Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 010 - BANKING DIVISION › Chapter 007 - STATE-CHARTERED CREDIT UNIONS › Section 21 010 007 - STATE-CHARTERED CREDIT UNIONS

Current through June, 2024
INTRODUCTION: Regulation B-06-1 supersedes former credit
				  union regulation B-83-1, and is promulgated by the Commissioner under the
				  authority established by
				  8 V.S.A. Section
				  30203.
Section
				I Minimum Bond Coverage
1. The
				governing body of each credit union shall acquire and maintain a blanket
				fidelity bond covering the directors, officers, employees, members of official
				committees, attorneys at law, and other agents with protection against loss to
				the credit union caused by dishonesty, burglary, robbery, larceny, theft,
				holdup, forgery or alteration of instruments, misplacement, or mysterious
				disappearance and for faithful performance of duty. (See Title 8, V.S.A.,
				Sections 31302(3) and 31602(a) ). This Section
				I prescribes the amount of minimum
				bond coverage required for all credit unions, which in no way absolves the
				governing body of their responsibility as noted in this regulation and in
				applicable statute.
2. The
				governing body of each credit union shall, at least annually, carefully review
				the bond and insurance coverage in force in order to ascertain its adequacy in
				relation to the exposure and potential risks facing the credit union and to the
				minimum requirements set forth herein by the Department of Banking, Insurance,
				Securities and Health Care Administration (the "Department").
3. The form of surety bond, at a minimum,
				shall satisfy the requirements of
				8 V.S.A. §
											31602. The credit union shall receive written
				confirmation from the bonding company that the surety bond, at a minimum,
				covers the directors, officers, employees, members of official committees,
				attorneys at law, and other agents and that the bond provides protection
				against loss caused by dishonesty, burglary, robbery, larceny, theft, holdup,
				forgery or alteration of instruments, misplacement or mysterious disappearance,
				and for faithful performance of duty.
4. The following schedule sets forth the
				minimum coverage and maximum deductible requirements:
Assets
Coverage
Deductible
0-$ 1,000,000
lesser of assets or $ 100,000
$ 2,000
$ 1,000,001-$ 4,000,000
$ 250,000
$ 4,000
$ 4,000,001-$ 50,000,000
$ 250,000 plus $ 50,000 for each million or fraction
							 thereof of assets over $ 4,000,000
$ 2,000 plus 1/1000 of the total assets
Over $ 50,000,000
$ 2,550,000 plus $ 10,000 for each million or
							 fraction thereof of assets over $ 50,000,000
$ 2,000 plus 1/1000 of the total assets up to a
							 maximum deductible of $ 200,000
It shall be the duty of the governing body to provide proper
				  protection to meet potential risks by obtaining adequate bond and insurance
				  coverage in excess of the above minimum requirements when circumstances require
				  such additional coverage.
5.
(a) Notwithstanding the minimum coverage
				requirements set forth in subsection
				4
				above, the minimum coverage required under this regulation for a credit union
				shall be increased to be equal to the greater of either of the following
				amounts:
(1) The aggregate amount of the
				daily cash fund (plus maximum anticipated daily money receipts) on the credit
				union's premises, or
(2) The
				aggregate amount of the credit union's money placed in transit in any one
				shipment.
(b) Such
				increased limits must be obtained no more than 30 days after the discovery of
				the need for such increase.
(c)
				Notwithstanding subsection
				5(a),
				no increase in coverage shall be required when a credit union temporarily
				increases its cash fund because of an unusual event that cannot reasonably be
				expected to recur. The Commissioner shall determine whether this subsection
				applies to a given situation.
6. The Commissioner may require additional
				coverage for any credit union when, in the Commissioner's opinion, the surety
				bonds in force are inadequate. The credit union shall obtain such additional
				coverage within 30 days after the date of written notice.