Board OKs joint ownership share accounts final rule

(Feb. 19, 2021) In other action Thursday, the NCUA Board unanimously approved a final rule on joint ownership share accounts, and heard a report on the new Emergency Capital Investment Program (EICP) established for financial institutions under legislation late last year.

The final rule on joint ownership share accounts, proposed by the board last May, would allow account records information other than a signature card to support the insured status of a joint ownership share account in a credit union. The final rule provides federally insured credit unions with an alternative method to satisfy the membership card or account signature card requirement, the agency said. “For example, under the final rule, the signature card requirement can be satisfied by the credit union having issued a mechanism for accessing the account, such as a debit card, to each co-owner or evidence of usage of the joint share account by each co-owner,” NCUA said.

NASCUS, in its comment supporting the proposal last year, wrote that providing federally insured credit unions flexibility in satisfying the signature card requirement with information in joint account records acknowledges that account opening practices have evolved substantially over the last nearly 50 years. NASCUS agreed with the proposal’s overall approach – and offered a modest change: replacing the phrase “such as” with “including, but not limited to.” Doing so, NASCUS wrote, would allow NCUA to “make clear on the face of the regulation that other evidence in the account records may be sufficient to establish qualifying joint ownership of a share account.”

Harper was commended by NASCUS’ Lucy Ito for considering state laws and rules in the agency’s deliberations over the final rule. The rule takes effect 30 days after publication in the Federal Register.

The board also heard a report on the new EICP, which was established by the Consolidated Appropriations Act, 2021, (adopted late last year) to encourage low- and moderate-income community financial institutions (such as federally insured CDFIs or MDIs that are in sound financial condition) to augment their efforts to support small businesses and consumers in their communities. The program contains $9 billion appropriated to Treasury to fund the program. For credit unions to participate, they may only issue subordinated debt to Treasury with a specified aggregate principal amount.

Eligible state-chartered credit unions must apply separately to (a) Treasury for access to ECIP funding and to (b) either their state regulator (state charters) or to NCUA (federal charters) for secondary capital approval.

Final Rule, Part 745, Joint Ownership Share Accounts

Board Briefing, Consolidated Appropriations Act, 2021, Emergency Capital Investment Program