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FCUs are not trusts of union sponsors
WASHINGTON (7/20/09)—In a recent legal opinion letter, the National Credit Union Administration (NCUA) responded to an inquiry about whether a federal credit union is obliged to provide financial information to its sponsor labor union for the union’s annual Department of Labor (DOL) report for labor trusts. The NCUA stated that a federal credit union is not a trust within the meaning of the applicable DOL rule and, therefore, should not provide the financial information for the report. The inquiry was sparked by a recent DOL rule requiring labor unions to file a disclosure, Form T-1, for any trust “to which they contributed money or otherwise provided financial assistance or over which they exercised managerial control.” The NCUA’s legal opinion noted that three elements determine whether an entity is a trust for the purposes of a T-1 filing. They are:
* An entity must have been created or established by the labor organization, or the labor organization must have selected a member of the trust’s governing board; * It’s primary purpose must be to provide benefits to the members of the labor organization; and * The labor organization must select a majority of the board of directors or comprise 50% or more of an entity’s receipts over the course of the year
In the July 6 letter addressed to CFO Jeff Hampton of Operating Engineers Local Union No. 3 FCU, Livermore, Calif., NCUA Associate General Counsel Sheila Albin wrote that none of the three elements are satisfied.
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