Written by Brandy Bruyere, Regulatory Compliance Counsel
Since it is Friday, and I am a bit rusty on blogging, we will keep it rather short today. On December 10, The NCUA issued this month’s issue of The NCUA Report. While this issue largely focuses on NCUA budget issues, the Region III Report focuses on the CUSO rule which went into effect in June, 2014. This article aims to clear up “some confusion as to what the rule does or what is required from a credit union and its CUSO” by providing a summary of the rule’s main requirements:
- An extension, for consistency, of the CUSO rule to all federally insured credit unions. Prior to this change in November 2013, rules governing CUSOs only applied to federal credit unions.
- The requirement that a CUSO must agree to:
- Prepare quarterly financial statements.
- Account for its transactions in accordance with generally accepted accounting principles.
- Obtain an annual financial statement audit by a licensed certified public accountant.
The Report also reminds credit unions that in addition to the CUSO reporting requirements, credit unions must continue to conduct risk assessments of their relationships with CUSOs. Here are questions the Report suggests credit unions ask when evaluating a CUSO relationship:
- Does the service provided by the CUSO benefit the existing members of the credit union?
- Does the CUSO conform to the requirement of primarily serving credit union members and not other interests or parties?
- Is a legal opinion needed to determine permissibility of the proposed structure of the CUSO?
- Is the investment in or loan to the CUSO a suitable avenue for revenue growth or expanded services for members?
Introducing Nolan! I have been absent from blogging for a while because my husband and I welcomed baby Nolan in early October. Nolan was 9 pounds, 8 ounces at birth, good thing he came a few weeks early! Here are a few photos of our little guy, including one with his best dog buddy, Lemmy.