WASHINGTON — CUNA putting its two cents in on a Department of Education rule preserved a service and income stream for federally insured credit unions.
In response to a comment letter by CUNA, the Department of Education agreed to revise its final rule on disbursement of federal student aid funds to include credit unions. "We believe that the Department's intention behind the proposed FDIC deposit insurance requirement is an admirable one: To reduce the risk of loss of student funds due to the failure of a depository institution or due to fraud," CUNA Executive Vice President and General Counsel Eric Richard wrote. "Permitting NCUSIF insurance as well as FDIC insurance would in no way increase the risk of loss of student funds."
He beseeched the department to "consider this comment despite its filing after September 7th because the definition of "bank account" used in the proposed rule…will have the consequence–presumably unintended and certainly unfortunate–of eliminating student access to credit union services; services upon which many university students rely." CUNA's letter was filed Sept. 28.
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