[Federal Register Volume 67, Number 78 (Tuesday, April 23, 2002)]
[Notices]
[Pages 19778-19779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9891]


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NATIONAL CREDIT UNION ADMINISTRATION


Guidelines for the Supervisory Review Committee

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final Interpretive Ruling and Policy Statement 02-1, 
``Supervisory Review Committee'' (IRPS 02-1).

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SUMMARY: This policy statement amends Interpretive Ruling and Policy 
Statement (IRPS) 95-1 to add Regulatory Flexibility Program issues to 
the list of material supervisory determinations that credit unions may 
appeal to NCUA's Supervisory Review Committee.

DATES: The IRPS is effective April 23, 2002.

ADDRESSES: National Credit Union Administration, 1775 Duke Street, 
Alexandria, VA 22314-3428.

FOR FURTHER INFORMATION CONTACT: Chrisanthy J. Loizos, Staff Attorney, 
at the above address, or telephone: (703) 518-6540.

SUPPLEMENTARY INFORMATION:

A. Background

    The NCUA Board (Board) adopted guidelines that, established an 
independent appellate process to review material supervisory 
determinations, entitled ``Supervisory Review Committee'' (IRPS 95-1). 
60 FR 14795 (March 20, 1995). IRPS 95-1 created a Supervisory Review 
Committee (Committee) consisting of three senior staff members to hear 
appeals of material supervisory determinations. IRPS 95-1 defined 
material supervisory determinations to include determinations on 
composite CAMEL ratings of 3, 4 and 5, all component ratings of those 
composite ratings, significant loan classifications and adequacy of 
loan loss reserves. The Board noted in the preamble to IRPS 95-1, 
however, that it would consider expanding the disputes covered by the 
Committee's review process at a later date. 60 FR 14795, 14796 (March 
20, 1995).

B. Regulatory Flexibility Program Amendment

    On November 15, 2001, the Board adopted a final rule that 
established the Regulatory Flexibility Program (RegFlex). 66 FR 58656 
(November 23, 2001). Under RegFlex, credit unions with advanced levels 
of net worth and consistently strong supervisory examination ratings 
are exempt from certain NCUA regulations, in whole or in part. A 
Regional Director may revoke a credit union's RegFlex authority, in 
whole or in part, by giving the credit union written notice of the 
Region's substantive and documented safety and soundness reasons. 12 
CFR 742.6. The RegFlex final rule provides that a credit union may 
appeal the Regional Director's determination to the Committee. 12 CFR 
742.7. This IRPS amends IRPS 95-1 by including RegFlex determinations 
in the list of material supervisory determinations within the 
Committee's purview and the special filing time frames adopted by the 
Board for RegFlex revocation appeals.
    In the RegFlex rule, the Board adopted slightly different filing 
time frames for RegFlex revocation appeals than those currently in IRPS 
95-1. Unlike the Regional Director's decision to revoke RegFlex 
authority, the other material supervisory determinations involve an 
intermediate review by the Region of a field examiner's determination 
before appealing to the Committee. A credit union may appeal the 
Regional Director's decision to revoke RegFlex authority to the 
Committee within 60 days from the date of the determination. 12 CFR 
742.7.
    Under the RegFlex rule, the credit union may appeal the Committee's 
decision to the Board within 60 days from the date the Committee issued 
the decision. 12 CFR 742.7. This differs from appeals of other material 
supervisory determinations because either the credit union or the 
Region may appeal to the Board within 30 days of receipt of the 
decision by the parties.

Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe a 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 final IRPS expands the types of material supervisory 
determinations that credit unions may appeal to the NCUA's Supervisory 
Review Committee. This final IRPS imposes no additional financial, 
regulatory or other burden on credit unions. NCUA has determined and 
certifies that this final IRPS will not have a significant impact on a 
substantial number of small credit unions. Accordingly, NCUA has 
determined that a Regulatory Flexibility Analysis is not required.

[[Page 19779]]

Paperwork Reduction Act

    NCUA has determined that this final IRPS does 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 final IRPS applies 
to all credit unions that appeal NCUA material supervisory 
determinations before the NCUA Supervisory Committee, 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 final IRPS 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 final IRPS 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 APA. 5 U.S.C. 551. 
The Office of Management and Budget has determined that this final IRPS 
is not a major rule for purposes of the Small Business Regulatory 
Enforcement Fairness Act of 1996.

    By the National Credit Union Administration Board on March 5, 
2002.
Becky Baker,
Secretary of the Board.
    Accordingly, for the reasons set forth in the preamble, IRPS 02-1 
amends IRPS 95-1 as follows:

    Note: The following ruling will not appear in the Code of 
Federal Regulations.


    1. Authority: Section 309 of the Riegle Community Development 
and Regulatory Improvement Act of 1994, Public Law 103-325.
    2. Amend the third paragraph in subpart A to read as follows:
    Material supervisory determinations are limited to: (1) Composite 
CAMEL ratings of 3, 4, and 5 and all component ratings of those 
composite ratings; (2) adequacy of loan loss reserve provisions; (3) 
loan classifications on loans that are significant as determined by the 
appealing credit union; and (4) revocations of Regulatory Flexibility 
Program (RegFlex) authority.
    3. Add a new paragraph in subpart A, after the sixth paragraph to 
read as follows:
    If a Regional Director revokes a credit union's RegFlex authority, 
in whole or in part, upon written notice to the credit union, the 
credit union may appeal the revocation to the Committee within 60 days 
from the date of the Region's determination. The RegFlex revocation is 
effective as soon as the credit union receives the notice and it 
remains in effect pending a decision from the Committee.
    4. Add the following sentence to the last paragraph in subpart A:
    If a RegFlex revocation is the basis of the appeal, the credit 
union may appeal the Committee's decision to the NCUA Board within 60 
days from the date the Committee issued its decision.

[FR Doc. 02-9891 Filed 4-22-02; 8:45 am]
BILLING CODE 7535-01-U