Many have heard that the NCUA is setting its sights on CUSOs. You may have read the transcript of Chairman Debbie Matz's testimony before the Senate. Or you are experiencing it firsthand with a zealous examiner shining his or her magnifying glass on your CUSO. Either way, are you prepared for the potential extra focus on your CUSO? Will you be able to quickly answer all questions with the necessary and relevant information, or will you look like a deer in headlights?

For years, CUSOs have been serving credit unions in many capacities, enabling them to use innovative ways to better provide services to members. In addition, CUSOs help drive down operating costs and increase noninterest income. CUSOs have saved and made millions of dollars for the credit union industry. Such benefits are undeniable.

Now, the NCUA would like to provide some closer parental guidance. Currently, the NCUA may examine the books and records of a CUSO but only to determine if the CUSO is a permissible investment and the effect on the safety and soundness of its owner credit unions. The NCUA currently requires owner credit unions to grant them access to the books and records of a CUSO and the examiner is charged with ensuring that the credit union's liability exposure is limited to its capital investment. This, ultimately, becomes a question of whether the CUSO is a legal separate entity, so that if there were claims made against the CUSO, the credit union would not be liable for them. There is also some consideration given to how critical the CUSO's services are to prevent debilitating effects on credit union's core services if the CUSO were unable to perform.