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CUNA seeks comment on share insurance signage plan
WASHINGTON (11/3/08)—Does a recent interim final rule issued by the National Credit Union Administration (NCUA) minimize burdens associated with incorporating temporary new share insurance limits into official signage? The Credit Union National Association (CUNA) is asking credit unions to comment by Dec. 11. The rule amends the NCUA’s share insurance regulation to make it consistent with recent actions by the U.S. Congress that temporarily increases the maximum share insurance amount to $250,000, up from $100,000. The temporary authority also increases the coverage for custodial loan accounts, also known as mortgage servicing accounts. The increase in the share insurance amount will be in effect until Dec. 31, 2009, unless it is extended or made permanent, and the interim final rule went into effect Oct. 22. That rule describes necessary changes to make the official insurance sign reflect the higher ceiling. Credit unions may:
* Continue to display the current sign, and there will be no penalty for credit unions that choose this option; * Display a sign that the NCUA will distribute and post on its website that reflects the temporary increase; or * Alter the current sign to reflect the temporary increase, by hand or otherwise, as long as the altered sign is legible. This could be done by placing a sticker that reads “$250,000” over the portion of the current sign that reads “$100,000.”
Credit unions that do not alter the current signs may post additional signs in their lobbies or place a notice on their websites. For mortgage servicing accounts, share insurance coverage will be expanded by insuring the principal and interest portion of a borrower’s payment separately from the borrower’s individual accounts, making coverage more consistent with that provided by the Federal Deposit Insurance Corp. The NCUA has said it believes its interim final rule will provide the greatest flexibility possible with regard to displaying the official sign that incorporates the new insurance limits, while also providing members with the necessary information. In its Comment Call, CUNA asks credit unions to comment. Comments are due to the agency by Dec. 22.
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