ALEXANDRIA, Va. (Dec. 16, 2022) – The following are National Credit Union Administration Chairman Todd M. Harper’s remarks on vendor authority, as prepared for delivery, at today’s Financial Stability Oversight Council meeting.
“Thank you, Secretary Yellen, for once again including in the annual report the recommendation that Congress pass legislation that ensures the NCUA, and other relevant agencies have adequate examination and enforcement powers to oversee third-party service providers.
“As I noted in my op-ed in the American Banker (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) today, this is an important issue for the NCUA, as the agency does not currently have supervisory or enforcement authority over credit union vendors and service providers — authority that all other federal banking regulators have to oversee and examine the vendors that depository institutions use for critical services like information technology, loan underwriting, payments, and mortgage originations.
“This issue has been recognized during this Congress as the House Financial Services Committee approved a bill to provide the NCUA with third-party vendor authority and that measure was later added to the House-approved 2023 National Defense Authorization Act. In the Senate, Senators Ossoff, Lummis, and Warner have introduced, S. 4698, the Improving Cybersecurity of Credit Unions Act, to restore the NCUA’s third-party vendor examination authority.
“Ultimately, we’d like to see the NCUA’s authority over credit union service providers and vendors give credit union members the same level of protection that bank customers currently have.”