Once an association has been authorized to commence business, all directors, officers, and employees of an association shall, before entering upon the performance of any of their duties, execute their individual bonds with adequate corporate surety payable to the association as an indemnity for any loss the association may sustain of money or other property by or through any fraud, dishonesty, forgery or alteration, larceny, theft, embezzlement, robbery, burglary, holdup, wrongful or unlawful abstraction, misapplication, misplacement, destruction, misappropriation, or other dishonest or criminal act or omission by the director, officer, employee, or agent. Associations which employ collection agents who for any reason are not covered by a bond as hereinabove required shall provide for the bonding of each agent in an amount equal to at least twice the average monthly collection of the agent. The agents must be required to make settlement with the association at least monthly. No bond coverage is required of any agent which is an insured financial depository institution. The amounts and form of the bonds and sufficiency of the surety thereon must be approved by the board of directors subject to any applicable regulations promulgated from time to time by the Board. In lieu of individual bonds, a blanket bond, protecting the association from loss through any act on the part of any director, officer, or employee, may be obtained. A true copy of every indemnity bond must be filed at all times at the association's home office and must be available to the Board. These bonds shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until ten days notice in writing has been given to the Board, unless it has approved the cancellation earlier. The amount of any bond shall provide for sufficient surety.

HISTORY: 1985 Act No. 124, Section 1.