Compliance Blog

NCUA recently issued Legal Opinion Letter 08-0121 (June 10, 2008) where it indicated that a federal credit union could offer gift card-related services for Texas Tech University, assuming that the University or its Athletic Department were members of the credit union.  In NCUA's words:

You have asked about the permissibility of a proposal Texas Tech Federal Credit Union (FCU) is considering where the FCU would receive payments for gift cards and track payments for the Texas Tech University Athletic Department (Athletic Department). We conclude it is within the FCU’s incidental powers to offer this financial service to the issuer of the gift card if the issuer is a member of the FCU.

The Athletic Department wants to offer Texas Tech fans a gift card for the purchase of athletic event tickets, concessions at events, and apparel at the university’s athletic store. Fans would access information about gift cards on the Athletic Department’s web site; when the fan initiates a card purchase, the fan would be transferred by an electronic link to the FCU’s website. The FCU would receive funds electronically from the purchaser on behalf of the Athletic Department into an account the Athletic Department would maintain at the FCU. The FCU will track the use of the gift card and debit its member’s account when the card purchaser uses the card to make a purchase. A local bank with which the FCU already has a relationship will provide the cards showing the logos of the FCU and the Athletic Department.

This letter also underscores the benefits of having your sponsor become a member of the credit union.  Be sure to read NCUA's letter for all the details. 

This guidance has me thinking about the upcoming football season already.  Let's go State!