Federal credit unions would be authorized to contribute to qualified war veterans organizations through the use of charitable donation accounts (CDAs) under proposed rule issued Thursday by the National Credit Union Administration (NCUA) Board.
The proposed rule would revise Part 721 of the agency’s rules and regulations, which cover federal credit union incidental powers, to define war veterans organizations as “qualified” entities that could receive the contributions through a CDA. With this proposed rule, the agency board, to ensure the authority only focuses on organization that are both non-profit and charitable, would limit the use of CDA funds to making charitable contributions or donations to organizations that are both non-profit and charitable in nature. To that end, this proposed rule focuses on “veterans’ organizations” as defined by section 501(c)(19) of the Internal Revenue Code.
Such organizations, among other things, must be organized in the United States or any of its possessions; and at least 75% of its members must be past or present members of the United States Armed Forces, the proposal states. It adds that at least 97.5% of such organizations’ members must be:
- present or former members of the United States Armed Forces,
- cadets (including only students in college or university ROTC programs or at Armed Services academies), or
- spouses, widows, widowers, ancestors, or lineal descendants of individuals referred to in the first or second bullet.
The proposed rule also explains what a qualified group’s purpose may be and lists additional qualifications for an auxiliary unit or society of a veterans’ post or organization, or a trust or foundation for a veterans’ post or organization.
It provides that “no part of its net earnings may inure to the benefit of any private shareholder or individual.”
The agency is also seeking input on what other types of entities should be included within the “qualified charity” provision of the CDA rule.
Comments will be due 60 days after the proposal is published in the Federal Register.
NCUA Board Approves Proposal to Include Veterans Organizations in Charitable Donation Accounts
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