[Federal Register Volume 75, Number 170 (Thursday, September 2, 2010)]
[Rules and Regulations]
[Pages 53841-53843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21864]



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  Federal Register / Vol. 75, No. 170 / Thursday, September 2, 2010 / 
Rules and Regulations  

[[Page 53841]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Parts 740 and 745

RIN 3133-AD78


Display of Official Sign; Permanent Increase in Standard Maximum 
Share Insurance Amount

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: President Obama signed into law the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act) on July 21, 2010. 
Section 335 of the Dodd-Frank Act amended the Federal Credit Union Act 
(FCU Act) to make permanent the standard maximum share insurance amount 
(SMSIA) of $250,000. NCUA is amending its share insurance and official 
sign regulations to conform to this statutory change.

DATES: The rule is effective September 2, 2010. The mandatory 
compliance date regarding the revisions to NCUA's official sign rule, 
12 CFR Part 740, is March 2, 2011.

FOR FURTHER INFORMATION CONTACT: Frank Kressman, Senior Staff Attorney, 
Office of General Counsel, 1775 Duke Street, Alexandria, Virginia 22314 
or telephone (703) 518-6540.

SUPPLEMENTARY INFORMATION: NCUA is amending its Part 745 share 
insurance regulations and Part 740 official sign regulations to reflect 
Congress' action making permanent the increase in the SMSIA from 
$100,000 to $250,000.

A. Background

    The Emergency Economic Stabilization Act of 2008 temporarily 
increased the SMSIA from $100,000 to $250,000 through December 31, 
2009. Public Law 110-343 (Oct. 3, 2008). On October 15, 2008, NCUA 
issued an interim final rule amending its share insurance regulations 
to reflect that temporary increase. 73 FR 62856 (October 22, 2008). On 
May 20, 2009, the President signed the Helping Families Save Their 
Homes Act of 2009 (``Helping Families Act'') which, among other things, 
extended the temporary increase in the SMSIA from December 31, 2009 to 
December 31, 2013. Public Law 111-22 (May 20, 2009). On October 22, 
2009, NCUA issued a final rule which, among other things, amended its 
share insurance regulations to reflect this extension. 74 FR 55747 
(October 29, 2009). On July 21, 2010, the President signed the Dodd-
Frank Act which, among other things, made permanent the increase in the 
SMSIA from $100,000 to $250,000. Public Law 111-203 (July 21, 2010).\1\
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    \1\ The effective date of the Dodd-Frank Act is July 22, 2010, 
one day after its enactment. Although the SMSIA has been permanently 
increased, it is still subject to an inflation adjustment pursuant 
to subparagraph (F) of section 11(a)(1) of the Federal Deposit 
Insurance Act. 12 U.S.C. 1821(a)(1)(F). However, this inflation 
adjustment will not affect the level of the SMSIA in the foreseeable 
future because it will not take effect until the value of $100,000, 
inflation adjusted since 2005, exceeds the current SMSIA.
---------------------------------------------------------------------------

    Part 740 of NCUA's regulations requires that each insured credit 
union continuously display an official NCUA sign. The official sign 
informs members of the minimum amount of share insurance coverage to 
which they are entitled and states that the insurance is backed by the 
full faith and credit of the United States Government. Because the 
SMSIA of $250,000 has been temporary until the recent enactment of the 
Dodd-Frank Act, NCUA's current official sign regulation has provided 
insured credit unions with maximum flexibility in displaying the sign. 
12 CFR 740.4. Specifically, Sec.  740.4 currently permits insured 
credit unions the options to: (1) Continue to display the version of 
the official sign reflecting the $100,000 limit; (2) display any other 
version of the official sign distributed or approved by NCUA and 
appearing on NCUA's official Web site that reflects the increase to 
$250,000; or (3) alter by hand or otherwise the $100,000 sign to make 
it reflect the increase to $250,000 provided the altered sign is 
legible and otherwise complies with Part 740.

B. The Final Rule

1. Section 745.1--Share Insurance Definitions

    The final rule amends NCUA's share insurance regulation by defining 
the SMSIA as $250,000 on a permanent basis as mandated by the Dodd-
Frank Act.

2. Section 740.4--NCUA's Official Sign

    The final rule amends NCUA's official sign rule to reflect the 
permanent increase in the SMSIA. The official sign will continue to 
have the same size and design. The only revision is replacing 
``$100,000'' with ``$250,000'' on the sign. This amendment also is in 
response to the Dodd-Frank Act.
    To ensure credit union members are made aware of the permanent 
$250,000 limit, insured credit unions should obtain and display the new 
official sign as promptly as possible, but in no event later than the 
mandatory compliance date discussed below. After the mandatory 
compliance date, insured credit unions may only display the revised 
official sign reflecting the $250,000 limit. Insured credit unions may 
not continue to display signs reflecting the $100,000 limit nor may 
they continue to display signs that originally reflected the $100,000 
limit that have been altered by hand or otherwise to reflect the 
$250,000 limit. NCUA is aware, from previous experience, that putting a 
revised official sign in place can be a disruptive process for credit 
unions. NCUA recognizes the need to balance easing that burden with the 
importance of informing members of the increased insurance coverage.
    Accordingly, an insured credit union will be required to replace 
the old version of the official sign with the revised official sign at 
required locations such as each station or window where the credit 
union normally receives insured funds or deposits in its principal 
place of business and all of its branches and on its internet page 
where it accepts deposits or opens accounts by March 2, 2011, which is 
six months from the effective date of this rule. Additionally, a credit 
union must replace the old version of the official sign with the 
revised official sign on each document where the credit union has 
chosen to include the official sign, including advertisements, 
marketing and

[[Page 53842]]

promotional materials, disclosures, and others by that same date. NCUA 
believes six months is sufficient time for an insured credit union to 
replace physical and internet signs and deplete its stockpiles of other 
printed advertising materials. NCUA also believes that many credit 
unions are already using official signs and printed advertising 
materials reflecting the $250,000 limit as permitted by Sec.  740.4.
    NCUA will provide insured credit unions with an initial supply of 
the revised official sign with a blue background and white lettering at 
no cost and has already made a downloadable graphic of the revised 
official sign available on the agency Web site for credit unions to use 
on their own Web sites. An insured credit union may continue to 
purchase signs from a commercial supplier or develop its own and use 
any color scheme it chooses so long as the sign is legible and 
otherwise complies with Part 740. 12 CFR 740.4(b)(2).

C. Administrative Procedure Act

    NCUA believes that good cause exists for issuing the final rule 
without an opportunity for public comment, pursuant to section 
553(b)(3)(B) of the Administrative Procedure Act (APA), because seeking 
public comment under these circumstances is ``unnecessary,'' 
``impracticable,'' and ``contrary to the public interest.'' 5 U.S.C. 
553(b)(3)(B). NCUA also finds good cause for issuing the final rule 
without a 30-day delayed effective date, pursuant to section 553(d)(3) 
of the APA.
    The Dodd-Frank Act amends section 207(k)(5) of the FCU Act, 12 
U.S.C. 1787(k)(5), to permanently increase the SMSIA to $250,000. The 
final rule makes conforming amendments to NCUA's regulations to reflect 
this statutory change. None of the other regulations affecting the 
calculation of share insurance are affected by the final rule.
    The final rule only amends NCUA's definition of SMSIA to conform to 
the language of the amended FCU Act and conforms the official NCUA sign 
to be consistent with those provisions. In this circumstance, NCUA has 
no rulemaking discretion that could be informed by the APA's notice and 
comment process. Accordingly, NCUA finds that notice and comment 
procedures are ``unnecessary'' and that the ``good cause'' exception to 
the APA's notice and comment requirement applies. See, e.g., Gray 
Panthers Advocacy Comm. v. Sullivan, 936 F.2d 1284, 1290-92 (DC Cir. 
1991) (regulations that ``either restate or paraphrase the detailed 
requirements'' of a self-executing statute do not require notice and 
comment); Nat'l Customs Brokers & Forwarders Ass'n v. United States, 59 
F.3d 1219, 1223-24 (Fed. Cir. 1995) (notice and comment unnecessary 
where Congress directed agency to change regulations and public would 
benefit from amendments).
    Additionally, a finding of good cause is warranted because it would 
be ``impracticable'' and ``contrary to the public interest'' to delay 
the effective date of this rule in order to seek public comment on the 
revision. Because the revision to the SMSIA was effective one day after 
enactment of the Dodd-Frank Act, it is in the public interest for NCUA 
to take immediate action to make credit union members aware of the 
permanent increase in share insurance coverage. A delay in taking 
action would be detrimental to this goal, and therefore, complying with 
formal notice and comment procedures is ``impracticable'' and 
``contrary to the public interest.''
    Finally, a finding of good cause for waiving the requirement of a 
30-day delayed effective date is warranted because of the need to 
provide immediate guidance to credit union members. Timely displaying 
of the new official sign will provide this. Also, delaying the 
effective date is unnecessary because the only provision of the final 
rule requiring credit unions to take action will not be enforced for 
six months after the rule's effective date, which is when credit unions 
must comply with the rule.

D. 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 entities (primarily those under ten million 
dollars in assets). This rule will not have a significant economic 
impact on a substantial number of small credit unions, and therefore, 
no regulatory flexibility analysis is required.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996, Public Law 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 Information and Regulatory Affairs, an office 
within the Office of Management and Budget, is currently reviewing this 
rule, and NCUA anticipates it will determine that, for purposes of 
SBREFA, this is not a major rule.

Paperwork Reduction Act

    The final rule will revise NCUA's share insurance and official sign 
regulations. It will not involve any new collections of information 
pursuant to the Paperwork Reduction Act. 44 U.S.C. 3501 et seq. NCUA 
has determined that the amendments will not increase paperwork 
requirements and a paperwork reduction analysis is not required.

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. This final rule will not have a 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 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

    NCUA has determined that this final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Public Law 105-277, 112 
Stat. 2681 (1998).

List of Subjects

12 CFR Part 740

    Advertisements, Credit unions, Signs and symbols.

12 CFR Part 745

    Credit unions, Share insurance.

    By the National Credit Union Administration Board, this 25th day 
of August 2010.
Linda K. Dent,
Acting Secretary of the Board.

0
For the reasons discussed above, NCUA amends 12 CFR Parts 740 and 745 
as follows:

[[Page 53843]]

PART 740--ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS

0
1. The authority citation for Part 740 continues to read as follows:

    Authority:  12 U.S.C. 1766, 1781, 1789.

0
2. Section 740.4 is amended by revising the image in paragraph (b) 
introductory text and by removing the last sentence of paragraph 
(b)(1).


Sec.  740.4  Requirements for the official sign.

* * * * *
    (b) * * *
    [GRAPHIC] [TIFF OMITTED] TR02SE10.000
    
* * * * *

PART 745--SHARE INSURANCE AND APPENDIX

0
3. The authority citation for Part 745 continues to read as follows:

    Authority:  12 U.S.C. 1752(5), 1757, 1765, 1766, 1781, 1782, 
1787, 1789.

0
4. Section 745.1(e) is revised to read as follows:


Sec.  745.1  Definitions.

* * * * *
    (e) The term ``standard maximum share insurance amount,'' referred 
to as the ``SMSIA'' hereafter, means $250,000 adjusted pursuant to 
subparagraph (F) of section 11(a)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(a)(1)(F)).

[FR Doc. 2010-21864 Filed 9-1-10; 8:45 am]
BILLING CODE 7535-01-P