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Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Rules and Regulations account. Section 745.8 provides that only qualifying joint accounts are insured separately from individually owned share accounts maintained by the co-owners.9 Qualifying joint accounts generally must satisfy two requirements: 1 Each co-owner has personally signed a membership card or account signature card; and 2 each coowner possesses withdrawal rights on the same basis.10 If a joint account is not a qualifying joint account, each coowners actual ownership interest in the account is considered individually owned and added to any other accounts individually owned by the co-owner and insured up to the SMSIA in the aggregate.11 This may result in some uninsured shares if a members single ownership accounts at the same FICU, including shares in any non-qualifying joint accounts, exceed $250,000.
Additionally, it is worth reiterating that, with limited exceptions, the FCU Act generally limits NCUA share insurance coverage to member accounts. 12
Despite this general limitation, the FCU
Act 13 and the NCUAs regulations 14 do allow a nonmember to become a joint owner with a member on a joint account with right of survivorship. The regulations provide that a nonmembers interest in such accounts will be insured in the same manner as the member joint-owners interest.
The signature requirement has been included in the regulation governing insurance coverage since its inception in 1971.15 The FDIC has had a substantially similar signature requirement since 1967.16 In originally adopting this requirement, the FDIC
intended to address practices such as the addition of nominal co-owners to an account solely to increase deposit insurance coverage. 17 The NCUA
thereafter adopted a substantially similar requirement 18 and views it as a reliable indicator of account ownership and important to ensuring consistency with the FCU Act, which expressly limits the net amount of share insurance payable to any member, or person with funds lawfully held in a member 9 Id.
10 12

CFR 745.8c.
CFR 745.8d.
12 12 U.S.C. 17525.
13 12 U.S.C. 1759a.
14 12 CFR 745.8e.
15 36 FR 2477 Feb. 5, 1971.
16 See 32 FR 10408, 10409 July 14, 1967.
17 84 FR 35022, 35023 July 22, 2019.
18 The FCU Act generally requires that the NCUA
determine the net amount of share insurance payable . . . in accordance with this paragraph, and consistently with actions taken by the Federal Deposit Insurance Corporation under section 1821a of this title. 12 U.S.C. 1787k1A
emphasis added.

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account, based on the member account classifications prescribed by the Board.19
Neither the FCU Act nor the NCUAs regulations define the terms membership card or account signature card. In implementing 745.8, the NCUA has not required any particular format for a membership card or account signature card. Therefore, the agency has previously permitted FICUs to satisfy the requirement through various forms of documentation used in their account opening processes. The Board also wishes to reiterate that, consistent with the Electronic Signatures in Global and National Commerce Act E-Sign Act,20 the signature requirement may be satisfied electronically. This has been the NCUAs long-standing position.
B. Summary of Proposed Rule The May 2020 proposed rule amended 745.8 to explicitly provide for an alternative method to satisfy the signature card requirement. The proposed rule specifically allowed the signature card requirement to be satisfied by information contained in the account records of the FICU
establishing the co-ownership of the share account, such as evidence that the FICU has issued a mechanism for accessing the account to each co-owner or evidence of usage of the share account by each co-owner. For example, under the proposal, the requirement could be satisfied by evidence that a FICU has issued a debit card to each coowner of the account or evidence that each co-owner of the account has conducted transactions using the share account. These examples, however, were not intended to define the only forms of evidence of co-ownership that could satisfy the signature requirement.
To the contrary, the evidence found in a FICUs account records could take many other forms.
The proposed amendment mirrors a change made by the FDIC in 2019 for federally insured depository institutions.21 As noted in the proposal, the Board believes that the change would better facilitate the prompt payment of share insurance in the event of a FICUs failure by explicitly providing alternative methods that the NCUA could use to determine the owners of joint accounts, consistent with the NCUAs statutory authority. In the proposal, the Board emphasized that this proposed change was not in 19 12

U.S.C. 1787k1.
Law 106229, codified at 15 U.S.C.
7001a.
21 84 FR 35022 July 22, 2019.
20 Public
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reaction to any observed current problem with respect to identifying qualifying joint accounts at FICUs and processing insurance payments timely.
Rather, the Board issued the proposed rule because it is important to maintain parity between the nations two Federal deposit/share insurance programs and to provide credit union members with equal access to insurance coverage. The Board proposed these regulatory changes with the belief that they will promote further confidence in the credit union system and embody a forwardlooking approach that will explicitly permit the use of new and innovative technologies and processes to meet the NCUAs policy objectives.
The proposed rule emphasized that the change would not introduce any new requirements for an account to be insured as a joint account, and would not reduce or affect insurance coverage for any account for which the existing joint account requirements are satisfied.
The proposed rule simply would provide an alternative method to satisfy the existing signature card requirement for share insurance coverage as a qualifying joint account. Under the proposal, if each co-owner of a joint account signs, or has previously signed, a membership card or account signature card in accordance with the existing requirement and the FICU can produce it, then the proposed alternative method would be unnecessary. Assuming that the remaining qualifying joint account requirement is satisfiedthat is, both co-owners possess equal withdrawal rightsand all other membership requirements are met,22 the account would be insured as a joint account. The proposal noted that the change would apply to all FICUs and would not impose any increased burden or new recordkeeping requirements for joint accounts.
In the proposal, the Board also detailed the non-quantifiable benefits to owners of joint accounts. By explicitly providing alternative methods that the NCUA could use to determine the owners of joint accounts, the proposed rule would further support a prompt share insurance determination in the event of a FICUs failure, alleviating delays in the recognition of account ownership and uncertainty regarding the extent of share insurance coverage.
22 With limited exceptions, the FCU Act generally limits NCUA share insurance coverage to member accounts. 12 U.S.C. 17525. Despite this general limitation, the FCU Act and the NCUAs regulations do allow a nonmember to become a joint owner with a member on a joint account with right of survivorship. 12 U.S.C. 1759a. The regulations provide that a nonmembers interest in such accounts will be insured in the same manner as the member joint owners interest. 12 CFR 745.8e.

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