GREENBELT, Md. — It would stifle innovation and result in the agency having to evaluate things that it doesn't know about.

Those are among the complaints lodged on Monday by three CUSO leaders about the NCUA's proposed new rule for regulating their organizations.

“I understand what they are trying to do in terms of reducing the risk but this is an intrusive way of doing that and won't necessarily accomplish it,'' said DigitalMailer Inc. President/CEO Ron Daly.

Daly, Ongoing Operations LLC President Kirk Drake and Credit Union Student Choice President Jon Jeffreys discussed the agency's proposed new rule at the luncheon meeting of the Metropolitan Area Credit Union Management Association.

Credit Union Times Editor-in-Chief Sarah Snell Cooke moderated the session.

Drake said that some CUSOs need to be examined more closely but “looking at everyone more won't get them [regulators] what they want. It will get them a pile of hay.''

When Cooke asked Jeffreys, who is also vice president of Callahan Financial Services, whether his organization had estimated the compliance costs, he replied that “it is too hard to get our arms around it.''

Jeffreys also said that the rule would create “an unfair playing field,'' for CUSOs because they would have to disclose information that non-CUSO vendors don't have to.

The NCUA's proposed rule would require all CUSOs to file financial reports directly with the NCUA and the appropriate state supervisory authority.

The board also proposed limiting federally insured state-chartered credit unions' aggregate cash outlays to a CUSO. It also proposed that less than adequately capitalized state-chartered federally insured credit unions to get permission from their regulators before making investments in a CUSO.

The rule would mandate CUSOs to use GAAP accounting, prepare quarterly financial reports and get annual audits. In addition, the rule would expand the definition of CUSO to include CUSO subsidiaries.

It was issued in July and the agency received more than 280 comments. Members of the NCUA Board and staff are reviewing the comments and the agency isn't expected to take additional action until next year.

Daly said the agency could accomplish what it wants to achieve under the existing rules.

“If they had the examiners they have [rather than issue a rule that requires them to bring on new examiners with different expertise] ask different questions it would be better. They already examine all 12 of our member credit unions regularly so they have access to lots of information,'' he said.