June 19, 2007

Mary Dunn, Deputy General Counsel

Credit Union National Association

601 Pennsylvania Avenue, NW

Washington, D.C. 20004\
(202) 638-5777

Re: Political Activities of Credit Unions.

Dear Ms. Dunn:

You have requested further elaboration and guidance on a recent Office
of General Counsel (OGC) opinion letter addressing permissible political
activities of credit unions. OGC Op. 06-0928 (Nov. 28, 2006). That
opinion letter responded to a question regarding the extent to which
federal credit unions (FCUs) may engage in political activities, such as
hosting events for congressional candidates. We are glad to provide the
following additional information.

The Federal Election Campaign Act of 1971 (FECA) prohibits FCUs from
making contributions or expenditures in connection with the election of
any individual to public office, whether at the federal, state, or local
level. 2 U.S.C. §441b(a); 11 C.F.R. §114.2(a). Federal Election
Commission (FEC) regulations for state-chartered credit unions are less
restrictive; they only prohibit making contributions or expenditures in
support of or in opposition to candidates for federal office. 11 C.F.R.
§114.2(b)(2).

There are several exceptions to the FEC's prohibitions and definitions
of the terms "contribution" and "expenditure," many of which may apply
to communications or solicitations restricted to an FCU's members.[^1]
Credit unions may engage in the excepted activities to the extent
allowed by FEC regulations. For example, there are fewer restrictions on
political activity involving internal political communications by a
credit union to its members and to its executive and administrative
personnel. 2 U.S.C. §441b(b)(2)(A); 11 C.F.R. §§114.1(a)(2)(i), 114.3.
To provide further guidance, we note credit union communications under
those circumstances may expressly advocate the election or defeat of a
federal candidate and may solicit funds for particular candidates.[^2]
11 C.F.R. §114.3(a), (c). Further, those communications may include
appearances by federal candidates before a credit union's members and
its executive and administrative personnel. 11 C.F.R. §114.3(c)(2).
Appearances by federal candidates before a credit union's members may
include requests made by credit union personnel and the candidate for
contributions. The candidate or his or her representative may collect
contributions before, during, or after such events. 11 C.F.R.
§114.3(c)(2).

Additionally, credit unions may permit their employees and members to
use, without charge, corporate facilities for voluntary political
activities on behalf of a federal candidate or committee as long as the
use is "occasional, isolated, or incidental." 11 C.F.R. §114.9(a). FEC
regulations specifically provide a safe harbor of one hour per week or
four hours per month during which this exception may be exercised. 11
C.F.R. §114.9(a)(1)(iii).

Our previous opinion letter explained the establishment of a separate
segregated fund (SSF), otherwise known as a political action committee
(PAC), to represent credit unions' political interests. We indicated
individual credit unions may form their own SSFs, and may under certain
circumstances, participate in the SSFs of other entities.[^3] To
elaborate, a credit union that is a member of a trade association may
solicit and collect voluntary contributions for the trade association's
PAC, as long as certain exacting rules are followed.[^4] 11 C.F.R.
§§114.2(f)(5), 114.8. The FEC has permitted member credit unions of the
Credit Union National Association (CUNA) to act as collecting agents for
purposes of soliciting and transmitting voluntary contributions to the
Credit Union Legislative Action Council (CULAC), CUNA's PAC. FEC Op.
1998-19 (November 2, 1998).

We hope this further clarification of these issues is helpful. Credit
unions should note that NCUA does not have jurisdiction over FECA issues
and should consult the FEC Office of General Counsel on specific
questions or for additional information concerning its guidelines.

> Sincerely,

Sheila A. Albin

> Associate General Counsel

OGC/AMT:bhs 07-0222

[^1]: FEC has provided guidance on the definitions of "contribution" and
    "expenditure." FEC Op. 1991-24 (August 30, 1991).

[^2]: As a point of clarification, the FEC's "one-third" rule described
    in OGC Op. 06-0928 applies to fundraising events for a credit
    union's PAC, not to a members-only candidate fundraiser. *See* 11
    C.F.R. §114.5(b)(2).

[^3]: An FEC opinion has permitted an FCU to use its own funds to
    establish, administer, and solicit contributions to a connected
    federal PAC. FEC Op. 1990-18 (October 5, 1990).

[^4]: An FEC opinion has permitted an FCU to make a donation to a
    charity in order to raise contributions from its members for CULAC.
    FEC Op. 2003-39 (February 6, 2004).