PSCU Financial Services, the payments CUSO serving over 500 credit unions that process their card transactions on the First Data platform has lobbied a financial ratings firm on behalf of credit unions.
MasterCard relies on ratings from LACE Financial, a financial ratings firm, in part to determine the amount of money credit card issuing credit unions have to set aside as reserves to cover card purchases, according to PSCU. The lower the rating, the higher the reserve requirements, the CUSO said, adding that Visa USA uses a similar system.
Because of the write down to capital that credit unions have taken due to the ongoing corporate CU problems, card issuing credit unions, not just PSCU members, were faced with possibly seeing lower ratings and higher reserve requirements. PSCU approached Lace Financial on behalf of all card issuing CUs to explain the situation.
"We were acting on behalf of our member-owners and the entire industry when we approached LACE Financial to request a temporary adjustment to the ratings structure for the first quarter," explained PSCU President David Serlo. "We believe these actions can help relieve further pressure on individual credit unions' capital position, which was created by the NCUA ruling to replenish the NCUSIF."
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
