[Federal Register Volume 69, Number 23 (Wednesday, February 4, 2004)]
[Proposed Rules]
[Pages 5300-5302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2279]


 ========================================================================
 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. 69, No. 23 / Wednesday, February 4, 2004 / 
Proposed Rules  

[[Page 5300]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Chap. VII


Request for Burden Reduction Recommendation; Consumer Protection: 
Lending-Related Rules; Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 Review

AGENCY: National Credit Union Administration.

ACTION: Proposed rule; notice of regulatory review; request for 
comments.

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SUMMARY: The NCUA Board is continuing its review of its regulations to 
identify outdated, unnecessary, or unduly burdensome regulatory 
requirements imposed on federally-insured credit unions pursuant to the 
Economic Growth and Regulatory Paperwork Reduction Act of 1996 
(EGRPRA). Today, NCUA requests comments and suggestions on ways to 
reduce burden in rules we have categorized as Consumer Protection: 
Lending-Related Rules, consistent with our statutory obligations. All 
comments are welcome.
    We specifically invite comment on the following issues: Whether 
statutory changes are needed; whether the regulations contain 
requirements that are not needed to serve the purposes of the statutes 
they implement; the extent to which the regulations may adversely 
affect competition; the cost of compliance associated with reporting, 
recordkeeping, and disclosure requirements, particularly on small 
credit unions; whether any regulatory requirements are inconsistent or 
redundant; and whether any regulations are unclear.
    We will analyze the comments received and propose burden reducing 
changes to our regulations where appropriate. Some suggestions for 
burden reduction might require legislative changes. Where legislative 
changes would be required, we will consider the suggestions in 
recommending appropriate changes to the Congress.

DATES: Comment must be received on or before May 4, 2004.

ADDRESSES: Direct comments to Becky Baker, Secretary of the Board. Mail 
or hand-deliver comments to: National Credit Union Administration, 1775 
Duke Street, Alexandria, Virginia 22314-3428. Fax comments to (703) 
518-6319. E-mail comments to [email protected]. Please send comments 
by one method only. Because of the number of regulatory matters for 
which NCUA may be receiving comments during the time this comment 
period is open, we suggest commenters identify comments in response to 
this notice by including ``EGRPRA'' in a subject or reference line in 
their comments.

FOR FURTHER INFORMATION CONTACT: Ross P. Kendall, Staff Attorney, 
Office of General Counsel, at the above address or telephone (703) 518-
6562.

SUPPLEMENTARY INFORMATION:

I. Introduction

    NCUA seeks public comment and suggestions on ways it can reduce 
regulatory burdens consistent with our statutory obligations. Today, we 
request input to help us identify which Consumer Protection--Lending 
Related rules are outdated, unnecessary, or unduly burdensome. The 
rules in this category are listed in a chart at the end of this notice. 
The EGRPRA review supplements and complements the reviews of 
regulations that NCUA conducts under other laws and its internal 
policies.
    In drafting this notice, the NCUA participated as part of the 
EGRPRA planning process with the Office of the Comptroller of the 
Currency, Board of Governors of the Federal Reserve System, Federal 
Deposit Insurance Corporation, and Office of Thrift Supervision 
(Agencies). Because of the unique circumstances of federally-insured 
credit unions and their members, NCUA is issuing a separate notice from 
the other Agencies, which are issuing a joint notice. NCUA's notice is 
consistent and comparable with the joint notice published by the other 
Agencies, except on issues that are unique to credit unions.
    This notice includes several regulations that affect credit union 
lending activity that are issued by the Board of Governors of the 
Federal Reserve System (Federal Reserve): Equal Credit Opportunity, 12 
CFR part 202 (Regulation B), Home Mortgage Disclosure, 12 CFR part 203 
(Regulation C), Consumer Leasing, 12 CFR part 213 (Regulation M) and 
Truth in Lending, 12 CFR part 226 (Regulation Z). These regulations are 
also included in the Agencies' joint notice in which the Federal 
Reserve is participating. The NCUA has enforcement authority for 
federal credit unions for Regulations B, M, and Z and for both federal 
credit unions and federally-insured state chartered credit unions for 
Regulation C. Credit unions and other interested parties seeking to 
comment on these rules may either submit comments to the NCUA or the 
EGRPRA Web site, at www.EGRPRA.gov, as specified in the joint notice. 
Commenters may address any aspect of the regulations, including 
specifically how the regulations uniquely affect credit unions.

II. A. The EGRPRA Review Requirements and NCUA's Proposed Plan

    This notice is part of the regulatory review required by section 
2222 of EGRPRA.\1\ The NCUA described the review requirements in our 
initial Federal Register notice, published on July 3, 2003.\2\ As we 
noted at that time, we anticipate that the EGRPRA review's overall 
focus on the ``forest'' of regulations will offer a new perspective in 
identifying opportunities to reduce regulatory burden. We must, of 
course, assure that the effort to reduce regulatory burden is 
consistent with applicable statutory mandates and provides for the 
continued safety and soundness of federally-insured credit unions and 
appropriate consumer protections.
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    \1\ Pub. L. 104-208, div. A, title II, sec. 2222, 110 Stat. 
3009-414; codified at 12 U.S.C. 3311.
    \2\ 68 FR 39863.
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    The EGRPRA review required that NCUA categorize our regulations by 
type. Our July 3, 2003, Federal Register publication identified ten 
broad categories for our regulations. The categories are:

1. Applications and Reporting
2. Powers and Activities
3. Agency Programs
4. Capital
5. Consumer Protection

[[Page 5301]]

6. Corporate Credit Unions
7. Directors, Officers and Employees
8. Money Laundering
9. Rules of Procedure
10. Safety and Soundness
    To spread the work of commenting on and reviewing the categories of 
rules over a reasonable period of time, we proposed to publish one or 
more categories of rules approximately every six months between 2003 
and 2006 and provide a 90-day comment period for each publication. We 
asked for comment on all aspects of our plan, including: The 
categories, the rules in each category, and the order in which we 
should review the categories. Because the NCUA was eager to begin 
reducing unnecessary burden where appropriate, our initial notice also 
published the first two categories of rules for comment (Applications 
and Reporting and Powers and Activities). All our covered categories of 
rules must be published for comment and reviewed by the end of 
September 2006.
    The EGRPRA review then requires the Agencies to: (1) Publish a 
summary of the comments we received, identifying and discussing the 
significant issues raised in them; and (2) eliminate unnecessary 
regulatory requirements. Within 30 days after the Agencies publish the 
comment summary and discussion, the Federal Financial Institutions 
Examination Council, which is the formal interagency body to which all 
of the Agencies, including the NCUA, belong, must submit a report to 
the Congress. This report will summarize significant issues raised by 
the public comments and the relative merits of those issues. It will 
also analyze whether the appropriate federal banking agency can address 
the burdens by regulation, or whether the burdens must be addressed by 
legislation.

B. Public Response and NCUA's Current Plan

    NCUA received eight comments in response to its first notice. The 
comments have been reviewed and an ongoing analysis of them is 
underway. The comments have been posted on the interagency EGRPRA Web 
site (www.EGRPRA.gov) and can be viewed by clicking on ``Comments.'' We 
are actively reviewing the feedback received about specific ways to 
reduce regulatory burden, as well as conducting our own analyses. 
Because the main purpose of this notice is to request comment on the 
next category of regulations, we will not discuss specific 
recommendations about the first set of regulation categories here. 
However, as we develop initiatives to reduce burden on specific 
subjects in the future--whether through regulatory, legislative, or 
other channels--we will discuss the public's recommendations that 
relate to our proposed actions.
    In our last notice, we requested comment about our proposed 
categories and placement of the rules within each category. Persons 
commenting on the joint notice published by the other Agencies last 
June observed that commenting on the Consumer Protection category would 
be burdensome in itself, and suggested that we might receive more 
useful feedback if the category was divided. As a result, both NCUA and 
the other Agencies have divided the consumer protection regulations 
into two categories: (1) Lending-Related Rules, and (2) Share Account--
Deposit Relationships and Miscellaneous Consumer Rules. The regulations 
in the Lending-Related Rules category are listed in the chart below. 
The Share Account--Deposit Relationships and Miscellaneous Consumer 
Rules category will contain the remaining rules previously identified 
in the Consumer Protection category. We plan to request comment on the 
Share Account--Deposit Relationships and Miscellaneous Consumer Rules 
in the next notice.
    We also requested comment about the order we should review the 
categories. According to some industry representatives, the 
requirements imposed by the Consumer Protection regulations are among 
the most burdensome. Given this response, we will focus on those rules 
first.

III. Request for Comment on Consumer Protection: Lending Related Rules 
Category

    NCUA is asking the public to identify the ways in which the 
Consumer Protection: Lending Related rules may be outdated, 
unnecessary, or unduly burdensome. If the implementation of a comment 
would require modifying a statute that underlies the regulation, the 
comment should, if possible, identify the needed statutory change. The 
rules in this category are listed in the chart below.
    We encourage comments that not only deal with individual rules or 
requirements but also pertain to certain product lines. For example, in 
the case of a particular loan, are any disclosure requirements under 
one regulation inconsistent with or duplicative of requirements under 
another regulation? Are there unnecessary records that must be kept? A 
product line approach is consistent with EGRPRA's focus on how rules 
interact, and may be especially helpful in exposing redundant or 
potentially inconsistent regulatory requirements. We recognize that 
commenters using a product line approach may want to make 
recommendations about rules that are not in our current request for 
comment. They should do so since the EGRPRA categories are designed to 
stimulate creative approaches rather than limiting them.
    Specific issues to consider. While all comments are welcome, NCUA 
specifically invites comment on the following issues:
     Need for statutory change. Do any of the 
statutory requirements underlying these regulations impose redundant, 
conflicting or otherwise unduly burdensome requirements? Are there less 
burdensome alternatives?
     Need and purpose of the regulations. Are the 
regulations consistent with the purposes of the statutes that they 
implement? Have circumstances changed so that the regulation is no 
longer necessary? Do changes in the financial products and services 
offered to consumers suggest a need to revise certain regulations (or 
statutes)? Do any of the regulations impose compliance burdens not 
required by the statutes they implement?
     General approach/flexibility. Generally, is 
there a different approach to regulating that NCUA could use that would 
achieve statutory goals while imposing less burden? Do any of the 
regulations in this category or the statutes underlying them impose 
unnecessarily inflexible requirements?
     Effect of the regulations on competition. Do any 
of the regulations in this category or the statutes underlying them 
create competitive disadvantages for credit unions compared to another 
part of the financial services industry?
     Reporting, recordkeeping and disclosure 
requirements. Do any of the regulations in this category or the 
statutes underlying them impose particularly burdensome reporting, 
recordkeeping or disclosure requirements? Are any of these requirements 
similar enough in purpose and use so that they could be consolidated? 
What, if any, of these requirements could be fulfilled electronically 
to reduce their burden? Are any of the reporting or recordkeeping 
requirements unnecessary to demonstrate compliance with the law?
     Consistency and redundancy. Do any of the 
regulations in this category impose inconsistent or redundant 
regulatory requirements that are not warranted by the purposes of the 
regulation?

[[Page 5302]]

     Clarity. Are the regulations in this category 
drafted in clear and easily understood language?
     Burden on small insured institutions. NCUA has a 
particular interest in minimizing burden on small insured credit unions 
(those with less than $10 million in assets). More than half of 
federally-insured credit unions are small--having $10 million in assets 
or less--as defined by NCUA in IRPS 03-2. NCUA solicits comment on how 
any regulations in this category could be changed to minimize any 
significant economic impact on a substantial number of small credit 
unions.
    NCUA appreciates the efforts of all interested parties to help us 
eliminate outdated, unnecessary or unduly burdensome regulatory 
requirements.

IV. Regulations About Which Burden Reduction Recommendations Are 
Requested Currently

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Consumer Protection: Lending Related Rules
    Nondiscrimination Requirement (Fair        12 CFR 701.31.
     Housing).
    Loans in Areas Having Special Flood        12 CFR part 760.
     Hazards.
    Credit Practices.........................  12 CFR part 706.
[Federal Reserve Rules]
    Equal Credit Opportunity [Regulation B]..  12 CFR part 202.
    Home Mortgage Disclosure [Regulation C]..  12 CFR part 203.
    Consumer Leasing [Regulation M]..........  12 CFR part 213.
    Truth in Lending [Regulation Z]..........  12 CFR part 226.
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    By the National Credit Union Administration Board on January 28, 
2004.
Becky Baker,
Secretary of the Board.
[FR Doc. 04-2279 Filed 2-3-04; 8:45 am]
BILLING CODE 7535-01-P