CUNA Outlines Concerns with NCUA’s Fidelity Bond Proposal

CUNA has several concerns with the National Credit Union Administration (NCUA)’s proposed regulation on fidelity bonds, it noted in a comment letter sent to the agency Tuesday. NCUA’s proposal is part of the changes recommended by the agency’s Regulatory Reform Task Force, which was created to oversee NCUA’s regulatory reform agenda.

Fidelity bonds help credit unions stem operation risks by protecting against loss of money or other tangible property incurred as a result of a dishonest act of employee, or another specified person.

Highlights of CUNA’s letter include:

  • CUNA supports NCUA’s proposal to clarify that coverage for credit union service organizations can be included in a credit union’s single fidelity bond policy, and applauds the agenda for these efforts to provide clarity;
  • CUNA’s believes NCUA’s cost expectations concerning a proposed requirement about involuntary liquidations are incorrect, and urges NCUA to engage in a cost-benefit analysis;
  • CUNA is concerned with the requirement that board members sign and approved fidelity bond applications, believing credit unions are currently in the best position to determine the level of board expertise. CUNA urges the removal of this provision; and
  • CUNA generally supports the proposed sunset for all bond forms 10 years after the form is approved. Under the proposal, the 10-year period will begin on the date the board approves a bond form.