C.F.R. » Title 12 » CHAPTER VII—NATIONAL CREDIT UNION ADMINISTRATION › SUBCHAPTER A—REGULATIONS AFFECTING CREDIT UNIONS › PART 713—FIDELITY BOND AND INSURANCE COVERAGE FOR FEDERALLY INSURED CREDIT UNIONS

12 C.F.R. § 713.3

What bond coverage must a federally insured credit union have?

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(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 § 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.

[84 FR 35524, July 24, 2019]
Notes of Decisions
Cited in 1 case, 2003–2003 · leading case: Futrell v. Dep't of Labor Fed. Credit Union, 816 A.2d 793 (D.C. 2003).
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Futrell v. Dep't of Labor Fed. Credit Union, 816 A.2d 793 (D.C. 2003). “” 12 C.F.R. § 713.3 provides that “[a]t a minimum, your bond coverage must: (a) [b]e purchased in an individual policy from a company holding a certificate of authority from the Secretary of the Treasury,” and (b) "[i]nclude fidelity bonds that cover fraud and dishonesty by all…”
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