If the agency was granted the authority, Matz said the NCUA would be on the forefront of detecting cyber threats. She vowed to remain aggressive in advocating for the authority in meetings with lawmakers.

“Particularly in this day and age with the trades going to Congress and the White House talking about the need for additional protections dealing with cybersecurity, this goes hand in glove with those requests,” Matz said.

She continued, “Asking the president and Congress to do something on cybersecurity and not giving the regulatory agency authority that we need when we're closest to the industry and can have the most direct impact on cybersecurity is shortsighted.”

Larry Fazio, NCUA director of examination and insurance, requested authority over third-party vendors during a recent Senate Banking Committee hearing on regulatory relief for credit unions and community banks.

Read more: NACUSO responds …

Jack Antonini, president/CEO of NACUSO, said the NCUA seemed to be out of touch with the purpose of the hearing. He called the NCUA's request a sweeping expansion of regulatory authority that is at odds with the Senate Committee's stated goal of reducing regulatory burdens.

“Instead of suggesting how NCUA can help meet the growing need of credit unions and credit union service organizations to reduce unnecessary regulatory burdens, NCUA took the opportunity to ask Congress for additional regulatory authority,” he said.

Antonini said the NCUA is already able to track what CUSOs are doing though their regulation of credit unions that own CUSOs. He argued that CUSOs are hardly a systemic risk and there have been very few CUSO failures.

“We would submit that, where there have been occasional CUSO failures, they did not result from a lack of NCUA authority over third-party vendors and CUSOs but rather a failure of NCUA to effectively utilize the authority the Agency already has under existing law and regulation,” he said.

NACUSO has created an advocacy fund with contributions from the association's members and retained the services of a governmental relations entity to communicate their opposition to Congress. NACUSO leadership has also taken its message the congressional offices of members on the banking committees.

“If NCUA gets vendor authority, it will be examining thousands of additional businesses, where they don't have the expertise, and it will be very costly and ultimately the credit unions will bear the cost of this. In a nutshell that is why we are opposed to this action,” Antonini said.

Matz was asked if the NCUA is prepared to take on the authority to examine third-party vendors and if the agency would have to hire additional staff.

“We're hiring more specialists now and currently one of the focuses of the specialists we're hiring is on cybersecurity so I don't know if we would need more. My hope is that we would have the staff and the skill to perform those exams without having to do any special hiring in order to meet the requirements of that authority if we get it,” she said.