ALEXANDRIA, Va.–The NCUA board has voted 3—0 in favor of updating its regulations around charitable donations so that credit unions can now support veterans organizations.
As CUToday.info reported here, the original proposal was made during the board’s May meeting. The new rule, technically Final Rule, Part 721, Charitable Donation Accounts, was adopted largely as proposed.
As a result of the change, NCUA’s regs have been amended to include under the definition of a qualified charity veterans groups as defined by section 501(c)(19) of the Internal Revenue Code.
As a result, credit unions can use charitable donation accounts to fund donations to veterans groups.
As noted at the May meeting, NCUA’s charitable donations account regulation was created nearly a decade ago to allow credit unions to develop charitable giving accounts that could be funded with investments otherwise impermissible for federal credit unions.
Agency staff said the comment letters received were all positive and in favor, with one letter asking for a certain clarifications, which have been made, and with four of the letter-writers asking for other groups to be included under the rule should it be amended in the future.
Harper: ‘An Important Step’
“With this final rule, the NCUA is taking an important step in honoring our nation’s many veterans,” said NCUA Chairman Todd Harper. “…What’s more, this rule makes sense and fits nicely within the credit union ethos of people helping people.”
Harper added, “The freedoms we cherish are not simply inherited. Rather, they are earned through the dedication and bravery of our servicemen and servicewomen of every generation. Their sacrifices and courage can never be forgotten, nor should their service be taken for granted.”
Hauptman: Small Change, Big Impact
“It might seem like a small change, but it has the potential to create a significant impact,” said NCUA Vice Chairman Kyle Hauptman.
Hauptman noted that nearly 30% of America’s over 137 million credit union members belong to military credit unions.
“There are also non-military federal credit unions in metropolitan statistical areas with large military populations or military retiree populations,” said Hauptman. “It is fitting to give all credit unions the ability to take advantage of Charitable Donation Accounts to support charities that benefit their military members."
In response to a question from Hauptman, agency staff said the rule requires that 51% of the total returns on charitable donation accounts must go to the charitable organization, and that that average must occur over a five-year period.
Hood: ‘Honoring the Heroes’
NCUA Board Member Rodney Hood also praised the rule.
“By incorporating certain veteran’s organizations as qualified charities, this final rule will enable federal credit unions to contribute to these entities through charitable donations accounts,” said Hood. “his would allow credit unions, especially those with fields of memberships that serve members of the military and defense organizations, the ability to better serve their members and give them more ways to support veteran’s groups and organizations.
“President Abraham Lincoln once aptly stated, ‘Any nation that does not honor its heroes will not long endure’,” Hood added. “This final rule stands as yet another stride in the NCUA continuously demonstrating our support for our uniformed heroes.”