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 supercedes
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
Printer Friendly
Text Version 
Email Page
