NEWS, EVENTS, PUBLICATIONS & EMERGING ISSUES

SW&M EMERGING ISSUE
December 26, 2008

NCUA ISSUES CUSO FINAL RULE

The NCUA has issued a Final CUSO Rule, available here, which affects both federal and state chartered credit unions.

For federal credit unions, the NCUA has expanded certain permissible activities, including the sale of stored value products, credit card origination, real estate settlement services, employee leasing and support, purchase of non-performing loans, and referrals of members denied loans by the credit union.

For state-chartered credit unions that are federally insured, the NCUA has extended certain regulations to apply to these credit unions. While credit unions should read the final rule, state-chartered credit unions should pay particular attention to new Rule 741.222. This rule extends to state-chartered credit unions the requirement to seek a legal opinion on the corporate separateness of their CUSOs before June 29, 2009. The specific language of this requirement can be found at Section 712.4 of the NCUA Rules and Regulations.

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