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NCUA Board set to propose rule related to charitable donations
The NCUA Board meets next week and is expected to issue a proposed rule related to charitable donation accounts. While details of what the proposed rule would modify won’t be available until the meeting, in November, NAFCU and other organizations called on the NCUA to amend the definition of “qualified charity” in part 721.3 of the agency’s regulations to include 501(c)(19) veterans’ organizations.
NAFCU, the Defense Credit Union Council (DCUC), the Veterans of Foreign Wars (VFW), and CUNA Mutual Group sent a letter to the NCUA flagging that although federal credit unions (FCUs) are allowed to fund a Charitable Donation Account (CDA), NCUA regulations only allow credit unions to donate to “a charitable organization or other non-profit entity recognized as exempt from taxation under section 501(c)(3) of the Internal Revenue Code.” However, the groups noted that the NCUA has authority to expand the definition of “qualified charity.”
The groups emphasized credit unions’ support of military members, veterans, and their families and how they are limited from helping veterans’ organizations by the narrow definition. By expanding the “qualified charity” definition, credit unions will be able to partner with 501(c)(19) organizations to help veterans deal with crises such as mental health issues, homelessness, and disabilities. In addition to the letter, NAFCU CEO Dan Berger met with NCUA Chairman Todd Harper in January to discuss the positive impact of such an amendment for servicemembers and their families.
The NCUA Board next week will also receive a quarterly briefing on the National Credit Union Share Insurance Fund. Share insurance has been a hot-topic in the wake of recent bank failures; NCUA Chairman Todd Harper mirrored NAFCU’s call to ensure parity with the FDIC should lawmakers look to adjust deposit insurance coverage limits during hearings this week.
NAFCU will monitor next week’s board meeting, set to begin at 10 a.m. Eastern, and provide credit unions with updates afterward. Stay tuned to NAFCU Today for the latest from the NCUA.