NCUA approves final charitable donation account rule
12/12/2013 10:49 am
CUNA News Now reports that a final rule on charitable donation accounts has been approved at the NCUA open board meeting.
Under the final rule, credit unions will be permitted to invest in hybrid charitable and investment vehicles known as charitable donation accounts (CDAs). These CDAs will allow federal credit unions to make investments that are otherwise prohibited, provided that the proceeds are primarily for charitable purposes.
The rule includes a CUNA supported change that limits total investment in CDAs to five percent of the credit union's net worth for the duration of the account. A minimum of 51 percent of the total return from such an account would have to be distributed to one or more qualified charities. Distributions could be made to qualified charities no less frequently than every five years and when the account terminates.
CUNA Deputy General Counsel Mary Dunn said there is no requirement that a trust vehicle be used but if it is, the trustee must be regulated by the Office of the Comptroller of the Currency, Securities and Exchange Commission, or other federal or state agency. "We will be talking more with NCUA about this," she said.