Bond or letter of credit; rules

(1) 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: ______________________________________________________________________________ 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. ______________________________________________________________________________ (2) 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. (3) 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.