National Credit Union Administration (NCUA).
NCUA is amending a number of its regulations by making minor technical corrections, clarifications and grammatical changes. Among those amendments is the addition of a cross-reference between two regulations addressing credit union borrowing authority; addition of a statement in the provision on insurance coverage for volunteer officials to note, when a federal credit union (FCU) cancels coverage, it must comply with any other applicable laws allowing an official to continue coverage at his or her own expense; and clarification that indemnification for dual employees is limited to activities on behalf of the FCU. NCUA is also removing certain regulatory references to NCUA's FCU Bylaws that are no longer accurate due to revisions to the Bylaws. The amendments generally are improvements alerting users to other relevant provisions, responsibilities, or limitations.
This rule is effective May 31, 2007.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Annette Tapia or Frank Kressman, Staff Attorneys, Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6540.End Further Info End Preamble Start Supplemental Information
NCUA continually reviews its 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. Under IRPS 87-2, NCUA conducts a rolling review of one-third of its regulations every year, involving both internal review and public comment. NCUA's 2006 review revealed that minor revisions to certain regulations would be helpful.
B. Regulatory Changes
NCUA's regulations implement the statutory provisions permitting FCUs to provide certain insurance for volunteer directors and committee members. 12 U.S.C 1761a; 12 CFR 701.33(b)(2)(ii). With respect to insurance coverage, the regulation provides that coverage must cease immediately when an official is no longer serving in that capacity. The amendment to § 701.33(b)(2)(ii) serves as a reminder that, when an FCU cancels insurance coverage for an official, other federal or state laws may provide departing officials the right to maintain health insurance coverage at their own expense.
The regulation also permits an FCU to indemnify its officials and employees under certain conditions. 12 CFR 701.33(c). The amendment adds a new subparagraph to § 701.33(c) clarifying that an FCU may not indemnify an FCU employee acting in a “dual employee” role for those duties performed for an entity other than the credit union. For example, an FCU employee who also performs duties for a credit union service organization (CUSO) is a dual employee and the FCU may only indemnify the employee for the functions performed for the FCU, not the CUSO.
NCUA's regulations permit an FCU to borrow funds from natural persons, provided it uses a certificate of indebtedness, which sets forth the terms and conditions of the repayment of the borrowing. 12 CFR 701.38. This borrowing authority is subject to a statutory limitation implemented in NCUA's regulations limiting an FCU's maximum borrowing authority from any source to 50% of its paid-in and unimpaired capital and surplus. 12 U.S.C. 1757(9); 12 CFR 741.2(a). NCUA is inserting a cross-reference in § 701.38 to the borrowing limitations in § 741.2 to alert users to the regulatory provision on maximum borrowing authority.
NCUA revised the FCU Bylaws in 1999 and 2006. The revised Bylaws provide greater clarity and flexibility. Several Bylaw provisions include fill-in-the-blank choices that enable an FCU's board of directors to select from a range of options best suited to their credit union's needs. As a result of those revisions, certain regulatory provisions referencing the Bylaws are outdated. The technical amendments remove those inaccurate references.
C. Regulatory Procedures
Final Rule Under the Administrative Procedure Act
Generally, the Administrative Procedure Act (APA) requires a federal agency to provide the public with notice and the opportunity to comment on agency rulemakings. The amendments in this rule are not substantive but technical in that they make minor corrections, merely provide clarification or alert users of the regulations to other legal requirements or limitations. The APA permits an agency to forego the notice and comment period under certain circumstances, such as when a rulemaking is technical and not substantive. NCUA finds good cause that notice and public comment are unnecessary under Section 553(b)(3)(B) of the APA. 5 U.S.C. 553(b)(3)(B). NCUA also finds good cause to dispense with the 30-day delayed effective date requirement under Section 553(d)(3) of the APA. 5 U.S.C. 553(d)(3). The rule will, therefore, be effective immediately upon publication.
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 provides minor, technical changes and clarifications to certain sections of NCUA's regulations. 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 Start Printed Page 30246determined 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).
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the APA. 5 U.S.C. 551. The Office of Management and Budget has determined that this rule is not a major rule for purposes of SBREFA. As required by SBREFA, NCUA will file the appropriate reports with Congress and the General Accounting Office so this rule may be reviewed.Start List of Subjects
List of Subjects
- consumer protection
- credit unions
- reporting and recordkeeping requirements
- truth in savings
By the National Credit Union Administration Board on May 24, 2007.
Secretary of the Board.
For the reasons discussed above, NCUA is amendingEnd Amendment Part Start Part
PART 701—ORGANIZATION AND OPERATIONS 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. Section 701.21 is amended as follows:End Amendment Part Start Amendment Part
a. In paragraph (a), by replacing the last word, “part” with the word “chapter”; andEnd Amendment Part Start Amendment Part
b. in paragraph (i)(1),introductory text, by removing the word “this.”End Amendment Part Start Amendment Part
3. Section 701.33(b)(2)(ii) is amended by adding the phrase “except that a credit union must comply with federal and state laws providing departing officials the right to maintain health insurance coverage at their own expense” after “if any;” and before “and” at the end.End Amendment Part Start Amendment Part
4. Section 701.33 is amended by adding a new paragraph (c)(4) to read as follows:End Amendment Part
(4) Notwithstanding paragraphs (c)(1) through (3) of this section, a federal credit union may not indemnify a dual employee for duties performed for any employer other than the federal credit union. For purposes of this subsection, a dual employee is a federal credit union employee who also performs work functions for another entity as part of a sharing arrangement between the federal credit union and the other entity.
5. Section 701.38 is amended by adding new paragraph (b) to read as follows:End Amendment Part
(b) Federal credit unions must comply with the maximum borrowing authority of § 741.2 of this chapter.
PART 703—INVESTMENT AND DEPOSIT ACTIVITIESEnd Part Start Amendment Part
6. The authority citation for part 703 continues to read as follows:End Amendment Part Start Amendment Part
7. Section 703.4 is amended by replacing references to “§ 701.12” wherever they appear with references to “§ 715.4.”End Amendment Part Start Part
PART 707—TRUTH IN SAVINGSEnd Part Start Amendment Part
8. The authority citation for part 707 continues to read as follows:End Amendment Part Start Amendment Part
9. Appendix B to Part 707 is amended as follows:End Amendment Part Start Amendment Part
a. Section B-3 is amended by replacing the “d” with “c” in the topic heading.End Amendment Part Start Amendment Part
b. Section B-6 is amended by removing the phrase “, but must be at least 6 months”.End Amendment Part Start Amendment Part
c. Section B-6, paragraph 12, in the “Note:” portion is amended by removing the sentence, “If this were a passbook account, then the requirements of Art. IV, Receipting for Money—Passbooks, in the NCUA Standard FCU Bylaws would also be included in item no. 9.”End Amendment Part Start Amendment Part
d. Section B-6, paragraph 12, in the “Note:” portion is amended by removing the phrase “, and Art. XIV, § 3 of the NCUA Standard FCU Bylaws”.End Amendment Part Start Amendment Part
e. Section B-7, paragraph 9 is amended by removing the phrase “, but must be at least 6 months”.End Amendment Part Start Amendment Part
f. Section B-11 in the “Note:” portion is amended by removing the phrase “, except for the overdraft transfer fee of $1.00 per overdraft and the excessive share transfer fee of $1.00 per item, which are set in the NCUA Standard FCU Bylaws, Art. III, § 4 and § 5(f), respectively”.End Amendment Part Start Amendment Part
10. Appendix C to Part 707 is amended as follows:End Amendment Part Start Amendment Part
a. Section 707.4(b)(2)(ii)(1) is amended by removing the parenthetical “(members have at least six months to replenish membership share before membership terminates and account is deemed closed)”.End Amendment Part Start Amendment Part
b. Section 707.7(b)(3) is amended by removing the parenthetical “(members have at least 6 months to replenish membership share before membership can terminate and the account is deemed closed)”.End Amendment Part Start Amendment Part
c. Section 707.11(b)(5) is amended by removing the open quotation marks between the words “overdrafts” and “created.”End Amendment Part Start Part
PART 710—VOLUNTARY LIQUIDATIONEnd Part Start Amendment Part
11. The authority citation for part 710 continues to read as follows:End Amendment Part Start Amendment Part
12. Section 710.3(a) introductory text is amended by removing the phrase “,End Amendment Part Start Part
PART 722—APPRAISALSEnd Part Start Amendment Part
13. The authority citation for part 722 continues to read as follows:End Amendment Part Start Amendment Part
14. Section 722.3(d) is amended by adding “and (a)(5)” after the words “paragraphs (a)(1).”End Amendment Part Start Part
PART 723—MEMBER BUSINESS LOANSEnd Part Start Amendment Part
15. The authority citation for part 723 continues to read as follows:End Amendment Part Start Amendment Part
16. Section 723.7(a) introductory text is amended by changing the reference to “§ 723.4” to read “§ 723.3”.End Amendment Part Start Part
PART 742—REGULATORY FLEXIBILITY PROGRAMEnd Part Start Amendment Part
17. The authority citation for part 742 continues to read as follows:End Amendment Part Start Amendment Part
18. Section 742.4(a)(3) is amended by removing “(b) and (c)” after “701.36(a)”.End Amendment Part End Supplemental Information
[FR Doc. E7-10392 Filed 5-30-07; 8:45 am]
BILLING CODE 7535-01-P