ORS 723.122: 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.