Compliance Blog

Representative Paul Kanjorski, a well-known champion of credit unions (and a fellow Keystone Stater, to boot!) has introduced legislation designed to help credit unions spread out payments to recapitalize the NCUSIF over a number of years.   The legislation does a number of other things as well.  I'd say this is a must read.  Access his press release here.  NAFCU Today has a good article on the development here.

Spreading out payments doesn't lessen the amount that a credit unions would ultimately pay.  But it would help credit unions that might facePCA problems due to a one-time "whopper" NCUSIF recapitalization payment. 

Yes.  I said Whopper. 

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Hey NAFCUers: We've updated our Book of Answers.  Download it here.

For you non-NAFCUers, here's a taste:

Question: We are redesigning our account application. We see some credit unions that require two signatures – one for the credit union application, and a separate signature for the substitute W-9. Other credit unions require one signature. Which is correct?

Answer: Either method is permissible. As you stated, the IRS allows credit unions to incorporate a substitute W-9 within their membership application. AW-9 is an IRS form used to request the taxpayer identification number of a U.S. person, including a resident alien. The form also asks for certain certifications and claims for exemptions. Credit unions that incorporate a substitute W-9 into their application must clearly state certain things. The IRS has indicated that substitute W-9s that require a separate signature line for the certifications satisfy the requirement that the required disclosures be “clearly stated.” If your credit union decides to use a single signature line for the required certifications and other provisions, “the certifications must be highlighted, boxed, printed in bold-face type, or presented in some other manner that causes the language to stand out from all other information contained on the substitute form.” In addition, the IRS requires the following statement to appear immediately above the single signature line: “The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.” See Instructions for the Request of Form W-9 (Rev. September 2007), available at www.irs.gov.
May 2009