CUSO Conundrum: Service ToNon-Members

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LAS VEGAS - (05/11/05) – The demise of the CUSO, postIncidental Power Act, allowing credit unions to do many of the samethings in-house, may have been overblown. One main reason: thecontinued ability of CUSOs to do business with non-credit unionmembers—just less than half—helping to defray the costsof services and products to credit union members and earn a profit,er, net income, in the process. The CUSO difference, as well as arecent legal opinion letter issued by NCUA stating that federalcredit unions can not earn any income, including reimbursement ofcosts, from dual-employees, is creating confusion among creditunions. This letter could cause havoc for credit unions seeking toprovide services, like check cashing or shared branching, to othercredit unions, as well as those providing their members withinvestment services, Brian Witt, a well known credit union attorneysaid during the annual NACUSO convention Tuesday. “You mayhave to go back to a CUSO to perform these services,” Wittsaid.

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