WASHINGTON–A draft bill that would give NCUA oversight over third-party vendors and CUSOs to credit unions is being circulated in the House Financial Services committee, sources have told CUToday.info.
The proposed legislation would seek to modify the Federal Credit Union Act as currently written. The language in the draft bill would also seek to provide the Federal Housing Finance Agency with certain expanded powers, as well.
A sponsor for the proposed legislation has not yet been publicly identified and similar legislation has been discussed in the past.
Bipartisan Board Support
Third-party oversight authority has been long sought by NCUA and has bipartisan support among the current three members of the board. Chairman Todd Harper, Vice Chairman Kyle Hauptman and Board Member Rodney Hood have separately and collectively made multiple statements related to gaining oversight over third parties, including CUSOs, during board meetings, public events and during congressional testimony.
NCUA has said it is particularly concerned with risks to credit unions from cyber-breaches by third parties that would put member data and perhaps a credit union itself at risk.
CU Pushback
As CUToday.info has reported, the credit union trade groups have pushed back hard against any expanded oversight authority by NCUA, arguing the agency already has all the authority it needs.
“This issue has been percolating beneath the surface for several years, and I’m not surprised that it’s about to break into the open,” said John McKechnie, senior partner with the Washington advocacy firm Total Spectrum, who has also held positions with both CUNA and NCUA. “During Y2K there was a lively debate about third-party exam authority, and I expect the arguments surrounding this will be dusted off again.”