[Federal Register Volume 77, Number 105 (Thursday, May 31, 2012)]
[Rules and Regulations]
[Pages 32004-32006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13210]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Chapter VII


Guidelines for the Supervisory Review Committee

AGENCY: National Credit Union Administration (NCUA).

ACTION: Direct final Interpretive Ruling and Policy Statement (IRPS) 
12-1, with request for comments.

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SUMMARY: This direct final policy statement amends IRPS 11-1, which 
addresses appeals to NCUA's Supervisory Review Committee. NCUA adopts 
IRPS 12-1 to remove Regulatory Flexibility designation determinations 
from the list of material supervisory determinations credit unions may 
appeal to the Committee because NCUA is eliminating the RegFlex program 
contemporaneously with the issuance of this IRPS.

DATES: This IRPS is effective August 29, 2012 unless NCUA withdraws the 
IRPS by July 30, 2012. Comments must be received by July 2, 2012.

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/Legal/Regs/Pages/PropRegs.aspx Follow the instructions for submitting comments.
     Email: Address to [email protected]. Include ``[Your 
name] Comments on IRPS 12-1'' in the email subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for email.
     Mail: Address to Mary Rupp, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.

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     Hand Delivery/Courier: Same as mail address.
    Public Inspection: You can view all public comments on NCUA's Web 
site at http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as 
submitted, except for those we cannot post for technical reasons. NCUA 
will not edit or remove any identifying or contact information from the 
public comments submitted. You may inspect paper copies of comments 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 email to [email protected].

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

SUPPLEMENTARY INFORMATION: 

I. Background
II. IRPS 12-1
III. Issuance as Direct Final
IV. Regulatory Procedures

I. Background

    In 1995, the NCUA Board (Board) adopted guidelines that established 
an independent appellate process to review material supervisory 
determinations, entitled ``Supervisory Review Committee'' (IRPS 95-1). 
Public Law 103-325, Sec.  309(a), 108 Stat. 2160 (1994); 60 FR 14795 
(Mar. 20, 1995). Through IRPS 95-1, NCUA established a Supervisory 
Review Committee (Committee) consisting of three senior staff members 
to hear appeals of material supervisory determinations. IRPS 95-1 
defined material supervisory determinations to include determinations 
on composite CAMEL ratings of 3, 4 and 5, all component ratings of 
those composite ratings, significant loan classifications and adequacy 
of loan loss reserves. In 2002, the Board amended IRPS 95-1 by issuing 
IRPS 02-1, which added Regulatory Flexibility (RegFlex) designation 
determinations to the list of material supervisory determinations 
credit unions may appeal to the Committee. 78 FR 19778 (Apr. 23, 2002). 
In order to centralize all applicable guidance on the Committee and 
ensure ease of understanding by credit unions, the Board combined IRPS 
95-1 and 02-1 into IRPS 11-1. 83 FR 23871 (Apr. 29, 2011).
    In December 2011, the Board issued a Notice of Proposed Rulemaking 
(NPRM) to eliminate its RegFlex program and remove corresponding part 
742 of NCUA's regulations. 76 FR 81421 (Dec. 28, 2011). In the NPRM, 
the Board notified the public that, upon issuance of a final RegFlex 
rule, it would amend IRPS 11-1 to remove the RegFlex appeals process. 
76 FR at 81422. Contemporaneous with this adoption of IRPS 12-1, the 
Board is adopting the NPRM as a final rule in a separate rulemaking. 
The final rule provides regulatory relief by expanding RegFlex 
authorities to all federal credit unions, rather than only those that 
qualified for a RegFlex designation. The final rule also removes or 
amends related rules to ease compliance burden while retaining certain 
safety and soundness standards.

II. IRPS 12-1

    IRPS 12-1 amends IRPS 11-1 by removing all references to the 
RegFlex program. The amendments remove RegFlex designations as the 
fourth type of material supervisory determination a federal credit 
union could appeal in subpart A's third paragraph. It also removes 
subpart A's seventh paragraph, which set the time frame for filing 
RegFlex appeals. Finally, it removes the second sentence in the last 
paragraph in subpart A, which permitted further appeals to the Board.

III. Issuance as Direct Final

    The Board is issuing this IRPS as a direct final IRPS under the 
Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(A) and Sec.  
553(b)(3)(B), because these provisions allow an agency to issue rules 
without notice and comment in the case of interpretative rules and when 
it finds for good cause that these procedures are unnecessary. IRPS 11-
1, as amended by IRPS 12-1, is an interpretation of agency procedure. 
Notice and public procedures are unnecessary because the Board finds 
that IRPS 12-1 is noncontroversial and believes it will not elicit 
significant adverse comments. The Board's rulemaking action to remove 
part 742 renders the RegFlex appeals process in IRPS 11-1 moot. IRPS 
12-1, therefore, is merely a housekeeping measure to remove references 
to a nonexistent program. The Board finds these reasons are good cause 
to dispense with the APA's notice and comment period and the procedures 
in NCUA's IRPS 87-2. 5 U.S.C. 553(b)(3)(B); 52 FR 35213 (Sept. 18, 
1987), as amended by IRPS 03-2, 68 FR 31949 (May 29, 2003).
    Although the IRPS is being issued as a direct final IRPS, 
interested parties have a 30-day comment period. If NCUA receives a 
significant adverse comment that explains why the IRPS is 
inappropriate, challenges its underlying premise, or states why it 
would be ineffective or unacceptable without a change, the agency will 
withdraw the IRPS by July 30, 2012. Unless NCUA publishes a Federal 
Register notice withdrawing the IRPS by this date, the IRPS will become 
effective on August 29, 2012.

IV. 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 final IRPS removes the appeal of RegFlex 
designations from the Committee's purview because the RegFlex program 
no longer exists. NCUA has determined and certifies that this IRPS will 
not have a significant economic impact on a substantial number of small 
credit unions.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in 
which an agency by rule creates a new paperwork burden on regulated 
entities or modifies an existing burden. 44 U.S.C. 3507(d); 5 CFR part 
1320. For purposes of the PRA, a paperwork burden may take the form of 
either a reporting or a recordkeeping requirement, both referred to as 
information collections. NCUA has determined that this final IRPS does 
not increase paperwork requirements under the PRA 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. 
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the executive order to adhere to fundamental 
federalism principles. This final IRPS applies to credit unions that 
appeal NCUA's material supervisory determinations before the Committee. 
It does 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 IRPS does not 
constitute a policy that has federalism implications for purposes of 
the executive order.

Assessment of Federal Regulations and Policies on Families

    NCUA has determined that this final IRPS will not affect family 
well-being within the meaning of Section 654 of

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the Treasury and General Government Appropriations Act, 1999, Public 
Law 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 APA. 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.

    Dated: By the National Credit Union Administration Board on May 
24, 2012.
Mary F. Rupp,
Secretary of the Board.

    Accordingly, for the reasons set forth in the preamble, IRPS 12-1 
amends IRPS 11-1 as follows:

    Note: The following ruling will not appear in the Code of 
Federal Regulations.


0
1. Authority: Section 309 of the Riegle Community Development and 
Regulatory Improvement Act of 1994, Pub. L. 103-325.

0
2. Amend the third paragraph in subpart A to read as follows:

    Material supervisory determinations are limited to: (1) Composite 
CAMEL ratings of 3, 4, and 5 and all component ratings of those 
composite ratings; (2) adequacy of loan loss reserve provisions; and 
(3) loan classifications on loans that are significant as determined by 
the appealing credit union. Subject to the requirements discussed 
below, credit unions may also appeal to the Committee a decision of the 
Director of the Office of Small Credit Union Initiatives (OSCUI) to 
deny Technical Assistance Grant (TAG) reimbursements.

0
3. Remove the 7th paragraph in subpart A.

0
4. Revise the last paragraph in subpart A to read as follows:

    Committee decisions on the denial of a TAG reimbursement are the 
final decisions of NCUA and are not appealable to the NCUA Board. All 
other appealable decisions must be appealed to the NCUA Board within 30 
days of the appellant's receipt by the party of the Committee's 
decision.

[FR Doc. 2012-13210 Filed 5-30-12; 8:45 am]
BILLING CODE 7535-01-P