Federal Register/Vol. 86, No. 35/Wednesday, February 24, 2021
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11098 Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Rules and Regulations custody by the U.S. Customs and Border requirement can be satisfied by the insurance programs and to provide Protection and introduced into the credit union having issued a mechanism credit union members with equal access stream of commerce in the United for accessing the account, such as a to insurance coverage. The Board States. Included are persons who hold debit card, to each co-owner or evidence proposed these regulatory changes with title to foreign-produced mangos of usage of the joint share account by the belief that they will promote further immediately upon release by the U.S. each co-owner. confidence in the credit union system Customs and Border Protection, as well DATES: The final rule is effective March and embody a forward-looking approach as any persons who act on behalf of 26, 2021. that will explicitly permit the use of others, as agents or brokers, to secure FOR FURTHER INFORMATION CONTACT: new and innovative technologies and the release of mangos from the U.S. Thomas I. Zells, Staff Attorney, Office of processes to meet the NCUA’s policy Customs and Border Protection when General Counsel, at 1775 Duke Street, objectives. such mangos are entered or withdrawn Alexandria, VA 22314 or telephone: Under the Federal Credit Union Act for consumption in the United States. (703) 548–2478. (FCU Act), the NCUA is responsible for paying share insurance to any member, (e) Mangos means all fresh fruit of SUPPLEMENTARY INFORMATION: Mangifera indica L. of the family I. Introduction or to any person with funds lawfully Anacardiaceae. II. Final Rule held in a member account, in the event * * * * * III. Legal Authority of a FICU’s failure up to the standard IV. Discussion of Public Comments Received maximum share insurance amount ■ 13. Revise § 1206.108 to read as on the Proposed Rule (SMSIA), which is currently set at follows: V. Regulatory Procedures $250,000.4 The FCU Act states that the § 1206.108 OMB control number. I. Introduction determination of the net amount of The control number assigned to the share insurance paid ‘‘shall be in A. Background information collection requirement in accordance with such regulations as the this subpart by the Office of In May 2020, the Board approved a Board may prescribe’’ and requires that, Management and Budget pursuant to the notice of proposed rulemaking 1 ‘‘in determining the amount payable to Paperwork Reduction Act of 1995, 44 (proposal or proposed rule) that any member, there shall be added U.S.C. Chapter 35, is OMB control amended the NCUA’s share insurance together all accounts in the credit union number 0581–0093. regulation governing the requirements maintained by that member for that for a share account to be insured member’s own benefit, either in the Bruce Summers, separately as a joint account. 2 member’s own name or in the names of Administrator, Agricultural Marketing Specifically, the proposal addressed the others.’’ 5 However, the FCU Act also Service. requirement for separate joint account specifically authorizes the Board to [FR Doc. 2021–03403 Filed 2–23–21; 8:45 am] insurance that each co-owner of a joint ‘‘define, with such classifications and BILLING CODE 3410–02–P account has personally signed a exceptions as it may prescribe, the membership card or account signature extent of the share insurance coverage card. In the event a federally insured provided for member accounts, NATIONAL CREDIT UNION credit union (FICU) could not produce including member accounts in the name ADMINISTRATION from its records such membership cards of a minor, in trust, or in joint or account signature cards, the proposal tenancy.’’ 6 12 CFR Part 745 explicitly permitted the use of other The NCUA has implemented these RIN 3133–AF11 evidence contained in a FICU’s account requirements by issuing regulations records to satisfy the signature card recognizing particular categories of Joint Ownership Share Accounts requirement. accounts, such as single ownership The proposed amendment mirrors a accounts and joint ownership accounts.7 AGENCY: National Credit Union change made by the Federal Deposit If an account meets the requirements for Administration (NCUA). Insurance Corporation (FDIC) in 2019 a particular category, the account is ACTION: Final rule. for federally insured depository insured up to the $250,000 limit institutions.3 In proposing the change, separately from shares held by the SUMMARY: The NCUA Board (Board) is the Board intended to better facilitate member in a different account category amending its share insurance regulation the prompt payment of share insurance at the same FICU. For example, governing the requirements for a share in the event of a FICU’s failure by provided all requirements are met, account to be separately insured as a explicitly providing alternative methods shares in the single ownership category joint account by the National Credit that the NCUA could use to determine will be separately insured from shares Union Share Insurance Fund (NCUSIF). the owners of joint accounts, consistent in the joint ownership category held by Specifically, the final rule provides an with the NCUA’s statutory authority. the same member at the same FICU. alternative method to satisfy the The Board emphasizes that this change Section 745.8 of the NCUA’s membership card or account signature was not proposed, and is not being regulations governs insurance coverage card requirement necessary for finalized, in reaction to any observed for joint ownership accounts.8 Joint insurance coverage (signature card current problem with respect to ownership accounts include share requirement). Under the final rule, even identifying qualifying joint accounts at accounts held pursuant to various forms if an insured credit union cannot credit unions and processing insurance of co-ownership under state law. For produce membership cards or account payments timely. Rather, the Board example, joint tenants could each hold signature cards signed by the joint issued the proposed rule because it is an equal, undivided interest in a share accountholders, the signature card important to maintain parity between requirement can be satisfied by the nation’s two Federal deposit/share 4 12 U.S.C. 1787(k)(1)(A), (6). information contained in the account 5 12 U.S.C. 1787(k)(1)(B). records of the insured credit union 1 85 FR 34545 (June 6, 2020). 6 12 U.S.C. 1787(k)(1)(C). establishing co-ownership of the share 2 12 CFR 745.8. 7 12 CFR part 745. account. For example, the signature card 3 84 FR 35022 (July 22, 2019). 8 12 CFR 745.8. VerDate Sep<11>2014 16:14 Feb 23, 2021 Jkt 253001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 E:\FR\FM\24FER1.SGM 24FER1 khammond on DSKJM1Z7X2PROD with RULES Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Rules and Regulations 11099 account. Section 745.8 provides that account, based on the member account reaction to any observed current only ‘‘qualifying joint accounts’’ are classifications prescribed by the problem with respect to identifying insured separately from individually Board.19 qualifying joint accounts at FICUs and owned share accounts maintained by Neither the FCU Act nor the NCUA’s processing insurance payments timely. the co-owners.9 ‘‘Qualifying joint regulations define the terms Rather, the Board issued the proposed accounts’’ generally must satisfy two ‘‘membership card’’ or ‘‘account rule because it is important to maintain requirements: (1) Each co-owner has signature card.’’ In implementing parity between the nation’s two Federal personally signed a membership card or § 745.8, the NCUA has not required any deposit/share insurance programs and account signature card; and (2) each co- particular format for a membership card to provide credit union members with owner possesses withdrawal rights on or account signature card. Therefore, the equal access to insurance coverage. The the same basis.10 If a joint account is not agency has previously permitted FICUs Board proposed these regulatory a qualifying joint account, each co- to satisfy the requirement through changes with the belief that they will owner’s actual ownership interest in the various forms of documentation used in promote further confidence in the credit account is considered individually their account opening processes. The union system and embody a forward- owned and added to any other accounts Board also wishes to reiterate that, looking approach that will explicitly individually owned by the co-owner consistent with the Electronic permit the use of new and innovative and insured up to the SMSIA in the Signatures in Global and National technologies and processes to meet the aggregate.11 This may result in some Commerce Act (E-Sign Act),20 the NCUA’s policy objectives. uninsured shares if a member’s single signature requirement may be satisfied The proposed rule emphasized that ownership accounts at the same FICU, electronically. This has been the the change would not introduce any including shares in any non-qualifying NCUA’s long-standing position. new requirements for an account to be joint accounts, exceed $250,000. insured as a joint account, and would Additionally, it is worth reiterating that, B. Summary of Proposed Rule not reduce or affect insurance coverage with limited exceptions, the FCU Act The May 2020 proposed rule for any account for which the existing generally limits NCUA share insurance amended § 745.8 to explicitly provide joint account requirements are satisfied. coverage to ‘‘member accounts.’’ 12 for an alternative method to satisfy the The proposed rule simply would Despite this general limitation, the FCU signature card requirement. The provide an alternative method to satisfy Act 13 and the NCUA’s regulations 14 do proposed rule specifically allowed the the existing signature card requirement allow a nonmember to become a joint signature card requirement to be for share insurance coverage as a owner with a member on a joint account satisfied by information contained in qualifying joint account.