In October 2021, the National Credit Union Administration (NCUA) finalized a rule that will allow credit union service organizations (CUSOs) more flexibility to offer loan products. Effective November 26, 2021, CUSOs will be able to offer any kind of loan a federal credit union (FCU) can offer. The current rule text specific to business loan, consumer mortgage loan, student loan, and credit card origination, found in sections 712.5(c), (d), (n), and (s) will be removed and the rule will be reorganized to account for these deletions and new section 712.5(q) will contain the language on CUSO lending authority:
(q) Loan origination, including originating, purchasing, selling, and holding any type of loan permissible for federal credit unions to originate, purchase, sell, and hold, including the authority to purchase and sell participation interests that are permissible for federal credit unions to purchase and sell…
The finalized rule also adds a new paragraph (r) that will allow the NCUA Board to approve other activities for CUSOs in writing, without necessarily going through the notice and comment period. Pooling resources through CUSOs is intended to help credit unions take advantage of innovation and technology.