www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ Federal credit unions are limited to investing 1% of their assets, in the aggregate, in credit union service organizations. That number went into the Federal Credit Union Act in the 1970s, and when NACUSO went back and researched it, they found no legislative history explaining why 1% was chosen. It is, as NACUSO general counsel Brian Lauer puts it, truly an arbitrary number — and it is now colliding with the capital requirements of artificial intelligence, cryptocurrency, and stablecoin. In this episode, Mark Treichel is joined by Brian Lauer, general counsel to the National Association of Credit Union Service Organizations (NACUSO) and a partner at Messick Lauer & Smith P.C., for a wide-ranging conversation on where CUSOs stand and where the rules governing them are headed. Brian explains why NACUSO has shifted from a defensive posture on Capitol Hill — largely a response to NCUA’s push for vendor authority — to an offensive one. Over roughly the last 18 to 24 months the association has been on the Hill four times and returns in September, as its own organization rather than as part of an industry fly-in, pushing for changes to the Federal Credit Union Act that would eliminate the 1% cap and let credit unions manage CUSO investments on a balance-sheet-by-balance-sheet basis, the same way boards already manage capital above the statutory prompt corrective action floor. The conversation also covers a second statutory issue that gets less attention: the "primarily serves" limitation. As Brian describes it, "primarily serves" is not a limitation on investment powers in the Act, but when NCUA wrote the modern CUSO regulation in the 1990s it conflated investment and lending and applied the standard to both. The practical effect is that a credit union asking for a strategic seat at the table with a technology company has to tell that company half its business must be with credit unions — and the company is usually the one that walks away. Elsewhere in the episode: why NCUA’s CUSO numbers are unreliable, with the most recent registry list dating from 2024 and no verification of the self-reported data, even as Brian’s own practice forms 30 to 40 CUSOs a year; the consolidation and acquisition activity now visible in the CUSO space, including third-party vendors buying CUSOs that fit their lanes and regional CUSOs merging across geographies; and what a one-member NCUA board does to the regulatory pendulum — faster swings, Brian argues, with less compromise built in. The episode closes on the GENIUS Act. CUSOs are named in the legislation, which Brian calls a real win, and federal credit unions that want to issue a payment stablecoin will need to do it through a CUSO. He makes the case that credit unions need a stablecoin of their own for the same reason they needed shared branching, that the only way it works is through collaboration among a large group of credit unions — he estimates closer to 1,000 than 100 — and that adoption will likely be slower than the conversation suggests, with the payments side mattering most. Mark adds the argument that moved him from skeptic to something closer to convinced: if stablecoin helps keep the dollar the world’s reserve currency, that is a reason to want it developed here rather than somewhere else. Brian can be reached through his firm at cusolaw.com and on LinkedIn. NACUSO’s annual conference is in Las Vegas in the spring of 2027, and the association also runs the VentureTech event for credit unions focused on technology. Concise version — social and discovery Federal credit unions can invest only 1% of assets in CUSOs. That number went into the Federal Credit Union Act in the 1970s, and there is no legislative history explaining where it came from. Brian Lauer, general counsel to NACUSO and a partner at Messick Lauer & Smith P.C., joins Mark Treichel to explain why that arbitrary ceiling now matters more than it ever has — and what NACUSO is doing on Capitol Hill about it. Inside the episode: the 1% cap and the campaign to remove it; the "primarily serves" limitation that keeps credit unions out of strategic fintech investments; why NCUA’s CUSO count cannot be trusted; CUSO consolidation and acquisition activity; what a one-member NCUA board does to the pace of regulatory change; and why any credit union stablecoin under the GENIUS Act will have to be issued through a CUSO — and will only work through collaboration.
