[Federal Register Volume 66, Number 81 (Thursday, April 26, 2001)]
[Proposed Rules]
[Pages 20945-20946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10306]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 66, No. 81 / Thursday, April 26, 2001 / 
Proposed Rules  

[[Page 20945]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 701


Organization and Operations of Federal Credit Unions

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule relaxes certain provisions in NCUA's 
regulations for advertising and posting notice of nondiscrimination in 
real estate-related lending. Currently, the regulations provide that a 
federal credit union (FCU) must include notice of nondiscrimination 
through use of a particular logotype and specified language. The 
proposed rule will provide an FCU with more flexibility in how it gives 
notice when advertising. The current regulations also require the 
display inside the FCU of an NCUA-developed poster giving notice of 
nondiscrimination compliance. The proposed rule will allow an FCU to 
display either the NCUA poster or a similar poster prepared by the 
United States Department of Housing and Urban Development. The proposed 
rule also prohibits advertising with words, symbols, models, or other 
forms of communication that suggest a discriminatory preference or 
policy of exclusion in violation of the Fair Housing Act or the Equal 
Credit Opportunity Act.

DATES: Comments must be received on or before June 25, 2001.

ADDRESSES: Send comments to Becky Baker, Secretary to the NCUA Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428. You may also fax comments to (703) 837-2914, or e-
mail comments to [email protected]. Please send comments by one 
method only.

FOR FURTHER INFORMATION CONTACT: Paul M. Peterson, Staff Attorney, 
Office of General Counsel, National Credit Union Administration, 1775 
Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-
6555.

SUPPLEMENTARY INFORMATION:

Background

    The Fair Housing Act generally prohibits discrimination in 
connection with the sale or rental of residential dwellings. 42 U.S.C. 
3601-3619. With regard to advertising, the Fair Housing Act provides 
that it is unlawful:

    To make, print, or publish, or cause to be made, printed, or 
published any notice, statement, or advertisement, with respect to 
the sale or rental of a dwelling that indicates any preference, 
limitation, or discrimination based on race, color, religion, sex, 
handicap, familial status, or national origin, or an intention to 
make any such preference, limitation, or discrimination.

42 U.S.C. 3604(c). The Department of Housing and Urban Development 
(HUD) is charged with the administration and enforcement of the Fair 
Housing Act. 42 U.S.C. 3608, 3612. HUD has developed guidelines for 
compliance with the Fair Housing Act's requirement for 
nondiscrimination in advertising. On the issue of affirmative notice of 
nondiscrimination compliance, HUD states that:

    All advertising of residential real estate * * * financing 
should contain an equal housing logotype, statement, or slogan as a 
means of educating the homeseeking public that the property is 
available to all persons regardless of race, color, religion, sex, 
national origin, [handicap, or familial status]. The choice of 
logotype, statement, or slogan will depend on the type of media used 
(visual or auditory) and, in space advertising, on the size of the 
advertisement.

24 CFR 109.30(a) (1995). HUD removed this part 109 and the guidance it 
contained from the Code of Federal Regulations in 1996. 61 FR 14378, 
April 1, 1996. Nevertheless, HUD still considers the information in 
part 109, including the notice provision, to be current guidance.
    The NCUA Board implements this notice provision for FCUs in 
Sec. 701.31(d)(1). The current Sec. 701.31(d)(1) requires use of one, 
particular logotype and legend in written and visual advertisements and 
one, particular phrase in oral advertisements. The Board has determined 
that the current Sec. 701.31(d)(1) is less flexible than the Fair 
Housing Act and associated HUD guidance require. The Board proposes to 
replace the mandatory logotype and language with a general requirement 
that FCUs, when advertising real estate-related lending, indicate that 
they do not discriminate on any prohibited basis. The proposed rule 
also provides FCUs with various ``safe harbor'' methods to satisfy this 
notice requirement. The proposed safe harbor methods are not mandatory. 
FCUs would be free to use any reasonable method to satisfy the 
requirement.
    Since 1972, HUD has also required that every entity subject to the 
Fair Housing Act display on its premises a poster containing specific 
nondiscrimination language. 24 CFR 110.15; 37 FR 3429, February 16, 
1972. HUD permits Federal financial regulatory agencies to substitute a 
different poster. 24 CFR 110.25(b). In 1989, NCUA obtained HUD approval 
for the version NCUA currently requires FCUs to display. 12 CFR 
701.31(d)(2), (3); 54 FR 21963, May 22, 1989. The proposed rule would 
permit FCUs to display either the NCUA version or the HUD version of 
the poster.
    The proposed rule is similar to the Federal Deposit Insurance 
Corporation's nondiscrimination in advertising rule. 12 CFR 338.3. 
Consistent with the FDIC rule, the proposed rule will prohibit 
advertising with words, symbols, models, or other forms of 
communication that suggest a discriminatory preference or policy of 
exclusion in violation of the Fair Housing Act or the Equal Credit 
Opportunity Act. 12 CFR 338.3(b), 12 U.S.C. 1691-1691f.

Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires the NCUA to prepare an 
analysis to describe any significant economic effect any regulation may 
have on a substantial number of small credit unions, meaning those 
under one million dollars in assets. The NCUA Board has determined and 
certifies that the final rule will not have a significant economic 
impact on a substantial number of small credit unions. Accordingly, the 
NCUA Board has determined that a regulatory flexibility analysis is not 
required.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to

[[Page 20946]]

consider the impact of their actions on state and local interests. In 
adherence to fundamental federalism principles, NCUA, an independent 
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies 
with the executive order. This proposed rule, if adopted, will apply 
only to federally-chartered credit unions. It will 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. NCUA has 
determined that this proposal does not constitute a policy that has 
federalism implications for purposes of the executive order.

Paperwork Reduction Act

    NCUA has determined that the proposed rule does not increase 
paperwork requirements under the Paperwork Reduction Act of 1995 and 
regulations of the Office of Management and Budget.

The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 
2681 (1998).

Agency Regulatory Goal

    NCUA's goal is to promulgate clear and understandable regulations 
that impose minimal regulatory burden. We request your comments on 
whether the proposed rule is understandable and minimally intrusive if 
implemented as proposed.

List of Subjects in 12 CFR Part 701

    Credit unions, Fair housing, Signs and symbols.

    By the National Credit Union Administration Board on April 19, 
2001.
Becky Baker,
Secretary of the Board.
    For the reasons stated in the preamble, the National Credit Union 
Administration proposes to amend 12 CFR part 701 as set forth below:

PART 701--ORGANIZATION AND OPERATIONS OF FEDERAL CREDIT UNIONS

    1. The authority citation for part 701 continues to read as 
follows:

    Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1759, 1761a, 
1761b, 1766, 1767, 1782, 1784, 1787, and 1789. Section 701.6 is also 
authorized by 31 U.S.C. 3717. Section 701.31 is also authorized by 
15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3619. Section 701.35 
is also authorized by 42 U.S.C. 4311-4312.
    2. In Sec. 701.31, revise paragraph (d) introductory text, 
paragraphs (d)(1) and (d)(2) to read as follows:


Sec. 701.31  Nondiscrimination requirements.

* * * * *
    (d) Nondiscrimination in advertising. No federal credit union may 
engage in any form of advertising of real estate-related loans that 
indicates the credit union discriminates on the basis of race, color, 
religion, national origin, sex, handicap, or familial status in 
violation of the Fair Housing Act. Advertisements must not contain any 
words, symbols, models or other forms of communication that suggest a 
discriminatory preference or policy of exclusion in violation of the 
Fair Housing Act or the Equal Credit Opportunity Act.
    (1) Advertising notice of nondiscrimination compliance. Any federal 
credit union that advertises real estate-related loans must prominently 
indicate in such advertisement, in a manner appropriate to the 
advertising medium and format used, that the credit union makes such 
loans without regard to race, color, religion, national origin, sex, 
handicap, or familial status.
    (i) With respect to written and visual advertisements, a credit 
union may satisfy the notice requirement by including in the 
advertisement a copy of the logotype, with the legend ``Equal Housing 
Lender,'' from the poster described in paragraph (d)(3) of this section 
or a copy of the logotype, with the legend ``Equal Housing 
Opportunity,'' from the poster described in Sec. 110.25(a) of the 
United States Department of Housing and Urban Development's (HUD) 
regulations (24 CFR 110.25(a)).
    (ii) With respect to oral advertisements, a credit union may 
satisfy the notice requirement by a spoken statement that the credit 
union is an ``Equal Housing Lender'' or an ``Equal Opportunity 
Lender.''
    (iii) When an oral advertisement is used in conjunction with a 
written or visual advertisement, the use of either of the methods 
specified in paragraphs (d)(1)(i) or (ii) of this section will satisfy 
the notice requirement.
    (iv) A credit union may use any other method reasonably calculated 
to satisfy the notice requirement.
    (2) Lobby notice of nondiscrimination. Every federal credit union 
that engages in real estate-related lending must display a notice of 
nondiscrimination. The notice must be placed in the public lobby of the 
credit union and in the public area of each office where such loans are 
made and must be clearly visible to the general public. The notice must 
incorporate either a facsimile of the logotype and language appearing 
in paragraph (d)(3) of this section or the logotype and language 
appearing at 24 CFR 110.25(a). Posters containing the logotype and 
language appearing in paragraph (d)(3) of this section may be obtained 
from the regional offices of the National Credit Union Administration.
* * * * *
[FR Doc. 01-10306 Filed 4-25-01; 8:45 am]
BILLING CODE 7535-01-U