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Share Insurance; Living Trust Accounts

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Information about this document as published in the Federal Register.

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National Credit Union Administration (NCUA).


Final rule.


NCUA is adopting as a final rule without change the interim rule amending Part 745 of its regulations concerning share insurance coverage for beneficial interests in living trust accounts. NCUA published the interim rule with a sixty-day comment period at 69 FR 8798, on February 26, 2004.


This final rule is effective on July 29, 2004.

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Ross Kendall, Staff Attorney, Office of General Counsel, at the above address or telephone: (703) 518-6562.

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Effective April 1, 2004, NCUA revised its living trust account rules to provide for insurance coverage of up to $100,000 per qualifying beneficiary who, as of the date of a credit union's failure, would become entitled to the living trust assets upon the owner's death, regardless of the existence of a defeating contingency affecting the beneficiary's interest. The NCUA Board determined that elimination of the defeating contingency provisions in the rule was beneficial to credit unions and their members because the operation of the rule was complex and not widely understood. The amendment also clarified that a credit union need not maintain records disclosing the names and interests of beneficiaries of living trusts. In addition, the amendment preserved parity between the NCUA and the Federal Deposit Insurance Corporation (FDIC), which administers the insurance fund that protects bank depositors and which had, in January of 2004, adopted a similar amendment to its rules.

Even though NCUA issued the amendment as an interim final rule, the Board established a sixty-day comment period in which interested members of the public could comment on any aspect of the amendment. We received five comments, all of which were fully supportive of the amendment. The commenters uniformly indicated the changes would result in elimination of confusion by credit unions and their members and an enhanced understanding of the scope and operation of the share insurance rules for beneficial interests in living trust accounts. The commenters also cited the benefit of having uniformity of insurance coverage between living trust accounts and other types of revocable trust accounts, as well as the benefit of parity between the NCUA and the FDIC.

In view of the comments and the benefits described herein and in the preamble to the interim rule, the NCUA Board has determined to adopt the rule as final without change.

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List of Subjects in 12 CFR Part 745

  • Credit unions
  • Share insurance
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By the National Credit Union Administration Board on July 22, 2004.

Becky Baker,

Secretary of the Board.

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Accordingly, the interim final rule amending 12 CFR 745.4, which was published at 69 FR 8798 on February 26, 2004, is adopted as a final rule without change.

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[FR Doc. 04-17258 Filed 7-28-04; 8:45 am]