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Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
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Regulation & Supervision
The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the United States, the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.
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The NCUA provides a number of support services to the credit union system, such as providing training, grants and loans, chartering, and field-of-membership services; maintaining the health and stability of Share Insurance Fund; managing the assets of failed credit unions; and providing emergency liquidity.
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Cyberattacks and cybersecurity vulnerabilities pose significant risks to the financial system. Because of vulnerabilities within the credit union industry and the broader financial system to potential cyberattacks, cybersecurity is one of the NCUA’s top supervisory priorities and a top-tier risk under the agency’s enterprise risk-management program.

Flow-Through Insurance Coverage

96-0136 / February 1996

Flow-Through Insurance Coverage

Subject

Share Insurance

Historic Status

Non-historic

February 7, 1996

Carlos E. Garcia, Assistant Vice President
J B Hanauer & Co.
2960 Aventura Boulevard
North Miami Beach, Florida 33180

Re: Flow-Through Insurance Coverage (Your January 29, 1996, Letter)

Dear Mr. Hanauer:

You have written asking for a legal opinion on whether the National Credit Union Share Insurance Fund provides flow-through insurance for a "block CD." You have defined a "block CD" as "one where there are several beneficial owners within it." Unlike the Federal Deposit Insurance Corporation, the National Credit Union Administration's Insurance Regulations, 12 C.F.R. Part 745, do not provide for multi-tiered fiduciary relationships. In order for insurance coverage to apply, the owner of the funds must be a member of the credit union. Because of the membership requirement, insurance coverage in multi-tiered relationships would have to be reviewed on a case-by-case basis.

Attached is an opinion letter from me to Anne E. Scalese, Esquire dated December 5, 1995, which addresses your concerns regarding recordkeeping requirements for custodial accounts and the limitations on brokered deposits.

I hope that we have been of assistance.

Sincerely,

Richard S. Schulman
Associate General Counsel

GC/MFR:bhs
SSIC 3500
96-0136
Enclosure

Last modified on

11/14/24