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NCUA describes nominal in volunteer awards
ALEXANDRIA, Va. (9/2/11)--A Volunteer Service Award recognizing an individual director’s or committee member’s substantial length of service is permissible under the National Credit Union Administration’s (NCUA) rule limiting compensation of officials (12 C.F.R. 701.33); just make sure the award is nominal in value and in proportion to the period of service it recognizes. So says an NCUA legal opinion letter (No. 11-0805) made public yesterday. The letter was written in response to a query by Patricia O’ Connell of Quartararo & Lois, PLLC in Fishkill, N.Y., asking if Hudson Valley FCU’s policy of awarding a $250 gift card is permissible under the rule. The compensation rule provides that only one board officer, if any, may be compensated as an officer of the board and that no other official may receive compensation for performing the duties or responsibilities of the board or committee position he or she holds, the opinion letter says in part. “Our view,” the letter signed by Hattie Ulan of the office of general counsel goes on to say, “is that a monetary award to individually recognize an official’s multiple years of volunteer service--as opposed to an award periodically given (e.g., annually or bi-annually) to all volunteers or to a class of volunteers (e.g., all directors) then-serving--would constitute an incentive to volunteerism, rather than proscribed ‘compensation,’ provided that the amount per year of service is nominal. “Based on our prior opinions, and adjusted for inflation, we would consider a maximum of $50 per year of service to be ‘nominal,’ Ulan wrote. Use the resource link to read the letter.
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