NCUA Eyes Fidelity BondRevamp

ALEXANDRIA, Va. - (05/20/05) -- The largest credit unions would beable to self-insure for up to $1 million in losses under a proposedchange in NCUA fidelity bond requirements, the first major changesin 25 years. The proposal, issued for a 60-day comment period,would allow the largest credit unions, those over $1 billion inassets and qualifying as well-run under NCUA's RegFlex program, tocontract for coverage with a $1 million deductible--effectivelyself-insuring for that amount. The proposal would also increaserequired coverages. For credit unions under $500 million requiredcoverage would be the lesser of $250,000 or total assets. Forcredit unions over $500 million the minimum bond would be 1% ofassets, to a maximum of $9 million.