April 4, 1996
Carlos E. Garcia, Assistant Vice President
J.B. Hanauer & Co.
2960 Aventura Boulevard
North Miami Beach, Florida 33180
Re: Flow-Through Insurance Coverage (Your February 12, 1996, Letter)
Dear Mr. Garcia:
You have requested our opinion on whether the National Credit Union Share Insurance Fund provides flow-though insurance for a "block CD." We have previously advised you that since only persons within a credit union's field of membership may belong to the credit union, insurance coverage involving multi-tiered relationships would have to be reviewed on a case-by-case basis using specific factual scenarios. Unfortunately, your facts are insufficient to provide a response. For example, while you reference community development credit unions (CDCU) in your letter, you do not indicate whether your facts apply to a CDCU. You have also not advised us whether the hypothetical beneficial owners are credit union members.
The less general your hypothetical, the more likely we will be able to give you a satisfactory response.
Richard S. Schulman
Associate General Counsel