The National Credit Union Administration (NCUA) board held its May board meeting this week. Here are key takeaways…
Proposed Rule: Charitable Donation Accounts
The Board issued a proposed rule to expand the Charitable Donation Accounts (CDA) rule. Currently, only (Internal Revenue Code) section 501(c)(3) organizations are considered to be a “qualified charity” for purposes of the CDA rule.
Section 501(c)(3) organizations are generally charitable organizations, churches and religious organizations, and private foundations. The proposed rule would amend the definition of “qualified charity” to also include veterans’ organizations under section 501(c)(19).
In addition to the proposed change, the NCUA is seeking input on whether additional groups should be included in the definition of a “qualified charity.” Comments will be accepted for 60 days following publication in the Federal Register.
Board Briefing: National Credit Union Share Insurance Fund
The board received a quarterly update on the National Credit Union Share Insurance Fund (NCUSIF). For June 30, 2023, NCUA staff projects the equity ratio for the NCUSIF will be 1.25 percent.
Also of note: 1) the number of composite CAMELS 3, 4, and 5 credit unions increased slightly from the preceding quarter (Capital adequacy, Asset quality, Management, Earnings, Liquidity Risk, and Sensitivity to market risk); and 2) so far this year, there have been two credit union failures (at a cost of $1.25m) and fraud was not a contributing factor in either failure. Last year, five of the six failures had fraud as a contributing factor.
