NCUA Examiners Stuck in Guam, Board Expands Meaning of 'Qualified Charity' for CUs

During opening statements of Thursday’s NCUA board meeting, Chairman Todd Harper said seven examiners happened to be in Guam working as the Category 4 Typhoon Mawar struck the island earlier this week.

The storm has left nearly the entire island nation without power. Harper said, “Our team sheltered in place together and are safe. We are trying to get them out in the coming days.” Both Vice Chairman Kyle Hauptman and Board Member Rodney Hood expressed their hopes the examiners would be able to get home soon.

Adding New Meaning to Qualified Charity

In a 3-0 vote, the NCUA board approved a proposed rule to amend the charitable donation accounts portion of the incidental powers regulation to include “war veterans’ organizations” to the definition of “qualified charity” that credit unions may contribute to using its charitable donation account.

The rule was last updated in 2013 and board members agreed it was time to expand the definition to not only open more charitable doors for credit unions, but to help those members and communities connected to the military and military charitable organizations.

The proposed rule added “veterans’ organizations” as defined by the Internal Revenue Code 501(c)(19) and aligned it “with the purposes of the current charitable donation account rule.”

Chairman Harper said, “Within the credit union system, we have many credit unions with fields of membership that specialize in serving military branches, military bases and defense-related organizations. With this proposed rule change, we will allow them to better serve their members and to fulfill their missions. That’s good for veterans, good for military families, good for credit union members, good for credit unions and good for our country.”

Credit union officials are encouraged to comment on the proposed rule. Those comments are due no later than 60 days once it’s published in the Federal Register.

READ MORE: Charitable Donation Accounts proposed rule.

SIF Health

During Thursday’s meeting, board members were briefed on the Share Insurance Fund (SIF) performance during the first quarter of 2023.

NCUA staff projected a 1.25% equity ratio for the SIF as of June 30.

According to the briefing, the SIF reported a net income of $41.9 million with a net position of $20.9 billion as of the end of the first quarter. Total assets rose to $21 billion from the $20.4 billion reported at the end of the fourth quarter of 2022.

Harper said, “The Share Insurance Fund generally continued to perform well in the first quarter of the year. Investment income continued to increase with the rise in interest rates and the shift in the fund’s portfolio to overnight investments, which yielded more than longer-term securities. The NCUA board will continue to closely watch credit union and Share Insurance Fund performance so that we may take any necessary actions to maintain the system’s stability and ensure the Share Insurance Fund’s strength.”

Two credit union failures during the first quarter cost the SIF $1.2 million in losses.