WASHINGTON—NAFCU's Ann Kossachev is urging the Social Security Administration (SSA) to extend the initial enrollment period – which is currently set to end today at 6 p.m. ET – for its electronic Consent Based Social Security Number Verification (eCBSV) service. Institutions could begin enrolling in the system July 17.
"NAFCU is concerned the short enrollment period and subsequent inability to enroll again for up to two years may disproportionately disadvantage smaller financial institutions like credit unions," wrote Kossachev, NAFCU's director of regulatory affairs. "Additionally, the proposed fees for the program are likely to make the service cost-prohibitive for some credit unions."
The service – expected to launch to a limited number of users in June 2020 – will allow financial institutions to verify the identity of credit applicants, helping to reduce identity theft and other financial fraud. Consent can be given via electronic signatures, as long as they are ESIGN compliant.
Kossachev recommended that the SSA reevaluate the enrollment process and extend the deadline for initial enrollment to allow credit unions and other financial institutions more time, or permit a second enrollment period during the expanded rollout next year.
Other Recommendations
Kossachev also encouraged the agency to consider ways to offer enrollment at a reduced cost for smaller institutions.
"The SSA should structure its rollout of this important, statutorily mandated new tool with attention to how financial institutions of all sizes may participate and how smaller financial institutions are likely to be impacted should the parameters of the rollout inadvertently prohibit their participation," she said.
Senate Urged to Tighten Oversight on Fintechs
Separately, ahead of a Senate Banking Committee hearing on cryptocurrencies and blockchain, NAFCU reiterated what it said is a need for appropriate oversight of new financial technologies to protect consumer data and compete on a level playing field with credit unions.
"Congress and regulators must ensure that when companies offering digital currencies compete with financial institutions, they do so on a level playing field where tested regulations and consumer protections apply to all actors," wrote NAFCU Associate Director of Legislative Affairs Max Virkus in a letter to the committee. "It is clear that digital assets pose a unique risk and regulators must be equipped, with suitable Congressional oversight, to provide supervision over these markets to protect consumers and our economy."
Virkus added that "NAFCU is supportive of innovation in the marketplace that maintains an inclusive, safe, and strong financial system." The association acknowledges that fintech can produce real benefits to consumers, including increased speed, convenience and new product offerings that make it easier for them to manage their financial lives.