[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR745.2]



[Page 610-611]

 

                       TITLE 12--BANKS AND BANKING

 

            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION

 

PART 745_SHARE INSURANCE AND APPENDIX--Table of Contents

 

  Subpart A_Clarification and Definition of Account Insurance Coverage

 

Sec. 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. The appendix provides 

examples of the application of these rules to various factual 

situations. 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 credit union has 

offices or service facilities.

    (b) The regulations in this part in no way are to be interpreted to 

authorize any type of account that is not authorized by Federal law or 

regulation or State law or regulation or by the bylaws of a particular 

credit union. The purpose is to be as inclusive as possible of all 

situations.

    (c) Records. (1) The account records of the insured credit union 

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.

    (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.

    (3) The account records of an insured credit union in connection 

with a trust account shall disclose the name of both the settlor 

(grantor) and the trustee of



[[Page 611]]



the trust and shall contain an account signature card executed by the 

trustee.

    (4) 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.

    (d) Valuation of trust interests. (1) Trust interests in the same 

trust deposited in the same account will be separately insured if the 

value of the trust interest is 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 Sec. 

20.2031-7 of the Federal Estate Tax Regulations (26 CFR 20.2031-7).

    (2) In connection with any trust in which certain trust interests 

are not capable of evaluation in accordance with the foregoing rule, 

payment by the Board to the trustee with respect to all such trust 

interests shall not exceed the basic insured amount of $100,000.

    (3) Each trust interest in any trust established by two or more 

settlors shall be deemed to be derived from each settlor pro rata to his 

contribution to the trust.

    (4) The term ``trust interest'' means the interest of a beneficiary 

in an irrevocable express trust, whether created by trust instrument or 

statute, but does not include any interest retained by the settlor.

    (e) Continuation of insurance coverage following the death of a 

member. The death of a member will not affect the member's share 

insurance coverage for a period of six months following death unless the 

member's share accounts are restructured in that time period. If the 

accounts are restructured during the six-month grace period, or upon the 

expiration of the six months if not restructured, the share insurance 

coverage will be provided on the basis of actual ownership of the 

accounts in accordance with the provisions of this part. The operation 

of this grace period, however, will not result in a reduction of 

coverage.

    (f) Continuation of separate share insurance coverage after merger 

of insured credit unions. Whenever the liability to pay the member 

accounts of one or more insured credit unions is assumed by another 

insured credit union, whether by merger, consolidation, other statutory 

assumption or contract: The insured status of the credit unions whose 

member account liability has been assumed terminates, for purposes of 

this section, on the date of receipt by NCUA of satisfactory evidence of 

the assumption; and the separate insurance of member accounts assumed 

continues for six months from the date the assumption takes effect or, 

in the case of a share certificate, the earliest maturity date after the 

six-month period. In the case of a share certificate that matures within 

the six-month grace period that is renewed at the same dollar amount, 

either with or without accrued dividends having been added to the 

principal amount, and for the same term as the original share 

certificate, the separate insurance applies to the renewed share 

certificate until the first maturity date after the six-month period. A 

share certificate that matures within the six-month grace period that is 

renewed on any other basis, or that is not renewed, is separately 

insured only until the end of the six-month grace period.



[51 FR 37560, Oct. 23, 1986, as amended at 65 FR 34924, June 1, 2000; 68 

FR 75114, Dec. 30, 2003]