Once again, the Financial Stability Oversight Council is calling on Congress to give the NCUA examination and enforcement powers over third-party service providers.
The NCUA is among the few financial regulators that does not have such powers, the FSOC said in its 2017 report, released Thursday. The council said granting the agency the supervisory power would assist in coordination among state and federal regulators.
“This will both reduce potentially conflicting and duplicative regulatory oversight and promote more consistency in cybersecurity,” the council said.
The FSOC is a multi-agency board charged with identifying and responding to threats to the U.S. financial services system. NCUA Board Chairman J. Mark McWatters sits on the council.
The council made the same recommendation in past reports, but credit union trade groups have opposed the proposal, contending that it would impose an unnecessary regulatory burden on the credit union industry.
The council also repeated its warnings about credit unions whose memberships are concentrated in the energy and transportation sectors.
“Although credit unions’ close ties to specific geographies or business organizations offer certain advantages, localized economic distress can present these institutions with certain unique challenges,” the FSOC said.
The council said the fall in the price of oil led to decreased investments and layoffs in energy companies, placing strains on the credit unions exposed in that sector.
The council also said credit unions exposed to the taxicab industry have been placed under stress because of competition from the ridesharing industry.
NCUA board member Rick Metsger recently said the NCUA may be forced to increase loss reserves for the Share Insurance Fund as the value of taxi medallions plunges, putting credit unions that made medallion loans at risk.
