WASHINGTON—Ahead of a hearing at which an NCUA executive again called for Congress to provide the agency with third party oversight authority, NAFCU reiterated its opposition to NCUA being given such expanded authority.
The trade association sent the letter ahead of the House Financial Services Committee Task Force on Artificial Intelligence hearing examining the use of AI within regulatory technology for the financial services industry.
Testimony by NCUA’s Kelly Lay is reported separately.
In the letter, Brad Thaler, NAFCU vice president of legislative affairs, told the committee there are tools already in place for the agency to get access to information about vendors and the that agency's time and resources are "better focused on reducing regulatory burden by coordinating efforts among the financial regulators."
‘Significant Expenditures’
Thaler further argued the implementation of such authority would incur significant expenditures for the NCUA, that would ultimately be borne by credit unions, as CUs fund the agency’s budget.
Alternatively, Thaler suggested Congress should require NCUA to measure the costs and benefits of developing a parallel vendor supervision program versus obtaining vendor examination reports from the FFIEC agencies.
"The NCUA should also supply a clear description of the stated objectives and scope of a third-party supervision program," stated Thaler, adding that Congress could require other FFIEC regulators to share their reports with NCUA, rather than authorize NCUA to create a costly duplicative program.
"NAFCU believes in a strong NCUA, but we also believe that the NCUA should stay focused on where their expertise lies – regulating credit unions," wrote Thaler.
Opposition to Act
In addition, Thaler called on Congress to reject the Strengthening Cybersecurity for the Financial Sector Act, legislation recently introduced by Rep. Bill Foster (D-IL), which would give both the Federal Housing Finance Agency and the NCUA additional third-party vendor examination authority.
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