Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 79397 

1See 12 U.S.C. 1752(5). 

2 12 U.S.C. 1787(k)(1)(A), (k)(6). 

3 12 U.S.C. 1787(k)(1)(A). 

4 12 U.S.C. 1787(k)(1)(B). The FCU Act states that 

‘‘[d]etermination of the net amount of share 

insurance . . . ‘‘shall be in accordance with such 

regulations as the Board may prescribe.’’ 

5 12 U.S.C. 1787(k)(1)(B). 

6 12 U.S.C. 1787(k)(1)(C). 

7 12 CFR part 745. 

filing deadlines and time frames for 

agency responses. The field office and 

the Board will apply the review process 

contained in 12 CFR part 746, subpart 

B, to any request for reconsideration or 

appeal. For credit union-sponsored 

applications, either the institution or the 

subject individual (or both, as a 

consolidated request) may file a request 

for reconsideration or appeal. The 

request for review must include a 

statement of the underlying facts that 

form the basis of the request for 

reconsideration or appeal, a statement of 

the basis for the denial to which the 

applicant objects and the alleged error 

in such denial, and any other support, 

materials, or evidence relied upon by 

the applicant that were not previously 

provided. 

[FR Doc. 2024–21887 Filed 9–27–24; 8:45 am] 

BILLING CODE 7535–01–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 745 

[NCUA–2023–0082] 

RIN 3133–AF53 

Simplification of Share Insurance 

Rules 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: The NCUA Board (Board) is 

amending its regulations governing 

share insurance coverage. The final rule 

simplifies the share insurance 

regulations by establishing a ‘‘trust 

accounts’’ category that will provide for 

coverage of funds of both revocable 

trusts and irrevocable trusts deposited at 

federally insured credit unions (FICUs), 

provides consistent share insurance 

treatment for all mortgage servicing 

account balances held to satisfy 

principal and interest obligations to a 

lender, and increases flexibility for the 

NCUA to consider various records in 

determining share insurance coverage in 

liquidations. The changes also increase 

consistency between the FDIC’s Federal 

deposit insurance rules and the NCUA’s 

share insurance rules. 

DATES: This rule is effective on 

December 1, 2026, except for the 

amendments to 12 CFR 745.2(c)(2) 

(instruction 5), 745.3 (instruction 7), 

and 745.14 (instruction 13), which are 

effective October 30, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Office of General Counsel: Thomas Zells 

and Rachel Ackmann, Senior Staff 

Attorneys; or Robert Leonard, 

Compliance Officer at (703) 518–6540 or 

by mail at National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, Virginia 22314. Office of 

Credit Union Resources and Expansion 

(CURE): Paul Dibble, Consumer Access 

Program Officer; or Rita Woods, Director 

of Consumer Access at (703) 518–1150 

or by mail at National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, Virginia 22314. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. General Background and Legal Authority 

A. General Background 

B. Legal Authority 

II. Simplification of Share Insurance Trust 

Rules 

A. Notice of Proposed Rulemaking 

B. Policy Objectives 

C. Background and Need for Rulemaking 

1. Evolution of Insurance Coverage of 

Funds Held in Trust Accounts 

2. Current Rules for Coverage of Funds 

Held in Trust Accounts 

3. Need for Further Rulemaking 

D. Final Rule 

E. Examples Demonstrating Coverage 

Under Current and Final Rules 

F. Discussion of Comments 

III. Amendments to Mortgage Servicing 

Account Rule 

A. Policy Objectives 

B. Background and Need for Rulemaking 

C. Final Rule 

D. Discussion of Comments 

IV. Recordkeeping Requirements 

A. Policy Objectives 

B. Background and Need for Rulemaking 

C. Final Rule 

D. Discussion of Comments 

V. Regulatory Procedures 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 

C. Executive Order 13132 on Federalism 

D. Assessment of Federal Regulations and 

Policies on Families 

E. Small Business Regulatory Enforcement 

Fairness Act (Congressional Review Act) 

I. General Background and Legal 

Authority 

A. General Background 

The NCUA is an independent Federal 

agency that insures funds maintained in 

accounts of members or those otherwise 

eligible to maintain insured accounts 

(member accounts) at FICUs, protects 

the members who own FICUs, and 

charters and regulates Federal credit 

unions (FCUs). 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 (Share 

Insurance Fund). Backed by the full 

faith and credit of the United States, the 

Share Insurance Fund provides Federal 

share insurance to account holders in all 

FCUs and the majority of state-chartered 

credit unions. 

B. Legal Authority 

The Board has issued this final rule 

pursuant to its authority under the FCU 

Act. Under the Federal Credit Union Act 

(FCU Act), in the event of a FICU’s 

failure the NCUA is responsible for 

paying share insurance to any member, 

or to any person with funds lawfully 

held in a member account,1 up to the 

standard maximum share insurance 

amount (SMSIA), which is currently set 

at $250,000.2 The FCU Act provides that 

the NCUA Board must determine the 

amount payable consistently with 

actions taken by the FDIC under its 

deposit insurance rules.3 The FCU Act 

also grants the NCUA express authority 

to issue regulations on the 

determination of the net amount of 

share insurance paid.4 The FCU Act 

further provides that ‘‘in determining 

the amount payable to any member, 

there shall be added together all 

accounts in the credit union maintained 

by that member for that member’s own 

benefit, either in the member’s own 

name or in the names of others.’’ 5

However, the FCU Act also specifically 

authorizes the Board to ‘‘define, with 

such classifications and exceptions as it 

may prescribe, the extent of the share 

insurance coverage provided for 

member accounts, including member 

accounts in the name of a minor, in 

trust, or in joint tenancy.’’ 6

The NCUA has implemented these 

requirements by issuing regulations 

recognizing particular categories of 

accounts, such as single ownership 

accounts, joint ownership accounts, 

revocable trust accounts, and 

irrevocable trust accounts.7 If an 

account meets the requirements for a 

particular category, the account is 

insured, up to the $250,000 limit, 

separately from shares held by the 

member in a different account category 

at the same FICU. For example, 

provided all requirements are met, 

shares in the single ownership category 

will be separately insured from shares 

in the joint ownership category held by 

the same member at the same FICU. 

The NCUA’s share insurance 

categories have been defined through 

both statute and regulation. Certain 

categories, such as the accounts held by 


ddrumheller on DSK120RN23PROD with RULES1
79398 Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 

8See 12 U.S.C. 1787(k)(2). 9See 12 U.S.C. 1787(k)(3). 10 12 CFR 745.8. 11 12 CFR 745.6. 12 12 U.S.C. 1752(5). 13 12 U.S.C. 1751 et seq. 14 12 U.S.C. 1766(a). 15 12 U.S.C. 1787. 16 12 U.S.C. 1789(a)(11). 

17 88 FR 73249 (Oct. 25, 2023). 

18Trusts include informal revocable trusts 

(commonly referred to as payable-on-death 

accounts, in-trust-for accounts, or Totten trusts), 

formal revocable trusts, and irrevocable trusts. 

19 87 FR 4455 (Jan. 28, 2022). 

20 73 FR 60616 (Oct. 14, 2008). 

21The NCUA’s Office of Credit Union Resources 

and Expansion, which fields most share insurance 

inquiries, only began tracking calls received on 

October 31, 2019. The high volume of trust-related 

inquires predates this tracking. 

22 In 2008, the NCUA adopted an insurance 

calculation for revocable trusts that have five or 

fewer beneficiaries. Under this rule, 12 CFR 

745.4(a), each trust grantor is insured up to 

$250,000 per beneficiary. 

23 87 FR 4455 (Jan. 28, 2022). 

government depositors 8 and certain 

retirement accounts, including 

individual retirement accounts, have 

been expressly defined by Congress.9

Other categories, such as joint 

accounts 10 and corporate accounts,11

have been based on statutory 

interpretation; these accounts have been 

recognized through regulations issued 

in 12 CFR part 745 pursuant to the 

NCUA’s rulemaking authority. In 

addition to defining the insurance 

categories, the share insurance 

regulations in part 745 provide the 

criteria used to determine insurance 

coverage for shares in each category. 

Notably, the FCU Act also defines the 

term ‘‘member account.’’ The NCUA 

insures member accounts at all FICUs.12

Importantly, this term is not limited to 

those persons enumerated in the credit 

union’s field of membership who have 

become members. It also includes as 

member accounts certain nonmembers, 

such as other nonmember credit unions; 

nonmember public units and political 

subdivisions; and, in the case of credit 

unions serving predominantly lowincome members, deposits of 

nonmembers generally. In other words, 

the NCUA provides share insurance 

coverage to members and those 

otherwise eligible to maintain insured 

accounts at FICUs. 

Finally, in addition to specific 

authority to draft share insurance 

regulations under § 1787 of the FCU 

Act, the NCUA also has general 

rulemaking authority. Under the FCU 

Act, the NCUA is the chartering and 

supervisory authority for FCUs and the 

Federal supervisory authority for 

FICUs.13 The FCU Act grants the NCUA 

a broad mandate to issue regulations 

governing both FCUs and FICUs. 

Section 120 of the FCU Act is a general 

grant of regulatory authority, and it 

authorizes the Board to prescribe rules 

and regulations for the administration of 

the FCU Act.14 Section 207 of the FCU 

Act is a specific grant of authority over 

share insurance coverage, 

conservatorships, and liquidations.15

Section 209 of the FCU Act is a plenary 

grant of regulatory authority to the 

NCUA to issue rules and regulations 

necessary or appropriate to carry out its 

role as share insurer for all FICUs.16

Accordingly, the FCU Act grants the 

Board broad rulemaking authority to 

ensure the credit union industry and the 

Share Insurance Fund remain safe and 

sound. 

II. Simplification of Share Insurance 

Trust Rules 

A. Notice of Proposed Rulemaking 

At its October 19, 2023, meeting, the 

Board issued a proposed rule to simplify 

the regulations governing share 

insurance coverage (proposed rule).17

The proposed rule primarily sought to 

simply share insurance coverage rules 

and increase consistency with changes 

adopted by the FDIC in January 2022. 

The Board’s overall objective was to 

facilitate the prompt payment of share 

insurance in accordance with the FCU 

Act. As discussed in more detail later in 

this preamble, the Board is finalizing 

the proposed changes to the share 

insurance regulations as proposed. 

B. Policy Objectives 

The Board is amending its regulations 

governing share insurance coverage for 

funds held in member accounts at 

FICUs in connection with trusts.18 Like 

the proposed rule, the amendments of 

the final rule are primarily intended to 

do the following: (1) provide a rule for 

trust account coverage that is easier to 

understand and apply; (2) provide 

parity with changes the FDIC adopted in 

January 2022; 19 and (3) facilitate the 

prompt payment of share insurance in 

accordance with the FCU Act. 

Accomplishing these objectives will 

further the NCUA’s mission in other 

respects, as discussed in greater detail 

later in this preamble. 

Clarifying Insurance Coverage for Trust 

Accounts 

The share insurance trust rules have 

evolved over time, and they can be 

difficult to apply in some 

circumstances. The amendments are 

intended to clarify the insurance rules 

and trust-account limits for FICUs, their 

employees, their accountholders, and 

other interested parties. The 

amendments reduce the number of rules 

governing coverage for trust accounts, 

and they establish a straightforward 

calculation to determine coverage. The 

amendments are also intended to 

alleviate some of the confusion that 

FICUs, their employees, and their 

accountholders may experience with 

respect to insurance coverage and 

limits. 

Under the regulations currently in 

effect (current rules), there are distinct 

and separate sets of rules applicable to 

shares of revocable trusts as opposed to 

irrevocable trusts. Each set of rules has 

its own criteria for coverage and 

methods by which coverage is 

calculated. Despite the NCUA’s efforts 

to simplify the revocable trust rules in 

2008, the consistently high volume of 

complex inquiries about trust accounts 

over an extended period suggests 

continued confusion about insurance 

limits.20 NCUA share insurance 

specialists have answered over 17,000 

calls with questions since the fourth 

quarter of 2019.21 The NCUA estimates 

that over 50 percent of these inquiries, 

which do not include those received 

through email, submitted through 

mycreditunion.gov, or directed to NCUA 

staff responsible for credit union 

liquidations, pertain to share insurance 

coverage for trust accounts (revocable or 

irrevocable). Additionally, comments 

received in response to the proposal 

also support the notion that there 

continues to be confusion regarding 

share insurance coverage of trust 

accounts. 

To better clarify insurance limits, the 

amendments will further simplify 

insurance coverage of trust accounts 

(revocable and irrevocable) by 

harmonizing the coverage criteria for 

revocable and irrevocable trust accounts 

and by establishing a simplified formula 

for calculating coverage that would 

apply to these funds deposited at FICUs. 

The final rule uses the calculation the 

NCUA first adopted in 2008 for 

revocable trust accounts with five or 

fewer beneficiaries. This formula is 

straightforward and familiar to FICUs 

and their members.22 The amendments 

will also eliminate formulas in the 

current rules for revocable trust 

accounts with more than five 

beneficiaries and irrevocable trust 

accounts. 

Parity 

Adoption of the final rule will also 

align with changes the FDIC adopted in 

January 2022, which took effect on April 

1, 2024.23 As the Board stressed in the 

proposed rule, as well as in the 2021 

final rule addressing the share insurance 


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Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 79399 

24 86 FR 11098 (Feb. 24, 2021). 

25 12 U.S.C. 1787(d)(1). 

26 36 FR 2477 (Feb. 5, 1971). 

27See, 71 FR 56001 (Sept. 26, 2006) 

(implementing statutory changes in the Federal 

Deposit Insurance Reform Act of 2005) and 80 FR 

27109 (May 12, 2015) (implementing statutory 

changes in the Credit Union Share Insurance Fund 

Parity Act). 

28 69 FR 8798 (Feb. 26, 2004). 

29Prior to the changes adopted in 2004, if the 

interest of a qualifying beneficiary in an account 

established under the terms of a living trust 

agreement was contingent upon fulfillment of a 

specified condition, referred to as a defeating 

contingency, separate insurance was not available 

for that beneficial interest. Instead, the beneficial 

interest would be added to any individual 

account(s) of the grantor and insured up to the 

SMSIA, then $100,000. An example of a defeating 

contingency is where an account owner names his 

son as a beneficiary but specifies in the living trust 

document that his son’s ability to receive any share 

of the trust funds is dependent upon him 

successfully completing college. 

30 12 CFR 745.2(d). 

31 69 FR 8798, 8799 (Feb. 26, 2004). 

32 73 FR 60616 (Oct. 14, 2008). 33See 12 CFR part 701, app. A. Art. III, sec. 6 

(‘‘Shares issued in a revocable trust—the settlor 

must be a member of this credit union in his or her 

own right.’’). 

coverage of joint ownership accounts, 

the Board believes it is important to 

maintain parity, to the extent possible, 

between the nation’s two Federal 

deposit and share insurance programs, 

which are backed by the full faith and 

credit of the United States.24 The Board 

believes it is important that members of 

the public who use trust accounts 

receive the same protection whether the 

accounts are maintained at FICUs or 

other federally insured institutions. 

Consistency between the FDIC’s Federal 

deposit insurance rules and the NCUA’s 

share insurance rules promotes public 

confidence in the safety of funds at 

depository institutions regardless of 

whether the institution is an insured 

bank or insured credit union. 

Prompt Payment of Share Insurance 

The FCU Act requires the NCUA to 

pay accountholders ‘‘as soon as 

possible’’ after a FICU liquidation.25

However, the insurance determination 

and subsequent payment for many trust 

accounts can be delayed when NCUA 

staff must review complex trust 

agreements and apply various rules for 

determining share insurance coverage. 

The final rule’s amendments are 

intended to facilitate more timely share 

insurance determinations for trust 

accounts by reducing the time needed to 

review trust agreements and determine 

coverage. These amendments should 

promote the NCUA’s ability to pay 

insurance proceeds to accountholders 

more quickly following the liquidation 

of a FICU, enabling accountholders to 

meet their financial needs and 

obligations. 

Facilitating Liquidations 

The final rule’s amendments will also 

facilitate the liquidation of failed FICUs. 

The NCUA is routinely required to make 

share insurance determinations in 

connection with FICU liquidations. In 

many of these instances, however, share 

insurance coverage for certain trust 

accounts is based upon information that 

is not maintained in the FICU’s account 

records. As a result, NCUA staff work 

with accountholders to obtain trust 

documentation following a FICU’s 

liquidation to complete share insurance 

determinations. The difficulties 

associated with completing such a 

determination are exacerbated by the 

substantial growth in the use of formal 

trusts in recent decades. These 

amendments could reduce the time 

spent reviewing such information, 

thereby reducing potential delays in the 

completion of share insurance 

determinations and payments. 

C. Background and Need for 

Rulemaking 

1. Evolution of Insurance Coverage of 

Funds Held in Trust Accounts 

The NCUA first adopted regulations 

governing share insurance coverage in 

1971.26 Over the years, share insurance 

coverage has evolved to reflect both the 

NCUA’s experience and changes in the 

credit union industry as well as 

statutory amendments.27

While the regulations addressing 

irrevocable trusts have undergone 

minimal change, the regulations 

addressing revocable trusts have seen 

numerous changes, largely aimed at 

providing increased flexibility and 

simplifying coverage. Notably, in 2004 

the NCUA amended the revocable trust 

rules, pointing to continued confusion 

about the coverage for revocable trust 

deposits and the need for parity with 

then recent FDIC amendments.28

Specifically, the NCUA eliminated the 

defeating contingency provisions of the 

rules, with the result that coverage 

would be based on the interests of 

qualifying beneficiaries, irrespective of 

any defeating contingencies in the trust 

agreement.29 This more closely aligned 

coverage for formal revocable trust 

accounts with payable-on-death 

accounts. Importantly, and of relevance 

to this final rule, defeating contingency 

provisions were not eliminated for 

irrevocable trusts, and these provisions 

remain relevant for calculating share 

insurance coverage under the current 

irrevocable trust provisions.30 At the 

same time, the NCUA eliminated the 

requirement to name the beneficiaries of 

a formal revocable trust in the FICU’s 

account records.31 The NCUA 

recognized a grantor may elect to change 

the beneficiaries or the beneficiaries’ 

interests at any time before the grantor’s 

death, and requiring a FICU to maintain 

a current record of this information 

would be impractical and unnecessarily 

burdensome. 

More recently, the NCUA’s experience 

and adoption of similar revisions by the 

FDIC suggested further changes to the 

trust rules were necessary. In 2008, the 

NCUA simplified the rules in several 

respects.32 First, it eliminated the 

kinship requirement for revocable trust 

beneficiaries, instead allowing any 

natural person, charitable organization, 

or nonprofit to qualify for perbeneficiary coverage. Second, a 

simplified calculation was established if 

a revocable trust named five or fewer 

beneficiaries; in which case, coverage 

would be determined without regard to 

the allocation of interests among the 

beneficiaries. This simplification 

eliminated the need to discern and 

consider beneficial interests in many 

cases. 

A different insurance calculation 

applied to revocable trusts with more 

than five beneficiaries. At that time, the 

SMSIA was $100,000; thus, if more than 

five beneficiaries were named in a 

revocable trust, coverage would be the 

greater of: (1) $500,000; or (2) the 

aggregate amount of all beneficiaries’ 

interests in the trust(s), limited to 

$100,000 per beneficiary. When the 

SMSIA was increased to $250,000, a 

similar adjustment was made from 

$100,000 to $250,000 for the calculation 

of per-beneficiary coverage. 

2. Current Rules for Coverage of Funds 

Held in Trust Accounts 

The NCUA’s current rules recognize 

two different insurance categories for 

funds held in connection with trusts at 

FICUs: (1) revocable trusts and (2) 

irrevocable trusts. The current rules for 

determining insurance coverage for 

shares in each of these categories are 

described below. Additionally, share 

insurance coverage is always limited to 

FICU members and those otherwise 

eligible to maintain insured accounts at 

the FICU. The NCUA’s longstanding 

position has been that, for revocable 

trust accounts, all grantors (sometimes 

described as settlors) of the trust must 

be members of the FICU or otherwise 

eligible to maintain an insured 

account.33 For irrevocable trust 

accounts, the NCUA has maintained the 

position that either all grantors (or 

settlors) or all beneficiaries of the trust 


ddrumheller on DSK120RN23PROD with RULES1
79400 Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 

34See 12 CFR part 701, app. A. Art. III, sec. 6 

(‘‘Shares issued in an irrevocable trust—either the 

settlor or the beneficiary must be a member of this 

credit union.’’). 

35 12 CFR 745.4(a). 

36 12 CFR 745.4(c). 

37 12 CFR 745.4(d). 

38 12 CFR 745.4(b). 

39 Id. 

40 12 CFR 745.4(a). 

41 12 CFR 745.4(e). 

42 12 CFR 745.4(g). For example, if a revocable 

trust provides a life estate for the member 

accountholder’s spouse and remainder interests for 

six other beneficiaries, the spouse’s life estate 

interest would be valued at the lesser of $250,000 

or the amount held in the trust for the purposes of 

the share insurance calculation. 

43 12 CFR 745.4(f)(1). 44 12 CFR 745.4(f)(2). 45 12 CFR 745.4(h). 46The revocable trust rules tend to provide 

greater coverage than the irrevocable trust rules 

because contingencies are not considered for 

revocable trusts. In addition, where five or fewer 

beneficiaries are named by a revocable trust, 

specific allocations to beneficiaries also are not 

considered. 47 12 CFR 745.2(d) and 745.9–1. 48 12 CFR 745.2(d)(1). For example, a life estate 

interest is generally non-contingent, as it may be 

valued using the life expectancy tables. However, 

where a trustee has discretion to divert funds from 

one beneficiary to another to provide for the second 

beneficiary’s medical needs, the first beneficiary’s 

interest is contingent upon the trustee’s discretion. 

49 12 CFR 745.9–1(b). 

50 12 CFR 745.2(d)(2). 

51See 12 CFR 745.2(d)(4) (The term ‘‘trust 

interest’’ does not include any interest retained by 

the settlor.). 

must be members of the FICU or 

otherwise eligible to maintain an 

insured account.34

As described in greater detail in 

section II.E., in the 2023 proposal, the 

NCUA requested commenters’ feedback 

as to whether these positions should be 

revisited. This final rule will not alter 

these longstanding positions. However, 

the NCUA will be continuing to 

evaluate commenters’ feedback and 

whether further changes are possible 

and necessary. 

Revocable Trust Accounts 

The revocable trust category applies 

to funds for which the member has 

evidenced an intention that the funds 

shall belong to one or more beneficiaries 

upon the member’s death. This category 

includes funds held in connection with 

formal revocable trusts—that is, 

revocable trusts established through a 

written trust agreement. It also includes 

funds that are not subject to a formal 

trust agreement, where the FICU makes 

payment to the beneficiaries identified 

in the FICU’s records upon the 

member’s death, based on account 

titling and applicable state law. The 

NCUA refers to these types of accounts, 

including Totten trust accounts, 

payable-on-death accounts, and similar 

accounts, as ‘‘informal revocable trusts.’’ 

Funds associated with formal and 

informal revocable trusts are aggregated 

for the purposes of the share insurance 

rules; thus, funds that will pass from the 

same grantor to beneficiaries are 

aggregated and insured up to the 

SMSIA, currently $250,000, per 

beneficiary, regardless of whether the 

transfer would be accomplished through 

a written revocable trust or an informal 

revocable trust.35

Under the current revocable trust 

rules, beneficiaries with insurable 

interests are limited to natural persons, 

charitable organizations, and non-profit 

entities recognized as such under the 

Internal Revenue Code of 1986.36 If a 

named beneficiary does not satisfy this 

requirement, funds held in trust for that 

beneficiary are treated as single 

ownership funds of the grantor and 

aggregated with any other single 

ownership accounts the grantor 

maintains at the same FICU.37

Certain requirements also must be 

satisfied for an account to be insured in 

the revocable trust category. The 

required intention that the funds shall 

belong to the beneficiaries upon the 

grantor’s death must either be 

manifested in the ‘‘title’’ of the account 

or elsewhere in the account records of 

the credit union (using commonly 

accepted terms such as ‘‘in trust for,’’ 

‘‘as trustee for,’’ ‘‘payable-on-death to,’’ 

or any acronym for these terms).38 For 

the purposes of this requirement, a 

FICU’s electronic account records are 

included. For example, a FICU’s 

electronic account records could 

identify the account as a revocable trust 

account through coding or a similar 

mechanism. In addition, the 

beneficiaries of informal trusts (that is, 

payable-on-death accounts) must be 

named in the FICU’s account records.39

The requirement to name beneficiaries 

in the FICU’s account records does not 

apply to formal revocable trusts; the 

NCUA generally obtains information on 

beneficiaries of such trusts from 

accountholders following a FICU’s 

liquidation. If a member’s funds at a 

liquidated FICU held in trust accounts 

exceed the SMSIA, a hold will be placed 

on the portion of such funds in excess 

of the SMSIA until the NCUA can fully 

review the member’s trust agreement 

and related documents to verify the 

beneficiary rules are satisfied. 

Therefore, this process can result in 

delays to some insured accountholders’ 

insurance determinations and full 

insurance payments. 

The calculation of share insurance 

coverage for revocable trust accounts 

depends upon the number of unique 

beneficiaries named by a member 

accountholder. If five or fewer 

beneficiaries have been named, the 

member accountholder is insured in an 

amount up to the total number of named 

beneficiaries multiplied by the SMSIA, 

and the specific allocation of interests 

among the beneficiaries is not 

considered.40 If more than five 

beneficiaries have been named, the 

member accountholder is insured up to 

the greater of: (1) five times the SMSIA; 

or (2) the total of the interests of each 

beneficiary, with each such interest 

limited to the SMSIA.41 For the 

purposes of this calculation, a life estate 

interest is valued at the SMSIA.42

Where a revocable trust account is 

jointly owned, the interests of each 

account owner are separately insured up 

to the SMSIA per beneficiary.43

However, if the co-owners are the only 

beneficiaries of the trust, the account is 

instead insured under the NCUA’s joint 

account rule.44

The current revocable trust rule also 

contains a provision that was intended 

to reduce confusion and the potential 

for a decrease in share insurance 

coverage in the case of the death of a 

grantor. Specifically, if a revocable trust 

becomes irrevocable due to the death of 

the grantor, the trust account may 

continue to be insured under the 

revocable trust rules.45 Absent this 

provision, the irrevocable trust rules 

would apply following the grantor’s 

death, as the revocable trust becomes 

irrevocable at that time, which could 

result in a reduction in coverage.46

Irrevocable Trust Accounts 

Accounts maintaining funds held by 

an irrevocable trust that has been 

established either by written agreement 

or by statute are insured in the 

irrevocable trust share insurance 

category. Calculating coverage in this 

category requires a determination of 

whether beneficiaries’ interests in the 

trust are contingent or non-contingent.47

Non-contingent interests are interests 

that may be determined without 

evaluation of any contingencies, except 

for those covered by the present worth 

and life expectancy tables and the rules 

for their use set forth in the Internal 

Revenue Service (IRS) Federal Estate 

Tax Regulations.48 Funds held for noncontingent trust interests are insured up 

to the SMSIA for each such 

beneficiary.49 Funds held for contingent 

trust interests are aggregated and 

insured up to the SMSIA in total.50

The irrevocable trust rules do not 

apply to funds held for a grantor’s 

retained interest in an irrevocable 

trust.51 Such funds are aggregated with 


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52 12 U.S.C. 1787(k)(1)(A). 

53For example, the NCUA currently aggregates 

funds in payable-on-death accounts and funds of 

written revocable trusts for the purposes of share 

insurance coverage, despite their separate and 

distinct legal mechanisms. Also, where the coowners of a revocable trust are also that trust’s sole 

Continued 

the grantor’s other single ownership 

funds for the purposes of applying the 

share insurance limit. 

3. Need for Further Rulemaking 

As noted, the rules governing share 

insurance coverage for trust accounts 

have been simplified and modified on 

several occasions. However, these rules 

are still frequently misunderstood and 

can present some implementation 

challenges. The trust rules can require 

overly detailed, time-consuming, and 

resource-intensive reviews of trust 

documentation to obtain the 

information necessary to calculate share 

insurance coverage. This information is 

often not found in a FICU’s records and 

must be obtained from members after a 

FICU’s liquidation. 

Revision of the share insurance 

coverage rules for trust accounts will 

reduce the amount of information that 

must be provided for trust accounts, as 

well as the complexity of the NCUA’s 

review. This revision should enable the 

NCUA to complete share insurance 

determinations more rapidly if a FICU 

with a large number of trust accounts is 

liquidated. Delays in the payment of 

share insurance can be consequential for 

accountholders, and the final rule will 

help to mitigate those delays. 

Several factors contribute to the 

challenges of making insurance 

determinations for trust accounts under 

the current rules. First, there are two 

different sets of rules governing share 

insurance coverage for trust accounts. 

Understanding the coverage for a 

particular account requires a threshold 

inquiry to determine which set of rules 

to apply—the revocable trust rules or 

the irrevocable trust rules. This requires 

review of the trust agreement to 

determine the type of trust (revocable or 

irrevocable), and the inquiry may be 

complicated by innovations in state 

trust law that are intended to increase 

the flexibility and utility of trusts. In 

some cases, this threshold inquiry is 

also complicated by the provision of the 

revocable trust rules that allows for 

continued coverage under the revocable 

trust rules where a trust becomes 

irrevocable upon the grantor’s death. 

The result of an irrevocable trust deposit 

being insured under the revocable trust 

rules has proven confusing for both 

accountholders and FICUs. 

Second, even after determining which 

set of rules applies to a particular 

account, it may be challenging to apply 

the current rules. For example, the 

revocable trust rules include unique 

titling requirements and beneficiary 

requirements. These rules also provide 

for two separate calculations to 

determine insurance coverage, 

depending in part upon whether there 

are five or fewer trust beneficiaries or at 

least six beneficiaries. In addition, for 

revocable trusts that provide benefits to 

multiple generations of potential 

beneficiaries, the NCUA needs to 

evaluate the trust agreement to 

determine whether a beneficiary is a 

primary beneficiary (immediately 

entitled to funds when a grantor dies), 

contingent beneficiary, or remainder 

beneficiary. Only eligible primary 

beneficiaries and remainder 

beneficiaries are considered when 

calculating NCUA share insurance 

coverage. The irrevocable trust rules 

may require detailed review of trust 

agreements to determine whether 

beneficiaries’ interests are contingent 

and may also require actuarial or 

present value calculations. These types 

of requirements complicate the 

determination of insurance coverage for 

trust deposits, have proven confusing 

for accountholders, and extend the time 

needed to complete a share insurance 

determination and insurance payment. 

Third, the complexity and variety of 

account holders’ trust arrangements 

adds to the difficulty of determining 

share insurance coverage under the 

current rules. For example, trust 

interests are sometimes defined through 

numerous conditions and formulas, and 

a careful analysis of these provisions 

may be necessary to calculate share 

insurance coverage under the current 

rules. Arrangements involving multiple 

trusts where the same beneficiaries are 

named by the same grantor(s) in 

different trusts add to the difficulty of 

applying the trust rules. The NCUA 

believes simplification of the share 

insurance rules presents an opportunity 

to more closely align the coverage 

provided for different types of trust 

funds. For example, the current 

revocable trust rules generally provide 

for a greater amount of coverage than 

the irrevocable trust rules. This outcome 

occurs because contingent interests for 

irrevocable trusts are aggregated and 

insured up to the SMSIA rather than up 

to the SMSIA per beneficiary, while 

contingencies are not considered and 

therefore do not limit coverage in the 

same manner for revocable trusts. 

Finally, as previously noted, adoption 

of this final rule will align with changes 

the FDIC adopted in January 2022, 

which took effect on April 1, 2024. The 

Board believes it is important to 

maintain parity between the nation’s 

two Federal deposit and share insurance 

programs.52 It is imperative that 

members of the public who use trust 

accounts for the transfer of ownership of 

assets better understand the rules 

governing such accounts and receive the 

same protection, whether the accounts 

are maintained at FICUs or other 

federally insured institutions. 

D. Final Rule 

The final rule adopts the proposed 

changes to the trust account rules as 

proposed. Specifically, the NCUA is 

amending the rules governing share 

insurance coverage for funds held in 

trust accounts at FICUs. Generally, the 

amendments will do the following: (1) 

merge the revocable and irrevocable 

trust categories into one category; (2) 

apply a simpler, common calculation 

method to determine insurance coverage 

for funds held by revocable and 

irrevocable trusts; and (3) eliminate 

certain requirements found in the 

current rules for revocable and 

irrevocable trusts. 

Merger of Revocable and Irrevocable 

Trust Categories 

As discussed above, the NCUA 

historically has insured revocable trust 

funds and irrevocable trust funds held 

at FICUs under two separate insurance 

categories. The NCUA’s experience has 

been this bifurcation often confuses 

FICUs’ staff and their members, as it 

requires a threshold inquiry to 

determine which set of rules to apply to 

a trust account. Moreover, all trust 

funds deposited at a FICU must be 

categorized before the aggregation of 

trust funds deposited within each 

category can be completed. The NCUA 

believes funds held in connection with 

revocable and irrevocable trusts are 

sufficiently similar, for the purposes of 

share insurance coverage, to warrant the 

merger of these two categories into one 

category. Under the NCUA’s current 

rules, share insurance coverage is 

provided because the trustee maintains 

the funds for the benefit of the 

beneficiaries. This fact is true regardless 

of whether the trust is revocable or 

irrevocable. Merging the revocable and 

irrevocable trust categories will better 

conform share insurance coverage to the 

substance—rather than the legal form— 

of the trust arrangement. This 

underlying principle of the share 

insurance rules is particularly important 

in the context of trusts, as state law 

often provides flexibility to structure 

arrangements in different ways to 

accomplish a given purpose.53


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beneficiaries, the NCUA instead insures the trust’s 

funds as joint funds, reflecting the arrangement’s 

substance rather than its legal form. 

54As noted above, if a revocable trust becomes 

irrevocable due to the death of the grantor, the 

account continues to be insured under the 

revocable trust rules. 12 CFR 745.4(h). 

55The death of an account owner can affect share 

insurance coverage, often reducing the amount of 

coverage that applies to a family’s accounts. To 

ensure that families dealing with the death of a 

family member have adequate time to review and 

restructure accounts if necessary, the NCUA insures 

a deceased owner’s accounts as if he/she/they were 

still alive for a period of 6 months after his/her/ 

their death. 12 CFR 745.2(e). 

56 73 FR 60616 (Oct. 14, 2008). 

57For example, two co-grantors that designate 

five beneficiaries are insured for up to $2,500,000 

(2 × 5 × $250,000). 

FICU members may have various 

reasons for selecting a particular legal 

arrangement, but that decision should 

not significantly affect share insurance 

coverage. Importantly, the merger of the 

revocable trust and irrevocable trust 

categories into one category for share 

insurance purposes will not affect the 

application or operation of state trust 

law; it will only affect the determination 

of share insurance coverage for these 

types of trust funds in the event of a 

FICU’s liquidation. 

Accordingly, the NCUA is amending 

§ 745.4 of its regulations, which 

currently applies only to revocable trust 

accounts, to establish a new ‘‘trust 

accounts’’ category that includes both 

revocable and irrevocable trust funds 

deposited at a FICU. The final rule 

defines the funds that will be included 

in this category as follows: (1) informal 

revocable trust funds, such as payableon-death accounts, in-trust-for accounts, 

and Totten trust accounts; (2) formal 

revocable trust funds, defined to mean 

funds held pursuant to a written 

revocable trust agreement under which 

funds pass to one or more beneficiaries 

upon the grantor’s death; and (3) 

irrevocable trust funds, meaning funds 

held pursuant to an irrevocable trust 

established by written agreement or by 

statute. 

In addition, the merger of the 

revocable trust and irrevocable trust 

categories eliminates the need for 

§ 745.4(h) through (i) of the current 

revocable trust rules, which provide that 

the revocable trust rules may continue 

to apply to an account where a formal 

revocable trust becomes irrevocable due 

to the death of one or more of the trust’s 

grantors. These provisions were 

intended to benefit accountholders, who 

sometimes were unaware that a trust 

owner’s death could trigger a significant 

decrease in insurance coverage as a 

revocable trust becomes irrevocable. 

However, in the NCUA’s experience, 

this rule has proven complex in part 

because it results in some irrevocable 

trusts being insured per the revocable 

trust rules, while other irrevocable 

trusts are insured under the irrevocable 

trust rules.54 As a result, an 

accountholder could know a trust was 

irrevocable but not know which share 

insurance rules to apply. The final rule 

will insure funds of formal and informal 

revocable trusts and irrevocable trusts 

according to a common set of rules, 

eliminating the need for these 

provisions (§ 745.4(h) through (i)) and 

simplifying coverage for 

accountholders. Accordingly, the death 

of a formal revocable trust owner will 

not result in a decrease in share 

insurance coverage for the trust. 

Coverage for irrevocable and formal 

revocable trusts will fall under the same 

category and share insurance coverage 

will remain the same, even after the 

expiration of the six-month grace period 

following the death of an account 

owner.55

Informal revocable trust accounts will 

also be insured under this same trust 

account category but are unlikely to 

result in the creation of an irrevocable 

trust account upon an owner or coowner’s death. As is the case under the 

existing share insurance regulations, 

when a co-owner of an informal 

revocable trust account dies, share 

insurance coverage for the deceased 

owner’s interest in the account will 

cease after the expiration of the sixmonth grace period allowed for the 

death of share account owners. After the 

expiration of the six-month grace 

period, share insurance coverage will be 

calculated as if the deceased co-owner 

did not exist and the deceased coowner’s name did not remain on the 

account. This treatment of the account 

will be based on the fact that all funds 

in the account will be owned by one 

person (that is, the surviving co-owner). 

Calculation of Coverage 

As was proposed, the final rule uses 

one streamlined calculation to 

determine the amount of share 

insurance coverage for funds of both 

revocable and irrevocable trusts. This 

method is already used by the NCUA to 

calculate coverage for revocable trusts 

that have five or fewer beneficiaries, and 

it is an aspect of the rules that is 

generally well understood by FICUs and 

their members. The final rule will 

provide that a grantor’s trust funds are 

insured in an amount up to the SMSIA 

(currently $250,000) multiplied by the 

number of trust beneficiaries, not to 

exceed five beneficiaries. The NCUA 

will presume that, for share insurance 

purposes, the trust provides for equal 

treatment of beneficiaries such that 

specific allocation of the funds to the 

respective beneficiaries will not be 

relevant, consistent with the NCUA’s 

current treatment of revocable trusts 

with five or fewer beneficiaries. This 

will, in effect, limit coverage for a 

grantor’s trust funds at each FICU to a 

total of $1,250,000; in other words, 

maximum coverage will be equivalent to 

$250,000 per beneficiary for up to five 

beneficiaries. In determining share 

insurance coverage, the NCUA will 

continue to consider only beneficiaries 

who are expected to receive the funds 

held by the trust in a member account 

at the FICU; the NCUA will not consider 

beneficiaries who are expected to 

receive only non-deposit assets of the 

trust. 

The NCUA is deciding to calculate 

coverage in this manner, in part, based 

on its experience with the revocable 

trust rules after the modifications to 

these rules in 2008.56 The NCUA has 

found the share insurance calculation 

method for revocable trusts with five or 

fewer beneficiaries has been the most 

straightforward and is easier for FICUs’ 

staff and the public to understand. This 

calculation provides for insurance in an 

amount up to the total number of 

unique grantor-beneficiary trust 

relationships (that is, the number of 

grantors, multiplied by the total number 

of beneficiaries, multiplied by the 

SMSIA).57 In addition to being simpler, 

this calculation has proven beneficial in 

liquidations, as it leads to more prompt 

share insurance determinations and 

quicker access to insured funds for 

accountholders. As discussed in section 

II.E., commenters also supported using 

this calculation. Accordingly, the NCUA 

will calculate share insurance coverage 

for trust accounts based on the simpler 

calculation currently used for revocable 

trusts with five or fewer beneficiaries. 

The streamlined calculation that will 

be used to determine coverage for 

revocable trust funds and irrevocable 

trust funds includes a limit on the total 

amount of share insurance coverage for 

all of an accountholder’s funds in the 

trust category at the same FICU. As was 

proposed, the final rule will provide 

coverage for trust funds at each FICU up 

to a total of $1,250,000 per grantor; in 

other words, each grantor’s insurance 

limit will be $250,000 per beneficiary 

up to a maximum of five beneficiaries. 

The level of five beneficiaries is an 

important threshold in the current 

revocable trust rules, as it defines 

whether a grantor’s coverage is 

determined using the simpler 

calculation of the number of 


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58 87 FR 4455 (Jan. 28, 2022). 

59See 12 CFR 745.4(a) (‘‘All funds that an owner 

holds in both living trust accounts and payable-ondeath accounts, at the same NCUA-insured credit 

union and naming the same beneficiaries, are 

aggregated for insurance purposes and insured to 

the applicable coverage limits . . . .’’). 

60For example, if a grantor maintained both an 

informal revocable trust account with three 

beneficiaries and a formal revocable trust account 

with three separate and unique beneficiaries, the 

two accounts would be aggregated and the 

maximum share insurance available would be $1.25 

million (one grantor times the SMSIA times the 

number of unique beneficiaries, limited to five). 

However, if the same three people were the 

beneficiaries of both accounts, the maximum share 

insurance available would be $750,000 (one grantor 

times the SMSIA times the three unique 

beneficiaries). 

61 12 CFR 754.4(c). 

62See NCUA Your Insured Funds at page 42 

(‘‘The beneficiaries are the people or entities 

entitled to an interest in the trust. Contingent or 

alternative trust beneficiaries are not considered to 

have an interest in the trust funds and other assets 

as long as the primary or initial beneficiaries are 

still living, with the exception of revocable living 

trusts with a life estate interest.’’). 

63See 74 FR 55747, 55748 (Oct. 29, 2009). 

64See 12 CFR 745.2(d)(4). 

beneficiaries multiplied by the SMSIA 

or the more complex calculation 

involving the consideration of the 

amount of each beneficiary’s specific 

interest (which applies when there are 

six or more beneficiaries). The current 

trust rules limit coverage by tying 

coverage to the specific interests of each 

beneficiary of an irrevocable trust or of 

each beneficiary of a revocable trust 

with more than five beneficiaries. The 

final rule’s $1,250,000 per-grantor, perFICU limit is more straightforward and 

balances the objectives of simplifying 

the trust rules, promoting timely 

payment of share insurance, facilitating 

liquidations, ensuring consistency with 

the FCU Act, and limiting risk to the 

Share Insurance Fund. The final rule 

will also provide parity between the 

NCUA’s regulations and those adopted 

by the FDIC in early 2022.58

The NCUA anticipates that limiting 

coverage to $1,250,000 per grantor, per 

FICU, for trust funds will not have a 

substantial effect on accountholders, as 

most trust accounts in past FICU 

liquidations have had balances well 

below this level. However, because the 

NCUA lacks sufficient information to 

project the exact effects of the new limit 

on current accountholders, the agency 

requested in the proposed rule that 

commenters provide information that 

might be helpful in this regard. As 

discussed in greater detail in section 

II.E., the comments received did not 

indicate that the limit will have a 

substantial effect on accountholders. 

Under the final rule, to determine the 

level of insurance coverage that will 

apply to funds held in trust accounts, 

accountholders will still need to 

identify the grantors and the eligible 

beneficiaries of the trust. The level of 

coverage that applies to trust accounts 

will no longer be affected by the specific 

allocation of trust funds to each of the 

beneficiaries of the trust or by 

contingencies outlined in the trust 

agreement. Instead, the final rule will 

provide that a grantor’s trust funds are 

insured up to a total of $1,250,000 per 

grantor, or an amount up to the SMSIA 

multiplied by the number of eligible 

beneficiaries, with a limit of no more 

than five beneficiaries. 

Aggregation 

As was proposed, the final rule also 

provides for the aggregation of funds 

held in revocable and irrevocable trust 

accounts for the purposes of applying 

the share insurance limit. Under the 

current rules, funds held in informal 

revocable trust accounts and formal 

revocable trust accounts are aggregated 

for this purpose.59 The final rule will 

aggregate a grantor’s informal and 

formal revocable trust accounts, as well 

as irrevocable trust accounts. For 

example, all informal revocable trusts, 

formal revocable trusts, and irrevocable 

trusts held for the same grantor at the 

same FICU will be aggregated, and the 

grantor’s insurance limit will be 

determined by how many eligible and 

unique beneficiaries are identified 

among all of their trust accounts.60 The 

share insurance coverage provided in 

the ‘‘trust accounts’’ category will 

remain separate from the coverage 

provided for other funds held in a 

different right and capacity at the same 

FICU. 

However, some accountholders who 

currently maintain both revocable trust 

and irrevocable trust deposits at the 

same FICU may have funds in excess of 

the insurance limit when these separate 

categories are combined. As noted in the 

proposed rule, the NCUA lacks data on 

accountholders’ trust arrangements that 

allow it to estimate the number of 

accountholders who might be affected 

in this manner. As such, the NCUA 

requested that commenters provide 

information that might be helpful in this 

regard. As discussed in greater detail in 

section II.E., the comments received did 

not indicate that the aggregate limit will 

have a substantial effect on 

accountholders. The agency does not 

believe this change will impact a 

substantial number of accountholders 

and is finalizing it as proposed. 

Eligible Beneficiaries 

Currently, the revocable trust rules 

provide that eligible beneficiaries 

include natural persons, charitable 

organizations, and non-profit entities 

recognized as such under the Internal 

Revenue Code of 1986,61 while the 

irrevocable trust rules do not establish 

criteria for beneficiaries. As stated in the 

proposed rule, the NCUA believes a 

single definition should be used to 

determine whether an entity is an 

eligible beneficiary for all trust funds 

and proposes to use the current 

revocable trust rule’s definition. The 

NCUA believes this single definition 

will result in a change in share 

insurance coverage only in very rare 

cases. 

As was proposed, the final rule will 

exclude from the calculation of share 

insurance coverage beneficiaries who 

would obtain an interest in a trust only 

if one or more named beneficiaries are 

deceased (often referred to as contingent 

beneficiaries). This exclusion codifies 

existing practice to include only 

primary, unique beneficiaries in the 

share insurance calculation.62 This 

codification does not represent a 

substantive change in coverage. 

Consistent with treatment under the 

current trust rules, naming a chain of 

contingent beneficiaries that would 

obtain trust interests only in the event 

of a beneficiary’s death will not increase 

share insurance coverage. 

Finally, as in the proposed rule, the 

final rule will codify an interpretation of 

the trust rules where an informal 

revocable trust designates the 

depositor’s formal trust as its 

beneficiary. A formal trust generally 

does not meet the definition of an 

eligible beneficiary for share insurance 

purposes, but the NCUA has treated 

such accounts as revocable trust 

accounts under the trust rules, insuring 

the account as if it were titled in the 

name of the formal trust.63 Additionally, 

the Board wishes to clarify that if an 

irrevocable trust is named as beneficiary 

of an informal revocable trust account, 

the informal revocable trust account 

will also be treated as if titled in the 

name of that formal trust. 

Retained Interests and Ineligible 

Beneficiaries’ Interests 

The current trust rules provide that, 

in some instances, funds corresponding 

to specific beneficiaries are aggregated 

with a grantor’s single ownership 

deposits at the same FICU for the 

purposes of the share insurance 

calculation. These instances include a 

grantor’s retained interest in an 

irrevocable trust 64 and interests of 

beneficiaries who do not satisfy the 


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65 12 CFR 745.4(d). 

66 In the unlikely event a trust does not name any 

eligible beneficiaries, the NCUA would treat the 

funds in the trust account as funds held in a single 

ownership account. Such funds would be 

aggregated with any other single ownership funds 

that the grantor maintains at the same FICU and 

insured up to the SMSIA of $250,000. 

67See 12 CFR 745.4(b). 

68See 12 CFR 745.4(f). 

69https://mycreditunion.gov/sites/default/staticfiles/insured-funds-brochure.pdf. 

definition of ‘‘beneficiary.’’ 65 This adds 

complexity to the share insurance 

calculation, as a detailed review of a 

trust agreement may be required to 

value such interests so they may be 

aggregated with a grantor’s other funds. 

To implement the streamlined 

calculation for funds held in trust 

accounts, the NCUA proposed to 

eliminate these provisions. Under the 

proposed rule, the grantor and other 

beneficiaries who do not satisfy the 

definition of ‘‘eligible beneficiary’’ 

would not be included for the purposes 

of the share insurance calculation.66

Importantly, this exclusion would not in 

any way limit a grantor’s ability to 

establish such trust interests under state 

law. These interests simply would not 

factor into the calculation of share 

insurance coverage. The Board has 

decided to adopt these changes as 

proposed. 

Future Trusts Named as Beneficiaries 

Trusts often contain provisions for the 

establishment of one or more new trusts 

upon the grantor’s death. The proposed 

rule sought to clarify share insurance 

coverage in these situations. Under the 

proposed rule, if a trust agreement 

provides that trust funds will pass into 

one or more new trusts upon the death 

of the grantor (or grantors), the future 

trust (or trusts) would not be treated as 

beneficiaries for the purposes of the 

calculation. The future trust(s) instead 

would be considered mechanisms for 

distributing trust funds, and the natural 

persons or organizations that receive the 

trust funds through the future trusts 

would be considered the beneficiaries 

for the purposes of the share insurance 

calculation. The Board has decided to 

adopt this position as proposed. This 

clarification is consistent with the 

NCUA’s current interpretations and 

would not represent a substantive 

change in share insurance coverage. 

Naming of Beneficiaries in Share 

Account Records 

Consistent with the current revocable 

trust rules and the proposed rule, the 

final rule will continue to require the 

beneficiaries of an informal revocable 

trust to be expressly named in the 

account records of the FICU.67 The 

NCUA does not believe this requirement 

imposes a burden on FICUs, as informal 

revocable trusts by their nature require 

the FICU to be able to identify the 

individuals or entities to which funds 

would be paid upon the accountholder’s 

death. 

Presumption of Ownership 

As in the proposed rule, the final rule 

also states that, unless otherwise 

specified in a FICU’s account records, 

funds held in an account for a trust 

established by multiple grantors are 

presumed to be owned in equal shares. 

This presumption is consistent with the 

current revocable trust rules.68

Funds Covered Under Other Rules 

Under the proposed rule, certain trust 

funds that are covered by other sections 

of the share insurance regulations 

would be excluded from coverage under 

§ 745.4. For example, employee benefit 

plan accounts are insured pursuant to 

current § 745.9–2. In addition, if the coowners of an informal or formal 

revocable trust are the trust’s sole 

beneficiaries, funds held in connection 

with the trust would be treated as a joint 

ownership account under § 745.8. The 

Board has decided to adopt this as 

proposed. In each of the provided cases, 

the NCUA is not changing the current 

rule. 

Removal of the Appendix to Part 745 

As was proposed, the final rule will 

remove the appendix to part 745, which 

provides examples of share insurance 

coverage. As noted in the proposed rule, 

the NCUA plans to update its Your 

Insured Funds brochure to reflect the 

amendments made to part 745.69 The 

Board believes the updated brochure 

and other updated resources available 

on mycreditunion.gov will provide a 

more consumer friendly and easier-toupdate avenue for providing examples 

of share insurance coverage. 

The final rule also removes references 

to the appendix in the heading of part 

745 and in §§ 745.0, 745.2, and 745.13. 

As such, once this portion of the final 

rule has gone into effect, providing the 

appendix will no longer satisfy the 

notification to members/shareholders 

requirement in § 745.13. Instead, FICUs 

will have to make available either the 

rules in part 745 of the NCUA’s 

regulations or the updated Your Insured 

Funds brochure. 

Conforming Changes 

As discussed in the proposal, the final 

rule’s simplification of the calculation 

for insurance coverage for funds held in 

trust accounts permits the elimination 

of current § 745.2(d) of the regulations 

addressing the valuation of trust 

interests. As discussed further below, 

the description of non-contingent 

interests in § 745.2(d)(1) and (2) is no 

longer relevant to trust accounts under 

the final rule. Additionally, § 745.2(d)(3) 

regarding the deemed pro rata 

contribution of settlors to a trust is 

replaced by new § 745.4(b)(4), which 

presumes equal allocation. Current 

§ 745.2(d)(4) defining a ‘‘trust interest’’ 

is replaced by the definition of 

‘‘irrevocable trust’’ in new § 745.4(a)(3). 

Regarding non-contingent interests, as 

was proposed, the final rule moves the 

current description of a non-contingent 

interest in § 745.2(d)(1) to the 

definitions section of part 745. The new 

definition of ‘‘non-contingent interest’’ 

in § 745.1 remains substantively the 

same but will now only be relevant to 

evaluating participants’ non-contingent 

interests in shares of an employee 

benefit plan under § 745.9–2(a). As was 

proposed, the new definition of ‘‘noncontingent interest’’ adds language to 

include any present worth or life 

expectancy tables that the IRS may 

adopt that are similar to those set forth 

in § 20.2031–7 of the Federal Estate Tax 

Regulations (26 CFR 20.2031–7). This 

change is not substantive but is instead 

intended to provide flexibility if the IRS 

makes any changes. As part of this 

change, the final rule also makes nonsubstantive changes to § 745.1 to 

improve readability. The final rule also 

removes the reference to § 745.2 in 

current § 745.9–2. 

Finally, the final rule redesignates 

current § 745.9–2 as § 745.9 to reflect 

the elimination of current § 745.9–1 

governing irrevocable trust accounts. 

The reference in § 745.9–2(a) to § 745.2 

is also removed to reflect the 

elimination of the description of a noncontingent interest in current § 745.2(d) 

and adoption of a definition of ‘‘noncontingent interest’’ in new § 745.1. 

Effective Date 

The effective date of the trust account 

changes will be delayed until December 

1, 2026. This delayed effective date 

mirrors the timeline the FDIC used in 

adopting its trust account changes. It is 

intended to provide FICUs, 

accountholders, and the NCUA time to 

prepare for the changes in trust account 

share insurance coverage. FICUs will 

have an opportunity to review the 

changes in coverage, train employees, 

and update publications if necessary. 

Accountholders may review insurance 

coverage for their funds and adjust their 

share account arrangements if desired. 

In addition, the NCUA must update its 


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share insurance estimator and share 

insurance coverage publications, 

including publications that provide 

guidance to FICUs and accountholders. 

The Board’s rationale for adopting a 

delayed effective date as was suggested 

in the proposal and not providing for 

any continued application of the current 

rules to existing accounts is discussed 

further in section II.E. 

E. Examples Demonstrating Coverage 

Under Current and Final Rules 

To assist commenters, the NCUA is 

providing examples demonstrating how 

the final rule will apply to determine 

share insurance coverage for funds held 

in trust accounts. These examples are 

not intended to be all-inclusive; they 

merely address a few possible scenarios 

involving funds held in trust accounts. 

The NCUA expects that, for most 

accountholders, insurance coverage will 

not change under the final rule. The 

examples here highlight a few instances 

where coverage could be reduced to 

ensure the public is aware of them. The 

examples mirror those provided in the 

proposed rule. 

In addition, all examples involve 

members or those otherwise entitled to 

maintain insured accounts at the FICU. 

Again, share insurance coverage is only 

available to FICU members and those 

otherwise entitled to maintain insured 

accounts. For revocable trust accounts, 

all grantors must be members of the 

FICU or otherwise eligible to maintain 

an insured account to receive share 

insurance coverage. In the case of an 

irrevocable trust account, all grantors or 

all beneficiaries must be members of the 

FICU or otherwise eligible to maintain 

an insured account to receive share 

insurance coverage. Where a revocable 

trust account has become irrevocable 

because of the death of a grantor, the 

deceased grantor’s membership will 

continue to satisfy their membership 

requirement as long as the trust account 

continues to be maintained at the FICU. 

Example 1: Payable-On-Death Account 

Member A establishes a payable-ondeath account at a FICU. Member A has 

designated three beneficiaries for this 

account—B, C, and D—who will receive 

the funds upon member A’s death and 

listed all three on a form provided to the 

FICU. The only other share account that 

member A maintains at the same FICU 

is a share draft account with no 

designated beneficiaries. What is the 

maximum amount of share insurance 

coverage for member A’s shares at the 

FICU? 

Under the final rule, member A’s 

payable-on-death account represents an 

informal revocable trust and would be 

insured in the trust accounts category. 

The maximum coverage for this account 

would be equal to the SMSIA (currently 

$250,000) multiplied by the number of 

grantors (in this case one because 

member A established the account) 

multiplied by the number of 

beneficiaries, up to a maximum of five 

(here three, the number of beneficiaries 

is less than five). Member A’s payableon-death account would be insured for 

up to ($250,000) × (1) × (3) = $750,000. 

The coverage for member A’s payableon-death account is separate from the 

coverage provided for member A’s share 

draft account, which would be insured 

in the single ownership category 

because she has not named any 

beneficiaries for that account. The single 

ownership share draft account would be 

insured up to the SMSIA, $250,000. 

Member A’s total insurance coverage for 

shares at the FICU would be $750,000 

+ $250,000 = $1,000,000. Notably, this 

level of coverage is the same as that 

provided by the current share insurance 

rules. 

Example 2: Formal Revocable Trust and 

Informal Revocable Trust 

Members E and F jointly establish a 

payable-on-death account at a FICU. 

Members E and F have designated three 

beneficiaries for this account—G, H, and 

I—who will receive the funds after both 

members E and F are deceased. They list 

these beneficiaries on a form provided 

to the FICU. Members E and F also 

jointly establish an account titled in the 

name of the ‘‘E and F Living Trust’’ at 

the same FICU. Members E and F are the 

grantors of the living trust, a formal 

revocable trust that includes the same 

three beneficiaries, G, H, and I. The 

grantors, members E and F, do not 

maintain any other share accounts at 

this same FICU. What is the maximum 

amount of share insurance coverage for 

members E and F’s shares? 

Under the final rule, members E and 

F’s payable-on-death account represents 

an informal revocable trust and would 

be insured in the trust accounts 

category. Members E and F’s living trust 

account constitutes a formal revocable 

trust and would also be insured in the 

trust accounts category. To the extent 

the funds in these accounts would pass 

from the same grantor (E or F) to 

beneficiaries (G, H, and I), the funds 

would be aggregated for the purpose of 

applying the share insurance limit. As 

under the current rules, it would be 

irrelevant that the grantors’ shares are 

divided between the payable-on-death 

account and the living trust account. 

The maximum coverage for members 

E and F’s shares would be equal to the 

SMSIA ($250,000) multiplied by the 

number of grantors (two, because 

members E and F are the grantors with 

respect to both accounts) multiplied by 

the number of unique beneficiaries, up 

to a maximum of five (here three, the 

number of beneficiaries, is less than 

five). Therefore, the coverage for E and 

F’s trust accounts would be ($250,000) 

× (2) × (3) = $1,500,000. This level of 

coverage is the same as that provided by 

the current share insurance rules. 

Example 3: Two-Owner Trust and a 

One-Owner Trust 

Members J and K jointly establish a 

payable-on-death account at a FICU. 

Members J and K have designated three 

beneficiaries for this account—L, M, and 

N—who will receive the funds after 

both J and K are deceased. They list 

these beneficiaries on a form provided 

to the FICU. At the same FICU, Member 

J establishes a payable-on-death account 

and designates Member K as the 

beneficiary upon J’s death. What is the 

maximum amount of coverage for 

members J and K’s shares? 

Under the final rule, both accounts 

would be insured under the trust 

account category. To the extent these 

shares would pass from the same 

grantor (J or K) to beneficiaries (such as 

L, M, and N), they would be aggregated 

for the purpose of applying the share 

insurance limit. For example, member K 

identified three beneficiaries (L, M, and 

N), and therefore, member K’s insurance 

limit is $750,000 (or (1) × (3) × 

($250,000)). Member K would be fully 

insured as long as one-half interest of 

the co-owned trust account was 

$750,000 or less, which is the same 

level of coverage provided under 

current rules. In this example, member 

J’s situation differs from member K’s 

because J has a second trust account, but 

the insurance calculation remains the 

same. Specifically, member J has two 

trust accounts and identified four 

unique beneficiaries (L, M, N, and K); 

therefore, member J’s insurance limit is 

$1,000,000 (or (1) × (4) × ($250,000)). 

Member J would remain fully insured as 

long as J’s trust shares—equal to onehalf of the co-owned trust account plus 

J’s personal trust account—total no more 

than $1,000,000. This methodology and 

level of coverage is the same as that 

provided by the current share insurance 

rules. 

Example 4: Revocable and Irrevocable 

Trusts 

Member O establishes a share account 

at a FICU titled the ‘‘O Living Trust.’’ 

Member O is the grantor of this living 

trust, a formal revocable trust that 

includes three beneficiaries—P, Q, and 

R. The grantor, member O, also 


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70For example, if all the beneficiaries’ interests 

were equal, coverage would be $250,000 × (7 

beneficiaries) = $1,750,000. This amount is the 

maximum coverage possible under the current rule. 

Conversely, if a few beneficiaries had a large 

interest in the trust, the total of all beneficiaries’ 

interests (limited to the SMSIA per beneficiary) 

could be less than $1,250,000, in which case the 

current rule would provide a minimum of 

$1,250,000 in coverage. Depending upon the precise 

allocation of interests, the amount of coverage 

provided would fall somewhere within this range. 

establishes an irrevocable trust for the 

benefit of the same three beneficiaries. 

The trustee of the irrevocable trust 

maintains a share account at the same 

FICU as the living trust account, titled 

in the name of the irrevocable trust. 

Neither member O nor the trustee 

maintains other share accounts at the 

same FICU. What is the insurance 

coverage for these accounts? 

Under the final rule, the living trust 

account is a formal revocable trust and 

would be insured in the trust accounts 

category. The account containing the 

funds from the irrevocable trust account 

would also be insured in the trust 

accounts category. To the extent these 

shares would pass from the same 

grantor (member O) to beneficiaries (P, 

Q, or R), they would be aggregated for 

the purposes of applying the share 

insurance limit. It would be irrelevant 

that the shares are divided between the 

living trust account and the irrevocable 

trust account. The maximum coverage 

for these shares would be equal to the 

SMSIA ($250,000) multiplied by the 

number of grantors (one, because 

member O is the grantor with respect to 

both accounts) multiplied by the 

number of beneficiaries, up to a 

maximum of five (here three, the 

number of beneficiaries, is less than 

five). Therefore, the maximum coverage 

for the shares in the trust accounts 

would be ($250,000) × (1) × (3) = 

$750,000. 

This example is one of the few 

instances where the final rule may 

provide a reduced amount of coverage 

as a result of the aggregation of 

revocable and irrevocable trust 

accounts, depending on the structure of 

the trust agreement. Under the current 

rules, member O would be insured for 

up to $750,000 for revocable trust shares 

and separately insured for up to 

$750,000 for irrevocable trust shares 

(assuming non-contingent beneficial 

interests), resulting in $1,500,000 in 

total coverage. If that were the case, 

current coverage would exceed that 

provided by the final rule. However, the 

terms of irrevocable trusts sometimes 

lead to less coverage than expected. It is 

often the case that irrevocable trust 

accounts are only insured up to 

$250,000 under the current rules due to 

contingencies in the trust agreement, 

but determining this with certainty 

often requires careful consideration of 

the trust agreement’s contingency 

provisions. Under the current rule, if 

contingencies existed, current coverage 

would exceed that provided by the final 

rule, as member O would be insured up 

to $1,000,000; $750,000 for the 

revocable trust and $250,000 for the 

irrevocable trust. In the NCUA’s view, 

one of the key benefits of the final rule 

versus the current rule will be greater 

clarity and predictability in share 

insurance coverage because whether 

contingencies exist will no longer be a 

factor that could affect share insurance. 

Example 5: Many Beneficiaries Named 

Member S establishes a share account 

at a FICU titled in the name of the ‘‘S 

Living Trust.’’ This trust is a revocable 

trust naming seven beneficiaries—T, U, 

V, W, X, Y, and Z. The grantor, member 

S, does not maintain any other shares at 

the same FICU. What is the coverage for 

this account? 

Under the final rule, the living trust 

is a formal revocable trust and would be 

insured in the trust accounts category. 

The maximum coverage for this account 

would be equal to the SMSIA ($250,000) 

multiplied by the number of grantors 

(one, because member S is the sole 

grantor) multiplied by the number of 

beneficiaries, up to a maximum of five. 

Here the number of named beneficiaries 

(seven) exceeds the maximum (five), so 

insurance is calculated using the 

maximum (five). Coverage for the 

account would be ($250,000) × (1) × (5) 

= $1,250,000. 

This example is another instance 

where the final rule may provide for less 

coverage than the current rule. Under 

the current rule, because more than five 

beneficiaries are named, the account is 

insured up to the greater of the 

following: (1) five times the SMSIA; or 

(2) the total of the interests of each 

beneficiary, with each such interest 

limited to the SMSIA. Determining 

coverage requires a review of the trust 

agreement to ascertain each 

beneficiary’s interest. Each such 

insurable interest is limited to the 

SMSIA, and the total of all these 

interests is compared with $1,250,000 

(five times the SMSIA). The current rule 

provides coverage in the greater of these 

two amounts. The result would fall into 

a range from $1,250,000 to $1,750,000, 

depending on the precise allocation of 

trust interests among the beneficiaries.70

In the NCUA’s view, one of the key 

benefits of the final rule versus the 

current rule is greater clarity and 

predictability in share insurance 

coverage because a single formula is 

used to determine maximum coverage, 

and this formula will not depend upon 

the specific allocation of funds among 

beneficiaries. 

F. Discussion of Comments 

Overview of the Comments 

The NCUA received 13 comments on 

the proposed rule, 11 of which provided 

relevant substantive feedback. 

Comments were received from 

individuals, a FICU, state credit union 

leagues and national trade associations, 

a law firm, and an association of state 

credit union supervisors. All 11 

substantive comments supported the 

proposed rule, with a number providing 

additional feedback regarding potential 

revisions or other matters to 

contemplate further. As described 

below, common issues commenters 

spoke to were parity with FDIC 

coverage, the merger of the trust account 

categories, the proposed trust 

calculation, and membership issues. 

Parity With FDIC Coverage 

Six commenters addressed the 

importance of parity with FDIC 

coverage. One deemed it crucial for 

maintaining consistency and fairness in 

the financial system. Another opined 

that if FDIC coverage is easier to 

understand or provides additional 

coverage, it could result in funds being 

moved to banks and could introduce 

reputational risk to the credit union 

system. A commenter noted that while 

parity is not reason enough to adopt a 

change, they recognized its importance, 

particularly because the public tends to 

be more familiar with the FDIC than the 

NCUA. As stated in both the proposed 

rule and this final rule, ensuring parity 

between the share insurance and 

deposit insurance regimes is an 

important basis for the NCUA making 

these changes to the trust account rules. 

Effects of the Changes on Understanding 

of the Trust Rules 

Commenters universally believed the 

proposed amendments would make 

insurance coverage for trust accounts 

easier to understand. One commenter 

said trust accounts are already more 

complex than individual share 

accounts, and the current rules increase 

the likelihood of misunderstanding 

coverage by adding complexity with 

different rules and calculation methods 

due to the type of trust, number of 

beneficiaries, or other factors. A 

national trade association said its 

member FICUs have reported the 

current system, with distinct rules for 

revocable and irrevocable trusts, has 

caused significant confusion and led to 


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71See Average Inheritance: How Much Are 

Retirees Leaving to Heirs? | Boldin (stating that the 

median size of a trust fund is around $285,000), 

citing the U.S. Federal Reserve’s Survey of 

Consumer Finances (SCF),’’ Nov. 2023. 

a high volume of complex inquiries. The 

association believed the proposal will 

offer clear and straightforward guidance 

for FICUs, their employees, and their 

accountholders. One commenter 

emphasized that making share 

insurance coverage easier to understand 

is important because the public is 

generally less familiar with the NCUA 

than the FDIC. The commenter 

supported changes to enhance visibility 

or, at a minimum, to make it easier for 

a consumer to understand the 

similarities between FDIC and NCUA 

coverage. 

The Board appreciates commenters’ 

confirmation that the changes will make 

share insurance for trust accounts easier 

to understand. In the proposal, the 

Board also stated it believes that under 

the proposal accountholders generally 

would have the information necessary 

to readily calculate share insurance 

coverage for their trust accounts, better 

allowing them to understand insurance 

coverage for their trust accounts. 

However, the Board also asked if there 

were instances where an accountholder 

would not likely have the necessary 

information. 

Two commenters cited instances 

where accountholders may lack the 

necessary information to calculate share 

insurance coverage under the proposal. 

The first cited an accountholder whose 

trust is not readily accessible, such as if 

it is old and maintained by a third party; 

this commenter suggested the NCUA 

apprise accountholders of the rule and 

remind them to find necessary 

documents. The second said complex 

trust structures or changes in 

beneficiaries could cause a lack of 

necessary information, particularly if 

the accountholder does not have 

immediate access to updated details. 

The commenter believed this could 

make determining the beneficiaries 

challenging, particularly in trusts 

involving multiple generations or those 

set up for estate planning. 

The Board agrees with commenters 

that fact-specific circumstances related 

to individual accountholders’ trust 

accounts may result in individual 

situations where an accountholder lacks 

the necessary information to readily 

calculate their share insurance coverage. 

However, the situations described, and 

others like them, relate to complexities 

in accountholders’ individual trust 

arrangements that would be difficult or 

impossible to ameliorate in regulations 

governing share insurance. Instead, it is 

up to accountholders and those 

maintaining these trusts to ensure their 

understanding of them, so they can 

apply the share insurance regulations to 

them in evaluating their share insurance 

coverage. The Board agrees with the 

commenter that requested that the 

NCUA apprise accountholders of the 

rule changes and remind them to locate 

necessary documents. The NCUA will 

be providing publicly available 

resources to notify accountholders of 

the rule changes and explain them. In 

doing so, the NCUA will also reiterate 

the importance of understanding trust 

arrangements and maintaining 

necessary trust documents. 

Merger of the Trust Categories 

Seven commenters specifically 

supported merging the revocable and 

irrevocable trust account categories. 

Commenters believed this would reduce 

confusion, minimize the number of 

questions to the NCUA, reduce 

regulatory burden, and improve 

operational processes. One national 

trade association said its member FICUs 

did not anticipate the merger would 

result in reduced insurance coverage in 

practice. However, they asked the 

NCUA to track any such outcomes in 

liquidations and suggested revisiting the 

rule if stakeholder input or liquidations 

show reduced coverage. 

The Board agrees the merger of the 

trust categories should simplify 

insurance coverage of trust accounts, 

reduce confusion, and alleviate burden 

on FICUs, accountholders, and the 

NCUA. While the Board appreciates the 

suggestion to track outcomes in 

liquidations where the merger of the 

trust categories causes a reduction in 

insurance coverage, it declines to create 

a formal process for doing so. 

Simultaneously calculating insurance 

coverage under the current and new 

trust rules would negate many of the 

efficiency and simplification benefits 

the changes are intended to provide. 

While there will not be a formal 

mechanism for tracking such results, 

should the agency become aware of the 

trust account changes creating an 

unanticipated level of decreased share 

insurance coverage, either during 

evaluation of liquidations or through 

public input, the Board will consider 

whether additional changes are needed, 

in consultation with the FDIC. 

Methodology for Calculating Trust 

Coverage 

Six commenters specifically 

supported the proposed method for 

calculating trust account coverage. 

Commenters believed the more 

straightforward uniform method would 

enhance transparency, as well as FICU 

and member understanding; make it 

easier to inform members of their 

coverage; provide consistency with 

FDIC coverage; and benefit from FICUs 

and members being already familiar 

with it. One national trade association 

said its member FICUs did not think the 

$1,250,000-per-grantor cap was too low, 

as the vast majority of accounts are well 

below that level, but did ask the NCUA 

to track liquidations to ensure the cap 

is not too low. Additionally, one 

commenter suggested clarifying in the 

final rule that a trust with more than 

one grantor—such as a husband and 

wife—would have maximum coverage 

of $1,250,000 per grantor. 

The Board agrees with commenters 

that the calculation method should 

provide the described benefits. The 

Board also agrees the $1,250,000-pergrantor cap is unlikely to be too low.71

However, as the commenter requested, 

the agency does plan to continue to 

track uninsured amounts in 

liquidations, if any, and can explore 

further changes should it become 

warranted. Finally, the Board believes 

the proposed rule was clear that a single 

grantor is eligible for a maximum of 

$1,250,000 for all their trust interests. 

However, it reiterates that is the case 

here. In other words, where a husband 

and wife maintained one account at a 

FICU, a co-owned revocable trust 

account with five named eligible 

beneficiaries, the account would be 

eligible for up to $1,250,000 per grantor, 

for a total of $2,500,000. 

Examples of Trust Account Coverage 

One commenter encouraged the 

NCUA to maintain communications 

with FICUs to ensure its examples 

sufficiently cover ownership structures 

implemented by members. The Board 

agrees the NCUA should communicate 

with FICUs about this issue and the 

agency will do so. 

Effects on Call Report Filings 

One commenter was concerned that 

reporting of insured shares on the Call 

Report is inaccurate. The commenter 

said FICU computer systems tend not to 

code trust accounts correctly for 

reporting insured shares, causing them 

to go unreported as insured shares or to 

be missing some beneficiaries. The 

commenter said many FICUs do not 

include beneficiaries in their computer 

systems and only maintain that data in 

paper records, which excludes many 

beneficiaries that would be included in 

reporting insured shares. The 

commenter believed it might be more 

accurate to take total outstanding shares 

and apply a factor to compute insured 


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72See footnote 71. 

shares. While outside the scope of this 

rulemaking, this concern will be 

evaluated by staff. 

Effects on Other Types of Accounts 

In the proposal, the NCUA asked if 

there are types of trusts not described in 

the proposal whose funds maintained in 

FICU accounts would be affected by the 

proposed changes. One commenter said 

the proposal might not fully address 

trusts like charitable remainder trusts or 

special needs trusts, noting they have 

unique characteristics that could affect 

insurance coverage. The commenter also 

said trusts operating under state-specific 

laws or provisions might have aspects 

not contemplated in the rule, 

necessitating a broader consideration. 

As the commenter noted, many trusts 

operate under state-specific laws, which 

can vary. As such, the share insurance 

regulations could not fully 

accommodate each and every type of 

trust. With regard to special needs trusts 

and charitable remainder trusts, 

coverage will depend upon the exact 

details of each trust arrangement, 

including whether the trust names 

eligible beneficiaries. 

Comments Addressing Other Changes to 

the Trust Rules 

Two commenters supported the 

proposal to eliminate certain 

requirements in the current trust 

account rules as a pragmatic step 

towards reducing unnecessary 

regulatory burdens, leading to more 

efficient operations and improved 

customer experience. One commenter 

supported the proposed removal of the 

appendix to part 745 in favor of updates 

to NCUA guidance. The commenter 

believed this would make it easier for 

members to understand share insurance 

coverage. 

Continued Application of the Current 

Rules to Existing Accounts or a Delayed 

Effective Date 

In the proposal, the Board noted it 

prefers a delayed effective date for the 

trust account changes over continuing 

the coverage under current rules for 

accounts existing at the time the final 

rule goes into effect. This situation was 

referred to as ‘‘grandfathering’’ accounts 

under the current rules in the proposal. 

It is referred to as ‘‘legacy coverage’’ in 

this final rule. The proposal reasoned 

that providing both legacy coverage for 

existing accounts and separate coverage 

under the new rules for new accounts 

would result in significantly greater 

complexity for the period when two sets 

of rules could apply to accounts— 

especially in conducting liquidations. 

The Board’s belief was and remains that 

a delayed implementation date allows 

stakeholders to make necessary 

adjustments for the new rules, without 

the complications of two sets of rules 

coexisting. In recognition that there 

could be instances that may not be 

easily restructured without adverse 

consequences to the accountholder, 

such as trusts holding share certificates 

or other account relationships, the 

proposal asked whether there are fact 

patterns where legacy coverage for 

existing accounts may be appropriate. 

The proposal also asked if this approach 

would be appropriate with respect to 

the proposed rule’s coverage limit of 

$1,250,000 per FICU for an 

accountholder’s funds held in trust 

accounts. 

Three commenters supported some 

form of legacy coverage for existing 

accounts. Two urged providing legacy 

coverage at current levels for existing 

trust accounts, such as if a member is 

the grantor of both a revocable and an 

irrevocable trust at the same FICU. One 

of these commenters argued that 

consumers with open accounts expect to 

maintain their current coverage, 

providing legacy coverage for existing 

accounts should not increase loss risk to 

the Share Insurance Fund relative to 

current policy, and a reduction in 

coverage represents a reputational risk 

to NCUA share insurance that could 

reduce public confidence in the credit 

union system. The other said that 

providing legacy coverage for existing 

accounts may increase complexity in 

liquidations but believed it may be the 

best solution to avoid adverse 

consequences to members. A third 

commenter said this legacy coverage 

may be appropriate in certain scenarios 

to protect members, such as in trusts 

with long-term investments like share 

certificates where restructuring could 

lead to financial losses, or in complex 

estate planning trusts requiring 

significant legal and administrative 

changes. 

Four commenters supported a delayed 

effective date. One said that if the 

NCUA avoids providing legacy coverage 

for existing accounts, it should adopt an 

appropriately delayed implementation 

that recognizes the potential hardships 

and allows stakeholders to make 

necessary changes. Another believed 

that even with legacy coverage for 

existing accounts, a delayed 

implementation date would be essential 

for FICUs to review trust relationships 

and notify any negatively affected 

members. A third opposed providing 

legacy coverage for existing accounts, 

reasoning the intricacies involved could 

present challenges. The commenter also 

stated, ‘‘concerns arise regarding the 

potential limitations of studying credit 

unions, as these may not fully capture 

the dynamics of larger credit unions, 

potentially leading to adverse effects on 

the relationships between [m]embers 

and credit unions.’’ 

The Board has strongly considered the 

comments received and the effects the 

new trust account rules will have on 

accountholders. The Board continues to 

believe providing legacy coverage for 

existing accounts poses complications 

and burdens to FICUs, accountholders, 

and the NCUA that make such a system 

unworkable. The Board believes that by 

providing a substantially delayed 

effective date that is in excess of two 

years, FICUs and their accountholders 

should have enough time to make any 

needed changes to their accounts to 

ensure adequate share insurance 

coverage. Further, the Board remains 

doubtful the changes will result in 

reduced coverage in most instances.72

Providing a delay in effect for the 

changes that matches the one the FDIC 

provided to insured depository 

institutions and their accountholders 

should provide both FICUs and their 

accountholders with sufficient time to 

complete any necessary adjustments. 

Membership 

Several commenters addressed the 

membership requirements for trust 

accounts. One commenter advocated 

simplifying membership requirements 

to establish a more straightforward 

approach with the goal of redefining the 

criteria determining the eligibility of 

individuals or entities for share 

insurance coverage, especially in the 

context of trust accounts. One 

commenter said membership should be 

satisfied for trust accounts if at least one 

member is on the account. 

One commenter expressed support for 

the NCUA’s efforts to simplify share 

insurance coverage but believed that 

meeting the agency’s goals of providing 

clarity to FICUs and members and of 

providing parity with the FDIC’s 

treatment of trust accounts required 

clarifying membership requirements for 

two types of accounts: (1) revocable 

trust accounts where not all settlors are 

members; and (2) irrevocable trust 

accounts where no settlors are members. 

On revocable trust accounts where not 

all settlors are members, the commenter 

believed the NCUA should provide 

coverage to nonmember co-owners of a 

revocable trust account. The commenter 

correctly noted the NCUA’s position has 

long been that joint accounts where 

there is a right of survivorship, which 

do not have beneficiaries, qualify for 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 79409 

73See 12 U.S.C. 1759(a). 

74See 12 CFR 745.8(e). 

75 12 CFR 745.3(a)(3). 

76 87 FR 4455 (Jan. 28, 2022). 

share insurance for interests of both 

depositors even where there is a 

nonmember co-owner; whereas a 

nonmember co-owner’s interest in a 

revocable trust account, such as a 

payable-on-death account, is not eligible 

for share insurance. The commenter 

believed the addition of a payable-ondeath beneficiary should not defeat the 

extension of share insurance to a 

nonmember co-owner. The commenter 

also said this position is not explicitly 

contained in the regulations and is only 

documented in the NCUA’s Share 

Insurance Estimator FAQ, which is not 

legally binding. The commenter 

emphasized that the FDIC clearly 

delineates that all payable-on-death 

beneficiaries are treated the same for 

insurance purposes, and the commenter 

believed the divergence from FDIC 

regulations is contrary to the NCUA’s 

parity goal. The commenter concluded 

the proposed rule provides an 

opportunity to provide clear 

instructions for calculating coverage for 

joint accounts with payable-on-death 

beneficiaries or any other revocable 

trust account with one or more 

nonmember settlors. 

To clarify, the NCUA’s longstanding 

position is that nonmembers may be 

joint owners of a joint account with a 

right of survivorship (an account with 

no beneficiaries) and have an insurable 

interest if one joint owner of the account 

is a member. This position is based on 

a specific statutory provision that allows 

for nonmembers to be co-owners with a 

member if the account is held with a 

right of survivorship.73 In other words, 

the NCUA provides share insurance 

coverage to nonmember owners of joint 

accounts (an account with no 

beneficiaries) where there is a right of 

survivorship based upon a statutory 

exception to the normal limitation that 

the NCUA only provides coverage to 

members. This coverage for nonmember 

owners of joint accounts with a right of 

survivorship (an account with no 

beneficiaries) is expressly provided for 

in the NCUA’s regulations.74

Conversely, the NCUA has not 

recognized a statutory exception for 

providing share insurance coverage to 

nonmember co-owners of revocable 

trust accounts, which are different from 

joint accounts with no beneficiaries 

under the share insurance regulations. 

Unlike the coverage for nonmember 

joint account owners expressly provided 

for in the NCUA’s regulations, the 

NCUA’s regulations do not contain any 

provision related to nonmember coowners of revocable trust accounts that 

negates the normal limitation that share 

insurance coverage is provided to 

members. Instead, the agency’s 

longstanding position has been that coowned revocable trust accounts are 

different from joint accounts held with 

a right of survivorship; and as such, 

they require co-owners (settlors of the 

trust) to be members to receive 

insurance coverage for their interests in 

the revocable trust account. It is also 

worth noting that while parity with 

FDIC coverage is an important aim, the 

NCUA’s coverage is generally limited to 

member accounts. Because the FDIC 

coverage is not so limited, instances will 

inevitably occur where coverage is not 

parallel. 

In addressing irrevocable trust 

accounts where no settlors are members, 

the commenter erroneously concluded 

the NCUA’s position as to membership 

requirements for irrevocable trust 

accounts would pose an issue under the 

proposal. The commenter correctly 

noted that under the current rules, 

irrevocable trust accounts can be 

established as long as either all settlors 

or all beneficiaries are members of the 

FICU. The commenter concluded that 

because the proposal would calculate 

coverage for irrevocable and revocable 

trusts in aggregate to $1.25 million per 

grantor, the NCUA would not provide 

coverage to an account where the 

settlors were not members, but all 

beneficiaries were members. This 

conclusion is incorrect. While coverage 

would be limited to $1.25 million in 

aggregate for a grantor, any interest 

related to an irrevocable trust where all 

the beneficiaries were members would 

still be insured based on the 

beneficiaries’ membership status. The 

limitation would only be related to 

interests for one grantor being limited to 

$1.25 million, irrespective of the 

grantor’s lack of membership. 

Other Comments 

Two commenters agreed the changes 

should help facilitate the prompt 

payment of share insurance. One 

commenter noted that, while NCUA 

Board Members will often accurately 

say no member has ever lost one penny 

of funds insured by the Share Insurance 

Fund, members have lost funds they 

thought were insured due to 

misunderstanding the coverage rules. As 

noted, the Board’s goal with this 

rulemaking is to reduce this confusion. 

In response to the NCUA’s request for 

input regarding empirical information 

the agency should consider to help it 

understand the effects of its proposed 

rule, a commenter provided an article 

detailing an empirical study of the 

jurisdictional competition for trust 

funds. Of most relevance, the article 

notes the difficulty of empirically 

studying inter vivos (living) trusts due 

to various factors, including these trusts’ 

private nature and complexity. 

III. Amendments to Mortgage Servicing 

Account Rule 

A. Policy Objectives 

The NCUA’s regulations governing 

share insurance coverage include 

specific rules on accounts maintained at 

FICUs by mortgage servicers.75 These 

rules are intended to be easy to 

understand and apply in determining 

the amount of share insurance coverage 

for a mortgage servicer’s account (MSA). 

The NCUA generally strives to maintain 

parity with FDIC’s regulations in 

furtherance of this aim. 

The NCUA proposed an amendment 

to its rules governing insurance 

coverage for accounts maintained at 

FICUs by mortgage servicers that consist 

of mortgagors’ principal and interest 

payments. The proposed change would 

mirror a change made by the FDIC in 

early 2022 that became effective in April 

2024, and which was intended to 

address a servicing arrangement that is 

not addressed in the current rules.76

Specifically, some servicing 

arrangements may permit or require 

servicers to advance their own funds to 

the lenders when mortgagors are 

delinquent in making principal and 

interest payments, and servicers might 

commingle such advances in the MSA 

with principal and interest payments 

collected directly from mortgagors. The 

FDIC reasoned that the factors that 

motivated the FDIC to establish its 

current rules for MSAs, which the 

NCUA also adopted and are further 

described below, weigh in favor of 

treating funds advanced by a mortgage 

servicer to satisfy mortgagors’ principal 

and interest obligations to the lender as 

if such funds were collected directly 

from borrowers. The FDIC also noted it 

seeks to avoid uncertainty concerning 

the extent of deposit insurance coverage 

for such accounts. The proposed rule 

noted the NCUA concurs with the 

importance of avoiding uncertainty 

regarding the extent of insurance 

coverage and believes that an important 

aspect of avoiding uncertainty is 

maintaining parity between the share 

insurance and deposit insurance 

regimes. 

After reviewing the comments 

received on this proposed change, the 

Board has decided to finalize the change 

as proposed. As discussed further 


ddrumheller on DSK120RN23PROD with RULES1
79410 Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 

77See 73 FR 61658, 61658–59 (Oct. 17, 2008). 

78 73 FR 62856, 62857 (Oct. 22, 2008). 

79The FDIC noted that, to fulfill their contractual 

obligations with investors, covered IDIs maintain 

mortgage principal and interest balances at a pool 

level and remittances, advances, advance 

reimbursements, and excess funds applications that 

affect pool-level balances are not allocated back to 

individual borrowers. 

below, the Board has also decided to 

make this change effective 30 days after 

publication in the Federal Register. 

B. Background and Need for 

Rulemaking 

The NCUA’s rules governing coverage 

for MSAs were last amended in 2008, 

which corresponded to changes made 

by the FDIC. More specifically, in 2008 

the FDIC recognized securitization 

methods and vehicles for mortgages had 

become more complex, exacerbating the 

difficulty of determining the ownership 

of deposits consisting of principal and 

interest payments by mortgagors and 

extending the time required to make a 

deposit insurance determination for 

deposits of a mortgage servicer in the 

event of an insured depository 

institution’s (IDI’s) failure.77 The FDIC 

expressed concern that a lengthy 

insurance determination could lead to 

continuous withdrawal of deposits of 

principal and interest payments from 

IDIs and unnecessarily reduce a funding 

source for such institutions. The FDIC 

therefore amended its rules to provide 

coverage to lenders based on each 

mortgagor’s payments of principal and 

interest into the MSA, up to its standard 

maximum deposit insurance amount per 

mortgagor (currently $250,000). The 

FDIC did not amend the rule for 

coverage of tax and insurance payments, 

which continued to be insured to each 

mortgagor on a pass-through basis and 

aggregated with any other deposits 

maintained by each mortgagor at the 

same IDI in the same right and capacity. 

The NCUA agreed that this treatment of 

principal and interest payments 

provided greater and fairer coverage for 

credit union members and decided to 

apply the same approach in its share 

insurance rules.78

Importantly, the 2008 amendments to 

the rules for MSAs did not provide for 

the fact that servicers may be required 

to advance their own funds to make 

payments of principal and interest on 

behalf of delinquent borrowers to the 

lenders. However, in its recent 

rulemaking the FDIC identified that 

advancing their own funds is required 

of mortgage servicers in some instances. 

For example, the FDIC noted that some 

IDIs identified challenges to 

implementing certain recordkeeping 

requirements with respect to MSA 

deposit balances because of the way in 

which servicer advances are accounted 

for and administered.79

The NCUA’s current rules, which 

mirror the FDIC’s rules that were in 

effect until April 1, 2024, provide 

coverage for principal and interest funds 

only to the extent ‘‘paid into the account 

by the mortgagors’’; they do not provide 

coverage for funds paid into the account 

from other sources, such as the 

servicer’s own operating funds, even if 

those funds satisfy mortgagors’ principal 

and interest payments. As a result, 

advances are not provided the same 

level of coverage as other deposits in an 

MSA consisting of principal and interest 

payments directly from the borrower, 

which are insured up to the SMSIA for 

each borrower. Instead, the advances are 

aggregated and insured to the servicer as 

corporate funds for a total of $250,000. 

In adopting changes to its rule in early 

2022, the FDIC expressed concern that 

this inconsistent treatment of principal 

and interest amounts could result in 

financial instability during times of 

stress, and could further complicate the 

insurance determination process, a 

result that is inconsistent with their 

policy objective. As noted in the 

proposal, the NCUA shares these 

concerns and believes it is important 

that parity is maintained between the 

insurance regimes. 

C. Final Rule 

The NCUA is finalizing the rule as 

proposed with no changes. The final 

rule will amend the rules governing 

coverage for funds in MSAs to provide 

parity with the FDIC’s regulation and 

provide consistent share insurance 

treatment for all MSA balances held to 

satisfy principal and interest obligations 

to a lender, regardless of whether those 

funds are paid into the account by 

borrowers or paid into the account by 

another party (such as the servicer) to 

satisfy a periodic obligation to remit 

principal and interest due to the lender. 

Under the final rule, accounts 

maintained by a mortgage servicer in an 

agency, custodial, or fiduciary capacity, 

which consist of payments of principal 

and interest, will be insured for the 

cumulative balance paid into the 

account to satisfy principal and interest 

obligations to the lender, whether paid 

directly by the borrower or by another 

party, up to the limit of the SMSIA per 

mortgagor. Mortgage servicers’ advances 

of principal and interest funds on behalf 

of delinquent borrowers will therefore 

be insured up to the SMSIA per 

mortgagor, consistent with the coverage 

rules for payments of principal and 

interest collected directly from 

borrowers. 

The composition of an MSA 

attributable to principal and interest 

payments will also include collections 

by a servicer, such as foreclosure 

proceeds, that are used to satisfy a 

borrower’s principal and interest 

obligation to the lender. In some cases, 

foreclosure proceeds may not be paid 

directly by a mortgagor. The current rule 

does not address whether foreclosure 

collections represent payments of 

principal and interest by a mortgagor. 

Under the final rule, foreclosure 

proceeds used to satisfy a borrower’s 

principal and interest obligation will be 

insured up to the limit of the SMSIA per 

mortgagor. 

The final rule does not make any 

changes to the share insurance coverage 

provided for MSAs comprised of 

payments from mortgagors of taxes and 

insurance premiums. Such aggregate 

escrow accounts are held separately 

from the principal and interest MSAs, 

and the funds therein are held for the 

mortgagors until such time as tax and 

insurance payments are disbursed by 

the servicer on the borrower’s behalf. 

Under the final rule, such funds will 

continue to be insured based on the 

ownership interest of each mortgagor in 

the account and aggregated with other 

funds maintained by the mortgagor at 

the same FICU in the same capacity and 

right. 

The Board is opting to make this 

change effective 30 days after 

publication in the Federal Register. 

Given the change provides more 

expansive coverage and should not 

impose additional burden on FICUs or 

accountholders, the Board does not see 

a reason to delay its effect. 

D. Discussion of Comments 

Six commenters expressly supported 

the proposed rule’s changes to 

insurance of MSAs. In terms of the 

benefits cited, four commenters noted 

the importance of parity with FDIC 

coverage. Three cited the benefits of a 

standardized approach and fair and 

equitable treatment. Five noted the 

greater clarity provided for FICUs and 

members. Two said the change 

represents improved protection of the 

interests of all parties, aligns with best 

practices, and offers additional security. 

One stressed the change simplifies the 

complex landscape and enables FICUs 

to manage MSAs more confidently and 

efficiently. That commenter believed the 

change was crucial for maintaining the 

integrity and reliability of the MSA 

system, as the change recognizes the 

practical realities of servicing 

arrangements and the various sources of 


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Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 79411 

80 12 CFR 745.2. 

81 12 CFR 745.2(c). 

82NCUA Legal Op. 97–0909 (Feb. 6, 1998), 

available at https://www.ncua.gov/regulationsupervision/legal-opinions/1997/pass-throughinsurance. 83 12 CFR 330.5(b)(2). 

funds that may be used to satisfy 

borrowers’ obligations. The commenter 

thought the inclusion of foreclosure 

collections particularly important, as 

the current rule does not address it. Two 

commenters stated the change would 

help promote financial stability. One 

said the change would reduce financial 

institutions’ counterparty risk exposure, 

which also reduces liquidity risk to the 

FICU holding the MSAs. Another said 

providing insurance for these advanced 

funds supports the mortgage market and 

broader financial system’s stability. 

One national trade association 

reported its FICU members expressed 

initial concerns with increased Share 

Insurance Fund costs due to larger 

insured balances from covering funds 

paid by mortgage servicers. However, 

after members reviewed the potential 

effect in greater detail, they concluded 

any such increase in cost would be 

nominal. The commenter urged the 

NCUA to monitor this change to ensure 

it does not lead to an excessive increase 

in Share Insurance Fund-related 

liquidation costs. The Board concurs 

that this change should only nominally 

increase any Share-Insurance-Fund 

related liquidation costs. However, the 

agency will continue to monitor such 

costs. 

Only one commenter addressed the 

NCUA’s request regarding whether a 

delayed effective date is necessary. The 

commenter believed a delayed effective 

date appropriate but had no concern 

with an earlier date. As discussed, the 

Board is opting to make this change 

effective 30 days after publication in the 

Federal Register. The comments 

received do not give the Board the 

impression that commenters were 

opposed to the change becoming 

effective without delay. Further, given 

the change only clarifies and expands 

share insurance coverage, the NCUA 

does not believe the change should 

impose any burden on FICUs or 

accountholders. 

IV. Recordkeeping Requirements 

A. Policy Objectives 

The NCUA’s regulations governing 

share insurance coverage include 

general principles applicable in 

determining insurance of accounts.80

Among these general principles are 

provisions addressing recordkeeping.81

The NCUA intends for these provisions 

to clearly articulate the records the 

agency will look to when evaluating 

insurance coverage. As discussed in 

more detail below, over time it has 

become apparent that the recordkeeping 

provisions do not clearly address all 

situations and may be especially unclear 

as to accounts maintained by an agent, 

custodian, fiduciary, or other party on 

behalf of a member or beneficial owner 

eligible to maintain an insured account 

at a FICU. To better address these 

situations, the NCUA proposed to 

amend the recordkeeping requirements. 

After reviewing the comments 

received on this proposed change, the 

Board has decided to finalize the change 

as proposed. As discussed further 

below, the Board has also decided to 

make this change effective 30 days after 

publication in the Federal Register. 

B. Background and Need for 

Rulemaking 

Section 745.2(c) of the NCUA’s 

regulations addresses general 

recordkeeping requirements. Other 

recordkeeping requirements applicable 

to specific account types are addressed 

as needed in the relevant sections of 

part 745. Current § 745.2(c)(1) provides 

that, as a general matter, the account 

records of the FICU shall be conclusive 

as to the existence of any relationship 

pursuant to which the funds in the 

account are deposited and on which a 

claim for insurance coverage is founded. 

Examples would be trustee, agent, 

custodian, or executor. No claim for 

insurance based on such a relationship 

will be recognized in the absence of 

such disclosure. 

Section 745.2(c)(2) provides that, if 

the account records of a FICU disclose 

the existence of a relationship which 

may provide a basis for additional 

insurance, as required under 

§ 745.2(c)(1), the details of the 

relationship and the interest of other 

parties in the account must be 

ascertainable either from the records of 

the FICU or the records of the member 

maintained in good faith and in the 

regular course of business. It is this 

provision that has raised questions 

regarding accounts maintained by an 

agent, fiduciary, or similar party. The 

NCUA has received several questions 

regarding whether records maintained 

by an agent, fiduciary, or similar third 

party on behalf of the member or 

beneficial owner eligible to maintain an 

insured account would qualify as the 

‘‘records of the member.’’ Due to the 

frequency with which these agent or 

fiduciary arrangements will involve a 

party other than the FICU or member 

maintaining records on the FICU’s or 

member’s behalf, the NCUA proposed to 

add language explicitly clarifying that 

such records, when maintained in good 

faith and in the regular course of 

business, can be looked to when 

evaluating the details of the relationship 

and the interest of other parties in the 

account at the FICU. 

C. Final Rule 

The NCUA is adopting the proposed 

rule as proposed with no changes. 

Section 745.3(a)(2) of the NCUA’s 

current regulations provides that when 

an account is held by an agent or 

nominee, funds owned by a principal 

and deposited in one or more accounts 

in the name or names of agents or 

nominees shall be added to any 

individual account of the principal and 

insured up to the SMSIA in the 

aggregate. The NCUA will also generally 

look to the principal or beneficial owner 

for satisfying the membership 

requirement or other eligibility to 

maintain an insured account at the 

FICU. As such, records maintained by 

an agent or nominee on behalf of the 

member principal or beneficial owner 

may not clearly be considered ‘‘records 

of the member’’ for the purpose of 

ascertaining their interests in the 

account under current § 745.2(c)(2). 

The NCUA has previously issued a 

legal opinion stating that where an agent 

or custodian ‘‘has an agreement with the 

beneficial owner/member to maintain 

custody of the beneficial owner/ 

member’s records, [the] NCUA would 

consider those records to be ‘records of 

the member’ within the meaning of 12 

[CFR] 745(c)(2).’’ 82 However, as the 

NCUA acknowledged in the proposed 

rule, it would be beneficial for the 

regulation to more clearly address this 

situation to allow the details of the 

relationship and the interests of other 

parties in the account to be 

ascertainable either from the account 

records of the FICU or from records 

maintained, in good faith and in the 

regular course of business, by the 

member or by some person who or 

entity that has undertaken to maintain 

such records for the member. 

Accordingly, the NCUA is adopting 

this change as proposed. This change 

will provide greater clarity, particularly 

in the event of multi-tiered fiduciary 

relationships, and would more closely 

compare to language previously adopted 

by the FDIC.83 Importantly, the NCUA 

retains discretion to determine when 

records are maintained on behalf of a 

member, in good faith and in the regular 

course of business. Ultimately, the 

NCUA must be able to establish 

ownership interests in the account by 

following the chain of records 


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79412 Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 

84 51 FR 21137 (June 11, 1986). 

maintained by parties at each level of 

the relationship from the account 

records maintained at the FICU. 

Additionally, § 745.2(c)(3) of the 

current regulations provides that the 

account records of a FICU in connection 

with a trust account shall disclose the 

name of both the settlor (grantor) and 

the trustee of the trust and shall contain 

an account signature card executed by 

the trustee. This requirement goes 

beyond the recordkeeping requirements 

of § 745.2(c)(1) through (2) and poses an 

unnecessary burden on FICUs and their 

members. Further, the FDIC previously 

eliminated a similar requirement.84 To 

eliminate unnecessary recordkeeping 

complexity and provide parity with the 

FDIC, the NCUA is eliminating current 

§ 745.2(c)(3), as was proposed. 

Section 745.2(c)(4) states that the 

interests of the co-owners of a joint 

account shall be deemed equal, unless 

otherwise stated on the insured credit 

union’s records in the case of a tenancy 

in common. As proposed, the NCUA is 

not making any substantive 

amendments to this provision but is 

moving it to § 745.2(c)(3) given the 

elimination of the current requirement 

in that section. 

Finally, § 745.14(a)(2) notes that 

interest on lawyers’ trust accounts 

(IOLTAs) and other similar escrow 

accounts are subject to the 

recordkeeping requirements of 

§ 745.2(c)(1) and (2). In doing so, 

§ 745.14(a)(2) provides an example of 

how the details of the relationship 

between the attorney or escrow agent 

and their clients and principals must be 

ascertainable from the records of the 

FICU or from records maintained, in 

good faith and in the regular course of 

business, by the member attorney or 

member escrow agent administering the 

account. As was proposed, the final rule 

amends this description to conform to 

the change to § 745.2(c)(2) to explicitly 

state that the records detailing the 

relationship and the interest of other 

parties in the account must be 

maintained, in good faith and in the 

regular course of business, by: (1) the 

FICU; or (2) the member attorney or 

member escrow agent, or a person or 

entity acting on their behalf. 

D. Discussion of Comments 

All seven commenters who addressed 

the proposed recordkeeping 

requirement changes supported the 

changes. Two commenters stated 

requiring the details of a relationship 

and the interests of other parties in an 

account to be ascertainable from records 

maintained in good faith is a sound 

practice, which should ensure 

transparency and accountability. One 

said the proposal would provide an 

approach consistent with FDIC passthrough deposit insurance expectations 

for various types of ‘‘other similar 

escrow account’’ that may exist, 

including sweep accounts. One 

commenter noted many FICU members 

rely on trusted third parties for 

recordkeeping as part of their estate 

planning. The commenter also believed 

this change should reduce inquiries to 

the NCUA. 

One commenter noted support for the 

proposed removal of the requirement 

that the account records of a FICU in 

connection with a trust account shall 

disclose the name of both the grantor 

and the trustee of the trust and shall 

contain an account signature card 

executed by the trustee. The commenter 

agreed the requirement poses an 

unnecessary burden on FICUs and 

members. 

Four commenters said the change 

provides FICUs adequate clarity as to 

the records the NCUA will look to when 

evaluating the details of account 

relationships and the interests of other 

parties in accounts maintained at FICUs. 

One urged the Board to finalize the 

change as proposed. Another 

understood there to be only limited 

confusion regarding the issue but noted 

support for reduced burden and 

enhanced usability of the rules. 

In response to the proposal’s 

questions on the subject, one 

commenter said that, while the 

proposed change is a significant step 

towards clarity and provides essential 

guidance in complex account 

management scenarios, there may be 

alternative or additional steps that could 

further align with the NCUA’s policy 

objectives, including the following: (1) 

adopting a definition of ‘‘account 

records’’ similar to the FDIC’s definition 

of ‘‘deposit account records’’ to 

standardize the documentation 

framework, ensure uniformity, and 

reduce ambiguity in what constitutes 

necessary records; (2) adopting specific 

detailed provisions for multi-tiered 

fiduciary relationships akin to those 

adopted by the FDIC, which would help 

clarify the responsibilities and 

recordkeeping obligations in complex 

arrangements involving multiple 

parties; and (3) adopting broader 

definitions and illustrative examples for 

various account relationships, such as 

joint accounts or trusts with multiple 

beneficiaries. The commenter said it is 

imperative to ensure the recordkeeping 

regulations remain relevant and 

effective as technology advances and 

banking evolves into a more digital 

domain. The commenter suggested 

adding a periodic review and update 

clause for the recordkeeping 

requirements to ensure regulations stay 

current with the evolving banking 

practices. The commenter believed this 

would be especially pertinent for 

handling international accounts or 

accounts involved in complex 

transactions. 

The Board will take these additional 

recommendations into consideration as 

it continues to evaluate ways to improve 

the NCUA’s share insurance regulations. 

The Board notes that NCUA staff 

routinely review rules for effectiveness, 

including through its annual review of 

one-third of its regulations and the 

Economic Growth and Regulatory 

Paperwork Reduction Act (also known 

as EGRPRA) process that the NCUA 

voluntarily undertakes every ten years. 

The proposal also requested comment 

on whether the NCUA should consider 

adoption of heighted recordkeeping 

requirements, akin to those the FDIC 

adopted in part 370 of its regulations, to 

facilitate prompt payment of insurance 

when large institutions fail. Six 

commenters addressed the possibility. 

None of the commenters supported 

adoption of such requirements, but 

some did provide recommendations if 

the NCUA were to adopt a similar 

regime. The Board will take this 

feedback into consideration as it further 

studies the possibility of proposing 

similar requirements. 

The proposed rule asked about 

whether there was any reason to delay 

the effective date of the recordkeeping 

change. This question intended to elicit 

comments on whether a delayed 

effective date for the proposed 

recordkeeping requirements changes 

would allow more flexibility when 

evaluating share insurance coverage by 

clarifying that the NCUA can look to 

records maintained by a third party on 

a member’s behalf if they are 

maintained in good faith and in the 

regular course of business. One 

commenter believed a delayed effective 

date for those changes appropriate but 

had no concern with an earlier date. 

Another commenter seemingly 

interpreted this question as asking about 

a delayed effective date for potential 

NCUA adoption of a regime similar to 

the FDIC’s, as was asked about in the 

previous question in the proposal, 

rather than about a delayed effective 

date for the proposed changes to the 

recordkeeping requirements. This 

commenter believed timing pivotal and 

suggested the NCUA grant FICUs an 

extended period to comply because of 

the intricacies of compliance, especially 

in terms of recordkeeping, and need to 


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Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 79413 

85This commenter specifically responded to this 

question. However, it seems likely the commenter 

interpreted the question as asking whether a 

delayed effective date would be appropriate for 

adopting a part 370 type regime, which was asked 

about in the preceding question. 86See 80 FR 57512 (Sept. 24, 2015). 87 44 U.S.C. 3507(d). 

effectively adapt FICU processes and 

systems without experiencing undue 

burden.85 Given the proposed changes 

would not increase burden on FICUs or 

members, but instead clarify that the 

NCUA will look to more expansive 

records to evaluate parties’ interest in 

insured accounts, the concerns the 

commenter raised do not seem 

applicable to the changes proposed. 

As discussed, the Board is opting to 

make this change effective 30 days after 

publication in the Federal Register. The 

comments received do not give the 

Board the impression that commenters 

were opposed to the change becoming 

effective without delay. Further, given 

the change only clarifies that the NCUA 

has additional flexibility to look to 

additional records to determine parties’ 

interests in an account, the Board does 

not believe that it will impose any 

burden on FICUs or their members. The 

Board believes that clarifying that the 

NCUA has this greater discretion to look 

to additional records will only provide 

benefit. 

V. Regulatory Procedures 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires that, in connection 

with a final rulemaking, an agency 

prepare and make available for public 

comment a final regulatory flexibility 

analysis that describes the effect of the 

final rule on small entities. A regulatory 

flexibility analysis is not required, 

however, if the agency certifies that the 

rule will not have a significant 

economic effect on a substantial number 

of small entities (defined for the 

purposes of the RFA to include credit 

unions with assets less than $100 

million) 86 and publishes its 

certification and a short, explanatory 

statement in the Federal Register 

together with the rule. 

The Board fully considered the 

potential economic effect of the changes 

made by this final rule during its 

development. As noted in the preamble, 

the final rule simplifies the NCUA’s 

current share insurance regulations 

covering types of trust accounts. It also 

provides more flexibility on the 

coverage of MSAs. Finally, it explicitly 

provides for additional flexibility in 

what records the NCUA can look to 

when determining the details of account 

relationships and various parties’ 

interests in the accounts. 

In short, the Board believes the 

principal consequence of the final rule 

will be to streamline its administrative 

procedures for insurance payouts on 

trust accounts when FICUs fail. Though 

the final rule will require FICUs and 

their members to be familiar with the 

new trust rules and the coverage limits 

imposed on trust accounts, the NCUA 

believes this will not impose any new 

significant burden on FICUs, may ease 

some existing requirements, and should 

reduce the complexity of questions 

FICUs receive from their members on 

share insurance coverage. 

Additionally, FICUs and their 

members are familiar with the new 

formula as it is already applied to 

revocable trust accounts with five or 

fewer beneficiaries. The formula is also 

simpler to understand and implement 

than the previous rules governing 

revocable trust accounts with six or 

more beneficiaries and irrevocable 

trusts. 

Ultimately, the changes to the rule 

governing coverage of MSAs and the 

changes to the recordkeeping 

requirements should only provide 

greater flexibility for coverage of these 

accounts and should not cause any new 

burden on FICUs or their members. 

Accordingly, the NCUA certifies that 

this final rule will not have a significant 

economic effect on a substantial number 

of small FICUs. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) applies to rulemakings in which 

an agency by rule creates a new 

paperwork burden on regulated entities 

or modifies an existing burden.87 For 

the purposes of the PRA, a paperwork 

burden may take the form of a reporting, 

disclosure, or recordkeeping 

requirement, each referred to as an 

information collection. The NCUA may 

not conduct or sponsor, and the 

respondent is not required to respond 

to, an information collection unless it 

displays a currently valid Office of 

Management and Budget (OMB) control 

number. 

The final rule does not contain 

information collection requirements that 

require approval by OMB under the 

PRA. The final rule will not create new 

or modify any existing paperwork 

burdens. Rather, the final rule will 

simplify the share insurance regulations 

by merging the revocable and 

irrevocable trust account categories into 

one trust account category and applying 

a simpler, common calculation method 

to determine insurance coverage for 

funds held in revocable and irrevocable 

trust accounts. The final rule will also 

provide consistent share insurance 

treatment for all MSA balances held to 

satisfy principal and interest obligations 

to a lender, regardless of whether those 

funds are paid into the account by 

borrowers or paid into the account by 

another party (such as the servicer) to 

satisfy a periodic obligation to remit 

principal and interest due to the lender. 

Finally, the final rule will explicitly 

allow the NCUA, when undertaking 

share insurance determinations, to look 

to records held in the normal course of 

business that are maintained by parties 

other than a FICU and its members on 

their behalf. As such, no PRA 

submissions to OMB will be made with 

respect to this final rule. 

C. Executive Order 13132 

Executive Order 13132 encourages 

independent regulatory agencies to 

consider the effect of their actions on 

state and local interests. The NCUA, an 

independent regulatory agency as 

defined in 44 U.S.C. 3502(5), voluntarily 

complies with the principles of the 

Executive Order to adhere to 

fundamental federalism principles. This 

final rule will only impact the NCUA’s 

regulations related to share insurance 

coverage; it will not affect state law 

related to trust accounts. The final rule 

will also not alter the NCUA’s 

relationship or division of 

responsibilities with state regulatory 

agencies or bodies because the final rule 

will affect the NCUA’s Federal share 

insurance determinations exclusively. 

This final rule will not have a 

substantial direct effect on the states, on 

the connection between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. The NCUA has 

determined that this final rule does not 

constitute a policy that has federalism 

implications for the purposes of the 

Executive Order. 

D. Assessment of Federal Regulations 

and Policies on Families 

The NCUA has determined that this 

rule will not affect family well-being 

within the meaning of section 654 of the 

Treasury and General Government 

Appropriations Act, 1999, Public Law 

105–277, 112 Stat. 2681 (1998). Under 

this statute, if the agency determines the 

final regulation may negatively affect 

family well-being, then the agency must 

provide an adequate rationale for its 

implementation. 

The NCUA has determined that the 

implementation of this rule will not 

negatively affect family well-being. The 

NCUA believes that any negative effect 


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79414 Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 

88 5 U.S.C. 801–804. 

will be limited because the trust 

changes may not affect many accounts, 

and members or others maintaining 

those accounts will have time and 

notice to modify the accounts before the 

final rule goes into effect. Further, the 

MSA and recordkeeping changes offset 

negative effects because they will 

instead provide the NCUA more 

flexibility to provide share insurance 

coverage with respect to funds 

dedicated to pay loans and other 

obligations related to family homes and 

businesses. If the NCUA ultimately 

finds that the rule does have a negative 

effect as the statute describes, it believes 

the benefits that the preamble describes 

in simplifying coverage and potentially 

reducing costs for the NCUA and for 

FICUs would support implementing the 

rule. 

E. Small Business Regulatory 

Enforcement Fairness Act 

(Congressional Review Act) 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 (Pub. 

L. 104–121) (SBREFA) generally 

provides for congressional review of 

new agency rules that qualify as 

‘‘major’’ under criteria specified in the 

Act.88 The NCUA’s analysis indicates 

the rule falls short of qualifying as 

‘‘major’’ under SBREFA’s criteria. As 

required by SBREFA, the NCUA is 

submitting this final rule and its 

economic impact analysis to OMB for 

concurrence on the ‘‘not major’’ 

determination. The NCUA also will file 

all other appropriate congressional 

reports. 

List of Subjects in 12 CFR Part 745 

Credit, Credit Unions, Share 

Insurance. 

By the National Credit Union 

Administration Board on September 19, 

2024. 

Melane Conyers-Ausbrooks, 

Secretary of the Board. 

For the reasons discussed in the 

preamble, the Board is amending 12 

CFR part 745 as follows: 

PART 745—SHARE INSURANCE 

COVERAGE 

■ 1. The authority citation for part 745 

continues to read as follows: 

Authority: 12 U.S.C. 1752(5), 1757, 1765, 

1766, 1781, 1782, 1787, 1789; title V, Pub. L. 

109–351;120 Stat. 1966. 

■ 2. The heading for part 745 is revised 

to read as set forth above. 

§ 745.0 [Amended] 

■ 3. Amend § 745.0 in the first sentence 

by removing the words ‘‘and appendix’’. 

■ 4. Revise § 745.1 to read as follows: 

§ 745.1 Definitions. 

For the purposes of this part: 

Account or accounts mean share, 

share certificate, or share draft accounts 

(or their equivalent under state law, as 

determined by the Board in the case of 

insured state-chartered credit unions) of 

a member (which includes other credit 

unions, public units, and nonmembers 

where permitted under the Act) in a 

credit union of a type approved by the 

Board which evidences money or its 

equivalent received or held by a credit 

union in the usual course of business 

and for which it has given or is 

obligated to give credit to the account of 

the member. 

Member or members mean those 

persons enumerated in the credit 

union’s field of membership who have 

been elected to membership in 

accordance with the Act or state law in 

the case of state-chartered credit unions. 

It also includes those nonmembers 

permitted under the Act to maintain 

accounts in an insured credit union, 

including nonmember credit unions and 

nonmember public units and political 

subdivisions. 

Non-contingent interest means an 

interest capable of determination 

without evaluation of contingencies 

except for those covered by the present 

worth tables and rules of calculation for 

their use set forth in § 20.2031–7 of the 

Federal Estate Tax Regulations (26 CFR 

20.2031–7) or any similar present worth 

or life expectancy tables which may be 

adopted by the Internal Revenue 

Service. 

Political subdivision includes any 

subdivision of a public unit, as defined 

in paragraph (c) of this section, or any 

principal department of such public 

unit, 

(1) The creation of which subdivision 

or department has been expressly 

authorized by state statute; 

(2) To which some functions of 

government have been delegated by 

state statute; and 

(3) To which funds have been 

allocated by statute or ordinance for its 

exclusive use and control. It also 

includes drainage, irrigation, navigation 

improvement, levee, sanitary, school or 

power districts and bridge or port 

authorities, and other special districts 

created by state statute or compacts 

between the states. Excluded from the 

term are subordinate or nonautonomous 

divisions, agencies, or boards within 

principal departments. 

Public unit means the United States, 

any state of the United States, the 

District of Columbia, the 

Commonwealth of Puerto Rico, the 

Panama Canal Zone, any territory or 

possession of the United States, any 

county, municipality, or political 

subdivision thereof, or any Indian Tribe 

as defined in section 3(c) of the Indian 

Financing Act of 1974. 

Standard maximum share insurance 

amount referred to as the ‘‘SMSIA’’ 

hereafter, means $250,000 adjusted 

pursuant to subparagraph (F) of section 

11(a)(1) of the Federal Deposit Insurance 

Act (12 U.S.C. 1821(a)(1)(F)). 

■ 5. Effective October 30, 2024, amend 

§ 745.2 by revising paragraph (c)(2) to 

read as follows: 

§ 745.2 General principles applicable in 

determining insurance of accounts. 

* * * * * 

(c) * * * 

(2) If the account records of an 

insured credit union disclose the 

existence of a relationship which may 

provide a basis for additional insurance, 

the details of the relationship and the 

interest of other parties in the account 

must be ascertainable either from the 

records of the credit union or the 

records of the member, maintained in 

good faith and in the regular course of 

business by the member or by some 

person who or entity that has 

undertaken to maintain such records for 

the member. 

* * * * * 

■ 6. Further amend § 745.2 by: 

■ a. Revising paragraph (a); 

■ b. Removing paragraph (c)(3); 

■ c. Redesignating paragraph (c)(4) as 

paragraph (c)(3); 

■ d. Removing paragraph (d); and 

■ e. Redesignating paragraphs (e) and (f) 

as paragraphs (d) and (e). 

The revision reads as follows: 

§ 745.2 General principles applicable in 

determining insurance of accounts. 

(a) General. This part provides for 

determination by the Board of the 

amount of members’ insured accounts. 

The rules for determining the insurance 

coverage of accounts maintained by 

members in the same or different rights 

and capacities in the same insured 

credit union are set forth in the 

following provisions of this part. While 

the provisions of this part govern in 

determining share insurance coverage, 

to the extent local law enters into a 

share insurance determination, the local 

law of the jurisdiction in which the 

insured credit union’s principal office is 

located will control over the local law 

of other jurisdictions where the insured 


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Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 79415 

credit union has offices or service 

facilities. 

* * * * * 

■ 7. Effective October 30, 2024, amend 

§ 745.3 by revising paragraph (a)(3) to 

read as follows: 

§ 745.3 Single ownership accounts. 

(a) * * * 

(3) Mortgage servicing accounts. 

Accounts maintained by a mortgage 

servicer, in a custodial or other 

fiduciary capacity, which are comprised 

of payments of principal and interest, 

shall be insured for the cumulative 

balance paid into the account by 

mortgagors, or in order to satisfy 

mortgagors’ principal or interest 

obligations to the lender, up to the limit 

of the SMSIA per mortgagor. Accounts 

maintained by a mortgage servicer, in a 

custodial or other fiduciary capacity, 

which are comprised of payments by 

mortgagors of taxes and insurance 

premiums shall be added together and 

insured in accordance with paragraph 

(a)(2) of this section for the ownership 

interest of each mortgagor in such 

accounts. 

* * * * * 

■ 8. Revise § 745.4 to read as follows: 

§ 745.4 Trust accounts. 

(a) Scope and definitions. This section 

governs coverage for funds held in 

connection with informal revocable 

trusts, formal revocable trusts, and 

irrevocable trusts. For the purposes of 

this section: 

(1) Informal revocable trust means a 

trust under which deposited funds pass 

directly to one or more beneficiaries 

upon the owner’s death without a 

written trust agreement, commonly 

referred to as a payable-on-death 

account, in-trust-for account, or Totten 

trust account. 

(2) Formal revocable trust means a 

revocable trust established by a written 

trust agreement under which deposited 

funds pass to one or more beneficiaries 

upon the grantor’s death. 

(3) Irrevocable trust means an 

irrevocable trust established by statute 

or a written trust agreement, except as 

described in paragraph (e) of this 

section. 

(b) Calculation of coverage— 

(1)General calculation. Deposited trust 

funds are insured in an amount up to 

the SMSIA multiplied by the total 

number of beneficiaries identified by 

each grantor, up to a maximum of five 

beneficiaries. 

(2) Aggregation for purposes of 

insurance limit. Deposited trust funds 

that pass from the same grantor to 

beneficiaries are aggregated for the 

purposes of determining coverage under 

this section, regardless of whether those 

funds are held in connection with an 

informal revocable trust, formal 

revocable trust, or irrevocable trust. 

(3) Separate insurance coverage. The 

share insurance coverage provided 

under this section is separate from 

coverage provided for other funds at the 

same federally insured credit union. 

(4) Equal allocation presumed. Unless 

otherwise specified in the account 

records of the federally insured credit 

union, deposited funds held in 

connection with a trust established by 

multiple grantors are presumed to have 

been owned or funded by the grantors 

in equal shares. 

(c) Number of beneficiaries. The total 

number of beneficiaries for trust funds 

deposited under paragraph (b) of this 

section will be determined as follows: 

(1) Eligible beneficiaries. Subject to 

paragraph (c)(2) of this section, 

beneficiaries include natural persons, as 

well as charitable organizations and 

other non-profit entities recognized as 

such under the Internal Revenue Code 

of 1986, as amended. 

(2) Ineligible beneficiaries. 

Beneficiaries do not include: 

(i) The grantor of a trust; or 

(ii) A person or entity that would only 

obtain an interest in the deposited funds 

if one or more named beneficiaries are 

deceased. 

(3) Future trust(s) named as 

beneficiaries. If a trust agreement 

provides that trust funds will pass into 

one or more new trusts upon the death 

of the grantor(s) (‘‘future trusts’’), the 

future trust(s) are not treated as 

beneficiaries of the trust; rather, the 

future trust(s) are viewed as 

mechanisms for distributing trust funds, 

and the beneficiaries are the natural 

persons or organizations that shall 

receive the trust funds through the 

future trusts. 

(4) Informal trust account payable to 

member’s formal trust. If an informal 

revocable trust designates the account 

owner’s formal trust as its beneficiary, 

the informal revocable trust account 

will be treated as if titled in the name 

of the formal trust. 

(d) Account records—(1) Informal 

revocable trusts. The beneficiaries of an 

informal revocable trust must be 

specifically named in the account 

records of the federally insured credit 

union. 

(2) Formal revocable trusts. The title 

of a formal trust account must include 

terminology sufficient to identify the 

account as a trust account, such as 

‘‘family trust’’ or ‘‘living trust,’’ or must 

otherwise be identified as a 

testamentary trust in the account 

records of the federally insured credit 

union. If eligible beneficiaries of such 

formal revocable trust are specifically 

named in the account records of the 

federally insured credit union, the 

NCUA shall presume the continued 

validity of the named beneficiaries’ 

interest in the trust. 

(e) Deposited funds excluded from 

coverage under this section—(1) 

Revocable trust co-owners that are sole 

beneficiaries of a trust. If the co-owners 

of an informal or formal revocable trust 

are the trust’s sole beneficiaries, 

deposited funds held in connection 

with the trust are treated as joint 

ownership funds under § 745.8. 

(2) Employee benefit plan deposits. 

Deposited funds of employee benefit 

plans, even if held in connection with 

a trust, are treated as employee benefit 

plan funds under § 745.9. 

§ 745.9–1 [Removed] 

■ 9. Remove § 745.9–1. 

§ 745.9–2 [Redesignated as § 745.9] 

■ 10. Redesignate § 745.9–2 as § 745.9. 

§ 745.9 [Amended] 

■ 11. Amend newly designated § 745.9 

in paragraph (a) by removing the phrase 

‘‘, in accordance with § 745.2 of this 

part’’. 

§ 745.13 [Amended] 

■ 12. Amend § 745.13 in the second 

sentence by removing ‘‘, the appendix,’’. 

■ 13. Effective October 30, 2024, amend 

§ 745.14 by revising paragraph (a)(2) to 

read as follows: 

§ 745.14 Interest on lawyers trust accounts 

and other similar escrow accounts. 

(a) * * * 

(2) Pass-through coverage will only be 

available if the recordkeeping 

requirements of § 745.2(c)(1) and the 

relationship disclosure requirements of 

§ 745.2(c)(2) are satisfied. In the event 

those requirements are satisfied, funds 

attributable to each client and principal 

will be insured on a pass-through basis 

in whatever right and capacity the client 

or principal owns the funds. For 

example, an IOLTA or other similar 

escrow account must be titled as such, 

and the underlying account records of 

the insured credit union must 

sufficiently indicate the existence of the 

relationship on which a claim for 

insurance is founded. The details of the 

relationship between the attorney or 

escrow agent and their clients and 

principals must be ascertainable from 

the records of the insured credit union 

or from records maintained, in good 

faith and in the regular course of 

business, by the attorney or the escrow 


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79416 Federal Register / Vol. 89, No. 189 / Monday, September 30, 2024 / Rules and Regulations 

agent administering the account, or by 

some person who or entity that has 

undertaken to maintain such records for 

the attorney or escrow agent. The NCUA 

will determine, in its sole discretion, the 

sufficiency of these records for an 

IOLTA or other similar escrow account. 

* * * * * 

Appendix to Part 745 [Removed] 

■ 14. Remove the appendix to part 745. 

[FR Doc. 2024–21888 Filed 9–27–24; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2024–0994; Project 

Identifier MCAI–2023–01238–T; Amendment 

39–22828; AD 2024–17–03] 

RIN 2120–AA64 

Airworthiness Directives; Embraer S.A. 

(Type Certificate Previously Held by 

Yabora ̃ Indu ́ stria Aerona ́utica S.A.; 

Embraer S.A.) Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is superseding 

Airworthiness Directive (AD) 2019–24– 

16, which applied to certain Embraer 

S.A. Model ERJ 190–100 STD, –100 LR, 

–100 IGW, and –100 ECJ airplanes; and 

Model ERJ 190–200 STD, –200 LR, and 

–200 IGW airplanes. AD 2019–24–16 

required revising the existing 

maintenance or inspection program, as 

applicable, to incorporate new or more 

restrictive airworthiness limitations. 

Since the FAA issued AD 2019–24–16, 

the FAA has determined that new or 

more restrictive airworthiness 

limitations are necessary. This AD 

requires revising the existing 

maintenance or inspection program, as 

applicable, to incorporate new or more 

restrictive airworthiness limitations, as 

specified in an Ageˆncia Nacional de 

Aviac ̧a ̃o Civil (ANAC) AD, which is 

incorporated by reference (IBR). The 

FAA is issuing this AD to address the 

unsafe condition on these products. 

DATES: This AD is effective November 4, 

2024. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of November 4, 2024. 

The Director of the Federal Register 

approved the incorporation by reference 

of certain other publications listed in 

this AD as of February 3, 2020 (84 FR 

71772, December 30, 2019). 

ADDRESSES: 

AD Docket: You may examine the AD 

docket at regulations.gov under Docket 

No. FAA–2024–0994; or in person at 

Docket Operations between 9 a.m. and 

5 p.m., Monday through Friday, except 

Federal holidays. The AD docket 

contains this final rule, the mandatory 

continuing airworthiness information 

(MCAI), any comments received, and 

other information. The address for 

Docket Operations is U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

Material Incorporated by Reference: 

• For ANAC material identified in 

this AD, contact National Civil Aviation 

Agency (ANAC), Aeronautical Products 

Certification Branch (GGCP), Rua Dr. 

Orlando Feirabend Filho, 230—Centro 

Empresarial Aquarius—Torre B— 

Andares 14 a 18, Parque Residencial 

Aquarius, CEP 12.246–190—Sa ̃o Jose ́

dos Campos—SP, Brazil; telephone 55 

(12) 3203–6600; email pac@anac.gov.br; 

website anac.gov.br/en/. You may find 

this material on the ANAC website at 

sistemas.anac.gov.br/certificacao/DA/ 

DAE.asp. 

• For Embraer material identified in 

this AD, contact Embraer S.A., 

Technical Publications Section (PC 

060), Av. Brigadeiro Faria Lima, 2170— 

Putim—12227–901 Sa ̃o Jose ́ dos 

Campos—SP—Brazil; telephone 55 (12) 

3927–5852 or 55 (12) 3309–0732; fax 55 

(12) 3927–7546; email distrib@

embraer.com.br; website 

www.flyembraer.com. 

• You may view this material at the 

FAA, Airworthiness Products Section, 

Operational Safety Branch, 2200 South 

216th St., Des Moines, WA. For 

information on the availability of this 

material at the FAA, call 206–231–3195. 

It is also available at regulations.gov 

under Docket No. FAA–2024–0994. 

FOR FURTHER INFORMATION CONTACT: 

Joshua Bragg, Aviation Safety Engineer, 

FAA, 1600 Stewart Avenue, Suite 410, 

Westbury, NY 11590; telephone 216– 

316–6418; email joshua.k.bragg@

faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 to supersede AD 2019–24–16, 

Amendment 39–21005 (84 FR 71772, 

December 30, 2019) (AD 2019–24–16). 

AD 2019–24–16 applied to certain 

Embraer S.A. Model ERJ 190–100 STD, 

–100 LR, –100 IGW, and –100 ECJ 

airplanes; and Model ERJ 190–200 STD, 

–200 LR, and –200 IGW airplanes. AD 

2019–24–16 required revising the 

existing maintenance or inspection 

program, as applicable, to incorporate 

new or more restrictive airworthiness 

limitations. The FAA issued AD 2019– 

24–16 to address fatigue cracking of 

structural components and to address 

failure of certain system components, 

which could result in reduced structural 

integrity and system reliability of the 

airplane. 

The NPRM published in the Federal 

Register on April 4, 2024 (89 FR 23529). 

The NPRM was prompted by AD 2023– 

12–02, effective December 15, 2023, 

issued by ANAC, which is the aviation 

authority for Brazil (ANAC AD 2023– 

12–02) (also referred to as the MCAI), 

for certain Embraer S.A. Model ERJ 190– 

100 STD, –100 LR, –100 IGW, –100 SR, 

and –100 ECJ airplanes; and Model ERJ 

190–200 STD, –200 LR, and –200 IGW 

airplanes. Model ERJ 190–100SR 

airplanes are not on the U.S. Register; 

this AD therefore does not include those 

airplanes in the applicability. The MCAI 

states that new or more restrictive 

airworthiness limitations have been 

developed. 

In the NPRM, the FAA proposed to 

retain all requirements of AD 2019–24– 

16, and require revising the existing 

maintenance or inspection program, as 

applicable, to incorporate additional 

new or more restrictive airworthiness 

limitations, as specified in ANAC AD 

2023–12–02. The FAA is issuing this 

AD to address failure of certain system 

components. The unsafe condition, if 

not addressed, could result in reduced 

structural integrity and system 

reliability of the airplane. 

You may examine the MCAI in the 

AD docket at regulations.gov under 

Docket No. FAA–2024–0994. 

Discussion of Final Airworthiness 

Directive 

Comments 

The FAA received no comments on 

the NPRM or on the determination of 

the cost to the public. 

Conclusion 

This product has been approved by 

the aviation authority of another 

country and is approved for operation in 

the United States. Pursuant to the FAA’s 

bilateral agreement with this State of 

Design Authority, it has notified the 

FAA of the unsafe condition described 

in the MCAI referenced above. The FAA 

reviewed the relevant data and 

determined that air safety requires 

adopting this AD as proposed. 

Accordingly, the FAA is issuing this AD 


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