NCUA Board Finalizes Deposit Insurance Reform in Lightning Fast Meeting
ALEXANDRIA, Va. -- In near-record time, NCUA closed its Sept. 21 board meeting upon finalizing updates to its deposit insurance rules.
NCUA, along with the FDIC, were charged with updating deposit insurance coverage after the president signed the Federal Deposit Insurance Reform Act of 2005 and another conforming amendments bill into law early this year. In April, both agencies had approved interim final rules to increase coverage for certain accounts while indexing others, as well as other adjustments and clarifications.
Specifically, the final rule the NCUA Board approved last week:
o defines the "standard maximum share insurance amount" as $100,000, and states that the NCUA and FDIC will jointly consider indexing that amount to inflation every five years beginning in 2010;
o increases the share insurance limit for retirement accounts--individual retirement accounts under ?408(a) of the Internal Revenue Code and any plan described in ?401(d) of the IRC (Keogh accounts)--from $100,000 to $250,000, subject to inflation;
o provides pass-through acceptance of shares in employee benefit plans to insured credit unions that are adequately or well capitalized; and
o clarifying insurance coverage for qualified tuition savings programs, often referred to as 529 plans, and that share accounts denominated in foreign currencies would be covered at the exchange rate quoted by the Federal Reserve Bank of New York as of noon on the day of default, similar to the FDIC.
The final rule is effective 30 days after publication in the Federal Register. --email@example.com