On June 14, Jack Antonini, NACUSO President and Guy Messick, NACUSO General Counsel met with NCUA Staff on the results of the CUSO Registry and the thinking on how CUSO Reviews will be handled.
The CUSO Registry sign-up period and the follow-up by NCUA found there were approximately 900 CUSOs. NCUA believes that there are more CUSOs that have not reported. Under the NCUA Regulations (Part 712.1(d)), “A CUSO also includes an entity in which a CUSO has an ownership interest of any amount, if that entity is engaged primarily in providing products or services to credit unions or credit union members.” So these subsidiary CUSOs are considered CUSOs and required to make annual reports to NCUA. The NCUA staff believes that many CUSOs were not fully aware of this requirement and there are a number of subsidiary CUSOs that have not reported. NCUA will be following up with CUSOs to obtain these filings. NCUA is also scrubbing the data and asking for clarification if the data is indicating that there may have been a reporting error.
For existing CUSOs that have filed, there is no requirement to update or file until the next filing period February through March 2017. However, you can choose to update or change information at any time. For a new CUSO or a company that just received its first credit union investment to make the company a CUSO, you must file with the Registry within 60 days of the first credit union investment. NCUA has requested that each CUSO name at least two administrators so that if one administrator is no longer available, or is out of the office, there is a back-up.
As you can see from the public information on the NCUA website, there is very little information provided. The Staff told us that if a person is requesting more information, NCUA will not release it without the consent of the CUSO. In our review of the service categories chosen, we noticed some CUSOs appear to be mischaracterizing themselves. For example, if you use technology in your business but are not a provider of technology services, do not list the CUSO as a technology provider as you will be under more extensive scrutiny than required.
NCUA is working to update its CUSO Review procedures to make them more relevant for CUSOs. We were given a draft of the Items Needed for a CUSO Review. This is a draft document but we have permission to share this with our members and seek input. As you can see there are general questions and questions that are specific to a type of service. Please provide your input to Shawna@nacuso.org and we will make sure it gets to the right people at NCUA.
Jack & Guy
June 16, 2016