ALEXANDRIA, Va. – The NCUA Board yesterday proposed a broad expansion of CUSO powers, including a provision that would allow the growing number of credit unions contemplating the sale of their credit card operations to move them off the books and into a separately owned CU Service Organization, or CUSO.
In proposing the rule, NCUA noted that increasing numbers of credit unions–more than 400–have sold their credit card portfolios in recent years. Under the proposal, federal credit unions would be able instead to conduct credit card loan originations through a CUSO.
NCUA also proposed to add several services to the permissible activities of the CUSO rule: the purchase and servicing of non-performing loans; business counseling services; referral and processing of loan applications to members turned down by the credit union for a loan; payroll processing services; and employee leasing.
CUSOs, like federally chartered credit unions, would also be allowed to provide money transfer and check cashing services to anyone within the participating credit unions’ field of membership, just as credit unions were allowed to do last year.
The proposal would also tighten regulatory oversight of CUSOs by authorizing NCUA to examine any CUSO partially owned by a federally insured credit union, even if the credit union is a state charter.
The CUSO proposal was issued for a 60-day comment period.
