CUNA Mutual Continues Bond Coverage When CUs Convert to Banks

From Credit Union Times Online - 6/22/2005 - 02:59 PM

MADISON, Wis. - How does the industry's largest provider of bond coverage handle credit unions that convert to banks?

According to CUNA Mutual, it does have a policy in place and that policy is to continue to provide bond coverage when they become mutual savings banks, however the coverage is not as broad as provided to credit unions.

CUNA Mutual will also provide coverage if they convert to a stock-owned bank, however the coverage changes further. The company has the converted CUs sign a document that says if they convert to a stock entity, they acknowledge that CUNA Mutual will terminate their Director and Officer coverage because the risk profile of a stock bank is very different than that of a credit union.

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