WASHINGTON--With NCUA’s deregulation efforts ongoing, America’s Credit Unions is encouraging future proposals to include updates to fidelity bond regulations. A letter sent Wednesday follows up on an October letter to the agency detailing the need for such changes.
Current regulations require a credit union’s board of directors to review and approve fidelity bond coverage, board approval to follow a rotation of signatories, and prescribe procedures for renewal and documentation.
“We urge the NCUA to modernize these requirements by focusing on substantive oversight rather than procedural formalities,” the letter reads. “Rather than requiring signatures on renewal paperwork, the agency could require that, upon renewal of a bond, the full board receive an overview of the fidelity bond coverage, limits, and any material changes. Many credit unions already handle this efficiently through regular board meetings.”
The letter notes that at a minimum, NCUA should provide credit unions with flexibility to delegate review and renewal authority, subject to board oversight. The agency should also consider allowing annual board review of coverage rather than transaction-by-transaction approvals tied to each renewal cycle.
These changes would reduce unnecessary burdens, particularly for small credit unions, while maintaining strong fidelity bond protections, ACU said.