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