Know the rules on holiday gifts

Know the rules on holiday gifts

Can CU staff accept gifts from members?

December 19, 2019

Your credit union's offices soon (if they aren't already) will be full of cards, chocolates, cookies, fruitcakes, and maybe tickets to the “concert of the year.” Can you accept these? Do you know when you might need to say “no thank you”?

Now is a good time to review your credit union’s Bank Bribery Act policy. The act applies to all credit unions with accounts insured by the National Credit Union Share Insurance Fund.

The National Credit Union Administration (NCUA) issued Interpretive Ruling and Policy Statement (IRPS) No. 87 in 1987 to provide federally insured credit unions with Bank Bribery Act guidelines. IRPS 87-1 gives credit unions some background on the act and recommends procedures to ensure compliance.

Under either 18 U.S.C. § 215(a) or (b), if the item offered or given is greater than $1,000 in value, the offense is a felony punishable by up to 30 years imprisonment and/or a fine of up to $1,000,000 or three times the value of the bribe or gratuity, whichever is greater. If the item of value is $1,000 or less, the offense is a misdemeanor punishable by imprisonment of up to one year and/or a similar fine.

There are situations when it might be appropriate for a credit union employee to receive a business-related gift. Your credit union’s policies should address specific examples.

Make sure you have a clear understanding of the guidelines.

You won’t violate the act if you:

• Accept a gift based on a family relationship;

• Receive a benefit available to the general public; or

• Receive a benefit paid by the credit union as a reasonable business expense.

Next: Examples of appropriate gifts

Examples of appropriate gifts include:

• Meals, gratuities, amenities, or favors based on obvious family or personal relationships.

The circumstances should make it clear that the relationship, rather than the business of the credit union, is the motivating factor.

For example, let’s say Aunt Margaret, who also happens to be a member of the credit union, pays for your meal at an expensive restaurant one day on your lunch break. 

• Meals, refreshments, travel arrangements, accommodations, or entertainment of reasonable value in the course of a meeting or other business occasion.

In this case, the occasion must be for a bona fide business discussion or part of an effort to foster better business relations.

And the expense should be one the credit union would pay as a reasonable business expense if not being paid by another party.

Check your credit union’s policies to determine if a dollar limit on gifts and favors is established under this exception.

• Advertising or promotional material of reasonable value, including pens, pencils, note pads, key chains, calendars, and similar items.

• Discounts or rebates on merchandise or services that are available to other persons or customers of the business or person under similar circumstances.

• Gifts of reasonable value related to commonly recognized events or occasions—such as a promotion, a new job, a wedding, a retirement, Christmas, or a bar or bat mitzvah.

For example, under the act, it’s permissible for you to accept a wedding gift from one of your favorite members.

Again, check your credit union’s policies to determine if they specify a dollar amount for acceptable gifts.

NCUA doesn’t define acceptable dollar amounts credit union personnel can give or receive in instances of business-related entertainment or gifts. The expectation is that the amount should be “reasonable.”

Each credit union must establish its own acceptable standards, with examples of what’s considered appropriate. Review your credit union’s guidelines and expectations now as the holiday gift-giving begins.

Questions? Contact CUNA’s compliance team