NCUA Letter to Credit Unions
by Amy Kleinschmit, Director of Compliance
On Tuesday, December 18, 2012, the National Credit Union Administration issued guidance on the scheduled expiration of the temporary corporate credit union share guarantee and unlimited insurance on noninterest-bearing transaction accounts. This letter to credit unions can be found here: http://www.ncua.gov/Resources/Documents/LCU2012-14.pdf
As we brought to your attention earlier this month, on December 31, the temporary unlimited insurance on excess shares in transaction accounts expires. Also, on December 31, the temporary corporate credit union share guarantee program ends.
The NCUA Letter 12-CU-14 provides that “with the expiration deadline now approaching, we encourage you to take reasonable steps to:
• Evaluate whether your credit union holds member accounts with the temporary unlimited insurance coverage.
• Communicate to your membership the potential changes in insurance coverage occurring on January 1, 2013.
• Ensure your account disclosures properly disclose the level of insurance coverage.
• Make your membership aware of NCUA’s Share Insurance Tool Kit on our website (http://www.ncua.gov/DataApps/Pages/SI-Tools.aspx) which may be used for estimating the insurance coverage on their accounts.”
Credit unions will also need to review their own investments. If the credit union has unlimited coverage deposits in other institutions that will be expiring, it should update its due diligence for credit risk implications. Also, credit unions conducting business with corporate credit unions should evaluate their uninsured corporate account holdings and perform appropriate due diligence.
Please do not hesitate to contact Amy Kleinschmit at email@example.com or 701.214.9721 with any questions or concerns on this or any other compliance topics.