Submission of written agreements between credit unions and credit union-owned service organizations (CUSOs) will be revised to only apply to new investments in CUSOs under a proposal out for a 60-day public comment period.
The National Credit Union Administration (NCUA) has proposed a revised information collection for credit unions having an interest in the service organizations. Under existing agency rules, a federally insured credit union (FICU) must enter into a written agreement with a CUSO prior to investing in or lending money to the entity. The agreement must stipulate that the CUSO will follow general accepted accounting principles (GAAP); prepare quarterly financial statements; grant NCUA access to the CUSO books and records; and annually report directly to NCUA via an online CUSO registry.
This information collection requirements only needed to be completed one time by all FICUs with an interest in a CUSO. The agency says that going forward, written agreements will only apply to new CUSO investments, according to NCUA’s filing in the Federal Register.
The agency has also revised the burden estimate for this rule. “Since the previous submission, the NCUA has launched the web-based CUSO Registry system which has provided a better estimate of the number of CUSOs in existence,” the agency said in its public notice. “The total number of CUSOs is less than previously estimated, which has reduced the overall burden” with regard to reporting, the agency said. According to NCUA, the overall burden has been reduced to 2,666 hours, down 77% (or 8,893 hours) from the 11,559 hours the agency originally estimated.
Comments are due on the proposed change by Dec. 10.