Corporate credit unions must monitor their CUSOs to ensure they are engaging only in approved activities and continuing to comply with all associated restrictions and requirements. In addition, corporate CUSOs are cautioned that, when engaging in approved CUSO activities, they must comply with all applicable laws and regulations, even if not specifically discussed in the matrix. For example, any CUSO that is both a corporate CUSO and a CUSO of a natural person federal credit union must comply with both Part 712 and Part 704 of NCUA’s regulations. Additionally, the corporate CUSO rule requires:
- A corporate CUSO must primarily serve credit unions and restrict its services to those related to the normal course of business of credit unions.
- Prior to making an investment in or loan to a corporate CUSO, a corporate credit union must obtain a written agreement that the CUSO will comply with all the requirements of §704.11 and will allow the auditor, board of directors, and NCUA complete access to its personnel, facilities, equipment, and records.
Where a corporate CUSO engages in activities not approved by NCUA, or the CUSO fails to comply with restrictions and reporting requirements associated with NCUA’s approval, each corporate credit union with an investment in that CUSO must divest from the CUSO, in accordance with the requirements of §704.11.