[Federal Register Volume 64, Number 118 (Monday, June 21, 1999)]
[Rules and Regulations]
[Pages 33009-33010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15649]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 707


Truth in Savings

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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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of one month or less, repealed TISA's civil liability provisions as of 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. 99-15649 Filed 6-18-99; 8:45 am]
BILLING CODE 7535-01-U