[Federal Register Volume 64, Number 227 (Friday, November 26, 1999)]
[Rules and Regulations]
[Pages 66355-66356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30691]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 227 / Friday, November 26, 1999 / 
Rules and Regulations  

[[Page 66355]]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 707


Truth in Savings

AGENCY: National Credit Union Administration (NCUA).

ACTION: Interim final rule with request for comments.

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SUMMARY: NCUA is amending its regulations that implement the Truth in 
Savings Act (TISA). This interim rule allows credit unions to deliver 
in electronic form periodic statement disclosures required by NCUA's 
regulations if the member agrees to this form of delivery.

DATES: This rule is effective November 26, 1999. Comments must be 
received on or before January 25, 2000.

ADDRESSES: Comments should be directed to Becky Baker, Secretary of the 
Board. Mail or hand-deliver comments to: National Credit Union 
Administration, 1775 Duke Street, Alexandria, VA 22314-3428. You may 
also fax comments to (703) 518-6319 or e-mail comments to 
[email protected]. Please send comments by one method only.

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

    Part 707 of NCUA's regulations 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 and TISA require, among other things, disclosure of yields, 
fees and other terms concerning share accounts to members at account 
opening, upon request, when changes in terms occur and in periodic 
statements. Many of these disclosures must be written. Many laws that 
require information to be in writing consider information in electronic 
form to be written. Information produced, stored, or communicated by 
computer is also generally considered to be a writing, where visual 
text is involved.
    The Board of Governors of the Federal Reserve System (Federal 
Reserve) has issued an interim rule that allows depository institutions 
to deliver periodic statement disclosures required by its Regulation DD 
in electronic form if the consumer agrees to this form of delivery. 64 
FR 49846 (September 14, 1999). In doing so, the Federal Reserve has 
stated that electronic delivery of these kind of disclosures will 
reduce paperwork and costs for institutions and may benefit consumers 
by allowing them to receive their periodic account statements, 
including required disclosures, more quickly and in a more convenient 
form.
    The Federal Reserve's interim rule does not permit a depository 
institution to deliver periodic statement disclosures electronically 
unless the consumer agrees to this method of delivery, but does not 
specifically discuss what constitutes a valid agreement between the 
consumer and depository institution. The Federal Reserve has stated 
that whether the parties have an agreement would be determined by state 
law, but does not intend to require a formal contract. It has also 
stated that consumers should be clearly informed when they are 
consenting to electronic delivery of periodic statements and 
disclosures. The Federal Reserve has further stated that the periodic 
statement must be provided in a form that can be displayed as visual 
text and must be clear and conspicuous and in a form that the consumer 
can retain.
    The Federal Reserve's interim rule applies only to periodic 
statement disclosures. Other disclosures required by TISA and 
Regulation DD may not be delivered in electronic form. The Federal 
Reserve, however, has issued a proposal addressing electronic delivery 
of these other disclosures. 64 FR 49740 (September 14, 1999).
    TISA requires NCUA to promulgate regulations substantially similar 
to those promulgated by the 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. NCUA's interim rule is substantially similar to that issued 
by the Federal Reserve.

Interim Final Rule

    The NCUA Board is issuing this rule as an interim final rule 
because there is a strong public interest in having in place consumer 
oriented rules that are consistent with those promulgated by the 
Federal Reserve. Additionally, NCUA is required to issue rules 
substantially similar to those issued by the Federal Reserve within 
ninety days of the effective dates of the Federal Reserve's rules. 
Accordingly, for good cause, the Board finds that, pursuant to 5 U.S.C. 
553(b)(3)(B), notice and public procedures are impracticable, 
unnecessary, and contrary to the public interest; and, pursuant to 5 
U.S.C. 553(d)(3), the rule shall be effective immediately and without 
30 days advance notice of publication. Although the rule is being 
issued as an interim final rule and is effective immediately, the NCUA 
Board encourages interested parties to submit comments.

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 credit unions, meaning those 
under $1 million in assets.
    The NCUA has determined and certifies that this interim rule will 
not have a significant economic impact on a substantial number of small 
credit unions. The reason for this determination is that the amendments 
to part 707 provide credit unions with an optional and alternative 
method of delivering certain required disclosures. Credit unions are 
free to choose not to utilize this alternative. Other credit unions, 
who choose to use this alternative, will likely realize a reduction in 
their costs of delivery as a result. Accordingly, the NCUA has 
determined that a Regulatory Flexibility Analysis is not required.

Paperwork Reduction Act

    NCUA has determined that the amendments to part 707 do not increase

[[Page 66356]]

paperwork requirements under the Paperwork Reduction Act of 1995 and 
regulations of the Office of Management and Budget.

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-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 interim 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 interim 
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 is 
reviewing this rule. We are awaiting its determination whether this is 
a major rule for purposes of the Small Business Regulatory Enforcement 
Fairness Act of 1996.

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 November 
18, 1999.
Becky Baker,
Secretary of the Board.

    For the reasons set forth above, 12 CFR part 707 is amended as 
follows:

PART 707--TRUTH IN SAVINGS

    1. The authority citation for part 707 continues to read as 
follows:

    Authority: 12 U.S.C. 4311.

    2. Section 707.6 is amended by revising the heading and adding a 
new paragraph (c) to read as follows:


Sec. 707.6  Periodic statement disclosures.

* * * * *
    (c) Electronic communication. (1) Definition. The term ``electronic 
communication'' means a message transmitted electronically between a 
member and a credit union in a format that allows visual text to be 
displayed on equipment such as a personal computer monitor.
    (2) Electronic communication between credit union and member. A 
credit union and a member may agree that the credit union will send by 
electronic communication periodic statement disclosures required by 
Sec. 707.6. Periodic statement disclosures sent by electronic 
communication to a member must comply with Sec. 707.3 and any 
applicable timing requirements contained in this part.

[FR Doc. 99-30691 Filed 11-24-99; 8:45 am]
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