Incidental Powers Hasn't Made CUSOs Incidental, Argues One Proponent

Incidental powers regulations have brought a new set of challenges and, according to Bob Dorsa, the need for credit union management to identify opportunity.

Dorsa, the president of the National Association of Credit Union Service Organizations (NACUSO), told the CUNA Operations Council conference that many people have assumed-incorrectly, he asserts-that incidental powers spell doom for CUSOs, and, by extension, for his organization.

"CUSOs are not going away, despite the rumors that have been spread around," he said. "The NCUA, through incidental powers, has given credit unions the choice-they can do things through a CUSO, or through the credit union."

Because Americans live in a litigious society, Dorsa continued, credit unions should be aware that all investments made by the credit unions carry risk to the credit union. "Don't let regulations stand in your way," he advised. "Get with counsel, get a specialist, and evaluate what you can and cannot do."

CUSOs were formed for operational purposes, he explained, and then during the 1990s experienced significant growth as the economy and the stock market boomed. Then, like the economy, CUSOs and CUSO performance hit the skids. Dorsa believes that as the result of the enactment of the incidental powers rules, the cycle is coming back around.

Among the challenges to CUs in this new climate are: integrating different cultures and sorting out compensation and human resources issues.

Growth Opportunities

According to Dorsa, the graying of the Baby Boomer generation means trust services should be part of every credit union's growth strategy.

"Find out where your credit union fits into this continuum. Trust services are very important. Credit unions must be in line to help people transfer their wealth to the next generation."

Dorsa said other areas of opportunity include business lending, residential mortgage lending and servicing, information technology, and insurance products and services.