NCUA Interim Final Rule on Deposit Insurance Beneficiary Extension Supported by Trades

ALEXANDRIA, Va.-In individual comment letters, CUNA and NAFCU expressed their support of NCUA’s interim final regulation regarding the extension of separate share insurance coverage for beneficiaries in living trust accounts. The rule would allow deposit insurance coverage to continue for living trust accounts separate from the beneficiaries’ accounts following the death of the original trust account holder if the beneficiary is subject to a defeating contingency. It also explains that credit unions do not have to maintain records of beneficiaries of living trusts. NCUA went with an interim final rule to maintain parity with the Federal Deposit Insurance Corporation’s rules, which became effective April 1. “CUNA supports removal of the defeating contingency provision because it simplifies the existing share insurance rules, and makes it easier for members to understand their insurance coverage.” CUNA Assistant General Counsel Michelle Q. Profit wrote. “Furthermore, CUNA supports this interim rule because it helps reassure members and all consumers who use living trust accounts that they are receiving the same insurance protection, regardless of whether their accounts are maintained at credit unions or other federally insured institutions.” NAFCU President and CEO Fred Becker wrote in his organization’s comment letter, “The amendments provide parity with FDIC’s rules and eliminate confusion in the implementation of share insurance coverage with respect to living trust accounts. NAFCU believes the interim final rule will provide additional flexibility for credit unions and allow them to remain competitive with other financial institutions.”