CUNA backs modernization bill, calls for look at ‘regulatory gaps’

CUNA supported a credit union governance modernization bill and commented on oversight of fintech companies in a letter to a House subcommittee Wednesday for the record of a hearing on the future of financial services. CUNA hopes the subcommittee will examine the legal framework and regulatory scope governing the oversight of commercial businesses engaged in financial activity.

CUNA urged the subcommittee to look closely at the regulatory gaps that fintech and other companies exploit to provide financial services.

“Consumer protection can be vastly different when a product or service is offered by non-financial institution, and consumers do not always appreciate this difference,” it reads.

CUNA also noted its support for the Credit Union Governance Modernization Act, one of the bills discussed during the hearing. It would update the credit union member expulsion process while ensuring a fair procedure for reinstatement.

CUNA believes it would “allow credit unions the ability to better protect members and employees,” the letter reads.

The letter addresses bank sales to credit unions, and misleading critiques of these transactions.

“Banks that sell to credit unions ensure continued access to locally provided, safe and affordable financial services,” it reads. “These types of sales help prevent new banking deserts from developing. They should be encouraged—not impeded.”

The letter also notes CUNA’s opposition to the NCUA Oversight of Third-Party Vendors Act, which would permanently give NCUA the authority to examine credit union service organizations (CUSOs) and other third-party vendors used by credit unions.