WASHINGTON–With the new Trump Accounts set to officially launch on July 4, America’s Credit Unions said it has updated its frequently asked questions document to clarify the role of credit unions now and in the future.
As the CU Daily has reported, credit unions are not yet eligible to participate, as Treasury has not yet announced steps to transition accounts from initial provider BNY Mellon to other authorized institutions.
Trump Accounts are tax-deferred accounts that can be established on behalf of a child under the age of 18. Account contributions begin after July 4, with contributions up to $5,000 a year allowed. The program was created by H.R. 1, which also established a pilot program to deposit a one-time $1,000 grant into accounts of children born between Jan. 1, 2025 and Dec. 31, 2028.
Once the child turns 18, the account funds are available for educational expenses, home ownership, entrepreneurship, and other designated purposes, America’s Credit Unions said.
Awaiting Guidance on Rollover Process
“Once guidance is available from Treasury, credit unions will be able to serve as trustees for Trump Accounts rolled over from the initial accounts,” America’s Credit Unions stated, adding it has remained engaged with the administration and the Treasury on the need for guidance on the rollover process. “Under current requirements, credit unions must work with either a credit union service organization or a third-party provider. Such third parties may need to be approved by Treasury to work with Trump Accounts.”
The trade group noted Treasury announced Wednesday the initial default investment available at launch and four additional low-cost index fund options that responsible parties may elect in the coming months.
The guidance is available here.
