[Federal Register Volume 66, Number 182 (Wednesday, September 19, 2001)]
[Rules and Regulations]
[Pages 48205-48206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23289]



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  Federal Register / Vol. 66, No. 182 / Wednesday, September 19, 2001 / 
Rules and Regulations  

[[Page 48205]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 701


Organization and Operations of Federal Credit Unions

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: NCUA is issuing a final rule that relaxes certain provisions 
in NCUA's regulations for advertising and posting notice of 
nondiscrimination in real estate-related lending. The rule provides a 
federal credit union (FCU) with flexibility in how it gives notice when 
advertising and allows an FCU to display either the NCUA lobby poster 
or a similar poster prepared by the United States Department of Housing 
and Urban Development. The 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: This rule is effective October 19, 2001.

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:

A. Background

    In April 2001, the NCUA Board published a proposed rule to relax 
certain provisions in NCUA's regulations for advertising and posting 
notice of nondiscrimination in real estate-related lending. 66 FR 
20945, April 26, 2001. The Board issued the proposed rule out of 
concern that the existing requirements were less flexible than the Fair 
Housing Act and associated United States Department of Housing and 
Urban Development (HUD) guidance require. 42 U.S.C. 3604(c); 24 CFR 
109.30(a) (1995) (removed from CFR by 61 FR 14378, April 1, 1996). This 
final rule adopts the language of the proposed rule without changes.
    The existing rule mandates FCUs give notice of nondiscrimination 
when advertising real estate-related lending through use of a 
particular logotype and specific language. The final rule replaces the 
existing rule's specific requirement with a general requirement that 
FCUs indicate that they do not discriminate on any prohibited basis. 
The final rule also provides FCUs with various ``safe harbor'' methods 
to satisfy this notice requirement. These safe harbor methods are not 
mandatory. FCUs are free to use any reasonable method to satisfy the 
requirement.
    HUD requires that every entity subject to the Fair Housing Act 
display on its premises a poster containing specific nondiscrimination 
language. 24 CFR 110.15. Federal financial regulatory agencies may 
substitute a different poster, and NCUA has done so. 24 CFR 110.25(b); 
12 CFR 701.31(d)(2), (3); 54 FR 21963, May 22, 1989. The final rule 
permits FCUs to display either the NCUA version or the HUD version of 
the poster.
    The final rule is similar to the Federal Deposit Insurance 
Corporation's (FDIC) nondiscrimination in advertising rule. 12 CFR 
338.3. Both this final rule and the FDIC's rule 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.

B. Comments

    NCUA received twelve comments on the proposed rule. The commenters 
generally supported the proposed rule. Most of the commenters thought 
the rule would be very beneficial to FCUs and several commended NCUA 
generally for efforts to reduce regulatory burden on credit unions.
    None of the commenters recommended changes to the wording of the 
proposed rule. One commenter did express concern that the proposed rule 
might encourage some credit unions to design their own disclosure and 
logotype formats and that this might create confusion and 
misunderstanding among some FCU members. The Board notes that, although 
the final rule provides flexibility in exactly how an FCU gives notice 
of nondiscrimination, it does require that the notice ``prominently 
indicate * * * that the credit union makes such loans without regard to 
race, color, religion, national origin, sex, handicap, or familial 
status.'' The Board believes an FCU should have the flexibility to 
design its own notice of nondiscrimination, if it wishes, within the 
bounds of this requirement.

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 
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

[[Page 48206]]

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).
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 final rule is not a major rule for purposes of the 
Small Business Regulatory Enforcement Fairness Act of 1996.
Agency Regulatory Goal
    NCUA's goal is to promulgate clear and understandable regulations 
that impose minimal regulatory burden. We requested comments on whether 
the proposed rules were understandable and minimally intrusive if 
implemented as proposed. We received no comments specifically directed 
to whether the rule was understandable. Almost all the commenters 
agreed that the rule reduced the current regulatory burden on FCUs and 
so was not intrusive.

List of Subjects in 12 CFR Part 701

    Credit unions, Fair housing, Signs and symbols.


    By the National Credit Union Administration Board, on September 
13, 2001.
Becky Baker,
Secretary of the Board.

    For the reasons stated above, the National Credit Union 
Administration amends 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 and 
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. 01-23289 Filed 9-18-01; 8:45 am]
BILLING CODE 7535-01-U