NCUA board approves charitable donation accounts final rule

Share Insurance Fund briefing details rising CAMELS Code 3 credit unions

ALEXANDRIA, VA (November 16, 2023) — The National Credit Union Administration Board held its tenth open meeting of 2023 and approved a final rule that amends the charitable donation accounts section of the NCUA’s incidental powers regulation. In addition, the NCUA’s Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund for the third quarter of 2023.

Veterans Organizations Now a Qualified Charity Under NCUA’s Regulations

The NCUA Board unanimously approved a final rule that adds “war veterans’ organizations” to the definition of a “qualified charity” that a federal credit union may contribute to using a charitable donation account.

“With this final rule, the NCUA is taking an important step in honoring our nation’s many veterans,” NCUA Chairman Todd M. Harper said. “The rule is good for veterans, good for military families, good for credit union members, good for credit unions, and good for our country. And, it fits nicely within the credit union ethos of people helping people.”

Specifically, the final rule adds a post or organization of past or present members of the Armed Forces of the United States, or an auxiliary unit or society of, or a trust or foundation for, any such post or organization recognized as exempt from taxation under section 501(c)(19) of the Internal Revenue Code to the definition of a “qualified charity” that a federal credit union may contribute to using a charitable donation account. A “qualified charity” is a section 501(c)(3) entity defined by the Internal Revenue Code and must be both a non-profit and organized for a charitable purpose.

At its May 2023 meeting, the NCUA Board approved the proposed rule, noting the attributes of “veterans’ organizations” as defined in the Internal Revenue Code aligned with the purposes of the agency’s charitable donation account rule.

The final rule is effective 30 days after publication in the Federal Register.

Number of CAMELS Code 3 Credit Unions Increase in Third Quarter

The Chief Financial Officer briefed the NCUA Board on the performance of the Share Insurance Fund for the quarter ending on September 30, 2023. The Share Insurance Fund reported a net income of $59.0 million, $20.9 billion in assets, and $113.4 million in total income for the third quarter of 2023.

“The Share Insurance Fund’s performance in the third quarter of 2023 mirrors the industry’s financial performance over the last year,” Chairman Harper said. “Like the credit union system, the Share Insurance Fund is performing generally well overall. But, there are some flashing cautionary lights that we should all heed and act upon. For several months, the NCUA has reported signs of growing liquidity, interest rate, and credit risks within the credit union system. In today’s report, we see that stress firsthand, especially in large, complex credit unions with $500 million or more in assets.”

Additionally, for the third quarter of 2023:

  • The number of composite CAMELS code 3 credit unions increased from 771 to 777 at the end of the third quarter. Assets for these credit unions increased from the second quarter to $131.7 billion from $91.0 billion.
  • The number of composite CAMELS codes 4 and 5 credit unions decreased from 134 to 131 at the end of the third quarter. Assets for these credit unions decreased from $6.3 billion to $5.4 billion.

“I cannot emphasize this enough: credit union executives, supervisors, and boards of directors must remain diligent in managing the potential risks on their balance sheets and when monitoring economic conditions and the interest rate environment. Today’s economic environment requires active — not passive — management by all,” Chairman Harper said.

At the end of the third quarter of 2023, three federally insured credit union failures cost the Share Insurance Fund approximately $1.4 million in losses.

The third quarter figures are preliminary and unaudited. Additional information on the performance of the Share Insurance Fund is available on the NCUA’s website.

Follow @TheNCUA on X, and access Board Action Memorandums and NCUA rule changes at The NCUA also live streams, archives, and posts videos of open Board meetings online.

About National Credit Union Administration (NCUA)

The NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, the NCUA operates and manages the National Credit Union Share Insurance Fund, insuring the deposits of more than 135 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. The NCUA also protects consumers and educates the public on consumer protection and financial literacy issues.


Ben Hardaway


Joe Adamoli

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