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CUNA Tells Senate Leadership it Opposes Warren Amendment for NCUA Vendor Authority
Thursday, August 6, 2015 6:40 AM

Yesterday, Credit Union National Association President/CEO Jim Nussle sent a letter to the Senate leadership in opposition to an amendment (#2607) filed by Senator Elizabeth Warren (D-MA) related to the National Credit Union Administration's vendor authority.

CUNA opposes additional authority for NCUA to regulate third-party vendors and CUSOs. In the letter, Nussle writes, "We oppose this amendment because we believe it is unnecessary and would increase the regulatory burden to which credit unions are subject. In addition, we believe the scope of the amendment exceeds the scope of the legislation to which it is being proposed."

Nussle also questioned the need for additional authority to perform due diligence on third-party relationships that are currently subject to NCUA supervision. "Credit unions are already supervised for due diligence in third-party vendor relationships during their regular examinations, and many of the third parties on which credit unions rely also serve banks and, therefore, are subject to supervision by banking regulators."

"While the amendment will not enhance the safety and soundness of the credit union system, it will make it more expensive for credit unions to serve their members," Nussle wrote. "Further, NCUA does not presently have the capacity or the competency to directly supervise these entities; conveying this authority will require NCUA to spend considerable credit union member resources to manage and implement this authority."

In yesterday's email announcing the letter to Sens. Harry Reid and Mitch McConnell, CUNA Chief Advocacy Officer Ryan Donovan wrote, "The good news is we are hearing from Senate leadership that it is highly unlikely that this amendment will be considered by the Senate on this bill, but its filing serves as a reminder that NCUA continues to press this issue on the Hill."

You can find additional coverage in CUNA's News Now and the Removing Barriers Blog.