[Federal Register Volume 69, Number 130 (Thursday, July 8, 2004)]
[Proposed Rules]
[Pages 41202-41204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15470]


 ========================================================================
 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. 130 / Thursday, July 8, 2004 / 
Proposed Rules  

[[Page 41202]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Chap. VII


Request for Burden Reduction Recommendation; Consumer Protection: 
Share Account--Deposit Relationships and Miscellaneous Consumer 
Regulations; Economic Growth and Regulatory Paperwork Reduction Act of 
1996 Review

AGENCY: National Credit Union Administration (NCUA).

ACTION: 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identify outdated, unnecessary, or unduly burdensome regulatory 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: 
Share Account--Deposit Relationships and Miscellaneous Consumer 
Regulations, 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 Congress.

DATES: Comment must be received on or before October 6, 2004.

ADDRESSES: You may submit comments by any of the following methods 
(please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs. html. Follow the 
instructions for submitting comments.
     E-mail: Address to [email protected]. Include ``[Your 
name] Comments on Third EGRPRA Notice'' in the e-mail subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for e-mail.
     Mail: Address to Becky Baker, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.

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 requirements in the category 
Consumer Protection: Share Account--Deposit Relationships and 
Miscellaneous Consumer Regulations 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 four bank regulatory agencies, which are issuing a joint notice. 
NCUA's notice is consistent and comparable with the joint notice, 
except on issues that are unique to credit unions.
    This category of rules includes Regulation E, Electronic Fund 
Transfers, 12 CFR part 205, which is issued by the Board of Governors 
of the Federal Reserve System (Federal Reserve). The NCUA has 
administrative enforcement authority for Regulation E for federal 
credit unions and the Federal Trade Commission has administrative 
enforcement authority for federally insured state credit unions. 
Regulation E is included in the joint notice in which the Federal 
Reserve is participating. Credit unions and other interested parties 
seeking to comment on this rule may either submit comments to the NCUA 
or the EGRPRA Web site, at http://www.EGRPRA.gov, as specified in the 
joint notice. Commenters may address any aspect of the regulation, 
including specifically how the regulation uniquely affects credit 
unions.

II. 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 (68 FR 
39863). 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. Law 104-208, div. A, title II, Sec.  2222, 110 Stat. 
3009-414; codified at 12 U.S.C. 3311.
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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:

[[Page 41203]]

    1. Applications and Reporting.
    2. Powers and Activities.
    3. Agency Programs.
    4. Capital.
    5. Consumer Protection.
    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). NCUA published its second 
notice, soliciting comment on consumer protection rules in the lending 
area, on February 4, 2004 (69 FR 5300). 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 an interagency body to which all of the 
Agencies belong, must submit a report to 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 financial institution regulatory agency can address 
the burdens by regulation, or whether the burdens must be addressed by 
legislation.

Public Response and NCUA's Current Plan

    NCUA received eight comments in response to its first notice, and 
four comments in response to its second notice. The comments have been 
posted on the interagency EGRPRA Web site, http://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 that we have received in response to our earlier 
notices 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 discussed how, in response to specific 
suggestions, both NCUA and the bank regulatory agencies divided the 
consumer protection regulations into two categories: (1) Lending-
Related Rules, and (2) Share Account--Deposit Relationships and 
Miscellaneous Consumer Rules. As we had indicated then, some industry 
representatives have stated that the requirements imposed by the 
Consumer Protection regulations are among the most burdensome. This 
notice is devoted to consideration of regulations in the Share 
Account--Deposit Relationships and Miscellaneous Consumer Rules 
category.

III. Request for Comment on Consumer Protection: Share Account--Deposit 
Relationships and Miscellaneous Consumer Rules Category

    NCUA is asking the public to identify the ways in which the rules 
in the category of non-lending related consumer protection 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 type of share account, 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?
     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

[[Page 41204]]

are small--having $10 million in assets or less--as defined by NCUA in 
Interpretative Ruling and Policy Statement 03-2, Developing and 
Reviewing Government Regulations. 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

      Consumer Protection: Share Account--Deposit Relationships and
                      Miscellaneous Consumer Rules
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                                       Code of Federal Regulations (CFR)
               Subject                             citation
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Truth in Savings....................  12 CFR Part 707.
Privacy of Consumer Financial         12 CFR Part 716.
 Information.
Accuracy of Advertising and Notice    12 CFR Part 740.
 of Insured Status.
Notice of Termination of Excess       12 CFR 741.5.
 Insurance Coverage.
Uninsured Membership Shares.........  12 CFR 741.9.
Disclosure of Share Insurance.......  12 CFR 741.10.
Share Insurance.....................  12 CFR Part 745.
Electronic Fund Transfers             12 CFR Part 205.
 (Regulation E--Federal Reserve).
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    By the National Credit Union Administration Board on June 30, 
2004.
Becky Baker,
Secretary of the Board.
[FR Doc. 04-15470 Filed 7-7-04; 8:45 am]
BILLING CODE 7535-01-P