A final rule on fidelity bonds for credit unions and a proposed policy statement on treatment of prohibition actions for minor, past or youthful transgressions were approved by the credit union federal regulator Thursday.
Meeting at its headquarters in Alexandria, Va., the three-member board unanimously approved:
- A final rule on fidelity bonds, which the agency said strengthens a board of directors’ oversight of a federally insured credit union’s (FICU) fidelity bond coverage; ensures an adequate period to discover and file fidelity bond claims following an FICU’s liquidation; codifies a 2017 NCUA Office of General Counsel legal opinion that permits a natural person credit union’s fidelity bond to include coverage for certain credit union service organizations (CUSOs); and addresses board approval of bond forms. The final rule takes effect 90 days after publication in the Federal Register.
- The proposed “second-chance” interpretive ruling and policy statement (IRPS), regarding statutory prohibitions imposed from participating in the affairs of a credit union on any individuals working at a credit union who have been convicted of criminal offenses, or other “breaches of trust.” The “second chance” IRPS would, essentially, tone down the extent of the prohibitions – especially for those who were convicted (or entered a diversionary program) for offenses they may have committed as youths. Specifically, the proposal would not require an application to the NCUA Board for eligibility to work again at a credit union for offenses including insufficient funds checks of aggregate moderate value, small-dollar simple theft, false identification, simple drug possession, and isolated minor offenses committed by covered persons as young adults. NCUA Board Chairman Rodney Hood said he was personally committed to more initiatives such as the “second chance” proposal, and told the audience to “expect more coming from this agency to work with second-chance individuals.” The IRPS was released with a 60-day comment period.
Final Rule, Parts 704 and 713, Fidelity Bonds, Item 2a, Item 2b
Proposed Interpretive Rule and Policy Statement, Guidance Regarding Prohibitions Imposed by Section 205(d), Item 3a, Item 3b