Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
NCUA opinion clarifies incidental powers
WASHINGTON (7/7/08)—It makes some sense that a recent National Credit Union Administration (NCUA) opinion letter originated from an inquiry from Texas—a state known for its love and support of school-level sports. In answering a question from Texas Tech FCU, Lubbock, the NCUA stated it is within a federal credit union’s incidental powers to receive payments for gift cards and track payments for one of its members. The Texas credit union was checking to see if it could perform those functions related to gift cards to be offered by Texas Tech University’s athletic department for purchases of athletic event tickets, concession goods and related apparel at the university’s athletic store. The NCUA letter signing off on the activity said: “Essentially, under this proposal, the FCU would receive and transfer funds on behalf of its member, which are traditional financial services credit unions perform for their members but, in this instance, through the electronic media represented by the gift cards, a type of stored value card product.” In a footnote, the NCUA brings up the following membership issues:
* A threshold issue for the FCU and the Athletic Department is establishing the Athletic Department as a member. We are not aware whether the Athletic Department would be considered a separate legal entity from Texas Tech University and, as an alternative, we suggest you consult with NCUA’s regional office regarding having the FCU’s sponsor, Texas Tech University, join as a member of the FCU if it has not done so already and have it be the issuer. Another option, if the Athletic Department is not a separate legal entity and eligible in its own right for membership, might be that it could be eligible under the provision in your charter for an organization of persons who are already enumerated as eligible in your charter.
In the proposed arrangement, fans would access information about gift cards on the athletic department’s web site. When a fan initiates a card purchase, he or she would be transferred by an electronic link to the credit union’s website. Also on the topic of incidental powers, credit unions are being asked to comment on a recent NCUA plan to update its rule on incidental powers for federal credit unions. The proposal would add illustrations of permissible activities under the categories of correspondent services, operational programs, and finder activities, and the Credit Union National Association seeks credit union comment by July 15. Comments are due to the NCUA by July 28.
Other Resources

RSS print
News Now LiveWire
September is National Preparedness Month. Read how your CU can get ready in #NewsNow #NPM @AgilityRecovery @Readygov
11 hours ago
Bay Area #creditunions featured in @SFBusinessTimes article http://t.co/SE7W81Ulia
13 hours ago
#NewsNow: 8 CU advisory board, new senior leaders named at @CFPB. http://t.co/EPKgHEDRRN
14 hours ago
#NewsNow: @FTC warns of government impostor scams. http://t.co/MMWBOcrqwJ
15 hours ago
Registration open for @CUNAMutualGroup's Discovery Conference #NewNow http://t.co/CATF0j9ct1
15 hours ago