NCUA Board OKs use of alternative records to show a joint account qualifies separately for share insurance

A final rule permitting the use of records other than signed membership cards or account signature cards as evidence that a jointly owned account qualifies for share insurance coverage apart from individually owned accounts was approved unanimously Thursday by the board of the federal credit union regulatory agency.

The National Credit Union Administration (NCUA) Board approved the rule proposed last May with one clarifying change. That change, suggested by a commenter, is intended to make clear that more than one type of record may be used if a signature card or signed membership card cannot be produced.

With that clarification, the agency said, final rule provides that the signature requirement may be satisfied by information contained in the account records of the federally insured credit union establishing co-ownership of the share account, “‘including, but not limited to,’ evidence that the institution has issued a mechanism for accessing the account to each co-owner or evidence of usage of the share account by each co-owner.” Such a mechanism could include the credit union’s issuance of a debit card to each co-owner, for example.

NCUA rules regarding insurance coverage for joint ownership accounts provide that only “qualifying joint accounts” are insured separately from individually owned share accounts maintained by the account co-owners. An account is treated as a “qualifying joint account” if each co-owner has personally signed a membership card or account signature card; and (2) each co-owner possesses withdrawal rights on the same basis.

The signature requirement, in place since 1971, is similar to the one the Federal Deposit Insurance Corp. (FDIC) has had since 1967, the NCUA notes, and Thursday’s final rule mirrors one adopted by the federal bank deposit insurer in 2019. The final rule also does not eliminate the need for federally insured credit unions to obtain signatures when opening an account, it said in its notice of final rulemaking.

The final rule will take effect 30 days after it is published in the Federal Register.

Notice of final rule