National Credit Union Administration.
The National Credit Union Administration (NCUA) Board is issuing a final technical corrections rule. The rule corrects cross-references, updates references to NCUA publications, and makes minor typographic corrections.
This rule is effective May 17, 2004.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Paul Peterson, Staff Attorney, Division of Operations, Office of General Counsel, at the National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6540.End Further Info End Preamble Start Supplemental Information
The Board has a policy of continually reviewing NCUA regulations to “update, clarify and simplify existing regulations and eliminate redundant and unnecessary provisions.” NCUA Interpretive Rulings and Policy Statement (IRPS) 87-2, Developing and Reviewing Government Regulations. The NCUA staff's most recent review of NCUA's regulations revealed the need for several minor updates and corrections.
Section 701.21(i)(4) currently states that Federal credit unions must account for financial options contracts transactions in accordance with the NCUA Accounting Manual for Credit Unions, but the current version of the Accounting Manual does not address financial options contracts accounting. 12 CFR 701.21(i)(4). Accordingly, the Board amends § 701.21(i)(4) to delete the reference to the Accounting Manual.
Section 703.1(b)(6) contains an incorrect reference to § 741.3(a)(3). The correct reference should be to § 741.3(a)(2). The Board amends § 703.1(b)(6) to make this correction.
Sections 709.1(c) and 725.18(c) contain incorrect references to §§ 700.1(j) and 700.1(k), respectively. The correct references should both be to § 700.2(e)(1). The Board amends §§ 709.1(c) and 725.18(c) to make this correction.
In § 715.3(a), the conjunction “and” that should be between the two subparagraphs (1) and (2) is incorrectly placed in the second subparagraph. The Board amends § 715.3(a) to correct this.
In the first sentence of § 723.20(b), the phrase “members business loan rule” should be “member business loan rule.” In § 723.21, the capitalization of “Net Member Business Loan Balance” should be changed to “Net member business loan balance” to make it consistent with the format of the other definitions in that section. The Board amends §§ 723.20(b) and 723.21 to make these changes.
B. Regulatory Procedures
Final Rule Under the Administrative Procedure Act
The amendments in this rule are technical rather than substantive. NCUA finds good cause that notice and public comment are unnecessary under sec. 553(b)(B) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B). NCUA also finds good cause to dispense with the 30-day delayed effective date requirement under sec. 553(d)(3) of the APA. The rule will, Start Printed Page 27828therefore, be effective immediately upon publication of this notice.
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (those credit unions under ten million dollars in assets). This rule will not have a significant economic impact on a substantial number of small credit unions, and, therefore, a regulatory flexibility analysis is not required.
Paperwork Reduction Act
NCUA has determined that this rule will not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on State and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order.
The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families
The NCUA has determined that this rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 2681 (1998).Start List of Subjects
List of Subjects
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By the National Credit Union Administration Board on May 11, 2004.
Secretary of the Board.
Accordingly, the NCUA amendsEnd Amendment Part Start Part
PART 701—ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONSEnd Part Start Amendment Part
1. The authority citation for part 701 continues to read as follows:End Amendment Part Start Amendment Part
2. Revise paragraph (i)(4) of § 701.21 as follows:End Amendment Part
(i) * * *
(4) Accounting. A federal credit union must account for financial options contracts transactions in accordance with generally accepted accounting principles.
PART 703—INVESTMENT AND DEPOSIT ACTIVITIESEnd Part Start Amendment Part
3. The authority citation for part 703 continues to read as follows:End Amendment Part Start Amendment Part
4. Revise paragraph (b)(6) of § 703.1 as follows:End Amendment Part
(b) * * *
(6) Investment activity by State-chartered credit unions, except as provided in § 741.3(a)(2) and § 741.219 of this chapter.
5. Remove the last sentence of paragraph (a) of § 703.4.End Amendment Part Start Part
PART 709—INVOLUNTARY LIQUIDATION OF FEDERAL CREDIT UNIONS AND ADJUDICATION OF CREDITOR CLAIMS INVOLVING FEDERALLY INSURED CREDIT UNIONS IN LIQUIDATIONEnd Part Start Amendment Part
6. The authority citation for part 709 continues to read as follows:End Amendment Part Start Amendment Part
7. Revise paragraph (c) of § 709.1 as follows:End Amendment Part
(c) Insolvent means insolvent as that term is defined in § 700.1(e)(1) of this chapter.
PART 715—SUPERVISORY COMMITTEE AUDITS AND VERIFICATIONSEnd Part Start Amendment Part
8. The authority citation for part 715 continues to read as follows:End Amendment Part Start Amendment Part
9. Revise paragraphs (a)(1) and (a)(2) of § 715.3 as follows:End Amendment Part
(a) * * *
(1) Meet required financial reporting objectives and
(2) Establish practices and procedures sufficient to safeguard members' assets.
PART 723—MEMBER BUSINESS LOANSEnd Part Start Amendment Part
10. The authority citation for part 723 continues to read as follows:End Amendment Part Start Amendment Part
11. Revise the first sentence of paragraph (b) of § 723.20 as follows:End Amendment Part
(b) To receive NCUA's approval of a state's member business loan rule, the state supervisory authority must submit its rule to the NCUA regional office. * * *
12. Revise the definition of “Net Member Business Loan Balance” in § 723.21 as follows:End Amendment Part
Net member business loan balance means the outstanding loan balance plus any unfunded commitments, reduced by any portion of the loan that is secured by shares in the credit union, or by shares or deposits in other financial institutions, or by a lien on the member's primary residence, or insured or guaranteed by any agency of the federal government, a state or any Start Printed Page 27829political subdivision of such state, or subject to an advance commitment to purchase by any agency of the federal government, a state or any political subdivision of such state, or sold as a participation interest without recourse and qualifying for true sales accounting under generally accepted accounting principles.
PART 725—CENTRAL LIQUIDITY FACILITYEnd Part Start Amendment Part
13. The authority citation for part 725 continues to read as follows:End Amendment Part Start Amendment Part
14. Revise the first sentence of paragraph (c) of § 725.18 as follows:End Amendment Part
(c) Specific characteristics of an uncreditworthy credit union include, but are not limited to, insolvency as defined by § 700.2(e)(1) of this chapter, unsatisfactory practices in extending credit, lower than desirable reserve levels, high expense ratio, failure to repay previous Facility advances as agreed, excessive dependence on borrowed funds, inadequate cash management policies and planning, or any other relevant characteristics creating a less than satisfactory condition. * * *
[FR Doc. 04-11180 Filed 5-14-04; 8:45 am]
BILLING CODE 7535-01-P