ALEXANDRIA, Va. - Among the alternatives to mergers are greater collaborations through CUSOs, and credit unions are calling on NCUA to adopt its proposed CUSO rule in order to broaden the types of activities credit union subsidiaries may engage in.
Navy FCU, in a comment letter on the proposal, urged NCUA to add credit card origination and payroll processing, as well as all types of lending, to the pre-approved list of CUSO activities. “Credit unions,” said John Peden, acting president of the $36-billion credit union, “should have the option of using CUSOs to aggregate volume and manage risk across all of their loan products.”
NAFCU also asked NCUA to expand its list of permissible CUSO activities to include all types of lending that federal credit unions currently are authorized to engage in.
PSCU Financial Services, the largest CUSO in the nation, asked NCUA to allow CUSOs to accept deposits–at least from commercial entities–to help them fund activities such as proposed credit card (consumer) lending.
PSCU also asked that CUSOs be allowed to participate out loans, as natural person credit unions are allowed to do. “By allowing the sale of loan participations to credit unions, the CUSO would benefit from funding and loan loss provision prospective,” said General Counsel Steve Salzer,
Kinecta FCU, which acquired a large check processing company last year, asked NCUA to amend the CUSO rule to allow the sale, processing or servicing of all money transfer instruments, and that the “primarily serves test,” requiring that a majority of CUSO customers be CUmembers, be changed for these services so the CUSO would be limited only by the members and eligible members within its FOM. (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
