As the NCUA considers allowing credit union service organizations (CUSOs) to originate all loans that federal credit unions can originate, NAFCU’s Aminah Moore offered the association’s support but cautioned the agency against future efforts to permit additional CUSO activities without going through a transparent rulemaking process.
In addition, Moore, NAFCU’s regulatory affairs counsel, encouraged the NCUA to reconsider its interpretation of the lending and investment authorities in the Federal Credit Union (FCU) Act.
“Investment in financial technology (fintech) should not be limited to investments in CUSOs,” Moore wrote. “To remain competitive in a fintech landscape where larger banks can easily acquire startup talent and innovative products in their infancy, credit unions need the authority to invest as stakeholders in promising technology companies without needing to rely on the limited functionality of a CUSO to make strategic inroads with financial product developers.
“Due to the COVID-19 pandemic, credit unions are trying to figure out where to allocate their liquid assets. Because of their limited direct investment powers, credit unions are potentially missing opportunities to invest directly in innovative and beneficial new strategies that would serve members well and lead to additional growth and stability for the industry,” she added.
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