TITLE 26

BANKS AND BANKING

CHAPTER 21

IDAHO CREDIT UNION ACT

26-2156.  BOND COVERAGE. (1) Each credit union must be adequately insured against risk. The board of directors of each credit union must at least annually review its bond and other insurance coverage to ensure that it is adequate in relation to the potential risks facing the credit union and the minimum requirements set by the board.

(2)  Each credit union must purchase a blanket fidelity bond that:

(a)  Covers the officers, employees, directors, members of official committees, attorneys and other agents;

(b)  Covers against loss caused by fraud and dishonesty; and

(c)  Has the following required minimum dollar amount of coverage:

Assets	Minimum Bond
$0 to $4,000,000	Lesser of total assets or $250,000
$4,000,001 to $50,000,000	$100,000 plus $50,000 for each million or fraction thereof over $1,000,000
$50,000,001 to $500,000,000	$2,550,000 plus $10,000 for each million or fraction thereof over $50,000,000, to a maximum of $5,000,000
Over $500,000,000	1% of assets rounded to the nearest hundred million, to a maximum of $9,000,000

(3)  The maximum amount of allowable deductible is computed based on the credit union’s asset size and capital level, as follows:

Assets	Maximum Deductible
$0 to $100,000	No deductible allowed
$100,001 to $250,000	$1,000
$250,001 to $1,000,000	$2,000
Over $1,000,000	$2,000 plus .001 of total assets, to a maximum of $200,000; for credit unions that received a composite capital, asset, management, earnings, liquidity, and sensitivity (CAMELS) rating of "1" or "2" for the last two (2) full examinations and maintained a net worth classification of "well-capitalized" under national credit union administration (NCUA) regulations part 702 for six (6) immediately preceding quarters or, if subject to a risk-based net worth (RBNW) requirement under NCUA regulations part 702, has remained "well-capitalized" for the six (6) immediately preceding quarters after applying the applicable RBNW requirements, the maximum deductible is $1,000,000

(4)  The director may require an additional amount of bond coverage for a credit union, taking into account the size of the credit union, the credit union’s field of membership, risk level of the credit union, and any other factors the director finds relevant to the determination of appropriate bond coverage for a credit union.

(5)  The board of directors should purchase additional or enhanced coverage when circumstances warrant.

(6)  If a credit union fails to maintain a blanket fidelity bond in the amount prescribed by the director, the director may order the credit union to cease its operations until such time when the credit union obtains the required bond.

(7)  When a credit union receives notice that its fidelity bond coverage will be suspended or terminated, the credit union shall notify the director in writing no fewer than thirty (30) days prior to the effective date of the suspension or termination.

History:

[26-2156, added 2018, ch. 165, sec. 21, p. 337; am. 2019, ch. 188, sec. 4, p. 599.]