ALEXANDRIA, Va. NCUA said MEMBERS Trust Co.’s Charitable Lead Trust Program being conducted in partnership with the National CU Foundation is a permissible investment for federal credit unions as long as individual investments made by the Trust are permissible investments under NCUA’s rules and regulations.
In a Feb. 14 letter to MEMBERS Trust President Tom Walker, obtained by the Credit Union Journal, NCUA said it has determined that the Trust is a permissible investment and subject to the agency’s Part 703 investment rules, so that “investments held in the individual Trust vehicles must be investments permissible for a FCU.”
Charitable Lead Trusts are commonly used by donors to make charitable contributions, allowing the opportunity for donors to customize charitable gifts and investment plans. Under the MEMBERS Trust plan earnings from the Trust are to be shared by the Foundation and the investing credit unions.
NCUA emphasizes that the letter to Walker, signed by Larry Fazio, director of Examinations and Insurance, does not constitute an official legal opinion and should not be used as a marketing tool to and is consistent with clarifications the agency has provided to other analogous investment vehicles (like mutual funds) in the past.
The letter only applies to federal credit unions, not state-chartered credit unions, the agency said.