ORS 723.122 Bond or letter of credit; rules

A credit union shall obtain and maintain a fidelity bond or irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, that includes coverage in accordance with rules of the Director of the Department of Consumer and Business Services, to protect the credit union against losses caused by occurrences such as fraud, dishonesty, forgery, embezzlement, misappropriation, misapplication of duty and all acts of agents, directors, officers, committee members, employees or attorneys of the credit union. The minimum amount of the bond or letter of credit is based on the amount of the credit union’s total assets in accordance with the following table:

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Total Assets Minimum Amount

of Bond

or Letter of Credit

$0 to $4,000,000 $250,000 or

coverage equal

to the credit

union’s total

assets, whichever

is less.

$4,000,001 to $50,000,000 $100,000 plus

$50,000 for each

$1,000,000 of total

assets or fraction

of total assets

over $1,000,000.

$50,000,001 to $500,000,000 $2,550,000 plus

$10,000 for each

$1,000,000 of total

assets or fraction

of total assets

over

$50,000,000,

with a maximum

of $5,000,000.

More than $500,000,000 1% of the credit

union’s total

assets rounded

to the nearest

$100,000,000,

with a maximum

of $9,000,000.

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A fidelity bond or letter of credit must include a faithful performance clause to cover the chief financial officer. The director must approve the fidelity bond or letter of credit and may require additional amounts as the director considers necessary.

Claims upon a fidelity bond or letter of credit that exceed one percent of the credit union’s reserves and undivided earnings or that are related to the errors or omissions of an officer, director or committee member must be reported to the director.