[Federal Register Volume 84, Number 142 (Wednesday, July 24, 2019)]
[Rules and Regulations]
[Pages 35517-35525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15709]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Parts 704 and 713

RIN 3133-AE87


Fidelity Bonds

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: The NCUA Board (Board) is finalizing a rule that amends its 
regulations regarding fidelity bonds for corporate credit unions and 
natural person credit unions. The rule strengthens a board of 
directors' oversight of a federally insured credit union's (FICU) 
fidelity bond coverage; ensures an adequate period to discover and file 
fidelity bond claims following a FICU's liquidation; codifies a 2017 
NCUA Office of General Counsel legal opinion that permits a natural 
person credit union's fidelity bond to include coverage for certain 
credit union service organizations (CUSOs); and addresses Board 
approval of bond forms.

DATES:  The final rule is effective October 22, 2019.

FOR FURTHER INFORMATION CONTACT: Rob Robine, Trial Attorney, or Rachel 
Ackmann, Staff Attorney, Office of General Counsel, 1775 Duke Street, 
Alexandria, VA 22314-3428 or telephone (703) 548-2601.

SUPPLEMENTARY INFORMATION

I. Introduction
II. Proposed Rule
III. Final Rule and Discussion of Comments
IV. Regulatory Procedures

I. Introduction

a. Background and Legal Authority

    The Federal Credit Union Act (FCU Act) requires that certain credit 
union employees and appointed and elected officials be subject to 
fidelity bond coverage.\1\ The FCU Act directs the Board to promulgate 
regulations concerning both the amount and character of fidelity bond 
coverage and to approve bond forms.\2\ The pertinent portion of the FCU 
Act provides that the Board is directed to require that every person 
appointed or elected by any Federal credit union to any position 
requiring the receipt, payment, or custody of money or other personal 
property owned by a Federal credit union or in its custody or control 
as collateral or otherwise, give bond in a corporate surety company 
holding a certificate of authority from the Secretary of Treasury as an 
acceptable surety on Federal bonds. Any such bond or bonds shall be in 
a form approved by the Board with a view to providing surety coverage 
to the Federal credit union with reference to loss by reason of acts of 
fraud or dishonesty including forgery, theft, embezzlement, wrongful 
abstraction, or misapplication on the part of the person, directly or 
through connivance with others, and such other surety coverages as the 
Board may determine to be reasonably appropriate. Any such bond or 
bonds shall be in such an amount in relation to the assets of the 
Federal credit union as the Board may from time to time prescribe by 
regulation.\3\
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    \1\ 12 U.S.C. 1761a, 1761b, and 1766.
    \2\ The FCU Act also grants the Board the powers to require such 
other surety coverage as the Board may determine to be reasonably 
appropriate; to approve a blanket bond in lieu of individual bonds; 
and to approve bond coverage in excess of minimum surety coverage.
    \3\ 12 U.S.C. 1766(h).
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    Parts 704 and 713 of the NCUA's regulations implement the 
requirements of the FCU Act regarding fidelity bonds.\4\ Part 713 
applies to natural person credit unions and Part 704 applies to 
corporate credit unions. The parts establish the requirements for a 
fidelity bond, the acceptable bond forms, and the minimum permissible 
coverage. Both parts require a FICU's board of directors to review 
annually its fidelity bond coverage to ensure it is adequate in 
relation to the potential risks facing the FICU and the minimum 
requirements set by the Board.
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    \4\ 12 CFR pts. 704 and 713.
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    Part 704 was recently revised to amend the provision that 
determines the maximum amount a corporate credit union may pay for a 
deductible or a covered loss before the fidelity bond insurer makes a 
payment. The NCUA restricts the deductible a corporate credit union may 
pay to limit the potential losses to it if there is a covered claim. 
The maximum deductible allowed is a percentage of a corporate credit 
union's capital based on its leverage ratio. For example, if a 
corporate credit union has a greater than 2.25 percent leverage ratio 
then it may have a maximum deductible that is 15 percent of its tier 1 
capital. The recent final rule updated this provision to reference tier 
1 capital instead of core capital.\5\ Part 713, however, has not been 
substantively revised since 2005, when the NCUA issued a final rule 
modernizing it.\6\
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    \5\ 80 FR 25932 (May 6, 2015).
    \6\ 70 FR 61713 (Oct. 26, 2005). In 2012, the NCUA revised Part 
713 by removing reference to the agency's former Regulatory 
Flexibility Program. 77 FR 74112 (Dec. 13, 2012).
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b. Regulatory Reform Task Force

    In August 2017, the Board published and sought comment on the 
NCUA's regulatory reform agenda (Agenda).\7\ The Agenda identifies 
those regulations the Board intends to amend or repeal because they are 
outdated, ineffective, or excessively burdensome. This is consistent 
with the spirit of Executive Order 13777.\8\ Although the NCUA, as an 
independent agency, is not required to comply with Executive Order 
13777, the Board has chosen to comply with it in spirit and has 
reviewed all of the NCUA's regulations to that end. One of the items in 
the Agenda is related to the NCUA's regulations on fidelity bonds. The 
Agenda supports exploring ways to implement the requirements of the FCU 
Act related to fidelity bonds in the least costly way possible. The 
Agenda further notes that while the FCU Act mandates fidelity bond 
coverage, the NCUA's objective should be to allow a credit union to 
make a business decision based on its own circumstances and needs. This 
would effectively reduce the NCUA's involvement in a credit union's 
operational decisions while remaining consistent with the FCU Act.
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    \7\ 82 FR 39702 (Aug. 22, 2017).
    \8\ E.O. 13777 (Feb. 24, 2017).
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c. The 2017 Legal Opinion

    As discussed above, part 713 establishes the minimum requirements 
for a fidelity bond for a natural person credit union. One such 
requirement under part 713 is that fidelity bonds be

[[Page 35518]]

purchased in an ``individual policy.'' \9\ The ``individual policy'' 
provision was intended to prevent multiple FICUs from being insured 
under one fidelity bond policy. The Board prohibited such joint 
coverage because the loss suffered by one or two of the joint 
policyholders could reduce the amount of available coverage for the 
other policyholders to below the required minimum amount.\10\ Before 
2017, the NCUA's Office of General Counsel (OGC) had issued legal 
opinions stating that a FICU may not include one or more CUSOs or other 
parties as additional insureds under its fidelity bond because of the 
``individual policy'' limitation.\11\ It came to OGC's attention, 
however, that some bond issuers may have been interpreting their 
policies to permit the issuance of bonds that covered FICUs and their 
CUSOs, despite OGC's opinions. This prompted OGC to review the 
regulation and approved bond forms. As a result of that review, OGC 
issued another legal opinion in September 2017 that rescinded and 
replaced all previous legal opinions that addressed the ``individual 
policy'' requirement.\12\ The 2017 opinion concluded that the 
``individual policy'' requirement of Sec.  713.3(a) of the NCUA's 
regulations generally prohibits joint coverage under fidelity bonds, 
but does not prohibit a FICU from purchasing a fidelity bond that 
covers both it and certain of its CUSOs, as discussed more fully below.
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    \9\ 12 CFR 713.3(a). There is not an analogous provision for 
corporate credit unions under Part 704, therefore, the legal opinion 
relates only to fidelity bonds for natural person FICUs under Part 
713.
    \10\ 64 FR 28178 (May 27, 1999).
    \11\ OGC Legal Op. 14-0311 (Mar. 21, 2014); see also OGC Legal 
Op. 04-0744 (Sept. 21, 2004).
    \12\ OGC Legal Op. 17-0959 (Sept. 26, 2017).
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II. Proposed Rule

    OGC's fidelity bond review extended beyond the issue of joint 
coverage and revealed several inconsistencies between part 713 and 
approved bond forms. The review also revealed several outdated 
provisions. In November 2018, the NCUA published a notice of proposed 
rulemaking (the proposed rule) to update its fidelity bond regulation 
to correct these problems, ensure the safe and sound operation of 
FICUs, and protect the National Credit Union Share Insurance Fund 
(NCUSIF).\13\ The comment period closed on January 22, 2019.
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    \13\ 83 FR 59318 (Nov. 23, 2018).
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III. Final Rule and Discussion of Comments

    The NCUA received 26 comment letters on its November 2018 proposed 
rule. These comments were received from credit unions, including 
corporate credit unions, credit union leagues and trade associations, 
an association of state credit union supervisors, an insurance company, 
and two insurance associations. In general, many of the commenters 
supported the stated goal, to implement fidelity bond requirements in a 
cost-effective manner. All of the commenters, however, expressed 
concerns about specific aspects of the proposal. Most commenters 
believed that the proposed rule resulted in unnecessary burden and 
increased costs without substantially improving the adequacy of FICU 
fidelity bond coverage. Some commenters also expressed concerns that 
the rule reduced the number of insurance companies providing fidelity 
bonds, which would reduce FICUs' ability to negotiate among providers. 
In response to the comments received, the Board has made several 
changes to the final rule. The specific details of the final rule, 
including changes as a result of the comments received, are discussed 
below.

Part 713

    In general, part 713 applies to all federally insured natural 
person credit unions and provides the fidelity bond requirements for 
them. Changes to the specific subsections of part 713 are discussed 
below.
Sec.  713.1 What is the scope of this section?
    The proposed rule retained most of the current Sec.  713.1 without 
change, with the following exceptions. The proposed rule added the 
words ``federally insured'' before the words ``credit union'' to more 
precisely describe which credit unions are subject to the section. The 
current rule uses the term ``credit union'' and ``federal credit 
union'' interchangeably to mean ``federal credit union.'' As discussed 
in the background section, the requirements in part 713 are applicable 
to both federal credit unions and federally insured, state-chartered 
credit unions (FISCUs).\14\ For clarity, the proposed rule cross-
referenced the requirement in part 741 that FISCUs must comply with 
Part 713 and referred to FICUs throughout the rule instead of federal 
credit unions.
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    \14\ Part 713 is applicable to all FISCUs through Sec.  741.201 
of the NCUA's regulations, which states that any credit union which 
makes application for share insurance must have the minimum fidelity 
bond coverage stated in part 713 in order for its application to be 
approved and for such share insurance coverage to continue.
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    One commenter questioned whether the proposed rule should be 
applicable to all FISCUs. FISCUs' fidelity bond requirements are 
applied through part 741, which states that ``[a]ny credit union which 
makes application for insurance . . . must possess the minimum fidelity 
bond coverage stated in part 713 . . . .'' The commenter stated that 
the positioning of the language referring to minimum coverage means 
that only the amount of bond coverage, and not the other requirements 
in part 713, apply to FISCUs. The commenter stated that the NCUA should 
invite specific comment on whether all of Part 713 should apply to 
FISCUs. The commenter also does not believe it is necessary for the 
NCUA to impose detailed provisions on FISCUs' fidelity bonds.
    The Board has considered the comment and disagrees that part 741 
applies to only the amount of bond coverage. Part 741 does not use the 
term ``amount'' and instead uses the term ``minimum coverage.'' The 
Board believes that the reasonable and plain understanding of the term 
``coverage'' includes factors such as the amount of insurance, the 
claims covered by the insurance, and other operational considerations 
that ensure the coverage is adequate. The Board's position is further 
supported by the fact it has been the Board's public and longstanding 
position that the entirety of part 713 applies to FISCUs. The commenter 
even noted that prior NCUA discussions of part 713 were directed to all 
FISCUs. Therefore, the Board is finalizing this provision as proposed.
    The final rule also includes a cross-reference for corporate credit 
unions and states that corporate credit unions must comply with Sec.  
704.18 instead of part 713.
Sec.  713.2 What are the responsibilities of a federally insured credit 
union's board of directors under this section?
2(a)
    The proposed rule amended current Sec.  713.2 by dividing the 
section into two subparagraphs. Current Sec.  713.2 became paragraph 
(a). The proposed rule retained most of the current Sec.  713.2 without 
change, with the following exception. For consistency with the rest of 
part 713, the term ``Federal credit union'' was revised to ``federally 
insured credit union.'' The Board did not receive any comment on this 
provision and is finalizing it as proposed.

[[Page 35519]]

2(b)
    The proposed rule added a new paragraph (b) to Sec.  713.2. 
Proposed paragraph (b) increased a board of directors' oversight 
responsibility of its FICU's fidelity bond coverage. Specifically, the 
proposed rule required a FICU's board, and, if applicable, a FICU's 
supervisory committee, to review all applications for purchase or 
renewal of bond coverage and to pass a board resolution approving the 
purchase or renewal. The proposed rule also required a FICU's board to 
delegate one board member, who is not an employee of the FICU, to sign 
the attestation for bond purchase or renewal. This proposal prohibited 
the same board member from signing the attestation for renewal in 
consecutive years.
    The Board notes the current rule already requires a FICU's board to 
annually review its fidelity bond and other insurance coverage to 
ensure it is adequate. The proposed rule took that review a step 
further and required a FICU's board, and, if applicable, its 
supervisory committee, to review all applications for purchase or 
renewal of fidelity bond coverage. The Board believed this change 
helped ensure the board is addressing the adequacy of the coverage at 
all stages, rather than at an annual point in time that may be 
retrospective, and require additional steps by the FICU to remedy a 
deficiency.
    Almost every commenter objected to the requirement for additional 
board review and stated that the current requirement for an annual 
review of the adequacy of coverage is sufficient. Most commenters 
stated that bond renewal is a highly involved, time-intensive, and 
technical process and that it is more appropriate for a board of 
directors to focus on broad strategic goals. One commenter stated that 
a bond renewal usually takes about one year to complete. A few 
commenters stated that the risk of loss from dishonest employees is 
better addressed through NCUA's examination of a credit union's 
internal controls. In contrast, one insurance company supported the 
proposed requirement as adding an important layer of review.
    The Board continues to believe that an ongoing review by a FICU's 
board of directors is necessary to ensure the adequacy of fidelity bond 
coverage. The Board agrees with commenters that adequate internal 
controls are a fundamental part of ensuring a FICU's safety and 
soundness. The Board, however, also believes that adequate fidelity 
bond coverage complements sound internal controls. Therefore, the Board 
is finalizing a board's requirement to review all applications for 
purchase or renewal of fidelity bond coverage as proposed.
    The proposed rule required a FICU's supervisory committee to 
conduct a review of all applications for purchase or renewal of 
fidelity bond coverage, in addition to the FICU's board. Several 
commenters objected to the proposed requirement that both the board of 
directors and the supervisory committee were responsible for reviewing 
renewal documents. Commenters generally believed that the dual review 
is unnecessary. A few commenters noted that many supervisory committees 
do not meet as frequently as boards of directors and it would be very 
difficult to synchronize their review given the back-and-forth 
negotiating with the insurance company that usually occurs during the 
renewal process. After reviewing the comments, the Board has removed 
the requirement for the supervisory committee to review fidelity bond 
purchases or renewals. The Board believes that removing the requirement 
for supervisory committee review balances the Board's concern for 
adequate fidelity bond oversight with concerns about regulatory burden.
    As noted, the proposed rule also required a FICU's board to, after 
conducting its review, pass a resolution approving the purchase or 
renewal of fidelity coverage and designating a member of the board, who 
is not an employee of the FICU, to sign applications for purchase, bond 
renewals, and any accompanying attestations. Also as mentioned, the 
proposed rule required that the member of the board acting as signatory 
rotate each time the FICU purchases or renews fidelity coverage. 
Commenters were almost universally against this proposed requirement.
    A few commenters stated that some insurance companies require an 
employee of the credit union to sign the renewal documents. The Board 
is aware that under the current rule it is industry practice for 
employees to generally sign renewal documents. The final rule, however, 
requires that a non-employee sign the renewal documents. This policy 
may necessitate changes to certain fidelity bond forms.
    One commenter thought a more effective solution would be to mandate 
the inclusion of a clause in the fidelity bond contract that states the 
signatory's fraud is not imputed to the company and, therefore, the 
signatory's fraud cannot serve as a basis for the insurer to rescind 
coverage. The Board has not adopted this suggestion. The Board is 
concerned that this level of specificity in a fidelity bond contract, 
along with the fact this would be a significant departure from current 
industry practice, would reduce the number of fidelity bond insurance 
providers. A robust market for fidelity bond insurance ensures each 
FICU has options when determining appropriate insurance coverage. The 
Board believes, however, that if an insurer offers such a bond form it 
would likely address the Board's concerns regarding rescinded fidelity 
bond coverage and may alleviate the need for the board of directors to 
review each renewal and for a director to sign the renewal.
    Most other comments focused on the potential burden of this 
provision. Some commenters expressed concern that this requirement 
could negatively affect a FICU's ability to recruit volunteer board 
members by increasing the perceived personal liability of the board 
member who is designated to sign the renewal. Other commenters thought 
insurance companies would either increase costs or modify contracts in 
response to the proposed rule. One commenter stated that the proposal 
is problematic due to the amount of time, bandwidth, and knowledge that 
is necessary to be a signatory, and believed it would require the board 
member to have a background in insurance. In contrast, one insurance 
company expressed support for this requirement, however, the company 
stated that the NCUA should impose additional requirements to ensure 
the signatory has done adequate due diligence before signing the bond 
renewal.
    The Board is finalizing this provision as proposed. The Board has 
not made any changes to this proposed provision because the Board 
believes it is necessary to prevent losses to the NCUSIF due to 
rescinded coverage. The underlying purpose of these requirements is to 
address the issue of rescission of fidelity bond coverage when the 
signatory to the application to purchase or renew coverage is 
knowledgeable of fraudulent activity. If the signatory to the 
application for purchase or renewal is knowledgeable of fraudulent 
activity, the bond issuer might void the policy and not make a payout 
when losses are discovered. The NCUA believes that a non-employee board 
member, who would not be involved in the day-to-day operations of a 
FICU, is less likely to be responsible for a fraudulent activity than 
an employee. The NCUA also believes that rotating signatories reduces 
the potential for the signatory to be knowledgeable of the fraudulent 
activity.

[[Page 35520]]

    In recent years, the NCUSIF has sustained increased losses due to 
voided fidelity bond coverage. Before 2010, bond rescission was not a 
material concern for the NCUA. Since 2010, however, the NCUA has had at 
least three claims denied due to rescinded fidelity bond coverage and 
the NCUA is concerned that the frequency of rescinded coverage will 
continue to increase. Between 2010 and May 2019, the NCUSIF has already 
lost in excess of $10 million from fidelity bonds that were voided due 
to the signatory being aware of fraudulent activities. Litigation 
related to denied claims is ongoing and may result in additional losses 
to the NCUA. The Board also notes that this requirement is also 
advantageous to individual FICUs, as this will help prevent them from 
losing coverage in cases not involving involuntary liquidation.
    Finally, the Board believes the final rule presents only a minimal 
increase in regulatory burden as the FICU's board is already required 
to annually review its fidelity bond coverage, but meaningfully 
mitigates the risk to the NCUSIF associated with fidelity bond coverage 
rescission.
713.3 What bond coverage must a federally insured credit union have?
    The proposed rule amended current Sec.  713.3 by renumbering and 
revising the section. Current Sec.  713.3 became paragraph (a), current 
paragraphs (a) and (b) were renumbered as paragraphs (a)(1) and (2), 
and two new subparagraphs were added as (a)(3) and (4). Finally, a new 
paragraph (b) also was added.
3(a)(2)
    Current paragraph (b) of Sec.  713.3 states that, at a minimum, a 
FICU's fidelity bond coverage must include fidelity bonds that cover 
fraud and dishonesty. The proposed rule removed the redundant phrase 
``[i]nclude fidelity bonds that'' in current paragraph (b). The Board 
did not receive any comment on this section and is finalizing this 
provision as proposed. The final rule reads ``At a minimum, your bond 
coverage must: . . . Cover fraud and dishonesty by all employees, 
directors, officers, supervisory committee members, and credit 
committee members;''.
3(a)(3)
    The proposed rule added a new paragraph (a)(3) to Sec.  713.3. 
Proposed paragraph (a)(3) required a FICU to have fidelity bond 
coverage that includes an option for the liquidating agent to purchase 
coverage that extends the discovery period, the period to discover and 
file a claim, for at least two years after liquidation.\15\ Most 
commenters objected to the proposed two-year discovery period following 
an involuntary liquidation. Most commenters cited the potential for 
increased premiums as the reason for their objection. In the proposed 
rule, the NCUA stated its belief that any additional cost of this 
provision would likely be covered by the liquidating agent as the 
liquidating agent would pay the fee for an extended discovery period.
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    \15\ The Board believes that an extended discovery period is 
important for protecting the NCUSIF as fidelity bonds mitigate the 
risk presented by fraudulent and other dishonest acts to the NCUSIF 
and have served as a significant source of recovery in liquidations 
caused by fraud.
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    Commenters, however, did not believe that the liquidating agent 
would bear all of the additional cost of the two-year discovery window 
because state insurance regulations cap the amount that an insurer can 
charge for an extended discovery period. Several commenters expressed 
concern that the NCUSIF savings would not justify the added cost to all 
FICUs due to the limited number of FICUs that are involuntarily 
liquidated. Several commenters requested that the NCUA undergo a cost-
benefit analysis. One commenter stated that the NCUA did not present 
any evidence that the current policy of providing notice does not work, 
just that it lacks legal certainty. In contrast, two credit union 
commenters supported the extended discovery period. In addition, two 
commenters associated with the insurance industry suggested a 12-month 
discovery window. One stated that a 12-month window is in line with 
industry standards and encourages timely action by the liquidating 
agent. In response to the commenters, the Board has amended the 
proposed two-year discovery window.
    In an effort to better balance the costs and benefits of the 
Board's intent, the Board has amended the final rule to require that 
fidelity bond contracts provide for a 12-month discovery window 
following an involuntary liquidation. The Board initially proposed a 
two-year discovery window as members have 18 months to file a claim on 
insured accounts after the appointment of a liquidating agent.\16\ Upon 
consideration of the comments, the Board believes a 12-month discovery 
period provides adequate time to discovery and file a claim. 
Additionally, after conducting research, the Board believes that this 
proposed requirement will not result in any material additional cost or 
burden on FICUs.
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    \16\ 12 U.S.C. 1787(o).
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3(a)(4)
    The Board also proposed to add a new paragraph (a)(4) to Sec.  
713.3 to include a requirement that, for voluntary liquidations, a 
FICU's fidelity bond coverage remain in effect, or provide that the 
discovery period is extended, for at least four months after the final 
distribution of assets. There were only two comments on the proposed 
four-month discovery period following a voluntary liquidation. One 
commenter did not object to it. The other commenter did not support 
imposing the requirement on FISCUs and stated that state law governs 
voluntary liquidations for FISCUs. The Board believes that this 
requirement is important because it benefits a FISCU's members as any 
recovery following a voluntary termination flows through to members. 
Additionally, the provision imposes only a minor burden for FISCUs. 
Therefore, the Board is finalizing this provision as proposed.
3(b)
    Section 713.3 requires that a bond, at a minimum, must be purchased 
in ``an individual policy.'' \17\ The NCUA added this section to part 
713 in a 1999 final rule in response to a commenter who pointed out 
that there had been instances of FICUs jointly purchasing fidelity 
bonds with each other.\18\ The commenter was concerned that a loss 
caused by one or two of the joint policyholders could reduce the amount 
of available coverage for the other policyholders to below the required 
minimum amount. In addressing this comment, the Board provided in Sec.  
713.3 that a FICU must purchase its own individual policy.\19\ The 
regulation did not, however, define ``individual policy.''
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    \17\ 12 CFR 713.3.
    \18\ 64 FR 28718, 28719 (May 27, 1999).
    \19\ Id. at 28719.
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    Since inclusion of this provision in the NCUA's regulations, OGC 
has issued two public legal opinions interpreting the meaning of 
``individual policy'' and opining on the type of coverage that is 
prohibited under Sec.  713.3(a).\20\ A 2014 OGC legal opinion states 
that a FICU may not include one or more of its CUSOs or other parties 
as additional insureds under its fidelity bond.\21\ In a 2004 legal 
opinion, OGC opined that a CUSO that provides management services for 
multiple credit unions could not purchase a single fidelity

[[Page 35521]]

bond with each credit union named as an insured.\22\ In both letters, 
OGC explained the purpose of the individual policy requirement is to 
avoid diluting the individual credit union's coverage.
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    \20\ OGC Legal Op. 04-0744 (Sep. 21, 2004); and OGC Legal Op. 
14-1013 (Mar. 21, 2014).
    \21\ OGC Legal Op. 14-1013 (Mar. 21, 2014).
    \22\ OGC Legal Op. 04-0744 (Sep. 21, 2004).
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    As noted above, OGC issued a third legal opinion on the 
``individual policy'' requirement in 2017 (2017 legal opinion). The 
2017 legal opinion rescinded and replaced the previous two opinions and 
expanded the permissibility for certain joint coverage provisions under 
the ``individual policy'' requirement. OGC and the NCUA's Office of 
Examination and Insurance determined this broader interpretation was 
both within the NCUA's legal authority under the FCU Act and a safe and 
sound practice for FICUs. For clarity and ease of reference, the Board 
sought to incorporate the 2017 legal opinion into proposed part 713.
    No commenters opposed this policy and several commenters supported 
it. The Board is finalizing this provision as proposed. Under the final 
rule, a FICU may have a fidelity bond that also covers its CUSO(s) if 
the FICU owns greater than 50 percent of a CUSO it wishes to cover, or 
a covered CUSO is organized by the FICU for the purpose of handling 
certain of its business transactions and composed exclusively of its 
employees. The 50 percent threshold reflects the standard for 
accounting consolidation under generally accepted accounting 
principles, or GAAP. A FICU directly benefits from any fidelity bond 
insurance proceeds collected by a consolidated CUSO.\23\ This final 
rule, however, does not eliminate the prohibition against joint 
coverage of entities not majority owned by the FICU, such as other 
credit unions or non-majority-owned CUSOs. The Board believes this 
amendment will provide greater flexibility to FICUs without affecting 
safety and soundness.\24\
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    \23\ As discussed in the 2017 legal opinion, the NCUA has 
previously approved certain nominee provisions that included limited 
joint coverage. For example, a nominee provision may state that a 
loss sustained by any ``nominee'' organized by the insured for the 
purpose of handling certain of its business transactions and 
composed exclusively of its employees shall be deemed to be loss 
sustained by the insured.
    \24\ The final rule is not making a comparable amendment to Part 
704. Corporate credit unions are not required to purchase fidelity 
bonds subject to an individual policy requirement. Therefore, the 
amendment to clarify the individual policy requirement is only 
applicable to natural person credit unions.
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Sec.  713.4 What bond forms may a federally insured credit union use?
    The current rule provides that the NCUA will maintain a current 
list of bond forms approved by the Board for use by FICUs. The rule 
also states that a FICU must obtain the approval of the Board before it 
can use any other basic bond form or any rider or endorsement that 
limits coverage of an approved bond form. The Board proposed to amend 
Sec.  713.4 to make several changes to reflect the practices of the 
NCUA, clarify the list of documents that must have Board approval, and 
address the expiration and continuing review of approved bond forms. 
The Board received several comments that addressed the expiration and 
continuing review of approved bond forms. Those comments are discussed 
below. Other than the expiration of bond form approval, the Board did 
not receive any comments that generally discussed its approval of bond 
forms. Therefore, this section has generally been finalized as 
proposed. Any questions regarding the NCUA's approval of fidelity bond 
forms can be directed to the NCUA's OGC, (703) 518-6540.
4(a)
    Current Sec.  713.4(a) states that a current listing of basic bond 
forms that may be used without prior Board approval is on the NCUA's 
website. The proposed rule clarified this requirement by dividing 
paragraph (a) into two new paragraphs. The Board did not receive any 
comment on this section and is finalizing this provision as proposed. 
New paragraph (a) explicitly states that ``the NCUA Board must approve 
all bond forms before federally insured credit unions may use them.''
4(b)
    Proposed paragraph (b) stated that approved bond forms are listed 
on the NCUA's website and may be used by a FICU without further NCUA 
approval. If a FICU is unable to access the NCUA's website, it can get 
a current listing of approved bond forms by contacting the NCUA at 
(703) 518-6330. The proposed rule rewrote this provision for clarity, 
but did not make any substantive changes. The Board did not receive any 
comment on this section and is finalizing it as proposed.
4(c)
    Proposed paragraph (c) set forth which fidelity bonds and fidelity 
bond documents require Board approval. The Board is finalizing this 
paragraph as proposed.
4(c)(1)
    The final rule clarifies that any bond form that has been amended 
or changed since the Board approved it requires new approval from the 
Board. The Board notes that this policy is the current practice whereby 
bond issuers submit amended bond forms to the Board for approval under 
current Sec.  713.4(b)(1).
4(c)(2)
    The final rule states explicitly that renewal forms (and any other 
document) that limit the coverage of approved bond forms must also 
receive Board approval. The Board is clarifying the list of documents 
subject to approval because the Board is aware of instances where the 
renewal or continuation of coverage forms included language affecting 
the bond coverage, including language that limited the bond coverage. 
As such, it is the Board's belief that the renewal form is an extension 
of the bond form and thus this is not an additional burden but further 
clarification of what constitutes the bond form.
4(d)
    The proposed rule also added a new paragraph (d) to sunset its 
approval on all bond forms ten years after the form is approved. The 
impetus for this provision is the discovery that Board approved-bond 
forms were being interpreted in a way that was contrary to the NCUA's 
understanding of how the bond forms would be used. In addition, a 
review of previously approved bond forms, as part of issuing the 2017 
legal opinion, revealed several instances of outdated provisions, 
additions that had not been approved by the Board, and some forms that 
contained provisions that were contrary to the FCU Act and part 713 of 
the NCUA's regulations. To avoid instances of this in the future, the 
Board proposed to sunset its approval of a bond form after a period of 
ten years. Commenters had mixed opinions on this provision. While 
several commenters supported the ten-year sunset, many other commenters 
expressed concerns about the ten-year sunset date. Specifically, two 
commenters associated with the insurance industry expressed concerns 
because form approval is already a complicated process as it involves 
state insurance regulators. The Board understands the complexity 
involved in the approval process, but is maintaining the ten-year 
sunset. The Board believes the sunset is necessary to ensure bond forms 
are up-to-date and continue to

[[Page 35522]]

provide adequate fidelity bond coverage for FICUs.
    With respect to bond forms that the Board has approved before 2019, 
the Board proposed to allow its approval on these forms to continue 
until January 1, 2029. Several commenters expressed concerns about the 
NCUA's ability to reapprove bond forms, and particularly, reapprove all 
existing bond forms in 2029. Commenters believed that re-approval would 
be a resource-intensive process and suggested that the NCUA include 
qualifying language in case there is a delay and the NCUA has not 
reapproved all bond forms by their expiration date. The Board agrees 
that qualifying language is beneficial. Therefore, the final rule 
provides that approval for all existing bond forms sunsets after ten 
years unless otherwise determined by the NCUA Board.\25\ The Board 
believes the addition of qualifying language provides reasonable 
flexibility while preserving its intent to sunset bond form approval 
after ten years.
---------------------------------------------------------------------------

    \25\ The Board has added this flexibility both for the general 
ten-year sunset provision and for the 2029 sunset date for all 
currently approved bond forms.
---------------------------------------------------------------------------

    Under the proposed rule, the ten-year approval period began on the 
date the Board approved a bond form. The proposed rule stated, however, 
that the ten-year period would not toll or start over if a bond carrier 
submits a revision to an approved bond form. One commenter believed 
that this is unnecessary and approval should always sunset ten years 
after a bond form is reviewed and approved. The Board has reconsidered 
and agrees with the commenter. Under the final rule, the Board's 
approval always sunsets ten years after a bond is reviewed and 
approved. The Board proposed to maintain the original sunset date 
because of concerns that a subsequent review may be targeted and not 
review the bond form in its entirety. To address this concern, under 
the final rule, a bond form will always be reviewed in its entirety.
    The proposed rule also noted that should the Board determine, upon 
re-review, that a bond form does not comply with the NCUA's 
regulations, the Board would not require FICUs with coverage under that 
bond to seek new coverage. One commenter objected to this provision and 
believed that if the coverage is not adequate, new coverage should be 
required immediately. The Board is supportive of adequate fidelity bond 
coverage, but is concerned about the burden to a FICU if the contract 
is determined to be inadequate during the contract term. Therefore, 
under the final rule a FICU must only seek new coverage under an 
approved bond form after its current coverage expires per the terms of 
the contract between the FICU and the bond issuer.
    The proposed rule also clarified that the Board may review a bond 
form at any time. The Board received no comment on this provision and 
is finalizing it as proposed.
Sec.  713.5-Sec.  713.7
    The proposed rule used the term federally insured credit union 
instead of federal credit union in each of Sec. Sec.  713.5, 713.6, and 
713.7 for consistency and clarity. The Board did not receive any 
comment on these sections and is finalizing them as proposed.

Part 704

    In general, part 704 applies to all federally insured corporate 
credit unions. Section 704.18 provides the fidelity bond requirements 
for such credit unions. Changes to the specific subparagraphs of Sec.  
704.18 are discussed below.
Sec.  704.18 Fidelity Bond Coverage
18(b)
    The proposed rule amended current Sec.  704.18(b) by dividing 
paragraph (b) into two subparts. Current paragraph (b) remained 
unchanged and was designated paragraph (b)(1). The proposed rule added 
a new paragraph as (b)(2). Proposed paragraph (b)(2) required that a 
corporate credit union's board of directors and supervisory committee 
review all applications for purchase or renewal of its fidelity bond 
coverage. After review, the corporate credit union's board was required 
to pass a resolution approving the purchase or renewal of fidelity bond 
coverage and delegate one member of the board, who is not an employee 
of the corporate credit union, to sign the purchase or renewal 
agreement and all attachments. No board member was permitted to be a 
signatory on consecutive purchase or renewal agreements for the same 
fidelity bond coverage policy. This proposed amendment was identical to 
proposed changes to Part 713 for natural person credit unions. The 
Board received significant comment on this proposed requirement. As 
compared to the proposed rule, the final rule does not require that the 
corporate credit union's supervisory committee review all applications 
for purchase or renewal. The Board is finalizing the remaining 
requirements of this paragraph as proposed. For additional background 
and a detailed discussion of comments received, see the previous 
discussion for changes to Sec.  713.2(b).
18(c)
    The proposed rule made significant revisions to current Sec.  
704.18(c). Section 704.18(c) was split into five new subparagraphs, 
each of which is described in more detail below.
18(c)(1)
    The proposed rule stated that a corporate credit union's fidelity 
bond coverage must be purchased from a company holding a certificate of 
authority from the Secretary of the Treasury. This was not a 
substantive change from the current requirements and the proposed 
language was intended to reflect the comparable language in part 713. 
The Board did not receive any comment on this provision and is 
finalizing it as proposed.
18(c)(2)
    Proposed Sec.  704.18(c)(2) stated that fidelity bonds must provide 
coverage for the fraud and dishonesty of all employees, directors, 
officers, and supervisory and credit committee members. This was not a 
substantive change from the current requirements and the Board is 
finalizing this provision as proposed.
18(c)(3)
    The proposed rule substantively amended the requirements for a 
corporate credit union's approved bond forms. The proposed requirements 
reflected the changes proposed for natural person credit unions in part 
713. The proposed rule required the Board to approve all bond forms 
before a corporate credit union may use them. In addition, a corporate 
credit union could not use any bond form that had been amended since 
receiving Board approval, or any rider, endorsement, renewal, or other 
document that limited coverage of approved bond forms, without first 
receiving approval from the Board. As required under proposed part 713, 
approval of all bond forms expired 10 years after the date the Board 
approved or reapproved use of the bond form. Any currently approved 
bond forms would expire on January 1, 2029. The Board is finalizing 
this provision as proposed with one exception. As compared to the 
proposed rule, the final rule adds qualifying language to provide the 
Board flexibility to extend its approval of bond forms. For additional 
background, and a detailed discussion of comments, see the previous 
discussion for changes to Sec.  713.4.

[[Page 35523]]

18(c)(4)
    The proposed rule added a new Sec.  704.18(c)(4) to ensure that 
there is an adequate discovery period, the period to discover and file 
a claim, following a corporate credit union's liquidation. The proposed 
requirements reflected the changes proposed for natural person credit 
unions in part 713. The proposed rule required fidelity bonds to 
include an option for the liquidating agent to purchase coverage in the 
event of an involuntary liquidation that extended the discovery period 
for a covered loss for at least two years after liquidation. The Board 
is finalizing this provision as proposed with one substantive 
modification. The final rule requires only a one-year discovery period 
following an involuntary liquidation. In the case of a voluntary 
liquidation, under the proposed rule, fidelity bonds were required to 
remain in effect, or provide that the discovery period is extended, for 
at least four months after the final distribution of assets. The Board 
is finalizing this provision as proposed. For additional background and 
a detailed discussion of comments, see the previous discussion for 
changes to Sec.  713.3(a)(3) and (4).
18(c)(5)
    The current rule requires that corporate credit union bond forms 
include a provision requiring written notification by surety to the 
NCUA when a credit union's bond is terminated or when the coverage of 
an employee, director, officer, supervisory or credit committee member 
has been terminated. The NCUA also must be notified in writing by 
surety if a deductible is increased above permissible limits. The 
proposed rule did not include any amendments to these requirements. One 
commenter, however, objected to the existing requirements and stated 
that the corporate credit union, and not the insurer, should be 
responsible for providing the required notice. This comment is outside 
the scope of the proposed rule, but the Board notes that it continues 
to believe that the insurance company should notify the NCUA if any of 
the listed events occur.

IV. Regulatory Procedures

a. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) 
requires that the Office of Management and Budget (OMB) approve all 
collections of information by a Federal agency from the public before 
they can be implemented. Respondents are not required to respond to any 
collection of information unless it displays a current, valid OMB 
control number.
    The burden outline in the preamble of the notice of proposed 
rulemaking did not include those associated with corporate credit 
unions. As with part 713, part 704 is being amended to require NCUA 
approval on all bond forms expired after a period of 10 years from the 
date of the NCUA approval or reapproved of its use. This information 
collection requirement is estimated to impact two corporate credit 
unions, for a total of two additional burden hours. This program change 
is reflected in the 19 total burden hours requested.
    In accordance with the PRA, the information collection requirements 
included in this final rule have been submitted to OMB for approval 
under control number 3133-0170.

b. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in 
connection with a final rulemaking, an agency prepare and make 
available for public comment a final regulatory flexibility analysis 
that describes the impact of a final rule on small entities. A 
regulatory flexibility analysis is not required, however, if the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities (defined for purposes of the RFA 
to include credit unions with assets less than $100 million) and 
publishes its certification and a short, explanatory statement in the 
Federal Register together with the rule.
    The Board does not believe that the final rule has a significant 
economic impact on a substantial number of small entities. Any 
increased costs for the bond insurer to resubmit their forms every ten 
years is spread out among all FICUs and the cost to each FICU is 
negligible. In addition, after conducting research the Board believes 
that the requirement for bond forms to include a 12-month discovery 
period following liquidation will not result in any material additional 
cost or burden on FICUs. Finally, the requirement that boards must 
approve purchases and renewals would impose no direct cost on FICUs. 
Accordingly, the NCUA certifies that the final rule does not have a 
significant economic impact on a substantial number of small FICUs.

c. Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. The 
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the executive order to adhere to fundamental 
federalism principles. This final rule does not have a direct effect on 
the states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. The NCUA has therefore determined that 
this final rule does not constitute a policy that has federalism 
implications for purposes of the executive order.

d. Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this final rule does not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Public Law 105-277, 112 
Stat. 2681 (1998).

e. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(Pub. L. 104-121) (SBREFA) generally provides for congressional review 
of agency rules.\26\ A reporting requirement is triggered in instances 
where the NCUA issues a final rule as defined by section 551 of the 
APA.\27\ An agency rule, in addition to being subject to congressional 
oversight, may also be subject to a delayed effective date if the rule 
is a ``major rule.'' \28\ The NCUA does not believe this rule is a 
``major rule'' within the meaning of the relevant sections of SBREFA. 
As required by SBREFA, the NCUA submitted this final rule to the Office 
of Management and Budget (OMB) for it to determine if the final rule is 
a ``major rule'' for purposes of SBREFA. OMB determined the final rule 
was not a major rule. The NCUA also will file appropriate reports with 
Congress and the Government Accountability Office so this rule may be 
reviewed.
---------------------------------------------------------------------------

    \26\ 5 U.S.C. 801-804.
    \27\ 5 U.S.C. 551.
    \28\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

List of Subjects in 12 CFR Parts 704 and 713

    Bonds, Credit unions, Insurance.

    By the National Credit Union Administration Board on July 18, 
2019.
Gerard Poliquin,
Secretary of the Board.

    For the reasons discussed above, the NCUA is amending 12 CFR parts 
704 and 713 as follows:

[[Page 35524]]

PART 704--CORPORATE CREDIT UNIONS

0
1. The authority citation for part 704 continues to read as follows:

    Authority: 12 U.S.C. 1762, 1766(a), 1772a, 1781, 1789, and 
1795e.


0
2. Section 704.18 is amended by revising paragraphs (b) and (c) to read 
as follows:


Sec.  704.18  Fidelity bond coverage.

* * * * *
    (b) Review of bond coverage. (1) The board of directors of each 
corporate credit union shall, at least annually, carefully review the 
bond coverage in force to determine its adequacy in relation to risk 
exposure and to the minimum requirements in this section.
    (2) The board of directors of each corporate credit union must 
review all applications for purchase or renewal of its fidelity bond 
coverage. After review, the credit union's board must pass a resolution 
approving the purchase or renewal of fidelity bond coverage and 
delegate one member of the board, who is not an employee of the credit 
union, to sign the purchase or renewal agreement and all attachments; 
provided, however, that no board members may be a signatory on 
consecutive purchase or renewal agreements for the same fidelity bond 
coverage policy.
    (c) Minimum coverage; approved forms. (1) The fidelity bond 
coverage must be purchased from a company holding a certificate of 
authority from the Secretary of the Treasury.
    (2) Fidelity bonds must provide coverage for the fraud and 
dishonesty of all employees, directors, officers, and supervisory and 
credit committee members.
    (3) The NCUA Board must approve all bond forms before a corporate 
credit union may use them. Corporate credit unions may not use any bond 
form that has been amended since the time the NCUA Board approved the 
form or any rider, endorsement, renewal, or other document that limits 
coverage of approved bond forms without receiving approval from the 
NCUA Board. Approval on all bond forms expires 10 years after the date 
the NCUA Board approved or reapproved use of the bond form unless 
otherwise determined by the NCUA Board; provided, however, that any 
bond forms approved before 2019 will expire on January 1, 2029, unless 
otherwise determined by the NCUA Board. The NCUA reserves the right to 
review a bond form at any point after its approval.
    (4) Fidelity bonds must include an option for the liquidating agent 
to purchase coverage in the event of an involuntary liquidation that 
extends the discovery period for a covered loss for at least one year 
after liquidation. In the case of a voluntary liquidation, fidelity 
bonds must remain in effect, or provide that the discovery period is 
extended, for at least four months after the final distribution of 
assets.
    (5) Notwithstanding the foregoing, all bonds must include a 
provision, in a form approved by the NCUA Board, requiring written 
notification by surety to NCUA:
    (i) When the fidelity bond of a credit union is terminated in its 
entirety;
    (ii) When fidelity bond coverage is terminated, by issuance of a 
written notice, on an employee, director, officer, supervisory or 
credit committee member; or
    (iii) When a deductible is increased above permissible limits. Said 
notification shall be sent to NCUA and shall include a brief statement 
of cause for termination or increase.
* * * * *

PART 713--FIDELITY BOND AND INSURANCE COVERAGE FOR FEDERALLY 
INSURED CREDIT UNIONS

0
3. The authority citation for part 713 continues to read as follows:

    Authority: 12 U.S.C. 1761a, 1761b, 1766(a), 1766(h), 
1789(a)(11).


0
4. The heading for part 713 is revised to read as set forth above.

0
5. Revise Sec.  713.1 to read as follows:


Sec.  713.1  What is the scope of this section?

    This section provides the requirements for fidelity bonds for 
federally insured credit union employees and officials and for other 
insurance coverage for losses such as theft, holdup, vandalism, etc., 
caused by persons outside the credit union. Federally insured, state-
chartered credit unions are required by Sec.  741.201 of this chapter 
to comply with the fidelity bond coverage requirements of this part. 
Corporate credit unions must comply with Sec.  704.18 of this chapter 
in lieu of this part.

0
6. Revise Sec.  713.2 to read as follows:


Sec.  713.2  What are the responsibilities of a federally insured 
credit union's board of directors under this section?

    (a) The board of directors of each federally insured credit union 
must at least annually review its fidelity and other insurance coverage 
to ensure that it is adequate in relation to the potential risks facing 
the federally insured credit union and the minimum requirements set by 
the NCUA Board; and
    (b) The board of directors of each federally insured credit union 
must review all applications for purchase or renewal of its fidelity 
bond coverage. After review, the federally insured credit union's board 
must pass a resolution approving the purchase or renewal of fidelity 
bond coverage and delegate one member of the board, who is not an 
employee of the federally insured credit union, to sign the purchase or 
renewal agreement and all attachments; provided, however, that no board 
members may be a signatory on consecutive purchase or renewal 
agreements for the same fidelity bond coverage policy.

0
7. Revise Sec.  713.3 to read as follows:


 Sec.  713.3  What bond coverage must a federally insured credit union 
have?

    (a) At a minimum, your bond coverage must:
    (1) Be purchased in an individual policy from a company holding a 
certificate of authority from the Secretary of the Treasury;
    (2) Cover fraud and dishonesty by all employees, directors, 
officers, supervisory committee members, and credit committee members;
    (3) Include an option for the liquidating agent to purchase 
coverage in the event of an involuntary liquidation that extends the 
discovery period for a covered loss for at least one year after 
liquidation; and
    (4) In the case of a voluntary liquidation, remain in effect, or 
provide that the discovery period is extended, for at least four months 
after the final distribution of assets, as required in Sec.  710.2(c) 
of this chapter.
    (b) The requirement in subsection (a) of this section does not 
prohibit a federally insured credit union from having a fidelity bond 
that also covers its credit union service organization (CUSO(s)), 
provided the federally insured credit union owns more than 50 percent 
of the CUSO(s) or the CUSO(s) is organized by the federally insured 
credit union for the purpose of handling certain of its business 
transactions and composed exclusively of the federally insured credit 
union's employees.

0
8. Revise Sec.  713.4 to read as follows:


Sec.  713.4  What bond forms may a federally insured credit union use?

    (a) The NCUA Board must approve all bond forms before federally 
insured credit unions may use them.
    (b) Bond forms the NCUA Board has approved for use by federally 
insured credit union are listed on the NCUA's website, http://www.ncua.gov, and may be used by federally insured credit unions 
without further NCUA approval.

[[Page 35525]]

If you are unable to access the NCUA's website, you can obtain a 
current listing of approved bond forms by contacting the NCUA at (703) 
518-6330.
    (c) Federally insured credit unions may not use any of the 
following without first receiving approval from the NCUA Board:
    (1) Any bond form that has been amended or changed since the time 
the NCUA Board approved the form; and
    (2) Any rider, endorsement, renewal, or other document that limits 
coverage of approved bond forms.
    (d) Approval on all bond forms expires after a period of 10 years 
from the date the NCUA Board approved or reapproved use of the bond 
form unless otherwise determined by the NCUA Board. Provided, however, 
that:
    (1) Any bond forms approved before 2019 will expire on January 1, 
2029, unless otherwise determined by the NCUA Board; and
    (2) The NCUA reserves the right to review a bond form at any point 
after its approval.


Sec.  713.5  [Amended]

0
9. In Sec.  713.5:
0
a. In paragraphs (a) and (b), remove the word ``federal'' before the 
words ``credit union's'' and add in its place the words ``federally 
insured'' each place they appear;
0
b. In paragraph (c), add the words ``federally insured'' before the 
words ``credit union'', ``credit unions'', or ``credit union's'' each 
place they appear; and
0
c. In paragraph (e), remove the word ``your'' and add in their place 
the words ``a federally insured credit union's''


Sec.  713.6  [Amended]

0
10. In Sec.  713.6 remove the word ``federal'' before the words 
``credit union's'' or ``credit unions'' and add the words ``federally 
insured'' before the words ``credit union's'', ``credit unions'', and 
``credit union'' each place they appear.

0
11. Revise Sec.  713.7 to read as follows:


Sec.  713.7  May the NCUA Board require a federally insured credit 
union to secure additional insurance coverage?

    The NCUA Board may require additional coverage when the NCUA Board 
determines that a federally insured credit union's current coverage is 
inadequate. The federally insured credit union must purchase this 
additional coverage within 30 days.

[FR Doc. 2019-15709 Filed 7-23-19; 8:45 am]
 BILLING CODE 7535-01-P