activities—shows NCUA is recognizing lending is becoming increasingly complex, and that “that pooled resources through CUSOs may be necessary for some credit unions should they want to continue to offer loans to members in today’s and tomorrow’s evolving marketplace.”

“CUSOs’ current lending activities demonstrate that there is a place in the market for both credit unions and CUSOs to lend directly to consumers,” the letter reads. “In the future, we see greater necessity for credit unions to pool resources through CUSOs to compete with large banks and fintechs or run the risk of being unable to offer loans either directly or through a credit union-controlled entity.”