ARLINGTON–NAFCU is calling on NCUA to rethink its fidelity bond proposal.
In a comment letter filed with the agency, the trade group said, "NAFCU suggests that NCUA re-evaluate the additional oversight requirements to achieve an operationally efficient and cost-effective solution.”
The letter, authored by Kaley Schafer, NAFCU's regulatory affairs counsel, was sent in response to the agency's fidelity bond proposal. NAFCU said it believes the proposed changes will actually increase credit unions' regulatory burden and costs, rather than reduce them.
The letter is response to a proposed rule issued by the NCUA board during its November meeting that is designed to address four objectives, according to the agency:
- Strengthen a board of directors' oversight of a credit union's fidelity bond coverage
- Ensure an adequate period of time to discover and file covered claims following a credit union's liquidation
- Formalize a legal opinion that permits a natural person credit union's fidelity bond to include coverage for certain credit union service organizations (CUSOs)
- Clarify the documents subject to the NCUA Board's approval and require all bond forms receive the NCUA board's approval every 10 years
In the letter Schafer commended some provisions of the proposal, such as allowing "fidelity bond insurance to include majority owned CUSOs and those CUSOs organized by the federal credit union for the purpose of handling its business transactions and composed exclusively of its employees."
But NAFCU is also calling on NCUA to:
- Maintain the current regulation requiring board approval only and to not require supervisory committee review because of the increased regulatory burden
- Conduct an impact study to ensure the proposed bond contract requirement does not adversely affect federal credit unions, such as higher premiums
- Clarify the process for re-approval of bond forms