Bulletin No. 2005-12-CU

In the matter of CUSOs providing services to other-than-credit-union customers

Issued and entered this 10th day of June 2005
By Linda A. Watters, Commissioner

This bulletin supersedes Bulletin No. 88-1.

The purpose of this bulletin is to provide guidance for credit unions investing in or lending to CUSOs providing services to other-than-credit-union customers.

Section 102(j) of the Michigan Credit Union Act, 2003 PA 215, as amended, MCL 490.102(j), defines a credit union service organization (CUSO) as a corporation or other organization that is engaged primarily in providing one or more products or services described in Section 407 of the Michigan Credit Union Act, MCL 590.407, to credit unions or their members and that a domestic credit union may organize, invest in, or lend to under Section 401(2)(gg) of the Act, MCL 490.401(2)(gg). The phrase "engaged primarily in providing one or more products or services ... to credit unions or their members" necessarily implies that all customers of a CUSO need not be credit unions or credit union customers.

Reviewing whether the CUSO serves primarily credit unions or their membership, OFIS will consider the following factors:

  • Gross income received from credit union customers and other-than-credit-union customers
  • Expenses related to credit union customers and other-than-credit-union customers
  • Number of credit union customers and other-than-credit-union customers
  • Time, space and employees allocated to credit union customers and other-than-credit-union customers
  • Other factors relevant to the particular circumstances

No single factor will be controlling, nor will the factors necessarily be weighted the same in each case.

Credit unions may consult with OFIS before organizing, investing in, or loaning to a CUSO which intends to provide services to other- than credit union customers. If so, a credit union may request a "no objection" letter from the commissioner. The request must:

  • Carefully describe the proposal
  • Specifically state the facts involved
  • Provide a suggested analysis of appropriate factors to be considered in making a determination
  • Apply those factors to the facts
  • Reach a conclusion on permissibility of the request.

Please include a copy of any legal opinion obtained, as well as any other relevant materials. If the commissioner agrees with the analysis and conclusion, a letter will be issued stating that the commissioner will offer no objection to the proposal.

Please feel free to contact the Credit Union Division with any questions you may have on this bulletin.

Any questions regarding this bulletin should be directed to:

Office of Financial and Insurance Services
Credit Union Division
611 West Ottawa Street
P.O. Box 30220
Lansing, Michigan 48909-7720

Phone: (517) 373-6930
Toll Free: (877) 999-6442

Signed: Linda A. Watters
Commissioner of Financial and Insurance Services