NCUA-FDIC Hosts Update on Federal Deposit Insurance Coverage Changes

Washington, DC, March 13, 2006 – National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood joined Federal Deposit Insurance Corporation (FDIC) Acting Chairman Martin Gruenberg today for an update to consumer organizations and financial services associations regarding the impending changes to federal deposit insurance coverage.

“I was pleased that the NCUA and FDIC joined together for such an important forum to discuss the implementation of deposit insurance changes recently signed into law by President Bush,” said Vice Chairman Hood. “It is vital that credit unions have accurate information available for members. We look forward to the assistance of those within the credit union system and consumer affairs in outreach efforts concerning enhancements to deposit insurance.”

Participating credit union associations in today’s briefing held at the FDIC were Credit Union National Association, National Association of Federal Credit Unions, and the National Association of Credit Union Supervisors.

During the March 16 meeting, the NCUA Board will consider an interim final rule with request for comments that amends its share insurance rules to implement amendments to the Federal Credit Union Act made by the Federal Deposit Insurance Reform Act of 2005 and the Federal Deposit Insurance Reform Conforming Amendments Act of 2005.

The interim final rule: (1) defines the “standard maximum share insurance amount” as $100,000 and provides that beginning in 2010, and in each subsequent 5-year period thereafter, NCUA and FDIC will jointly consider if an inflation adjustment is appropriate to increase that amount; (2) increases the share insurance limit for certain retirement accounts such as IRAs and Keoghs from $100,000 to $250,000, subject to the above inflation adjustments; and (3) provides pass-through coverage to each participant of an employee benefit plan, but limits the acceptance of shares in employee benefit plans to insured credit unions that are well capitalized or adequately capitalized. Additionally, NCUA is amending its share insurance rules to clarify insurance coverage for qualified tuition programs, commonly