Voglio sapere a riguardo di…

lotter on DSK11XQN23PROD with RULES1

Federal Register / Vol. 86, No. 205 / Wednesday, October 27, 2021 / Rules and Regulations because it would result in increased lending opportunities. One of the reasons for increased lending discussed was CUSOs potential to lower costs through economies of scale. Several commenters stated that CUSOs enable FCUs to share costs, distribute risk, and provide scale. A few commenters specifically stated that the proposed rule would enable smaller FCUs to continue their lending activities but, instead of keeping their lending operations in-house, utilize the services of a CUSO to generate loans.
In contrast, several commenters who opposed the proposed rule believed that CUSOs would bring unnecessary competition, particularly for smaller credit unions. Some commenters stated that the proposed rule could benefit certain, larger FCUs, but it could hurt other, smaller credit unions as wellfunded CUSOs could capture potentially significant market share.
One commenter noted that past NCUA
Boards have been concerned that CUSOs only benefit large credit unions and once noted that smaller credit unions have been unable to meet minimum eligibility requirements in order to partake of CUSO services. One commenter noted there is no evidence FCUs need help with non-complex consumer loans or auto loans. Other commenters stated that the proposed rule would not result in increased lending and that CUSO-originated loans sold to credit unions do not drive credit union loan growth.
A few other commenters believed that the rule could be anti-competitive as it may result in additional industry consolidation because small credit unions could lose market share.
The Board has considered the differing viewpoints on this issue and determined that this concern does not warrant refraining from adopting the rule as proposed. As discussed in the introduction to this preamble, the Board has re-examined its historical stance on competition as it relates to CUSO
activity and small credit unions.
First, it is not clear that the Board should, as a matter of principle, consider shielding credit unions from competition as an important consideration in its rulemaking.48 Doing so may result in stagnation and could produce overall negative results for the credit union system and the NCUSIF
over time.
Second, the NCUA currently does and will continue to provide significant 48 See Fed. Commcns Commn et al. v.
Prometheus Radio Project et al., No. 191231 Apr.
1, 2021, Thomas, J., concurring discussing whether the FCC should have considered a nonstatutory factor in its rulemaking.

VerDate Sep<11>2014

18:39 Oct 26, 2021

Jkt 256001

support and flexibility to small credit unions through various regulatory and supervisory programs. These efforts recognize the challenges that these small credit unions face by reducing regulatory burdens. For example, the NCUA has a small credit union examination program that streamlines the examination process for small FCUs with a record of solid performance.49
The Board believes the final rule presents an opportunity for all credit unions to work collaboratively. It is the Boards belief that the final rule has the potential to benefit all credit unions, especially smaller credit unions, if they can effectively pool their resources to form new technology. The Board also believes the final rule would likely be a net benefit to the entire system. The Board acknowledges there would likely be additional competition for credit unions, particularly certain smaller credit unions, but this rule provides additional flexibilities to permit the credit union system to offer enhanced lending products. The Board believes that under the final rule, credit unions will have an enhanced ability to collaborate and create better lending products for their members.
For each of these reasons on their own, and in their totality, the Board finds that it is prudent to proceed with this final rule despite this objection.
Types of Loans Some of the commenters who favor the rule encouraged the NCUA to finalize expansive lending authorities for CUSOs as lending opportunities are always evolving. Several commenters stated that there are currently companies looking for FCU partners that originate solar, renovation, boat, and airplane loans. One commenter expressed concern that these types of loans might cause credit unions to focus on loans for luxury items to the detriment of lowand moderate-income members.
The Board has not limited the types of loans a CUSO can originate provided that the loans are the type of loan an FCU is able to originate. Contrary to the concern of one commenter, the Board does not believe that focused CUSO
activity would detract from individual credit unions focus on providing financial services to all their members, as required by fair lending laws.
Auto Loans and National Lending Several commenters who support the proposed rule stated that the proposal is necessary for FCUs to remain competitive as lending becomes more 49 See,
PO 00000

12FCU03 2012.

Frm 00019

Fmt 4700

Sfmt 4700

59297

standardized and consumers move online for more of their financial services. Many commenters discussed a recent trend to point of sale financing.
According to these commenters, consumers are acquiring credit at the point of sale, instead of acquiring credit through a credit union first.
Commenters were particularly concerned about this trend for auto loans. These commenters expressed concerns that point of sale sellers are not interested in working with credit unions. The challenge, according to some commenters, is that a large, nationally focused seller is unlikely to secure relationships with thousands of individual credit unions. This presents an opportunity for CUSOs to help the credit union industry with their collaborative business model. Some commenters believed credit unions risk diminishing market share if CUSOs are not permitted to contract with national lenders. One CUSO commenter stated that CUSOs could easily use a common platform and participate out loans to credit unions within the geographic area in which members are located.
A few of the commenters who opposed the rule highlighted the established relationships some credit unions have with local dealers. These commenters were concerned that national lending CUSOs would threaten these existing relationships.
The Board finds that the comments on this issue generally support the regulatory changes. The Board agrees that expanding CUSO lending authority to cover auto loans may help credit unions compete at the point of sale.
Existing data also supports the Boards belief that small credit unions are struggling to compete in auto lending and that the final rule may support small credit union auto lending efforts.
The largest 150 credit unions have seen significant expansion of their auto lending market share over the prior two decades, while smaller credit unions have lost market share almost every year.50 The data indicates that smaller credit unions are becoming increasingly less competitive in the auto lending space.
The Board also recognizes that, despite the stated intent of the proposal, some credit union relationships with local dealers could be displaced by this rule, as they equally could be by other market forces. As discussed previously in response to concerns regarding additional competition for some small 50 The Board notes, however, that during this period, the number of credit unions with less than $1 billion in assets also decreased by over fifty percent.

E:FRFM27OCR1.SGM

27OCR1