NCUA Board meeting, Nov. 16, 2023
During Thursday's NCUA Board meeting, members voted 3-0 to approve the final rule to amend the charitable donation accounts section adding "war veterans' organizations" to the definition of a "qualified charity" that federal credit unions may contribute to with a charitable donation account.
According to the NCUA, the final rule "adds a post or organization of past or present members of the Armed Forces of the United States, or an auxiliary unit or society of, or a trust or foundation for, any such post or organization recognized as exempt from taxation under section 501(c)(19) of the Internal Revenue Code to the definition of a 'qualified charity' that a federal credit union may contribute to using a charitable donation account." Of note, "qualified charity" is a section 501(c)(3) entity defined by the Internal Revenue Code and must be both a non-profit and organized for a charitable purpose.
NCUA Board Chair Todd Harper said, "With this final rule, the NCUA is taking an important step in honoring our nation's many veterans. The rule is good for veterans, good for military families, good for credit union members, good for credit unions and good for our country. And, it fits nicely within the credit union ethos of people helping people."
Credit union trade groups have fully supported the final rule.
In a statement, CUNA Deputy Chief Advocacy Officer for Regulatory Affairs Alexander Monterrubi said, "This final rule means many worthy tax-exempt organizations that serve veterans can now receive support from credit unions. We appreciate NCUA responding to our engagement on the need for this rule, which was based on direct feedback from our member credit unions — this is a great example of collaboration between the industry and agency that results in better outcomes for consumers."
The final rule will go into effect 30 days after publication in the Federal Register.
Share Insurance Fund Update
Board members received some positive news concerning the Share Insurance Fund (SIF) from NCUA CFO Eugene Schied during Thursday's meeting. For the quarter ending Sept. 30, Schied said the SIF had a net income of $59 million, $20.9 billion in assets and $113.4 million in total income.
Harper said, "The Share Insurance Fund's performance in the third quarter of 2023 mirrors the industry's financial performance over the last year."
He added, "Like the credit union system, the Share Insurance Fund is performing generally well overall. But, there are some flashing cautionary lights that we should all heed and act upon. For several months, the NCUA has reported signs of growing liquidity, interest rate and credit risks within the credit union system. In today's report, we see that stress firsthand, especially in large, complex credit unions with $500 million or more in assets."
Additionally, for the third quarter of 2023, other items reported for the third quarter, according to Schied and the NCUA, included:
- The number of composite CAMELS code 3 credit unions increased from 771 to 777 at the end of the third quarter. Assets for these credit unions increased from the second quarter to $131.7 billion from $91 billion.
- The number of composite CAMELS codes 4 and 5 credit unions decreased from 134 to 131 at the end of the third quarter. Assets for these credit unions decreased from $6.3 billion to $5.4 billion.
"I cannot emphasize this enough: Credit union executives, supervisors and boards of directors must remain diligent in managing the potential risks on their balance sheets and when monitoring economic conditions and the interest rate environment. Today's economic environment requires active — not passive — management by all," Harper said.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
