[Federal Register Volume 66, Number 182 (Wednesday, September 19, 2001)]
[Rules and Regulations]
[Pages 48206-48207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23288]


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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; lifting mandatory compliance date.

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SUMMARY: On June 21, 2001, NCUA published an interim final rule with 
request for comments amending its regulation that implements the Truth 
in Savings Act (TISA). The rule established uniform standards for the 
electronic delivery of disclosures required by TISA. NCUA established 
October 1, 2001 as the mandatory compliance date for the rule. As a 
result of concerns raised by commenters, NCUA is considering revising 
the rule to provide additional flexibility. Accordingly, NCUA is 
lifting the mandatory compliance date. Once a permanent final rule is 
issued, NCUA will afford credit unions a reasonable period of time to 
comply with the rule.

DATE: The mandatory compliance date of October 1, 2001 for the interim 
final rule published at 66 FR 33159 (June 21, 2001) is lifted.

FOR FURTHER INFORMATION CONTACT: Frank S. Kressman, Staff Attorney, at 
the above address or telephone: (703) 518-6540.

SUPPLEMENTARY INFORMATION:

A. 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 accounts offered by credit unions and 
other financial institutions. 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.

[[Page 48207]]

Many of these disclosures must be written.
    In April 2001, The Board of Governors of the Federal Reserve System 
(Federal Reserve) issued an interim rule amending its Regulation DD, 
which implements TISA (April 2001 Interim Rule). 66 FR 17795 (April 4, 
2001). That rule established uniform standards for the timing and 
electronic delivery of disclosures required by TISA and Regulation DD, 
and addressed electronic advertisements.
    TISA requires NCUA to promulgate regulations substantially similar 
to those promulgated by the Federal Reserve within 90 days of the 
effective date of the Federal Reserve's rules. 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. In compliance with TISA, NCUA published an interim final rule 
with request for comments in June 2001 that is substantially similar to 
the Federal Reserve's April 2001 Interim Rule. 66 FR 33159 (June 21, 
2001).

B. Lifting the Mandatory Compliance Date

    In August 2001, the Federal Reserve issued an interim final rule 
that lifted the October 1, 2001 mandatory compliance date. This enables 
the Federal Reserve to address concerns noted by commenters regarding 
operational issues raised by the April 2001 Interim Rule. Accordingly, 
to fulfill our statutory obligation under TISA, the NCUA is also 
lifting the October 1, 2001 mandatory compliance date.
    Credit unions may continue to provide electronic disclosures under 
their existing policies and practices if they comply with the 
Electronic Signatures in Global and National Commerce Act (E-Sign Act), 
as discussed more fully below, or they may follow the interim rule 
issued by NCUA in June 2001, until the NCUA issues a permanent rule.

C. Withdrawal of the 1999 Interim Rule Unaffected

    The E-Sign Act was enacted in June 2000, to encourage the continued 
expansion of electronic commerce. It generally provides that electronic 
documents and signatures have the same validity as paper documents and 
handwritten signatures. It provides that consumer disclosures may be 
provided in electronic form only if the consumer affirmatively consents 
after receiving information specified in the statute. The consumer 
consent provisions in the E-Sign Act became effective October 1, 2000. 
In September 1999, before enactment of the E-Sign Act, the Federal 
Reserve issued an interim rule that also amended Regulation DD 
(September 1999 Interim Rule), but did not specify the manner or form 
of consumer's consent to electronic disclosures. 64 FR 49846 (September 
14, 1999). With the issuance of the April 2001 Interim Rule, which sets 
forth the general rule that an institution subject to Regulation DD may 
provide disclosures electronically only if the institution complies 
with Sec. 101(c) of the E-Sign Act, the Federal Reserve has withdrawn 
the September 1999 Interim Rule. The lifting of the October 1, 2001 
mandatory compliance date has no effect on the withdrawal of the 
September 1999 Interim Rule.

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 recently promulgated by 
the Federal Reserve. Additionally, as discussed above, NCUA is 
statutorily required to issue rules substantively similar to those of 
the Federal Reserve within 90 days of the effective date 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 will be effective immediately 
and without 30 days advance notice of publication.

Regulatory Procedures

Regulatory Flexibility Act
    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact agency rulemaking may have 
on a substantial number of small credit unions. For purposes of this 
analysis, credit unions under $1 million in assets are considered small 
credit unions.
    This interim final rule provides credit unions with the flexibility 
of voluntarily using an optional and alternative method of delivering 
certain required disclosures. Credit unions are free to choose not to 
utilize this alternative. Credit unions that choose to use this 
alternative will likely realize a reduction in their costs of delivery 
as a result. The NCUA has determined and certifies that this interim 
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
    NCUA has determined that these amendments to part 707 do not 
increase paperwork requirements under the Paperwork Reduction Act of 
1995 and regulations of the Office of Management and Budget.
Executive Order 13132
    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their regulatory 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 interim final rule 
applies to all federally-insured credit unions, but does not have 
substantial 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 final rule does not constitute a policy 
that has federalism implications for purposes of the executive order.
Assessment of Federal Regulations and Policies on Families
    NCUA has determined that this 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).
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 
Procedure Act. 5 U.S.C. 551. The Office of Management and Budget has 
determined that this rule is not 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 September 
13, 2001.
Becky Baker,
Secretary of the Board.
[FR Doc. 01-23288 Filed 9-18-01; 8:45 am]
BILLING CODE 7535-01-U