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News Now

Washington
CUNA Seeks Comment On Charitable Accounts Proposal
WASHINGTON  (9/24/13)--Credit unions can now comment on the National Credit Union Administration's proposal to allow federal credit unions to invest in charitable donation accounts (CDA) while creating safeguards to ensure the donations are used for their intended charitable purposes.
 
The NCUA plan would limit total investment in CDAs to 3% of the credit union's net worth for the duration of the accounts. A minimum of 51% of the total return from such an account would have to be distributed to one or more qualified charities. Distributions could be made to qualified charities no less frequently than every five years.
 
The National Credit Union Foundation is one of these approved charities, the Credit Union National Association noted.

CUNA in a Comment Call asks credit unions to comment on whether:
  • NCUA should consider reducing the minimum donation requirement of the investment proceeds;
  • The agency should require trust companies regulated by the Office of the Comptroller of the Currency to be investment advisors registered with the Securities and Exchange Commission; and
  • The proposed 3% net worth limitation should be increased. 
Credit unions that believe this threshold should be increased should suggest an appropriate level that would ensure safety and soundness.
 
CUNA supports the NCUA proposal and has commended the agency for its willingness to create a novel structure to facilitate credit unions engaging in charitable activities. These engagements benefit the credit union system and their local communities, CUNA said.
 
The NCUA proposal was released for public comment at the September open board meeting.
 
Use the resource link to access the CUNA Comment Call. Comments are due to CUNA Oct. 15 and to NCUA Oct. 21.
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