(1) Credit unions may enter into arrangements
with third parties in order for the third party or credit union to offer the
third party's products and services to the credit union's members. These
arrangements are referred to in this rule as commercial arrangements.
In connection with commercial arrangements, credit unions
may:
(a) Allow third parties to offer
products and services to members through the credit union;
(b) Endorse, directly or indirectly, products
and services of a third party;
(c)
Enter into group purchasing arrangements with third parties;
(d) Receive payment from third parties for
participation in commercial arrangements; and
(e) Rent, lease or sublease portions of their
land and buildings to third parties to offer products and services to members.
This list is not intended to be exhaustive.
As used in this rule, the term "third party" includes, but is
not limited to, credit union service organizations.
(2) Before entering into any
commercial arrangements, a credit union's board must adopt a written policy
regarding such arrangements. At a minimum, the policy should provide for the:
(a) Evaluation of potential risk of
liability; and
(b) Approval of each
arrangement, whether by the board or management pursuant to established
guidelines.
(3) Before
entering into or renewing each commercial arrangement, a credit union must:
(a) Ensure that the arrangement is a prudent
one and that it does not present safety and soundness risks to the credit
union;
(b) Evaluate the potential
risk of liability and ensure that the credit union takes appropriate
precautions to reduce or offset such risk, including, but not limited to, the
use of such devices as disclaimers/disclosures to members and bond or insurance
coverage; and
(c) Ensure that the
contract evidencing the arrangement includes provision for indemnification of
the credit union by the third party.
(4) Credit unions must comply with applicable
laws in entering into and carrying out commercial arrangements, including, but
not limited to, any applicable federal or state law on privacy of member
information.
(5) This section does
not apply to situations where a credit union provides its own products or
services to members.