[Federal Register Volume 69, Number 145 (Thursday, July 29, 2004)]
[Rules and Regulations]
[Page 45239]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17258]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 745


Share Insurance; Living Trust Accounts

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: NCUA is adopting as a final rule without change the interim 
rule amending Part 745 of its regulations concerning share insurance 
coverage for beneficial interests in living trust accounts. NCUA 
published the interim rule with a sixty-day comment period at 69 FR 
8798, on February 26, 2004.

DATES: This final rule is effective on July 29, 2004.

FOR FURTHER INFORMATION CONTACT: Ross Kendall, Staff Attorney, Office 
of General Counsel, at the above address or telephone: (703) 518-6562.

SUPPLEMENTARY INFORMATION: Effective April 1, 2004, NCUA revised its 
living trust account rules to provide for insurance coverage of up to 
$100,000 per qualifying beneficiary who, as of the date of a credit 
union's failure, would become entitled to the living trust assets upon 
the owner's death, regardless of the existence of a defeating 
contingency affecting the beneficiary's interest. The NCUA Board 
determined that elimination of the defeating contingency provisions in 
the rule was beneficial to credit unions and their members because the 
operation of the rule was complex and not widely understood. The 
amendment also clarified that a credit union need not maintain records 
disclosing the names and interests of beneficiaries of living trusts. 
In addition, the amendment preserved parity between the NCUA and the 
Federal Deposit Insurance Corporation (FDIC), which administers the 
insurance fund that protects bank depositors and which had, in January 
of 2004, adopted a similar amendment to its rules.
    Even though NCUA issued the amendment as an interim final rule, the 
Board established a sixty-day comment period in which interested 
members of the public could comment on any aspect of the amendment. We 
received five comments, all of which were fully supportive of the 
amendment. The commenters uniformly indicated the changes would result 
in elimination of confusion by credit unions and their members and an 
enhanced understanding of the scope and operation of the share 
insurance rules for beneficial interests in living trust accounts. The 
commenters also cited the benefit of having uniformity of insurance 
coverage between living trust accounts and other types of revocable 
trust accounts, as well as the benefit of parity between the NCUA and 
the FDIC.
    In view of the comments and the benefits described herein and in 
the preamble to the interim rule, the NCUA Board has determined to 
adopt the rule as final without change.

List of Subjects in 12 CFR Part 745

    Credit unions, Share insurance.

    By the National Credit Union Administration Board on July 22, 
2004.
Becky Baker,
Secretary of the Board.

PART 745--SHARE INSURANCE AND APPENDIX

0
Accordingly, the interim final rule amending 12 CFR 745.4, which was 
published at 69 FR 8798 on February 26, 2004, is adopted as a final 
rule without change.

[FR Doc. 04-17258 Filed 7-28-04; 8:45 am]
BILLING CODE 7535-01-P