The NCUA on Monday released guidance reminding credit unions of the expanded opportunities to work with Credit Union Service Organizations (CUSOs) and to address some of the primary related risks.
A final rule amending the NCUA’s regulation part 712 regarding CUSOs went into effect in November 2021, and expanded the list of permissible activities and services for CUSOs to include originating any type of loan that a federal credit union may originate and grants the board additional flexibility to approve permissible activities and services.
The guidance states that, based on a credit union’s relationship with a CUSO — whether sole owner, investor, lender, or customer — the level and types of risk may vary. Credit unions also need to remain mindful of and properly address any consumer financial protection risks that CUSO-originated loans pose, according to the NCUA.
Additional guidance on managing CUSO relationships and associated risks can be found in the CUSO section of the Examiner’s Guide, and the NCUA’s CUSO Activities page.