Protect Your Assets: A Discussion of Fidelity Bond Coverage

Written by Nick St. John, NCCO, NCBSO, Regulatory Compliance Counsel, NAFCU

Fraud. Theft. Embezzlement. No credit union wants to suffer a loss due to misconduct or criminal activity. Fidelity bond coverage can insure a credit union against those losses. However, obtaining a fidelity bond is not just a prudent business practice. It is a requirement for all federally insured credit unions (FICUs) under the Federal Credit Union Act (FCU Act) and the National Credit Union Administration’s (NCUA) regulations. Corporate credit unions are also required to maintain coverage; however, this article focuses on the requirements for FICUs.