Lizeth GeorgeA concerted campaign to give the National Credit Union Administration (NCUA) third-party vendor authority (TPVA) continued last month when four former NCUA Chairs called on Congress to grant the agency supervisory powers. This effort echoes with Chairman Todd Harper’s long-stated priority to restore TPVA to the purview of the NCUA.
Former NCUA chairmen Michael Fryzel, Debbie Matz, Mark McWatters, and Rick Metsger penned a letter to the Financial Services Committee and the Senate Banking Committee stating that “Given the increasing reliance of credit unions on third-party vendors for critical functions such as data processing, deposit taking, payment services, loan servicing, and mobile and online member services, it is imperative that the NCUA be granted the authority to oversee these vendors effectively.”
While the NCUA had temporary supervisory powers between 1998-2001 as financial institutions prepared for ‘Y2K,’ that authority has since lapsed – resulting in repeated efforts from the NCUA to restore authority. In 2022, the House Financial Services Committee approved similar legislation, 24-22, giving the agency the power to audit vendors. However, the bill was never considered by the full House.
Last year, Senate Banking Committee Chairman Sherrod Brown (D-Ohio) gave public remarks at the Credit Union National Association’s Government Affairs Conference indicating that he was in favor of restoring NCUA’s TPVA. Currently, the League of Southeastern Credit Unions (LSCU) is monitoring a wide swath of legislative efforts where TPVA could be added as an amendment.
