Asset Thresholds

Citation86 FR 15397
CourtNational Credit Union Administration
Publication Date23 Mar 2021
Record Number2021-05967
Federal Register, Volume 86 Issue 54 (Tuesday, March 23, 2021)
[Federal Register Volume 86, Number 54 (Tuesday, March 23, 2021)]
                [Rules and Regulations]
                [Pages 15397-15401]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-05967]
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                Rules and Regulations
                 Federal Register
                ________________________________________________________________________
                This section of the FEDERAL REGISTER contains regulatory documents
                having general applicability and legal effect, most of which are keyed
                to and codified in the Code of Federal Regulations, which is published
                under 50 titles pursuant to 44 U.S.C. 1510.
                The Code of Federal Regulations is sold by the Superintendent of Documents.
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                Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules
                and Regulations
                [[Page 15397]]
                NATIONAL CREDIT UNION ADMINISTRATION
                12 CFR Parts 700, 702, 708a, 708b, and 790
                [NCUA-2021-0111]
                RIN 3133-AF36
                Asset Thresholds
                AGENCY: National Credit Union Administration (NCUA).
                ACTION: Interim final rule with request for comments.
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                SUMMARY: To mitigate transition costs on credit unions related to the
                coronavirus disease 2019 (COVID-19 Pandemic), the NCUA Board (Board) is
                issuing this temporary interim final rule to permit federally insured
                credit unions (FICUs) to use asset data as of March 31, 2020, in order
                to determine the applicability of certain regulatory asset thresholds
                during calendar years 2021 and 2022. Specifically, the interim final
                rule allows a FICU to use March 31, 2020, financial data when
                determining whether the institution is subject to capital planning and
                stress testing requirements under the NCUA's regulations and
                supervision from the Office of National Examinations and Supervision.
                DATES: This rule is effective on March 23, 2021, except for amendatory
                instruction 4, which is effective January 1, 2022. Comments must be
                received on or before May 24, 2021.
                ADDRESSES: You may submit written comments, identified by RIN 3133-
                AF36, by any of the following methods (Please send comments by one
                method only):
                 Federal eRulemaking Portal: http://www.regulations.gov.
                The docket number for this interim final rule is NCUA-2021-0111. Follow
                the instructions for submitting comments.
                 Fax: (703) 518-6319. Include ``[Your Name]--Comments on
                Interim Final Rule: Asset Thresholds'' in the transmittal.
                 Mail: Address to Melane Conyers-Ausbrooks, Secretary of
                the Board, National Credit Union Administration, 1775 Duke Street,
                Alexandria, Virginia 22314-3428.
                 Hand Delivery/Courier: Same as mail address.
                 Public inspection: You may view all public comments on the Federal
                eRulemaking Portal at http://www.regulations.gov, as submitted, except
                for those we cannot post for technical reasons. The NCUA will not edit
                or remove any identifying or contact information from the public
                comments submitted. Due to social distancing measures in effect, the
                usual opportunity to inspect paper copies of comments in the NCUA's law
                library is not currently available. After social distancing measures
                are relaxed, visitors may make an appointment to review paper copies by
                calling (703) 518-6540 or emailing [email protected].
                FOR FURTHER INFORMATION CONTACT: Yvonne Applonie, Director of
                Supervision, Office of National Examinations and Supervision; or Rachel
                Ackmann, Senior Staff Attorney, Office of General Counsel, 1775 Duke
                Street, Alexandria, VA 22314-3428. Yvonne Applonie can also be reached
                at (703) 518-6595, and Rachel Ackmann can be reached at (703) 548-2601.
                SUPPLEMENTARY INFORMATION:
                I. Background
                 In light of strains in economic conditions related to the COVID-19
                Pandemic and stress in U.S. financial markets, the NCUA has taken a
                number of actions intended to: (i) Restore market functioning and
                support the flow of credit to households, businesses, and communities
                and (ii) increase flexibility and tailor regulations.
                 Among those actions, the NCUA has issued a number of rules and
                supervisory guidance communications designed to mitigate the
                consequences of the COVID-19 Pandemic, to facilitate the safe and
                effective operations of FICUs and to protect credit union members.\1\
                Credit unions have played an instrumental role in the nation's
                financial response to the COVID-19 Pandemic, and many have experienced
                significant balance sheet growth as a result of the COVID-19 Pandemic
                and the policy response to the event.
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                 \1\ See e.g., Temporary Regulatory Relief in Response to COVID-
                19-Extension, 85 FR 83405 (Dec. 22, 2020); Regulatory Capital Rule:
                Paycheck Protection Program Lending Facility and Paycheck Protection
                Program Loans, 85 FR 23212 (Apr. 27, 2020); and Real Estate
                Appraisals, 85 FR 22014 (Apr. 21, 2020).
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                 The unprecedented balance sheet growth is largely a result of
                individual member response to actions taken by monetary and fiscal
                authorities. At the start of the COVID-19 Pandemic, consumer spending
                decreased as individual states or major metropolitan areas ordered
                millions of Americans to stay home. Additionally, market volatility
                pushed savers with money in financial markets to safer assets,
                including insured shares. Fiscal stimulus applied additional upward
                pressure on FICU balance sheets. For example, as part of the
                Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the
                U.S. government provided over $1 trillion in direct support to
                consumers and businesses through business loans, expanded unemployment
                insurance, and direct checks to individuals.\2\ The direct government
                assistance and dramatic reduction in discretionary spending lifted the
                personal savings rate and fueled share growth. For FICUs just below $10
                billion in assets, these factors have resulted in their balance sheets
                swelling by an average of about 14 percent, and in one case by more
                than 34 percent. In contrast, in 2019, FICUs with assets just below the
                $10 billion threshold had an average asset growth of only 9 percent.
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                 \2\ Public Law 116-136, 134 Stat. 281.
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                 FICUs are subject to regulatory requirements predicated on their
                risk profile and asset size.\3\ Specifically, part 702 of the NCUA's
                regulations contain asset-based thresholds that determine whether a
                FICU is required to comply with capital planning and stress testing
                requirements. In addition, oversight by the Office of National
                Examinations and Supervision (ONES) is dependent on a FICU's asset
                size. Due to their response to the COVID-19 Pandemic, many FICUs have
                been, or may soon be, pushed over the asset thresholds that could
                subject them to additional regulatory requirements or ONES
                [[Page 15398]]
                supervision.\4\ Complying with these new or more stringent regulatory
                standards would impose additional transition and compliance costs on
                such FICUs that otherwise may not have become subject to these
                requirements at this time. This interim final rule gives affected FICUs
                more time to either reduce their balance sheets, or to prepare for
                higher regulatory standards.
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                 \3\ See e.g., 12 CFR 702.103 and 12 CFR 702.502.
                 \4\ Based on data as of December 31, 2020, there are eight FICUs
                that crossed asset-based threshold in part 702, Subpart E.
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                 Additionally, the Board does not believe that the balance sheet
                growth related to the COVID-19 Pandemic has significantly increased the
                general risk profile of the affected FICUs. As discussed previously,
                FICUs' growth is largely due to the extraordinary growth in insured
                shares held by FICUs. Therefore, the Board feels it prudent to offer
                FICUs relief with respect to certain regulatory requirements being
                triggered by the unprecedented balance sheet growth.
                 On December 2, 2020, the Federal Deposit Insurance Corporation, the
                Office of the Comptroller of the Currency, and Board of Governors of
                the Federal Reserve System published a related interim final rule to
                mitigate temporary transition costs on banking organizations with under
                $10 billion in total assets as of December 31, 2019, related to the
                COVID-19 Pandemic.\5\
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                 \5\ 85 FR 77345 (Dec. 2, 2020).
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                II. Legal Authority
                 The Board is issuing this interim final rule pursuant to its
                authority under the Federal Credit Union Act (FCU Act).\6\ Under the
                FCU Act, the NCUA is the chartering and supervisory authority for
                Federal credit unions (FCUs) and the federal supervisory authority for
                FICUs. The FCU Act grants the NCUA a broad mandate to issue regulations
                governing both FCUs and FICUs. Section 120 of the FCU Act is a general
                grant of regulatory authority and authorizes the Board to prescribe
                regulations for the administration of the FCU Act.\7\ Section 209 of
                the FCU Act is a plenary grant of regulatory authority to the NCUA to
                issue regulations necessary or appropriate to carry out its role as
                share insurer for all FICUs.\8\ Accordingly, the FCU Act grants the
                Board broad rulemaking authority to ensure that the credit union
                industry and the National Credit Union Share Insurance Fund remain safe
                and sound.
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                 \6\ 12 U.S.C. 1751 et seq.
                 \7\ 12 U.S.C. 1766(a).
                 \8\ 12 U.S.C. 1789.
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                III. The Interim Final Rule
                A. Measurement Date for the Applicability of Capital Planning and
                Stress Testing Requirements and Office of National Examinations and
                Supervision Oversight
                 Part 702, subpart E, of the NCUA's regulations (part 702) contains
                asset-based thresholds that determine whether a FICU is required to
                comply with capital planning and stress testing requirements.\9\ The
                asset-based thresholds are meant to ensure that the regulatory
                requirements applicable to a FICU are appropriate, given the FICU's
                asset size and, in some cases, the potential risk that the credit union
                poses to the National Credit Union Share Insurance Fund.
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                 \9\ 12 CFR part 702, subpart E.
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                 As discussed previously, many FICUs have experienced an unexpected
                and sharp increase in their balance sheets since the beginning of the
                COVID-19 Pandemic. This unexpected and rapid growth has caused the
                assets of certain FICUs to rise above asset-based thresholds in part
                702 and may cause other FICUs to do so soon. In addition, much of this
                growth is the result of actions taken by monetary and fiscal
                authorities, and by individual members in response to the COVID-19
                Pandemic and generally does not reflect any immediate change in the
                organization's longer-term risk profile.
                 In the absence of regulatory change, FICUs that experience an
                increase in assets above one or more thresholds in part 702 would face
                additional transition costs necessary to comply with the new or more
                stringent regulatory standards they have not accounted for in 2021
                strategic financial plans and budgets. Given the rapid and unexpected
                nature of FICU asset growth in 2020, many FICUs are unlikely to have
                planned for these transition costs.
                 Therefore, the Board believes it is appropriate to provide
                temporary regulatory relief to FICUs that have risen above, or will
                rise above, the asset-based thresholds in part 702. The relief should
                permit a covered FICU to either delay for one year transition costs
                that it would otherwise be subject to immediately, to comply with the
                new standards or an additional year to reduce its total assets to below
                the applicable asset-based threshold. In order to provide this relief,
                the Board is issuing this interim final rule to temporarily change the
                date as of when a FICU measures its assets for the purpose of the
                capital planning and stress testing requirement.
                 Part 702 applies capital planning and stress testing requirements
                to ``covered credit unions.'' A FICU is defined as a covered credit
                union, and subject to capital planning and stress testing requirements,
                if it has $10 billion or more in total assets.\10\ Covered credit
                unions are then further divided into three tiers and varying levels of
                regulatory requirements are imposed based on those asset tiers. The
                tiers ensure capital planning and stress testing requirements are
                tailored to reflect the size, complexity, and financial condition of
                the subject credit union. For example, tier I credit unions are not
                subject to stress testing requirements, however tier II and tier III
                credit unions are subject to stress testing requirements. Under part
                702:
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                 \10\ See, 12 CFR 702.502. Covered credit unions are defined as a
                FICU whose assets are $10 billion or more.
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                 A tier I credit union is a covered credit union that has
                less than $15 billion in total assets;
                 A tier II credit union is a covered credit union that has
                $15 billion or more in total assets, but less than $20 billion in total
                assets, or is otherwise designated as a tier II credit union by the
                NCUA; and
                 A tier III credit union is a covered credit union that has
                $20 billion or more in total assets, or is otherwise designated as a
                tier III credit union by the NCUA.
                 Part 702 applies the asset thresholds for each tier based on a
                FICU's asset size on March 31 each year (measurement date). Under the
                current rule, if a FICU crosses any of the tier I, II, or III asset
                thresholds on March 31, then the FICU's new classification is effective
                on January 1 of the next year. Accordingly, a FICU's calendar year 2021
                capital planning and stress testing requirements were determined by its
                total assets as of March 31, 2020 and were effective January 1, 2021.
                If a FICU had $10 billion or more in total assets as of March 31, 2020,
                it must complete a capital plan in calendar year 2021. And, if a
                covered credit union had $15 billion in assets on March 31, 2020, it
                must conduct a stress test in calendar year 2021.
                 As discussed previously, the interim final rule temporarily amends
                the measurement date used to determine whether a FICU crosses any of
                the tier I, II, or III asset thresholds for capital planning and stress
                testing requirements in calendar year 2022. Under the interim final
                rule, a FICU will use its assets reported as of March 31, 2020, instead
                of March 31, 2021, to determine its applicable asset thresholds for
                [[Page 15399]]
                calendar year 2022. This means that asset growth in 2020 will not
                trigger new regulatory requirements under Part 702 until January 1,
                2023, at the earliest.
                 Therefore, if a FICU had substantial asset growth during the latter
                half of 2020 and has $10 billion or more in assets on March 31, 2021,
                but had less than $10 billion in assets on March 31, 2020, the FICU
                does not meet the definition of a covered credit union and will not be
                designated as a tier I credit union subject to capital planning
                requirements on January 1, 2022. If a FICU had $10 billion or more in
                total assets on March 31, 2020, however, it must complete a capital
                plan this year (for calendar year 2021). And, if a covered credit union
                has $15 billion in assets on March 31, 2021, but had less than $15
                billion on March 31, 2020, it is not required to conduct a stress test
                in calendar year 2022. Similarly, a covered credit union is not
                designated as a tier III covered credit union based on its total assets
                as of March 31, 2021.
                 Accordingly, a FICU would not be newly designated as a tier I, II,
                or III covered credit union until March 31, 2022, and such designation
                will not be effective until January 1, 2023. This temporary regulatory
                relief reflects that much of the balance sheet growth since the start
                of the COVID-19 Pandemic, especially growth related to member deposits,
                does not generally reflect changes in FICUs' risk profiles and was
                unexpected by the FICU. Based on this analysis, the Board finds that
                this temporary change will not undermine the purpose behind the capital
                planning and stress testing requirements and will permit FICUs an
                additional year to either reduce their total assets to under the
                applicable asset-size threshold or prepare for compliance with capital
                planning and stress testing requirements.
                 As discussed, the interim final rule also makes a conforming change
                to the measurement date for determining oversight by ONES. Currently,
                ONES oversees FICUs with $10 billion or more in assets. Similar to the
                measurement date for capital planning and stress testing requirements,
                FICUs reporting assets of $10 billion or more on March 31 each year
                will be reassigned to ONES on January 1 of the following year. Under
                the interim final rule, the NCUA will use financial data as of March
                31, 2020, instead of March 31, 2021, to determine the supervision of
                natural person credit unions for calendar year 2022.
                 The interim final rule also makes conforming amendments to other
                NCUA regulations that refer to supervision by ONES. These changes
                replace specific references to the $10 billion asset threshold with
                cross-references to the threshold, as temporarily modified, in part
                702.
                B. Reservation of Authority
                 The temporary regulatory relief described previously is generally
                available to FICUs that otherwise would have crossed the tier I, II, or
                III thresholds in part 702 or become subject to ONES supervision.
                However, there may be limited instances in which such regulatory relief
                would be inappropriate. To address such situations, the Board may use
                existing reservations of authority in part 702 to designate a FICU as
                subject to ONES supervision or a tier I, II, or III credit union. When
                making any such determination, the Board would consider all relevant
                factors affecting the FICU's safety and soundness, including, but not
                limited to, the extent of asset growth of the FICU since March 31,
                2020; the causes of such growth, including whether growth occurred as a
                result of mergers or purchase and assumption transactions; whether such
                growth is likely to be temporary or permanent; whether the FICU has
                become involved in any additional activities since March 31, 2020, and,
                if so, the risk of such activities; and the type of assets held by the
                FICU. In particular, as noted in the preceding sentence, the NCUA will
                consider whether the FICU crossed the threshold due to a merger or
                purchase and assumption transaction that significantly increases the
                FICU's asset size. Asset growth that occurs as a result of a merger or
                purchase and assumption transaction is planned, unlike the growth that
                many FICUs have experienced since the beginning of the COVID-19
                Pandemic. FICUs crossing a regulatory threshold as a result of a merger
                or purchase and assumption transaction therefore have had the
                opportunity to plan and prepare for the change in regulatory
                requirements. The Board notes that it may designate a FICU as a tier I,
                II, or III credit union even in the absence of a merger or purchase and
                assumption transaction, as significant asset growth at a FICU may
                reflect a material change in the business model, risk profile, or
                complexity of the FICU. Nonetheless, the NCUA expects to apply the
                reservation of authority only in limited circumstances.
                C. Request for Comments
                 The Board seeks comment on all aspects of this interim final rule.
                In particular, the Boards seeks comment on the duration of the
                temporary regulatory relief and on the advantages and disadvantages of
                using an alternative measurement date. Commenters are invited to
                describe other dates and the advantages and disadvantages of any such
                dates.
                III. Regulatory Procedures
                A. Administrative Procedure Act
                 The Board is issuing this interim final rule without prior notice
                and the opportunity for public comment and the delayed effective date
                ordinarily prescribed by the Administrative Procedure Act (APA).
                Pursuant to section 553(b)(B) of the APA, general notice and the
                opportunity for public comment are not required with respect to a
                rulemaking when an ``agency for good cause finds (and incorporates the
                finding and a brief statement of reasons therefor in the rules issued)
                that notice and public procedure thereon are impracticable,
                unnecessary, or contrary to the public interest.''
                 The Board believes that the public interest is best served by
                implementing the interim final rule immediately upon publication in the
                Federal Register. As discussed previously, the interim final rule
                provides temporary regulatory relief to FICUs crossing certain
                regulatory asset thresholds in 2020 and 2021. Many FICUs have
                experienced dramatic and unexpected increases in their balance sheets
                as a result of their efforts to support the economy during the ongoing
                COVID-19 Pandemic. The interim final rule facilitates the ability of
                FICUs to temporarily defer the implementation of certain regulatory
                thresholds that would not have been applicable had the FICUs not
                experienced this balance sheet growth. Therefore, the interim final
                rule temporarily exempts FICUs from new requirements that may have
                otherwise been applicable due to growth. The interim final rule does
                not impose any requirements on any FICUs.
                 The Board believes that the public interest is best served by
                making the interim final rule effective immediately upon publication in
                the Federal Register. The Board believes that issuing the interim final
                rule will ensure that FICUs will not be unnecessarily required to
                immediately comply with certain threshold-based regulatory standards
                given the FICU's unexpected growth and likely long-term risk profile
                and activities. The interim final rule also will provide FICUs time to
                comply with new threshold-based regulatory standards and avoid
                unexpected and unplanned costs, allowing the FICU to continue to focus
                on the provision of affordable credit to members during this time of
                economic stress. In addition, the
                [[Page 15400]]
                Board believes that providing a notice and comment period prior to
                issuance of the interim final rule is impracticable, as FICUs may start
                incurring transition costs now in anticipation of needing to comply
                with additional requirements if its asset classification would
                otherwise change on March 31, 2021. For these reasons, the Board finds
                there is good cause consistent with the public interest to issue the
                interim final rule without advance notice and comment.
                 The APA also requires a 30-day delayed effective date, except for:
                (1) Substantive rules which grant or recognize an exemption or relieve
                a restriction; (2) interpretative rules and statements of policy; or
                (3) as otherwise provided by the agency for good cause. Because the
                rules relieve a restriction, the interim final rule is exempt from the
                APA's delayed effective date requirement. The reasons previously
                discussed for forgoing prior notice and comment would also separately
                justify this determination.
                 While the Board believes that there is good cause to issue the rule
                without advance notice and comment and with an immediate effective
                date, the Board is interested in the views of the public and requests
                comment on all aspects of the interim final rule.
                B. Congressional Review Act
                 For purposes of the Congressional Review Act, the OMB makes a
                determination as to whether a final rule constitutes a ``major'' rule.
                If a rule is deemed a ``major rule'' by the Office of Management and
                Budget (OMB), the Congressional Review Act generally provides that the
                rule may not take effect until at least 60 days following its
                publication.
                 The Congressional Review Act defines a ``major rule'' as any rule
                that the Administrator of the Office of Information and Regulatory
                Affairs of the OMB finds has resulted in or is likely to result in (A)
                an annual effect on the economy of $100,000,000 or more; (B) a major
                increase in costs or prices for consumers, individual industries,
                Federal, State, or local government agencies or geographic regions, or
                (C) significant adverse effects on competition, employment, investment,
                productivity, innovation, or on the ability of United States-based
                enterprises to compete with foreign-based enterprises in domestic and
                export markets.
                 For the same reasons set forth above, the Board is adopting this
                interim final rule without the delayed effective date generally
                prescribed under the Congressional Review Act. The delayed effective
                date required by the Congressional Review Act does not apply to any
                rule for which an agency for good cause finds (and incorporates the
                finding and a brief statement of reasons therefor in the rule issued)
                that notice and public procedure thereon are impracticable,
                unnecessary, or contrary to the public interest.
                 As required by the Congressional Review Act, the Board will submit
                the final rule and other appropriate reports to Congress and the
                Government Accountability Office for review.
                C. Paperwork Reduction Act
                 The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in
                which an agency by rule creates a new paperwork burden on regulated
                entities or modifies an existing burden (44 U.S.C. 3507(d)). For
                purposes of the PRA, a paperwork burden may take the form of a
                reporting, recordkeeping, or a third-party disclosure requirement,
                referred to as an information collection. The interim final rule will
                not affect any existing or impose any new information collection
                requirements.
                D. Executive Order 13132
                 Executive Order 13132 encourages independent regulatory agencies to
                consider the impact of their actions on state and local interests. The
                NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5),
                voluntarily complies with the executive order to adhere to fundamental
                federalism principles.
                 This interim final rule does not have substantial interim 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. The NCUA has therefore determined
                that this rule does not constitute a policy that has federalism
                implications for purposes of the executive order.
                E. 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.\11\
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                 \11\ Public Law 105-277, 112 Stat. 2681 (1998).
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                F. Regulatory Flexibility Act
                 The Regulatory Flexibility Act (RFA) generally requires that when
                an agency issues a proposed rule or a final rule pursuant to the APA or
                another law, the agency must prepare a regulatory flexibility analysis
                that meets the requirements of the RFA and publish such analysis in the
                Federal Register. Specifically, the RFA normally requires agencies to
                describe the impact of a rulemaking on small entities by providing a
                regulatory impact analysis. For purposes of the RFA, the Board
                considers credit unions with assets less than $100 million to be small
                entities.
                 Rules that are exempt from notice and comment are also exempt from
                the RFA requirements, including conducting a regulatory flexibility
                analysis, when among other things the agency for good cause finds that
                notice and public procedure are impracticable, unnecessary, or contrary
                to the public interest.\12\ Accordingly, the NCUA is not required to
                conduct a regulatory flexibility analysis for the reasons stated above
                relating to the good cause exemption. In addition, this interim final
                rule applies only to FICUs that have or will have $10 billion or more
                in assets as of March 31, 2021. Nevertheless, the Board welcomes
                comments on the effect this interim final rule may have on small
                entities.
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                 \12\ 5 U.S.C. 553(a).
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                List of Subjects
                12 CFR Part 700
                 Credit unions.
                12 CFR Part 702
                 Credit unions, Reporting and recordkeeping requirements.
                12 CFR Part 708a
                 Credit unions, Reporting and recordkeeping requirements.
                12 CFR Part 708b
                 Bank deposit insurance, Credit unions, Reporting and recordkeeping
                requirements.
                12 CFR Part 790
                 Organization and functions (Government agencies).
                 By the NCUA Board on March 18, 2021.
                Melane Conyers-Ausbrooks,
                Secretary of the Board.
                 For the reasons discussed in the preamble, the Board is amending 12
                CFR parts 700, 702, 708a, 708b, and 790 as follows:
                PART 700--DEFINITIONS
                0
                1. The authority citation for part 700 continues to read as follows:
                 Authority: 12 U.S.C. 1752, 1757(6), 1766.
                0
                2. Effective March 23, 2021, in Sec. 700.2, revise the definitions of
                ``Regional Director'' and ``Regional Office'' to read as follows:
                [[Page 15401]]
                Sec. 700.2 Definitions.
                * * * * *
                 Regional Director means the representative of NCUA in the
                designated geographical area in which the office of the federally
                insured credit union is located or, for covered credit unions under
                part 702 of this chapter, the Director of the Office of National
                Examinations and Supervision.
                 Regional Office means the office of NCUA located in the designated
                geographical areas in which the office of the federally insured credit
                union is located or, for covered credit unions under part 702 of this
                chapter, the Office of National Examinations and Supervision.
                * * * * *
                PART 702--CAPITAL ADEQUACY
                0
                3. The authority citation for part 702 continues to read as follows:
                 Authority: 12 U.S.C. 1766(a), 1790d.
                0
                4. Effective January 1, 2022, in Sec. 702.1(c), revise the third
                sentence to read as follows:
                Sec. 702.1 Authority, purpose, scope, and other supervisory
                authority.
                * * * * *
                 (c) * * * Subpart C applies capital planning and stress testing to
                credit unions defined as covered credit unions under Sec. 702.302. * *
                *
                * * * * *
                0
                5. Effective March 23, 2021, revise Sec. 702.2(a) to read as follows:
                Sec. 702.2 Definitions.
                * * * * *
                 (a) Appropriate Regional Director means the director of the NCUA
                Regional Office having jurisdiction over federally insured credit
                unions in the state where the affected credit union is principally
                located or, for covered credit unions under this part, the Director of
                the Office of National Examinations and Supervision.
                * * * * *
                0
                6. Effective March 23, 2021, in Sec. 702.502, revise the definition of
                ``Covered credit union'' to read as follows:
                Sec. 702.502 Definitions.
                * * * * *
                 Covered credit union means a federally insured credit union whose
                assets are $10 billion or more.
                 (1) Timing. A credit union that crosses the asset threshold as of
                March 31 of a given calendar year is subject to the applicable
                requirements of this subpart in the following calendar year.
                 (2) Regulatory relief for 2021 and 2022. If a federally insured
                credit union reaches or crosses an asset size threshold under this
                subpart on March 31, 2021, the NCUA will use the assets the federally
                insured credit union reported on March 31, 2020 for the purpose of
                determining the applicability of those thresholds.
                * * * * *
                PART 708a--BANK CONVERSIONS AND MERGERS
                0
                7. The authority citation for part 708a continues to read as follows:
                 Authority: 12 U.S.C. 1766, 1785(b), and 1785(c).
                0
                8. Effective March 23, 2021, in Sec. 708a.101, revise the second
                sentence of the definition of ``Regional Director'' to read as follows:
                Sec. 708a.101 Definitions.
                * * * * *
                 Regional Director * * * For corporate credit unions and natural
                person credit unions defined as covered credit unions under part 702 of
                this chapter, Regional Director means the director of NCUA's Office of
                National Examinations and Supervision.
                * * * * *
                0
                9. Effective March 23, 2021, in Sec. 708a.301, revise the second
                sentence of the definition of ``Regional Director'' to read as follows:
                Sec. 708a.301 Definitions.
                * * * * *
                 Regional Director * * * For corporate credit unions and natural
                person credit unions defined as covered credit unions under part 702 of
                this chapter, Regional Director means the director of NCUA's Office of
                National Examinations and Supervision.
                * * * * *
                PART 708b--MERGERS OF INSURED CREDIT UNIONS INTO OTHER CREDIT
                UNIONS; VOLUNTARY TERMINATION OR CONVERSION OF INSURED STATUS
                0
                10. The authority citation for part 708b continues to read as follows:
                 Authority: 12 U.S.C. 1752(7), 1766, 1785, 1786, 1789.
                0
                11. Effective March 23, 2021, in Sec. 708b.2, revise the second
                sentence of the definition of ``Regional Director'' to read as follows:
                Sec. 708b.2 Definitions.
                * * * * *
                 Regional Director * * * For corporate credit unions and natural
                person credit unions defined as covered credit unions under part 702 of
                this chapter, Regional Director means the director of NCUA's Office of
                National Examinations and Supervision.
                * * * * *
                PART 790--DESCRIPTION OF NCUA; REQUESTS FOR AGENCY ACTION
                0
                12. The authority citation for part 790 continues to read as follows:
                 Authority: 12 U.S.C. 1766, 1789, 1795f.
                0
                13. Effective March 23, 2021, in Sec. 790.2(c)(2), revise the first
                sentence to read as follows:
                Sec. 790.2 Central and field office organization.
                * * * * *
                 (c)
                 (2) * * * Similar to a Regional Director, the Director of the
                Office of National Examinations and Supervision manages NCUA's
                supervisory program over credit unions; however, it oversees the
                activities for corporate credit unions and of natural person credit
                unions defined as covered credit unions under part 702 of this chapter,
                in accordance with established policies. * * *
                * * * * *
                [FR Doc. 2021-05967 Filed 3-19-21; 4:15 pm]
                BILLING CODE 7535-01-P