ALEXANDRIA, Va. – At its board meeting yesterday, the NCUA approved a final rule updating the agency’s fixed assets regulation and approved a proposed rule that will modify NCUA’s investment and charitable donation regulations allowing more flexibility for federal credit unions to make such donations.
The board approved a final rule that amends the regulation governing federal credit union (FCU) ownership of fixed assets. The revisions are intended to clarify the rule by improving its organization, structure, and "ease of use." The changes include plain language revisions, new definitions and rewordings that impact the current fixed-assets rule, Section 701.36. That rule allows federal credit unions to purchase, hold and dispose of property necessary or incidental to their operations. These fixed assets include office buildings, branch facilities, furniture, computer hardware and software, and ATMs.
The regulation changes will become effective 60 days after they are published in the Federal Register.
NCUA has long recognized that making charitable contributions and donations is among a federal credit union’s incidental powers. The proposed rule would limit total investment in CDAs to 3% of a credit union's net worth for the full term of the accounts. A minimum of 51% of the total return from such an account would be required to be distributed to one or more qualified charities. Distributions must be made to qualified charities no less frequently than every five years. The National Credit Union Foundation is one of these approved charities.
The agency will accept comment on the proposal for 30 days after it is published in the Federal Register.
The NCUA Board also approved a community charter expansion of Peoples Advantage FCU, which currently serves Prince George, Dinwiddie, Chesterfield, and Sussex Counties, and the cities of Petersburg, Hopewell, and Colonial Heights, Virginia.