NCUA issued a Letter to Credit Unions (21-CU-16) to provide clarity on the already existing authority of federally insured credit unions to establish relationships with third-party providers that offer digital asset services to the members, provided certain conditions are met.
This includes third-party provided services to allow federally insured credit union members to buy, sell, and hold uninsured digital assets with the third-party provider outside of the FICU.
Digital assets are one of many terms used to describe distributed ledger technology (DLT) based tokens.
NCUA—as insurer—does not prohibit federally insured credit unions from establishing these relationships. The authority for federal credit unions to establish these relationships is described in in the letter.
The authority for federally insured, state-chartered credit unions to establish these relationships will depend upon the laws and regulations of their states.
A federally insured credit union’s relationship with third parties offering these services and related technologies will be evaluated by the NCUA in the same manner as all other third-party relationships. This includes a federally insured credit union exercising sound judgment and conducting the necessary due diligence, risk assessment, and planning when choosing to introduce or bring together an outside vendor with its members.
According to NCUA, federally insured credit unions should establish effective risk measurement, monitoring, and control practices for such third-party arrangements.
CUNA has called on NCUA and Congress to look for ways to allow credit unions to deliver digital assets and related services.