NCUA amends regulations on fidelity bonds

How can your credit union stay compliant?

The National Credit Union Administration recently published a final rule to amend its regulations regarding fidelity bonds which will go in effect on October 22, 2019. See below for a checklist for staying compliant with these new amendments.

The effect of the NCUA final rule on credit union board of directors

The NCUA final rule requires a credit union’s board of directors (BOD) to annually review and approve all applications for fidelity bond purchase or renewal. The BOD must also pass a resolution approving the purchase or renewal and designate a non-employee BOD member to be a signatory. The designated signatory must rotate for each application for purchase or renewal.

Key points of the NCUA Rule 713.2 related to the BOD responsibilities

  • The board of directors of each federally insured credit union must at least annually review its fidelity and other insurance coverage to ensure that it is adequate in relation to the potential risks facing the federally insured credit union and the minimum requirements set by the NCUA Board; and
  • The board of directors of each federally insured credit union must review all applications for purchase or renewal of its fidelity bond coverage.

After review, the federally insured credit union’s board must pass a resolution approving the purchase or renewal of fidelity bond coverage and delegate one member of the board, who is not an employee of the federally insured credit union, to sign the purchase or renewal agreement and all attachments; provided, however, that no board members may be a signatory on consecutive purchase or renewal agreements for the same fidelity bond coverage policy.

A checklist for staying compliant with the NCUA Rule 713.2


Annually - Reference point A of the rule

  • At least annually, schedule the Fidelity Bond and other insurance coverages review as an agenda item for your BOD meeting
  • Prior to the meeting, you can provide the Insurance Review to your BOD for review
    • Access your Insurance Review using My Services at (User ID & Password required)
    • Save and forward the Insurance Review (via PDF or print) to your board of directors for review
  • Document in the BOD minutes that the insurance (be specific of which coverages) was reviewed to ensure adequacy in relation to (1) the potential risks facing your credit union and (2) the minimum requirements set by the NCUA Board per the NCUA rule


When applicable - Reference point B of the rule

Note: You may not have proposals or applications to review annually

  • Upon receipt of your credit union’s Required Renewal Questionnaire, complete it. The completed Questionnaire represents your application
  • Share the completed Required Renewal Questionnaire with your BOD for review. Simply email or print it for review
  • Note: Your board should review sections related to the Fidelity Bond coverage
  • Have BOD review and pass a resolution that the BOD approves the purchase or renewal of the fidelity bond coverage
  • Document within the BOD minutes that the fidelity bond application has been reviewed and a resolution has been passed approving the purchase or renewal of the fidelity bond coverage
  • A board member, who is not an employee of the credit union, should sign the Required Renewal Questionnaire and any Proposal for the fidelity bond coverage Note: The same board member should not sign consecutive agreements
  • Keep copies of these signed documents with your BOD minutes

Download a PDF of the NCUA Fidelity Bond Rule Checklist

Download a PDF of a list of important questions about Switching Bond Carriers

Download a PDF of the longevity and Credit Union Bond Carrier timeline 

Resources to Help You Manage Credit Union Risk

Log in to your account for your Insurance Review and Required Renewal Questionnaire, as well as other resources that can help your credit union and board comply.

Stay at the forefront of emerging risk trends that may be impacting your credit union through these videos and related resources. For more insights, access the Protection Resource Center.

For additional assistance, contact your CUNA Mutual Group Sales Executive or Property & Casualty Consultant at 800.356.2644.

This resource is for informational purposes only. It does not constitute legal advice. Please consult your legal advisors regarding this or any other legal issues relating to your credit union. CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Insurance products offered to financial institutions and their affiliates are underwritten by CUMIS Insurance Society, Inc. or CUMIS Specialty Insurance Company, members of the CUNA Mutual Group. Some coverages may not be available in all states. If a coverage is not available from one of our member companies, CUNA Mutual Insurance Agency, Inc., our insurance producer affiliate, may assist us in placing coverage with other insurance carriers in order to serve our customers’ needs. CUMIS Specialty Insurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market.