Removing Barriers Blog

Reminder: NCUA Fidelity Bonds Rule Now Effective
Posted October 23, 2019 by CUNA Advocacy

Yesterday, NCUA’s final rule on fidelity bonds under Part 704 for corporate credit unions and Part 713 for natural person credit unions became effective. As we noted in a July blog post at the time the rule was adopted, the final rule:

  • Strengthens a board of directors’ oversight of a FICU’s fidelity bond coverage;
  • Ensures an adequate period to discover and file fidelity bond claims following a FICU’s liquidation;
  • Codifies a 2017 legal opinion that permits a natural person credit union’s fidelity bond to include coverage for certain CUSOs; and
  • Addresses Board approval of bond forms.

The final rule includes the following changes from the proposed rule aimed at reducing regulatory burden:

  • Does not require a credit union’s supervisory committee to review its fidelity bond renewal;
  • Reduced the mandatory discovery period from two years to one year following a credit union’s involuntary liquidation; and
  • Provides increased flexibility to the provision that sunsets Board approval of fidelity bond forms.