Credit union fidelity bond rule changes out for comment

Rules on fidelity bond requirements for corporate credit unions and natural-person credit unions would, among other things, codify authority for coverage of certain service organizations under a proposed rule issued for public comment Thursday by credit unions’ federal regulator.

The proposed rule from the National Credit Union Administration (NCUA) is intended to:

  • strengthen a board of directors’ oversight of a credit union’s fidelity bond coverage;
  • ensure there is an adequate period to discover and file covered claims following a credit union’s liquidation;
  • codify a 2017 Office of General Counsel (OGC) legal opinion that permits a natural person credit union’s fidelity bond to include coverage for certain credit union service organizations (CUSOs); and
  • clarify the documents subject to the NCUA Board’s approval and require all bond forms receive the NCUA Board’s approval every 10 years.

The fidelity bond requirements are provided in Part 704 of the agency’s rules and regulations for corporate credit unions and Part 713 for natural person credit unions (both federal and federally insured, state-chartered credit unions).

The fidelity bond rule changes are part of NCUA’s regulatory reform agenda.

NCUA will take comments on the proposed rule for 60 days following its publication in the Federal Register.

Draft notice for Federal Register