ALEXANDRIA, Va. – NCUA has cleared credit unions to offer gift cards and other cash inducements to help draw members to the sparsely-attended annual meetings.
“Generally, we believe an FCU’s use of a gift card incentive is a permissible incidental powers activity,” said NCUA in a new legal opinion posted yesterday. Earlier, NCUA had expressly approved the use of raffles and other incentives to boost annual meeting attendance, NCUA noted. “A gift card incentive meets this same premise and thus, is generally permissible,” said the new legal opinion.
However, the credit union should carefully weigh the costs of such promotions, which may be objectionable on safety and soundness grounds or concerns of corporate waste. “Any incentive offered by a FCU to increase participation at its annual meeting must be reasonable.”
In addition, the incentive should not be used in any way to influence any votes conducted at the annual meeting, NCUA said.
The legal opinion was provided to an Minneapolis attorney representing an undisclosed credit union that wants to give attendees to the annual meeting a $25 gift card at the end of the meeting, which usually draws about 200 of the credit union’s 61,000 members. The $25 gift card would be less than paying for a meal for all attendees, as the credit union usually does.
