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NCUA guidance helps with Savings Bond changes
ALEXANDRIA, Va. (9/30/11)--The National Credit Union Administration (NCUA) has issued a Letter to Credit Unions (11-CU-15) to provide guidance in answering members’ questions that might be sparked by upcoming changes to the U.S. Savings Bond program. After 75 years of regular sales, savings bonds will no longer be sold at credit unions and other financial institutions as of Jan. 1, 2012, the U.S. Treasury has announced (News Now July 14). Series EE and I savings bonds will still be made available for purchase via the U.S. Treasury Department's online purchase platform, Consumers can also use the Treasury's online platform to convert existing paper bonds into electronic bonds and to purchase savings bonds via a payroll savings plan. Treasury estimates that the move from paper to electronic bonds will save $70 million in taxpayer funds over five years. The NCUA letter advises credit unions that “(a)s a trusted source of information about savings bonds, your credit union will likely receive questions about these changes.” It asks credit unions that, as they respond to member questions and assist them through this transition, to consider the following:
* Educate members about the upcoming changes. Let members know they will no longer be able to buy paper savings bonds at your credit union or by mail order. Refer members to where they can purchase, manage, and redeem electronic savings bonds online. * Stop accepting applications for savings bonds after Dec. 31. Members have until the close of business on that date to submit a final purchase applications and funds. Final applications mailed directly to the Federal Reserve by members must be received by Dec. 31. * Continue to redeem savings bonds. Consumers currently hold more than 670 million paper bonds worth $181 billion. Continue redeeming paper bonds on behalf of your members. Also, inform members that paper bonds that have not matured but are lost, stolen, or destroyed, can be reissued in paper or electronic form.
The Treasury Department is offering a free toolkit to help communicate changes to consumers (News Now Sept. 8) Use the resource links below to read the complete NCUA letter and to access the Treasury information on its toolkit.
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