CCUL Gives NCUA High Marks for Deposit Parity Proposal

RANCHO CUCAMONGA, Calif. – The California Credit Union League congratulated NCUA for proposing amendments to the share insurance rules that would give credit union members the same extended grace period in deposit coverage that customers of federally insured banks receive when two institutions where they have deposits merge, or when one spouse in a husband-and-wife joint account dies. CCUL Executive Vice President Matthew Davidson said credit union members “deserve the same six-month grace period that bank customers receive in these situations. We have long urged the agency to adopt these changes which will help achieve NCUA’s stated goal of maintaining parity between the National Credit Union Share Insurance Fund and the Federal Deposit Insurance Corporation, and will have little material impact on the NCUSIF.” Credit union members currently do not have a grace period with NCUSIF coverage if they have insured shares in credit unions that merge. So when CUs merge, any member who has more than $100,000 in shares in the combined CU is not insured for the excess amount. The situation is similar when a married member dies. Under FDIC regulations, deposit coverage continues for six months following a bank customer’s death, but under current NCUSIF regulations, deposit coverage does not continue.