Final Rule: Extended NCUSIF Limit, NCUSIF Official Sign, NCUSIF & Mortgage Servicing Accounts Posted by AVCU on 10:15 AM

NCUA issued a final rule reflecting the extended temporary increase of NCUSIF from $100k to $250k through 12/31/13. The rule also finalizes changes regarding increased coverage for mortgage servicing accounts and display of NCUA’s official sign. The final rule will be effective as of November 30, 2009

Official Sign – An October 2008 interim final rule amended regulations regarding display of NCUA’s official sign to reflect a temporary increase in the SMSIA. The interim final rule provided credit unions the following options:

• Continue to display the current official sign, reflecting the $100,000 limit, without penalty;
• Display any other version of the official sign distributed or approved by NCUA that reflects the increase; or
• Alter the current sign to reflect the temporary increase, by hand or otherwise, as long as it remains legible.
• Credit unions that do not alter the current signs should post additional signs in their lobbies or place a notice on their websites.

The final rule adopts the amendments made by the interim final rule without change other than to reflect the extension of the increased SMSIA through December 31, 2013.

Mortgage Servicing Accounts (custodial loan accounts) - The October 2008 interim final rule expanded share insurance coverage for mortgage servicing accounts by insuring the principal and interest portion of a mortgagor’s payment separately from his or her individual accounts. Prior to the interim final rule these accounts were combined with the borrower’s other accounts at the credit union for purposes of share insurance coverage. The taxes and insurance portion of these payments continue to be combined with the borrower’s other accounts at the credit union for share insurance purposes.