[Federal Register Volume 69, Number 145 (Thursday, July 29, 2004)]
[Rules and Regulations]
[Pages 45236-45237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17257]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 705


Community Development Revolving Loan Program for Credit Unions

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: NCUA is amending its regulation pertaining to the Community 
Development Revolving Loan Program For Credit Unions (CDRLP) to permit 
student credit unions to participate in the program.

DATES: This final rule is effective August 30, 2004.

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

SUPPLEMENTARY INFORMATION:

A. Background

    Part 705 of NCUA's regulations implements the CDRLP. 12 CFR part 
705. The purpose of the CDRLP is to support the community development 
activities of participating credit unions. 12 CFR Sec.  705.2. 
Participating credit unions are defined as those that are specifically 
involved in the stimulation of economic development and community 
revitalization activities in the communities they serve, whose 
membership consists of predominantly low-income members as reflected by 
a current low-income designation pursuant to Sec.  701.34, Sec.  
741.204, or other applicable standards, and have submitted an 
application for participation and have been selected. 12 CFR Sec.  
705.3(b); 12 CFR Sec.  701.34; 12 CFR Sec.  741.204. The CDRLP achieves 
its purpose by making low interest loans and providing technical 
assistance to those credit unions. A credit union that participates in 
the CDRLP increases economic and employment opportunities for its low-
income members.
    Previously, NCUA took the position that although student credit 
unions are designated as low-income credit unions for purposes of 
receiving nonmember deposits, they did not qualify to participate in 
the CDRLP because they were not specifically involved in the 
stimulation of economic development activities and community 
revitalization. 61 FR 50694 (September 27, 1996); 58 FR 21642 (April 
23, 1993). The NCUA believes this historical perspective underestimates 
the importance of student credit unions and the impact they have on the 
economic development and revitalization of the communities they serve. 
Student credit unions not only provide their members with valuable 
financial services generally not available but also a unique 
opportunity for financial education. NCUA believes that well run 
student credit unions would benefit greatly from participation in the 
CDRLP and, as a result, would be better able to serve their 
communities. Accordingly, in April 2004, NCUA issued a proposed rule to 
amend the CDRLP regulation to allow student credit unions to 
participate in the program. 69 FR 21443 (April 21, 2004).

[[Page 45237]]

B. Summary of Comments

    NCUA received twenty-six comment letters regarding the proposed 
rule: eleven from federal credit unions, four from state credit unions, 
one from a private individual, and ten from credit union and student 
trade organizations. Twenty-one commenters fully supported the 
proposal. Four low-income designated credit unions involved in 
community development activities and one trade organization that 
represents community development credit unions opposed the proposal. 
Those opposed took the position that student credit unions do not 
fulfill the same mission as those credit unions for which the CDRLP was 
created. As noted above, NCUA believes that viewpoint underestimates 
the impact the few remaining student credit unions have on the 
communities they serve. Student credit unions not only provide their 
members with valuable financial services generally not available but 
also a unique opportunity for financial education. Also, NCUA believes 
a small CDRLP loan or technical assistance grant might help a student 
credit union survive or prosper while having a minor impact on CDRLP 
funding availability. Accordingly, NCUA adopts the amendments to part 
705 as proposed.

Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact a rule may have on a 
substantial number of small credit unions, defined as those under ten 
million dollars in assets. This rule permits student credit unions to 
participate in the CDRLP, without imposing any additional regulatory 
burden. The final amendments will not have a significant economic 
impact on a substantial number of small credit unions, and, therefore, 
a regulatory flexibility analysis is not required.

Paperwork Reduction Act

    NCUA has determined that the final rule would 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 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. The final rule would not have substantial 
direct effects on the states, on the connection 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 rule does not constitute a policy that has 
federalism implications for purposes of the executive order.

The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this final rule would 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 705

    Community development, Credit unions, Loan programs--housing and 
community development, Reporting and recordkeeping requirements, 
Technical assistance.

    By the National Credit Union Administration Board on July 22, 
2004.
Becky Baker,
Secretary of the Board.


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For the reasons stated above, NCUA amends 12 CFR part 705 as follows:

PART 705--COMMUNITY DEVELOPMENT REVOLVING LOAN PROGRAM FOR CREDIT 
UNIONS

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1. The authority citation for part 705 continues to read as follows:

    Authority: 12 U.S.C. 1772c-1; 42 U.S.C. 9822 and 9822 note.


Sec.  705.3  [Amended]

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2. Remove the parenthetical clause ``(excluding student credit 
unions)'' from Sec.  705.3(b).

[FR Doc. 04-17257 Filed 7-28-04; 8:45 am]
BILLING CODE 7535-01-P