An exam-integrated CUSO review is performed as a component of a credit union exam. An EIC has the authority to decide when to perform these reviews. During an exam-integrated review, examiners will review the accuracy of information submitted by the CUSO in the CUSO Registry. It is imperative that this information is correct to accurately identify and assess risk and take appropriate action (including conducting stand-alone reviews) regarding CUSOs that present elevated risk.
When conducting an exam-integrated CUSO review, examiners should:
- Confirm the accuracy of the CUSO Registry information
- For a non-wholly owned CUSO, confirm the credit union performs appropriate vendor due diligence and follows strong third-party vendor management practices
- Review all legal opinions regarding the relationships between the CUSO and the credit union, particularly in relation to the structure of the CUSO and the limited liability structure
- Verify the credit union has a written contract with the CUSO which incorporates all the requirements outlined in NCUA regulation § 712.3, What are the characteristics of and what requirements apply to CUSOs?
- Understand and assess the risks and potential impact the CUSO’s operations have on the credit union including any financial or service dependencies
- Ensure the credit union is properly accounting for its ownership interest in the CUSO
Examiners will document this review using the examination software. This information may be used to support the need for a stand-alone CUSO review.
Reviewing CUSO Registry Information
In accordance with the NSPM, NCUA examiners are required to verify the completeness and accuracy of information reported by a CUSO in the CUSO Registry during examinations. This review step is documented in the examination software.
Because CUSOs only report information to the NCUA at the beginning of the calendar year, examiners attempting to reconcile registry data with credit union data will need to account for timing differences.
Last updated October 14, 2021
