Technical Amendments
| Published date | 02 October 2020 |
| Citation | 85 FR 62207 |
| Record Number | 2020-17372 |
| Section | Rules and Regulations |
| Court | National Credit Union Administration |
Federal Register, Volume 85 Issue 192 (Friday, October 2, 2020)
[Federal Register Volume 85, Number 192 (Friday, October 2, 2020)]
[Rules and Regulations]
[Pages 62207-62214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17372]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Parts 700, 701, 702, 704, 705, 707, 708a, 708b, 709, 717,
725, 740, 741, 747, 748, and 750
RIN 3133-AF22
Technical Amendments
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule and final rule; correction.
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SUMMARY: The NCUA Board (Board) is issuing a final rule to make
technical amendments to various provisions of the NCUA's regulations.
These amendments correct minor technical problems and improve clarity.
DATES: The final rule is effective on October 2, 2020, except for the
corrections to the final rule amending 12 CFR part 702, published at 80
FR 66626, which was delayed on November 6, 2018 (83 FR 55467) and
December 17, 2019 (84 FR 68781), which are effective on January 1,
2022.
FOR FURTHER INFORMATION CONTACT: Justin Anderson, Senior Staff
Attorney; Gira Bose, Staff Attorney, Division of Regulations and
Legislation, Office of General Counsel, at 1775 Duke Street,
Alexandria, VA 22314 or telephone: (703) 518-6540.
SUPPLEMENTARY INFORMATION:
I. Background
The Board periodically issues a technical amendments rule
correcting minor typographical errors, inaccurate legal citations, or
superfluous or outdated regulatory provisions throughout the NCUA's
regulations. Because these changes are technical in nature, and do not
affect federally insured credit unions in a substantive manner, the
Board issues these technical amendments rules as final rules without
notice and comment typically required by the Administrative Procedure
Act (APA).\1\ Accordingly, the Board is issuing this final rule to
address those matters.
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\1\ 5 U.S.C. 553(b)(A), (B).
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II. Legal Authority
The Board has the legal authority to issue this final rule pursuant
to its plenary rulemaking authority under the Federal Credit Union Act
(FCU Act) \2\ and its specific rulemaking authority under the various
acts the Board administers.
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\2\ 12 U.S.C. 1766, 1789.
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III. Section-by-Section Analysis
General Wording, Style, and Cross-Reference Changes
The final rule makes general wording, style, and cross-reference
changes throughout the NCUA's regulations. For example, the final rule
corrects various typographical errors. Technical amendments of this
nature will apply throughout the NCUA's regulations. Therefore, the
preamble does not address these types of stylistic changes in the
section-by-section analysis below.
[[Page 62208]]
Parts 700, 701, 702, 704, 705, 707, 708a, 708b, 709, 717, 725, 740,
741, 747, 748, and 750
The final rule amends one of the definitions listed in Sec. 700.2
of the NCUA's regulations that was erroneously changed. The definitions
in part 700 apply throughout chapter VII of title 12 of the Code of
Federal Regulations ``unless the context indicates otherwise.'' \3\ A
``Noninsured credit union'' is currently defined by regulation as ``a
credit union chartered under the laws of any State, the District of
Columbia, the several territories and possessions of the United States,
the Panama Canal Zone, or the Commonwealth of Puerto Rico, whose member
accounts are not insured by NCUA.'' This term mirrors the Federal
Credit Union Act definition.\4\ A final technical amendments rule
issued in 2018 amended several references to ``Non-federally insured
credit unions'' changing them to ``Noninsured credit unions.'' Although
this change conformed the regulatory definition to the statutory
definition, it also inadvertently created internal inconsistencies in
the regulations and created unintended confusion and consequences. The
Board has determined that the erroneous technical amendment issued in
2018 needs to be reversed to correct the inadvertent regulatory
inconsistencies. This will restore clarity that the term ``Non-
federally insured credit unions,'' consistent with the Federal Credit
Union Act, includes credit unions whose member accounts are insured by
agencies or entities other than the NCUA, such as state or private
share insurers, as well as credit unions whose member accounts are not
insured by any party. Accordingly, the final rule makes this change in
Sec. 700.2 and in other parts where the term ``Noninsured credit
union'' currently appears--parts 704, 705, 708b, and 740.
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\3\ 12 CFR 700.2.
\4\ 12 U.S.C. 1752(7).
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Section 701.34 Designation of Low Income Status; Acceptance of
Secondary Capital Accounts by Low-Income Designated Credit Unions
Section 701.34(a)(6) provides the definition of ``median family
income'' and ``total median earnings for individuals'' by referring to
data from the Census Bureau. The current definition points to the
Census Bureau's American FactFinder site with a specific hyperlink. The
Census Bureau no longer houses this data at that specific site.
Accordingly, this final rule replaces the ``FactFinder'' reference with
``American Community Survey'' and provides a more general link to the
Census Bureau's website. This change is not intended to alter the
reliance on Census Bureau data for these statistics.
Appendix B to Part 701--Chartering and Field of Membership Manual
The final rule amends certain provisions to update the NCUA office
responsible for a certain activity. For instance, the Office of Credit
Union Resources and Expansion (CURE) has replaced the Regional Office
as the responsible office at Chapter 1, Section III. The final rule
also updates references to the Regional Offices to reflect the agency's
realignment that was finalized in 2019, as well as an update to the
name of one of the credit union trade associations noted in the
Chartering Manual.
Part 702--Capital Adequacy
In addition to typographical corrections, the final rule includes
corrections to the amendatory instructions from the 2015 final rule on
risk-based capital \5\ to ensure that cross-references to other
provisions that the Board has since been amended will be correctly
reflected in this part when the 2015 final rule goes into effect, as it
is scheduled to do on January 1, 2022.\6\ These corrections do not make
any substantive change to the 2015 final rule.
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\5\ 80 FR 66626 (Oct. 29. 2015).
\6\ See 84 FR 68781 (Dec. 17, 2019).
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Part 704--Corporate Credit Union
Throughout part 704, corporate credit unions are frequently
referred to as ``corporates.'' The final rule amends several sections
in this part to replace ``corporate'' or ``corporates'' with
``corporate credit union'' or ``corporate credit unions'' to avoid
confusion and to be more precise.
In addition, a reference to ``notational principal balance'' has
been corrected to ``notional principal balance.''
Part 707--Truth in Savings
This final rule makes a notable change relating to the model
clauses and forms in appendix B to this part, which addresses Truth in
Savings. Specifically, appendix B refers several times to a chart of
accounts in a specific section of the NCUA's Accounting Manual for
Federal Credit Unions. This publication no longer contains this chart
of accounts, but this chart served as the model for the sample forms.
Accordingly, the final rule adds a statement to this effect in the
prefatory language to this appendix to avoid confusion for those
referring to the current version of the Accounting Manual.
In addition, the final rule redesignates several paragraphs in
appendix C to this part to correct duplicate paragraph numbering that
resulted from prior amendments. This change does not affect or add to
the substance of these provisions. The final rule will also correct
minor wording or typographical errors.
Part 708a--Bank Conversions and Mergers
Section 708a.304 addresses the notice that a credit union must file
with the NCUA within 30 days of its board adopting a proposal to merge.
This provision refers to an asset threshold set by the Federal Trade
Commission (FTC) under the Hart-Scott Rodino Act that triggers a
premerger notification to the FTC. The threshold amount listed in the
current regulation is outdated. Because the FTC will continue to update
this threshold, removing the specific dollar amount from this
regulation will help to avoid confusion or alternatively, the need for
the NCUA to update its regulation each time the FTC updates the
threshold. Credit unions should refer to the FTC's announcements of the
threshold amounts on that agency's website and in the Federal Register.
Part 747--Administrative Actions, Adjudicative Hearings, Rules of
Practice and Procedure, and Investigations
The final rule makes two notable clarifications and updates to this
part. In Sec. 747.0, which sets forth the scope of this part, the
final rule adds a defined term for the Uniform Rules when that subject
is first discussed in order to provide clarity. In Sec. 747.207, which
addresses notices of termination of insured status, the final rule
updates a reference to the standard maximum share insurance amount from
$100,000 to $250,000 to reflect the statutory change that Congress
enacted in 2010.\7\
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\7\ Public Law 111-203, sec. 335(b).
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IV. Regulatory Procedures
Administrative Procedure Act
Generally, the APA requires a Federal agency to provide the public
with notice and an opportunity to comment on agency rulemakings.\8\ The
APA, however, creates an exception in cases where an agency for good
cause determines ``that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public
[[Page 62209]]
interest.'' \9\ Because all of the changes in this final rule involve
only minor, technical amendments to the NCUA's existing regulations,
the Board has determined that notice and comment would be unnecessary
and contrary to the public interest.
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\8\ 5 U.S.C. 553(b).
\9\ Id. at 553(b)(B).
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Furthermore, the APA generally provides that a final rule may not
become effective until at least 30 days after its publication in the
Federal Register unless the agency determines that good cause exists to
dispense with this requirement.\10\ As noted above, given that the rule
does not impose new requirements on federally insured credit unions and
only involves minor, technical amendments to existing regulations, the
Board finds sufficient good cause exists to dispense with the 30-day
effective date requirement. The rule will, therefore, be effective
immediately upon publication.
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\10\ 5 U.S.C. 553(d). For the same reasons, the Board is not
providing the usual 60-day comment period before finalizing this
rule. See NCUA Interpretive Ruling and Policy Statement (IRPS) 87-2,
as amended by IRPS 03-2 and IRPS 15-1. 80 FR 57512 (Sept. 24, 2015),
available at https://www.ncua.gov/files/publications/irps/IRPS1987-2.pdf.
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Regulatory Flexibility Act
The Regulatory Flexibility Act requires the NCUA to prepare an
analysis of any significant economic impact a regulation may have on a
substantial number of small entities (primarily those under $100
million in assets).\11\ As discussed previously, consistent with the
APA,\12\ the Board has determined for good cause that general notice
and opportunity for public comment is unnecessary, and therefore the
Board is not issuing a notice of proposed rulemaking. Rules that are
exempt from notice and comment procedures 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. Accordingly, the Board has concluded that the RFA's
requirements relating to initial and final regulatory flexibility
analysis do not apply.
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\11\ 5 U.S.C. 601-612.
\12\ 5 U.S.C. 553(b)(3)(B).
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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 increases an existing burden.\13\ For purposes of the PRA,
a paperwork burden may take the form of a reporting or recordkeeping
requirement, both referred to as information collections. As the final
rule makes only minor, technical amendments to the NCUA's existing
regulations, the NCUA has determined it does not increase paperwork
requirements under the PRA.
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\13\ 44 U.S.C. 3501-3521.
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Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) provides generally for congressional review of agency
rules.\14\ A reporting requirement is triggered in instances where the
NCUA issues a ``final rule'' as defined by statute.\15\ As required by
SBREFA, the NCUA will submit this rule to the Office of Management and
Budget for it to determine if the final rule is a ``major rule'' for
purposes of SBREFA. The NCUA does not believe the rule is major.
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\14\ 5 U.S.C. 801-808.
\15\ 5 U.S.C. 551, 804.
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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.\16\
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\16\ Public Law 105-277, sec. 654, 112 Stat. 2681, 2681-528
(1998).
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Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests.\17\
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. The final rule does 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. The NCUA
has therefore determined that this final rule does not constitute a
policy that has federalism implications for purposes of the Executive
order.
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\17\ ``Federalism,'' E.O. 13,132 (Aug. 10, 1999).
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List of Subjects
12 CFR Part 700
Credit unions.
12 CFR Part 701
Advertising, Aged, Civil rights, Credit, Credit unions, Fair
housing, Individuals with disabilities, Insurance, Marital status
discrimination, Mortgages, Religious discrimination, Reporting and
recordkeeping requirements, Sex discrimination, Signs and symbols,
Surety bonds.
12 CFR Part 702
Credit unions, Reporting and recordkeeping requirements.
12 CFR Part 704
Credit unions, Reporting and recordkeeping requirements, Surety
bonds.
12 CFR Part 705
Community programs, Credit unions, Grants, Loans, Low income,
Revolving fund.
12 CFR Part 707
Advertising, Credit unions, Reporting and recordkeeping
requirements, Truth in lending.
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 709
Claims, Credit unions.
12 CFR Part 717
Consumer protection, Credit unions, Information, Privacy, Reporting
and recordkeeping requirements.
12 CFR Part 725
Central liquidity facility.
12 CFR Part 740
Advertisements, Credit unions, Share insurance, Signs and symbols.
12 CFR Part 741
Bank deposit insurance, Credit unions, Reporting and recordkeeping
requirements.
12 CFR Part 747
Administrative practice and procedure, Bank deposit insurance,
Claims, Credit unions, Crime, Equal access to justice, Investigations,
Lawyers, Penalties.
12 CFR Part 748
Credit unions, Reporting and recordkeeping requirements, Security
measures.
12 CFR Part 750
Credit unions, Golden parachute payments, Indemnity payments.
[[Page 62210]]
By the National Credit Union Administration Board on June 25,
2020.
Gerard Poliquin,
Secretary of the Board.
Correction
In FR Doc. 2015-26790, appearing on page 66626 in the Federal
Register of Thursday, October 29, 2015, the following corrections are
made:
Sec. 702.1 [Corrected]
0
1. On page 66706, in the third column, revise Sec. 702.1(a) by
removing ``12 U.S.C. 1776'' adding in its place ``12 U.S.C. 1766''.
0
2. On page 66722, in the first column, remove instruction 11.
Sec. 702.305 [Corrected]
0
3. On page 66722, in the first column, correct instruction 12 to read
as follows: ``Amend newly redesignated Sec. 702.305(b)(4) by removing
the citation ``Sec. 702.504'' and adding in its place ``Sec.
702.304''
For the reasons discussed above, the Board is correcting FR Doc.
2015-26790, as set forth above, and amending 12 CFR parts 700, 701,
702, 704, 705, 707, 708a, 708b, 709, 717, 725, 740, 741, 747, 748, and
750 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. Amend Sec. 700.2 by:
0
a. Removing the definition of ``Noninsured credit union''; and
0
b. Adding in alphabetical order the definition of ``Non-federally
insured credit union''.
The addition reads as follows:
Sec. 700.2 Definitions
* * * * *
Non-federally insured credit union means a credit union chartered
under the laws of any State, the District of Columbia, the several
territories and possessions of the United States, the Panama Canal
Zone, or the Commonwealth of Puerto Rico, whose member accounts are not
insured by the NCUA.
* * * * *
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
0
3. The authority citation for part 701 continues to read as follows:
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759,
1761a, 1761b, 1766, 1767, 1782, 1784, 1786, 1787, 1789. Section
701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also
authorized by 15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3610.
Section 701.35 is also authorized by 42 U.S.C. 4311-4312.
Sec. 701.22 [Amended]
0
4. In Sec. 701.22, amend paragraph (e) by removing the citation
``(b)(1)(ii)'' and adding in its place the citation ``(b)(5)(ii)''.
0
5. Amend Sec. 701.34 by revising paragraph (a)(6) to read as follows:
Sec. 701.34 Designation of low income status; Acceptance of secondary
capital accounts by low-income designated credit unions.
* * * * *
(a) * * *
(6) Definitions. The following definitions apply to this section:
Median family income and total median earnings for individuals are
income statistics reported by the U.S. Census Bureau. The applicable
income data can be obtained via the American Community Survey on the
Census Bureau's web page at http://www.census.gov.
Metropolitan area means an area designated by the Office of
Management and Budget pursuant to 31 U.S.C. 1104(d), 44 U.S.C. 3504(c),
and Executive Order 10253 (June 13, 1951) (as amended).
* * * * *
0
6. Amend appendix B to part 701 by revising the first sentence of the
second paragraph under the heading ``III --Subscribers'', Appendix 3,
and Appendix 5 to read as follows:
Appendix B to Part 701--Chartering and Field of Membership Manual
* * * * *
III--Subscribers
* * * * *
Persons interested in organizing a Federal credit union should
contact one of the credit union trade associations or the NCUA
Office of Credit Union Resources and Expansion. * * *
* * * * *
Appendix 3
NCUA Offices
Office of Credit Union Resources and Expansion (CURE)
1775 Duke Street, Alexandria, VA 22314-3428
Phone: 703-518-1150
Fax: 703-518-6672
Email: [email protected]
The Divisions of Consumer Access (East, Central, and West)
within CURE share the responsibility for chartering and field-of-
membership matters, low-income designations, charter conversions,
and bylaw amendments.
Eastern Region--Alexandria
1775 Duke Street, Alexandria, VA 22314-3428
Phone: 703-519-4600
Fax: 703-519-6674
Email: [email protected]
States in the Eastern Region include: Connecticut, Delaware, the
District of Columbia, Maine, Maryland, Massachusetts, Michigan, New
Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island,
Vermont, Virginia, and West Virginia.
Southern Region--Austin
4807 Spicewood Springs Road, Suite 5200, Austin, TX 78759-8490
Phone: 512-342-5600
Fax: 512-342-5620
Email: [email protected]
States in the Southern Region include: Alabama, Arkansas,
Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina, Oklahoma, Tennessee, and Texas, as well as
Puerto Rico and the U.S. Virgin Islands.
Western Region--Tempe
1230 West Washington Street, Suite 301, Tempe, AZ 85281
Phone: 602-302-6000
Fax: 602-302-6024
Email: [email protected]
States in the Western Region include: Alaska, Arizona,
California, Colorado, Hawaii, Idaho, Illinois, Iowa, Kansas,
Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota,
Nevada, Oregon, South Dakota, Utah, Washington, Wisconsin, and
Wyoming, as well as Guam.
* * * * *
Appendix 5
Trades Associations
Credit Union National Association (CUNA)
www.cuna.org
P.O. Box 431, Madison, WI 53701, 800-356-9655
National Association of Federally-Insured Credit Unions (NAFCU)
www.nafcu.org
3138 N 10th Street, Suite 300, Arlington, VA 22201-2149, 800-336-
4644
National Association of State Credit Union Supervisors (NASCUS)
www.nascus.org
1655 North Fort Myer Drive, Suite 650, Arlington, VA 22209, 703-528-
8351
Inclusiv
https://www.inclusiv.org/
39 Broadway, Suite 2140, New York, NY 10006-3063, 212-809-1850
PART 702--CAPITAL ADEQUACY
0
7. The authority citation for part 702 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1790d.
Sec. 702.306 [Amended]
0
8. In Sec. 702.306(a)(1)(i), remove the word ``the-present'' and add,
in its place, the word ``then-present''.
[[Page 62211]]
PART 703--INVESTMENT AND DEPOSIT ACTIVITIES
0
9. The authority citation for part 703 continues to read as follows:
Authority: 12 U.S.C. 1757(7), 1757(8), 1757(15).
0
10. Revise Sec. 703.14(k) to read as follows:
Sec. 703.14 Permissible investments.
* * * * *
(k) Derivatives. A Federal credit union may only enter into the
following derivatives transactions:
* * * * *
Sec. 703.112 [Amended]
0
11. In Sec. 703.112, amend paragraph (a) by removing the word
``fescribed'' and adding, in its place, the word ``described''.
PART 704--CORPORATE CREDIT UNIONS
0
12. The authority citation for part 704 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1781, 1789.
Sec. 704.1 [Amended]
0
13. In Sec. 704.1, amend paragraph (a) by removing in the second
sentence the words ``Noninsured corporate credit unions'' and adding,
in their place, the words ``Non-federally insured corporate credit
unions''.
Sec. 704.4 [Amended]
0
14. Amend Sec. 704.4 by adding the words ``credit union'' after
``corporate'' in the last sentence of paragraph (e)(1)(ii)(5).
Sec. 704.5 [Amended]
0
15. In Sec. 704.5 amend paragraph (e)(4) by adding the words ``credit
union'' after ``corporate'' in the last sentence.
0
16. Amend Sec. 704.6 by revising paragraph (f)(2) to read as follows.
Sec. 704.6 Credit risk management.
* * * * *
(f) * * *
(2) A corporate credit union must identify and monitor any changes
in credit quality of the investment and retain appropriate supporting
documentation as long as the corporate credit union owns the
investment.
* * * * *
0
17. Amend Sec. 704.8 by revising paragraphs (j)(1) and (k) to read as
follows:
Sec. 704.8 Asset and liability management.
* * * * *
(j) Limit breaches. (1)(i) If a corporate credit union's decline in
NEV, base case NEV ratio, or any NEV ratio calculated under paragraph
(d) of this section exceeds established or permitted limits, or the
corporate credit union is unable to satisfy the tests in paragraph (f)
or (g) of this section, the operating management of the corporate
credit union must immediately report this information to its board of
directors and ALCO; and
(ii) If the corporate credit union cannot adjust its balance sheet
to meet the requirements of paragraph (d), (f), or (g) of this section
within 10 calendar days after detection by the corporate credit union,
the corporate credit union must notify in writing the Director of the
Office of National Examinations and Supervision.
* * * * *
(k) Overall limit on business generated from individual credit
unions. On or after April 22, 2013, a corporate credit union is
prohibited from accepting from any member, or any nonmember credit
union, any investment, including shares, loans, PCC, or NCAs if,
following that investment, the aggregate of all investments from that
entity in the corporate credit union would exceed 15 percent of the
corporate credit union's moving daily average net assets.
0
18. Amend Sec. 704.11 by:
0
a. Adding the words ``credit union'' after the second use of the word
``corporate'' in the last sentence of paragraph (b)(2);
0
b. Adding the words ``credit union'' after ``corporate'' in the first
sentence of paragraph (b)(3);
0
c. Adding the word ``from'' between the words ``activity'' and ``the''
in paragraph (e)(2); and
0
d. Revising paragraph (g)(7).
The revision reads as follows:
Sec. 704.11 Corporate Credit Union Service Organizations (Corporate
CUSOs).
* * * * *
(g) * * *
(7) Will inform the corporate credit union, at least quarterly, of
all the compensation paid by the CUSO to its employees who are also
employees of the corporate credit union; and
* * * * *
0
19. Amend Sec. 704.14 by revising paragraphs (a)(4) and (8) to read as
follows:
Sec. 704.14 Representation.
(a) * * *
(4) No individual may be elected or appointed to serve on the board
if, after such election or appointment, any member of the corporate
credit union would have more than one representative on the board of
the corporate credit union;
* * * * *
(8) In the case of a corporate credit union whose membership is
composed of more than 25 percent non-credit unions, the majority of
directors serving as representatives of member credit unions, including
the chair, must be elected only by member credit unions; and
* * * * *
0
20. Revise Sec. 704.19(a) introductory text to read as follows:
Sec. 704.19 Disclosure of executive compensation.
(a) Annual disclosure. A corporate credit union must annually
prepare and maintain a disclosure of the dollar amount of compensation
paid to its most highly compensated employees, including compensation
from any corporate CUSO in which the corporate credit union has
invested or made a loan, in accordance with the following schedule:
* * * * *
Sec. 704.20 [Added and Reserved]
0
21. Add reserved Sec. 704.20.
0
22. Amend Sec. 704.22 by revising paragraph (b) to read as follows:
Sec. 704.22 Membership fees.
* * * * *
(b) The corporate credit union must calculate the fee uniformly for
all members as a percentage of each member's assets, except that the
corporate credit union may reduce the amount of the fee for members
that have contributed capital to the corporate credit union. Any
reduction must be proportional to the amount of the member's
nondepleted contributed capital.
* * * * *
Appendix A to Part 704 [Amended]
0
23. Amend appendix A to part 704 as follows:
0
a. In Part I, add the words ``credit union'' between the words
``corporate'' and ``on'' in the first sentence;
0
b. In Part I, add the words ``credit union'' between the words
``corporate'' and ``before'' in the first sentence;
0
c. In Part II, Model Form C, add the words ``credit union'' after the
word ``corporate'' in the second sentence of paragraph (3); and
0
d. In Part II, Model Form D, add the words ``credit union'' after the
word ``corporate'' in the second sentence of paragraph (3).
[[Page 62212]]
Appendix B to Part 704 [Amended]
0
24. Amend appendix B to part 704 as follows:
0
a. In paragraph titled ``Base-Plus'', add the words ``credit union''
after the word ``corporate'';
0
b. In paragraph (b)(1) of Part III, remove the word ``corporate's'' and
add, in its place, ``corporate credit union's'';
0
c. In paragraph (b)(2) of Part III, add the words ``credit union''
between the words ``corporate'' and ``must'';
0
d. In paragraph (b)(2) of Part III, remove the word ``corporate's'' and
add, in its place, ``corporate credit union's'';
0
e. In paragraph (b)(3) of Part III, add the words ``credit union''
after the word ``corporate'';
0
f. In paragraph (b)(4) of Part III, add the words ``credit union''
between the words ``corporate'' and ``must''; and
0
g. In paragraph (b)(4) of Part III, remove the word ``corporate's'' and
add, in its place, ``corporate credit union's''.
Appendix C to Part 704 [Amended]
0
25. Amend appendix C to part 704 by:
0
a. In Part I, paragraph (b):
0
i. Revising the definition of ``Face amount;'' and
0
ii. Revising paragraph (2) of the definition of ``Qualifying mortgage
loan;''
0
b. In Part II, paragraph (a)(6), in the first sentence, remove the word
``corporate's'' and add, in its place, ``corporate credit union's'';
0
c. In Part II, paragraph (b)(2)(ii), in the last sentence, remove the
word ``or'' and add, in its place, the word ``of''; and
0
d. In Part II, paragraph (c)(3)(i), in the last sentence, remove the
word ``corporate's'' and add, in its place, the words ``corporate
credit union's''.
The revisions read as follows:
Appendix C to Part 704--*
* * * * *
Part I
* * * * *
(b) * * *
Face amount means the notional principal, or face value, amount
of an off-balance sheet item or the amortized cost of an on-balance
sheet asset.
* * * * *
Qualifying mortgage loan * * *
(2) Is underwritten in accordance with prudent underwriting
standards, including standards relating to the ratio of the loan
amount to the value of the property (LTV ratio), as presented in the
Interagency Guidelines for Real Estate Lending Policies (December
31, 1992). A nonqualifying mortgage loan that is paid down to an
appropriate LTV ratio (calculated using value at origination,
appraisal obtained within the prior six months, or updated value
using an automated valuation model) may become a qualifying loan if
it meets all other requirements of this definition;
* * * * *
PART 705--COMMUNITY DEVELOPMENT REVOLVING LOAN FUND ACCESS FOR
CREDIT UNIONS
0
26. The authority citation for part 705 continues to read as follows:
Authority: 12 U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1782,
1784, 1785 and 1786.
Sec. Sec. 705.2 and 705.7 [Amended]
0
27. Amend Sec. Sec. 705.2 and 705.7(b)(3) by removing ``noninsured
credit union'' and adding in its place ``Non-federally insured credit
union''.
PART 707--TRUTH IN SAVINGS
0
28. The authority citation for part 707 continues to read as follows:
Authority: 12 U.S.C. 4311.
0
29. Amend appendix B to part 707 by:
0
a. Adding a paragraph at the end of the introductory text;
0
b. In the note to B-6 Sample Form (REGULAR SHARE ACCOUNT DISCLOSURES),
revising ``Nonfederally'' to read as ``Non-federally'',
0
c. In B-9 ``Sample Form (TERM SHARE (CERTIFICATE) ACCOUNT
DISCLOSURES)'':
0
i. In paragraph 3, removing the word ``minium'' in the first non-
italicized sentence, and adding in its place the word ``minimum''; and
0
ii. In the ``NOTE'' in the last sentence, removing the word ``if'', and
adding in its place, the word ``is''.
The addition reads as follows:
Appendix B to Part 707--Model Clauses and Sample Forms
* * * * *
Note also that certain information that appeared in previous
versions of the NCUA Accounting Manual for FCUs that served as a
model for this appendix do not appear in the current version of that
publication.
* * * * *
0
30. Amend appendix C to part 707 by:
0
a. In Section 707.2:
0
i. Under ``(i) Dividend and Dividends'' revise paragraph 4.D;
0
ii. Under ``(z) Variable-Rate Account'', revise the first sentence of
paragraph 2;
0
b. In Section 707.4,
0
i. Under ``(a)(2)(i)'' revise paragraph (2;
0
ii. Under ``(b)(6)(ii)'' revise paragraph (2)(i);
0
c. In Section 707.7, revise the heading for ``(a)(2)'';
0
d. In Section 707.9, under ``(c)Record retention'', revise paragraph
(1)(ii);
0
e. In Section 707.11, under ``(a)(1) General'':
0
i. Redesignate sections (a)(1)(2) through (a)(1)(6) as (a)(1)(3)
through (a)(1)(7); and
0
ii. redesignate the second section numbered (1) as (2).
The revisions read as follows:
Appendix C to Part 707--Official Staff Interpretations
* * * * *
Section 707.2--Definitions
* * * * *
(i) Dividend and Dividends
* * * * *
4. * * *
D. I further certify that the Board of Directors of this Credit
Union has, and at the time of adoption of this resolution had, full
power and lawful authority to adopt the foregoing resolutions and
that this resolution revokes any prior resolution.
* * * * *
(z) Variable-Rate Account
* * * * *
2. Differences between fixed-rate and variable-rate accounts.
All accounts must either be fixed-rate or variable-rate accounts.
Classifying an account as variable-rate affects credit unions three
ways:
* * * * *
Section 707.4--Account Disclosures
* * * * *
(a)(2) Requests
(a)(2)(i)
* * * * *
2. General requests. When members or potential members request
disclosures about a type of account (a share draft account, for
example), a credit union that offers several variations may provide
disclosures for any one of them. No disclosures need be made to
nonmembers, though a credit union may provide disclosures to
nonmembers within its sole discretion.
* * * * *
(b) Content of Account Disclosures
* * * * *
(b)(6)(ii) Early Withdrawal Penalties
* * * * *
2. * * *
i. Monetary penalties, such as a specific dollar amount (e.g.,
``$10.00'') or a specific days' worth of dividends (e.g., ``seven
days' dividends plus accrued but uncredited dividends, but only if
the account is closed'').
* * * * *
Section 707.7--Payment of Dividends
* * * * *
(a2) Determination of Minimum Balance To Earn Dividends
* * * * *
[[Page 62213]]
Section 707.9--Enforcement and Record Retention
(c) Record retention
* * * * *
ii. Retained sample disclosures for each type of account offered
to members, such as account-opening disclosures, copies of
advertisements, and change-in-term notices; and information
regarding the dividend rates and annual percentage yields offered.
* * * * *
PART 708a--BANK CONVERSIONS AND MERGERS
0
31. The authority citation for part 708a continues to read as follows:
Authority: 12 U.S.C. 1766, 1785(b), 1785(c).
Sec. 708a.304 [Amended]
0
36. In Sec. 708a.304(a)(13), remove the words ``currently $63.4
million,''.
PART 708b--MERGERS OF INSURED CREDIT UNIONS INTO OTHER CREDIT
UNIONS; VOLUNTARY TERMINATION OR CONVERSION OF INSURED STATUS
0
32. The authority citation for part 708b continues to read as follows:
Authority: 12 U.S.C. 1752(7), 1766, 1785, 1786, 1789.
0
33. Throughout part 708b, remove the terms ``nonfederal'',
``noninsured'', ``noninsured credit union'', and ``noninsured state
credit union'' and add in their place ``non-Federal'', ``non-federally
insured'', ``Non-federally insured credit union'', and ``Non-federally
insured credit union'', respectively.
Sec. 708b.1 [Amended]
0
34. Amend Sec. 708b.1 as follows:
0
a. In paragraph (a), remove the word ``partprescribes'', and, add in
its place, the phrase ``part prescribes''.
0
b. In paragraph (b), remove the word ``partprescribes'', and, add in
its place, the phrase ``part prescribes''.
0
c. In paragraph (d), remove the word ``partrestricts'', and, add in its
place, the phrase ``part restricts''.
Sec. 708b.205 [Amended]
0
35. In Sec. 708b.205 amend paragraph (c) by removing the word
``state'' and adding, in its place, ``state-chartered''.
PART 709--INVOLUNTARY LIQUIDATION OF FEDERAL CREDIT UNIONS AND
ADJUDICATION OF CREDITOR CLAIMS INVOLVING FEDERALLY INSURED CREDIT
UNIONS IN LIQUIDATION
0
36. The authority citation for part 709 continues to read as follows:
Authority: 12 U.S.C. 1757, 1766, 1767, 1786(h), 1786(t), and
1787(b)(4), 1788, 1789, 1789a.
Sec. 709.8 [Amended]
0
37. In Sec. 709.8 amend paragraph (f) by in the first sentence, adding
the word ``is'' between the words ``request'' and ``filed''.
Sec. 709.9 [Amended]
0
38. In Sec. 709.9 amend paragraph (b)(5)(ii)(B) by, in the last
sentence, removing the word ``all'' after the word ``existing''.
PART 717--FAIR CREDIT REPORTING
0
39. The authority citation for part 717 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1789; 15 U.S.C. 1681m(e).
Sec. 717.82 [Amended]
0
40. In Sec. 717.82(a), add the word ``a'' between words ``is'' and
``federal''.
PART 725--NATIONAL CREDIT UNION ADMINISTRATION CENTRAL LIQUIDITY
FACILITY
0
41. The authority citation for part 725 continues to read as follows:
Authority: 12 U.S.C. 1795f(a)(2).
Sec. 725.4 [Amended]
0
42. Amend Sec. 725.4 as follows:
0
a. In paragraph (b)(4), add the word ``the'' between the words ``of''
and ``Facility''; and
0
b. In paragraph (e), remove the word ``agent'' and add in its place
``Agent'' in the first sentence.
Sec. 725.18 [Amended]
0
43. In Sec. 725.18(c), in the first sentence, add a closing quotation
mark after the word ``insolvency''.
PART 740--ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS
0
44. The authority citation for part 740 continues to read as follows:
Authority: 12 U.S.C. 1766, 1781, 1785, and 1789.
0
45. Throughout part 740, remove the term ``nonfederally'' and add in
its place the word ``Non-federally''.
0
46. Revise Sec. 740.5(c)(6) to read as follows:
Sec. 740.5 *.
* * * * *
(c) * * *
(6) Joint or group advertisements of credit union services where
the names of federally insured credit unions and Non-federally insured
credit unions are listed and form a part of such advertisement;
* * * * *
PART 741--REQUIREMENTS FOR INSURANCE
0
47. The authority citation for part 741 continues to read as follows:
Authority: 12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31
U.S.C. 3717.
Sec. 741.4 [Amended]
0
48. In Sec. Sec. 741.4(i)(2) and (j)(1), remove the word
``nonfederally'' and add in its place the word ``non-federally''.
Sec. 741.204 [Amended]
0
49. In Sec. 741.204(c), add the word ``union'' after the word
``credit'' in the first sentence the first time that word appears.
PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF
PRACTICE AND PROCEDURE, AND INVESTIGATIONS
0
50. The authority citation for part 747 continues to read as follows:
Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a,
1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L.
104-134; Pub. L. 109-351; Pub. L. 114-74.
Sec. 747.0 [Amended]
0
51. In Sec. 747.0, in the second sentence, add the words ``(Uniform
Rules)'' after the words ``uniform rules of practice and procedure''.
Sec. 747.29 [Amended]
0
52. In Sec. 747.29(a)(2), remove the word ``part'' and add in its
place the word ``party''.
Sec. 747.207 [Amended]
0
53. In Sec. 747.207, amend paragraph 3 of the sample notice, by
removing ``$100,000'' and adding, in its place, ``$250,000'';
Sec. 747.306 [Amended]
0
54. In Sec. 747.306(b), in the first sentence, remove the words
``state with'' the second time they appear;
[[Page 62214]]
Sec. 747.402 [Amended]
0
55. In Sec. 747.402(b), remove the word ``or'' between the words
``dissipation'' and ``credit'' and add in its place the word ``of''.
PART 748--SECURITY PROGRAM, REPORT OF SUSPECTED CRIMES, SUSPICIOUS
TRANSACTIONS, CATASTROPHIC ACTS AND BANK SECRECY ACT COMPLIANCE
0
56. The authority citation for part 748 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1786(q); 15 U.S.C. 6801-6809; 31
U.S.C. 5311 and 5318.
Appendix B to Part 748 [Amended]
0
57. Amend appendix B to part 748 as follows:
0
a. In footnote 34, remove the word ``identify'' and add, in its place,
the word ``identity'';
0
b. In footnote 39, remove the word ``Suspiciouis'' and add, in its
place, the word ``Suspicious''; and
0
c. In footnote 39, remove the word ``Isues'' and add, in its place, the
word ``Issues''.
PART 750--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS
0
58. The authority citation for part 750 continues to read as follows:
Authority: 12 U.S.C. 1786(t).
Sec. 750.5 [Amended]
0
59. In Sec. 750.5(a)(3), add a space between the word ``in'' and
``Sec. 750.1(j)''.
Sec. 750.6 [Amended]
0
60. In Sec. 750.6(a), in the first sentence, add a space between the
word ``to'' and ``Sec. 750.1(d)(2)(v)''.
[FR Doc. 2020-17372 Filed 10-1-20; 8:45 am]
BILLING CODE 7535-01-P
