At its January 2021 board meeting, the NCUA Board voted 2-1 in favor of a proposal that would grant credit union service organizations expanded authority to offer loans. Currently CUSOs can offer mortgages, credit cards, business loans, and student loans. The proposed changes will allow CUSO to expand their offerings into auto and payday loans–in short, any kind of loan that a federal credit union can originate.
The comment period for the change ends March 29. The American Banker’s Association is requesting that the comment period be extended another 60-days to May 28.
In their request letter, the ABA stated it requires additional time to “read, understand, analyze evaluate the proposal and the nature and extent of its impact and the risks imposed upon consumers, communities, and the financial services industry.” Also cited was NCUA Chairman Todd Harper’s opposition to the proposal, who in January said “There is no economic analysis to make the business case for expanding this unfettered lending authority.”
Board Members Kyle Hauptman and Rodney Hood voted in favor of the changes, with Hauptman commenting fears of CUSOs abusing the ruling to harm members were “unfounded.”
Though few comments have been submitted, credit unions have voiced their support of the decision, which will provide added support in surviving in thriving in the current financial landscape.
The request is under review.