House Version of NDAA Gives NCUA Third-Party Oversight Authority; League Opposes Expansion of NCUA Authority

Source: CUToday.info

While the credit union trade associations have hailed House passage of the National Defense Authorization Act because it includes amendments backed by CUs, getting less attention with last week’s passage is the fact the bill would also give NCUA oversight of third-party vendors.

Your League remains engaged on this issue and other provisions of interest to credit unions in the NDAA as the Senate begins its work on the legislation.

And that’s something CUNA, NAFCU, the National Association of CUSOs and others within credit unions have strongly opposed, even as the agency has sought the authority for years.

As CUToday.info was first to report in May, a discussion draft of legislation that would provide NCUA with third-party oversight authority was circulated in the House of Representatives.

The bill providing NCUA oversight authority was originally HR 7022, introduced by Rep. Bill Foster (D-IL).

Such oversight has been a long-time priority of numerous members of the NCUA board, including its current three members. The agency argues other regulators have the authority and that the inability to oversee the many vendors, including CUSOs, to credit unions creates numerous vulnerabilities, most especially in data security. 

The CU trade groups have argued NCUA already has all the oversight authority it needs, including over vendors.