§ 14409 Credit Union Bond Requirements

This law requires credit unions to buy bond or insurance that protects their directors, officers, committee members, credit manager, and employees, and it lets the commissioner set the minimum coverage amount, often using the credit union's size as a guide.

Key Takeaways

•Every credit union must obtain bond or insurance for directors, officers, committee members, the credit manager, and all employees.
•The minimum coverage amount is not fixed by the statute; it is set by the commissioner through regulations.
•Those regulations often use the credit union's gross assets to calculate the required coverage.

Example

A community credit union with 30 staff members needs to get coverage for its board members and managers.

The credit union must purchase insurance that covers each director, officer, committee member, the credit manager, and every employee. The exact minimum amount of coverage is not fixed in the statute; instead, the commissioner can create rules that may use the credit union's total assets to calculate how much coverage is required.

How to Calculate

The statute does not provide a specific numeric formula; it only authorizes the commissioner to adopt regulations that may include a formula based on gross assets.

Find the credit union's gross assets (the total value of all assets before liabilities).
Use the formula or schedule that the commissioner has adopted in the regulations to determine the minimum coverage amount.
Multiply the gross assets by the percentage or apply the schedule to get the required coverage amount.

A credit union with $15 million in gross assets is subject to a regulation that sets minimum coverage at 0.15% of gross assets.

Result: 22500

(a) Every credit union shall obtain adequate bond or insurance coverage, for each director, officer, supervisory committee member, audit committee member, and credit committee member, for the credit manager, and for each employee. (b) The commissioner may adopt regulations setting forth guidelines with respect to the minimum amount of the bond or insurance coverage deemed adequate. The regulations may be based upon the gross assets of the credit union and may contain a formula or schedule for the calculation of minimum bond or insurance coverage. (Amended by Stats. 2021, Ch. 762, Sec. 2. (SB 269) Effective January 1, 2022.)

Key Takeaways

•Every credit union must obtain bond or insurance for directors, officers, committee members, the credit manager, and all employees.
•The minimum coverage amount is not fixed by the statute; it is set by the commissioner through regulations.
•Those regulations often use the credit union's gross assets to calculate the required coverage.

Example

A community credit union with 30 staff members needs to get coverage for its board members and managers.

How to Calculate

The statute does not provide a specific numeric formula; it only authorizes the commissioner to adopt regulations that may include a formula based on gross assets.

Find the credit union's gross assets (the total value of all assets before liabilities).
Use the formula or schedule that the commissioner has adopted in the regulations to determine the minimum coverage amount.
Multiply the gross assets by the percentage or apply the schedule to get the required coverage amount.

A credit union with $15 million in gross assets is subject to a regulation that sets minimum coverage at 0.15% of gross assets.

Result: 22500

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 14409 Credit Union Bond Requirements

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References