Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
NCUA Approves Final Charitable Donation Account Rule
ALEXANDRIA, Va. (12/13/13)--Credit unions will soon be permitted to invest in hybrid charitable and investment vehicles known as charitable donation accounts (CDAs) under a new regulation approved by the National Credit Union Administration on Thursday.

Specifically, the rule clarifies that federal credit unions are authorized to create and fund a CDA, a hybrid charitable and investment vehicle, as an activity incidental to the business for which the credit union is chartered, provided the account is primarily charitable in nature and meets other regulatory conditions to ensure safety and soundness.

"This innovative rule strikes the right balance to provide flexibility, but ensures that the majority of earnings received from the account will benefit charities and communities, rather than propping up a credit union's income statement," NCUA Chairman Debbie Matz said.

The rule includes a Credit Union National Association supported change that limits total investment in CDAs to 5% of the credit union's net worth for the duration of the account. The proposed version of this rule, released in September, set this limit at 3%.

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 and when the account terminates.

CUNA Deputy General Counsel Mary Dunn noted that while the final rule made clear there is no requirement that a trust vehicle be used, if one is used the trustee must be regulated by the Office of the Comptroller of the Currency, the Securities and Exchange Commission, or other federal or state agency. "We will be talking more with NCUA about this," she said.

The final rule will become effective once it is published in the Federal Register.

For more on the NCUA meeting, use the resource link.
RSS





print
News Now LiveWire
Matz: Revised @TheNCUA #RBC rule for #creditunions 2 B unveiled 1/15/15, 90-day comment period to follow #newsnow http://t.co/qABhvghSTU
1 Day ago
Just announced: @TheNCUA board will consider a revised risk-based capital rule at its Jan 15 mtg. See #NewsNow Monday for more info.
1 Day ago
Nearing one-yr anniversary of data breach, @Target asks for class action suits to be dismissed via @BloombergNews http://t.co/kra6kupd35
1 Day ago
.@PeoplesTrustFCU has been recognized with the Juntos Avanzamos designation by @Cornerstone_CUL for its service to the Hispanic community
1 Day ago
#NewsNow: Rep. Hensarling names #HFSC subcommittee chairs. http://t.co/dXAMZdpn1p
1 Day ago