NAFCU backs charitable donation account reg
NAFCU Regulatory Affairs Counsel PJ Hoffman
Oct. 22, 2013 – NAFCU on Monday told NCUA it supports the agency’s proposal to allow federal credit unions to establish charitable investment accounts, which would be a helpful tool in credit unions’ efforts to make a difference in the towns and cities where their members live.
PJ Hoffman, NAFCU’s regulatory affairs counsel, said the proposal reflects credit unions’ history of community involvement and altruism. “Because of the fundamental make up of different fields of membership, credit unions are tied to their communities like no other types of financial institutions,” Hoffman wrote. “Many credit unions have been very successful in assisting others in their community and this rule allows credit unions to have the flexibility to get higher returns for their charitable investments.”
The proposal, released last month, would allow federal credit unions to create and fund “charitable donation accounts” under preapproved incidental powers authority related to donations to 501(c)(3) organizations. The accounts could hold up to 3 percent of net worth and could be invested. Donations of at least 51 percent of total return would have to be made at least every five years.
Hoffman, in his letter, urged the agency to broaden other federal credit union authorities as well. Pointing to the agency’s rules on investment authorities, he suggested that NCUA lift its ban on credit union purchases of mortgage servicing rights; at the least, he said, credit unions should be able to purchase mortgage servicing rights from other credit unions. He also urged the agency to consider allowing credit unions some securitization authority.