Credit unions: Truth in Savings Act Indoor lobby signs, disclosure requirements for share accounts, civil liability, etc.,
[Federal Register: June 21, 1999 (Volume 64, Number 118)]
[Rules and Regulations]
[Page 33009-33010]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jn99-2]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 707
Truth in Savings
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule.
SUMMARY: The NCUA is adopting as a final rule without change the interim final amendments to part 707 issued by NCUA on December 29, 1998. Those amendments implemented certain statutory changes to the Truth in Savings Act (TISA). Specifically, they modified the rules governing indoor lobby signs, eliminated subsequent disclosure requirements for automatically renewable term share accounts with terms of one month or less, repealed TISA's civil liability provisions as of September 30, 2001, and permitted disclosure of an annual percentage yield (APY) equal to the contract dividend rate for term share accounts with maturities greater than one year that do not compound but require dividend distributions at least annually.
DATES: This rule is effective July 21, 1999.
FOR FURTHER INFORMATION CONTACT: Frank S. Kressman, Staff Attorney, Division of Operations, Office of General Counsel, at the above address or telephone: (703) 518-6540.
SUPPLEMENTARY INFORMATION:
Background
On December 29, 1998, the NCUA Board issued an interim final rule with request for comments amending part 707 of NCUA's regulations regarding truth in savings. 63 FR 71573 (December 29, 1998). Part 707 implements TISA. 12 CFR part 707. The purpose of part 707 and TISA is to assist members in making meaningful comparisons among share accounts offered by credit unions. Part 707 requires disclosure of fees, dividend rates, APY, and other terms concerning share accounts to members at account opening or whenever a member requests this information. Fees and other information also must be provided on any periodic statement credit unions send to their members.
TISA requires NCUA to promulgate regulations substantially similar to those promulgated by the Board of Governors of the Federal Reserve System (Federal Reserve). 12 U.S.C. 4311(b). In doing so, NCUA is to take into account the unique nature of credit unions and the limitations under which they may pay dividends on member accounts.
The Federal Reserve issued final rules to implement certain statutory changes to TISA. One of these rules expanded an exemption from certain advertising provisions for signs on the interior of depository institutions, eliminated the requirement that depository institutions provide disclosures in advance of maturity for automatically renewable (rollover) accounts with a term of one month or less, and repealed TISA's civil liability provisions, effective September 30, 2001. 63 FR 52105 (September 29, 1998). The Federal Reserve also promulgated a final rule to permit depository institutions to disclose an APY equal to the contract interest rate for time accounts with maturities greater than one year that do not compound but require interest distributions at least annually. 63 FR 40635 (July 30, 1998). The interim final rule issued by NCUA on December 29, 1998 is substantially similar to the above rules issued by the Federal Reserve.
Summary of Comments
The NCUA Board received two comment letters regarding the interim final rule from credit union trade associations. Both commenters generally supported the interim final rule as drafted.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact any proposed regulation may have on a substantial number of small entities (primarily those under $1 million in assets). The NCUA has determined and certifies that this final rule will not have a significant economic impact on a substantial number of small credit unions. Accordingly, the NCUA has determined that a Regulatory Flexibility Analysis is not required.
Paperwork Reduction Act
This final rule has no net effect on the reporting requirements in part 707.
Executive Order 12612
Executive Order 12612 requires NCUA to consider the effect of its actions on state interests. It states that: ``Federal action limiting the policy-
[[Page 33010]]
making discretion of the states should be taken only where constitutional authority for the action is clear and certain, and the national activity is necessitated by the presence of a problem of national scope.'' This final rule will not have a direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this final rule does not constitute a significant regulatory action for purposes of the executive order.
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) 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 Administrative Procedures Act. 5 U.S.C. 551. The Office of Management and Budget has reviewed this rule and has determined that for purposes of the Small Business Regulatory Enforcement Fairness Act of 1996 this is not a major rule.
List of Subjects in 12 CFR Part 707
Advertising, Consumer protection, Credit unions, Reporting and recordkeeping requirements, Truth in savings.
By the National Credit Union Administration Board on June 14, 1999. Becky Baker, Secretary of the Board.
PART 707--TRUTH IN SAVINGS
Accordingly, the interim final rule amending 12 CFR part 707 which was published at 63 FR 71573 on December 29, 1998, is adopted as a final rule without change.
[FR Doc. 99-15649Filed6-18-99; 8:45 am]
BILLING CODE 7535-01-U
