[Federal Register Volume 70, Number 245 (Thursday, December 22, 2005)]
[Proposed Rules]
[Pages 75986-75988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24368]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Chap. VII


Request for Burden Reduction Recommendation; Rules Relating to 
Agency Programs, Capital, and Corporate Credit Unions; 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identify outdated, unnecessary, or unduly burdensome regulatory 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). NCUA requests comments and suggestions on ways to reduce 
burden in regulations that govern agency programs, capital and 
corporate credit unions, consistent with our statutory obligations. All 
comments are welcome. This is the final notice in the ten-year 
regulatory review required by EGRPRA.
    NCUA will analyze the comments received and propose burden reducing 
changes to its regulations where appropriate. Some suggestions for 
burden reduction might require legislative changes. Where legislative 
changes would be required, NCUA will consider the suggestions in 
recommending appropriate changes to Congress.

DATES: Comments must be received on or before March 22, 2006.

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

[[Page 75987]]

name] Comments on Sixth EGRPRA Notice'' in the e-mail subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for e-mail.
     Mail: Address to Mary F. Rupp, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.
    Public inspection: All public comments are available on the 
agency's website at http://www.ncua.gov/RegulationsOpinionsLaws/comments as submitted, except as may not be possible for technical 
reasons. Public comments will not be edited to remove any identifying 
or contact information. Paper copies of comments may be inspected in 
NCUA's law library, at 1775 Duke Street, Alexandria, Virginia 22314, by 
appointment weekdays between 9 a.m. and 3 p.m. To make an appointment, 
call (703) 518-6546 or send an e-mail to OGC--Mail @ncua.gov.

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. This 
notice requests comments to help identify which requirements in three 
regulatory categories--Agency Programs, Capital, and Corporate Credit 
Unions--are outdated, unnecessary, or unduly burdensome. The rules in 
these categories 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.
    NCUA specifically invites 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.
    Commenters should note that NCUA has recommended that Congress 
consider amending provisions of the Federal Credit Union Act governing 
capital requirements for federally insured credit unions. Congress last 
amended the law in 1998 to impose certain ``prompt corrective action'' 
requirements for credit unions, based on their capital ratios. The 
proposed amendments would make credit union capital standards more 
comparable with other federally insured financial institutions and 
would provide greater enforcement flexibility to NCUA. More information 
about the proposed legislation is available at the NCUA Web site, 
http://www.ncua.gov, under the heading of ``Legislation'' in the left 
hand menu on the home page.
    In drafting this notice, the NCUA participated in 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 Agencies, 
which are issuing a joint notice. NCUA's notice is consistent and 
comparable with the joint notice, although there are differences. For 
example, credit unions are not covered under the Community Reinvestment 
Act, and so this notice makes no reference to that subject. Similarly, 
the Agencies have no category similar to NCUA's corporate credit union 
category, so their notice does not include that subject.

II. A. The EGRPRA review requirements and NCUA's proposed plan

    This is the sixth and final notice in the multi-year regulatory 
review required by section 2222 of EGRPRA.\1\ NCUA described the review 
requirements in its initial Federal Register notice, published on July 
3, 2003 (68 FR 39863). As noted at that time, NCUA anticipates that the 
EGRPRA review's overall focus on the ``forest'' of regulations will 
offer a new perspective in identifying opportunities to reduce 
regulatory burden. Nevertheless, NCUA's efforts to reduce regulatory 
burden must be consistent with applicable statutory mandates and 
provide for the continued safety and soundness of federally-insured 
credit unions and appropriate consumer protections.
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    \1\ Public 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 its 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
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, NCUA 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. NCUA 
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 NCUA was eager to begin reducing 
unnecessary burden where appropriate, the 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); its third notice, relating to other 
consumer protection rules, on July 8, 2004 (69 FR 41202); its fourth 
notice, relating to safety and soundness and anti-money laundering, on 
February 4, 2005 (70 FR 5946); and its fifth notice, relating to 
directors, officers and employees and rules of procedure, on July 7, 
2005 (70 FR 39202). All 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, 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 (FFIEC), 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.

[[Page 75988]]

B. Public Response and NCUA's Current Plan

    NCUA received eight comments in response to its first notice, four 
comments in response to its second notice, six in response to the third 
notice, eleven in response to the fourth notice, and five in response 
to the fifth notice. The comments have been posted on the interagency 
EGRPRA Web site, http://www.EGRPRA.gov, and can be viewed by clicking 
on ``Comments.'' NCUA is actively reviewing the coments received about 
specific ways to reduce regulatory burden, as well as conducting its 
own analyses. Because the main purpose of this notice is to request 
comment on the next category of regulations, NCUA will not discuss 
specific recommendations received in response to earlier notices here. 
As NCUA develops initiatives to reduce burden on specific subjects in 
the future--whether through regulatory, legislative, or other 
channels--it will discuss the public's recommendations that relate to 
its proposed actions.

III. Request for Comment on Agency Programs, Capital and Corporate 
Credit Union Categories

    NCUA is asking the public to identify the ways in which the rules 
in the category of Agency Programs, Capital and Corporate Credit Unions 
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. NCUA encourages comments that not only deal 
with individual rules or requirements but also pertain to certain 
product lines. 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. NCUA 
recognizes that commenters using a product line approach may want to 
make recommendations about rules that are not in the 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 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

          Agency Programs, Capital, and Corporate Credit Unions
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                                           Code of Federal Regulations
                Subject                          (CFR) Citation
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Community Development Revolving Loan    12 CFR Part 705.
 Program.
Central Liquidity Facility............  12 CFR Part 725.
Designation of low-income status;       12 CFR 701.34.
 receipt of secondary capital accounts
 by low-income designated credit
 unions.
Prompt Corrective Action..............  12 CFR Part 702.
Adequacy of Reserves                    12 CFR 741.3(a).
Corporate Credit Unions...............  12 CFR Part 704.
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    By the National Credit Union Administration Board on December 
15, 2005.
Mary F. Rupp,
Secretary of the Board.
[FR Doc. 05-24368 Filed 12-21-05; 8:45 am]
BILLING CODE 7535-01-P