[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Proposed Rules]
[Pages 46173-46174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21316]
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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. 82, No. 191 / Wednesday, October 4, 2017 /
Proposed Rules
[[Page 46173]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 740
RIN 3133-AE78
Accuracy of Advertising and Notice of Insured Status
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule with request for comments.
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SUMMARY: The NCUA Board (Board) proposes to revise certain provisions
of NCUA's advertising rule to provide regulatory relief to federally
insured credit unions (FICUs). The advertising rule requires FICUs to
use NCUA's ``official advertisement statement'' when advertising. In
addition to being permitted to use any of the three current versions of
the official advertising statement, the Board proposes to allow FICUs
the option of using a fourth version, namely by stating ``Insured by
NCUA.'' To provide additional regulatory relief, the Board proposes to
expand a current exemption from the advertising statement requirement
regarding radio and television advertisements, and eliminate the
requirement to include the official advertising statement on statements
of condition required to be published by law.
DATES: Comments must be received on or before December 4, 2017.
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.
Email: Address to [email protected]. Include ``[Your
name] Comments on Notice of Proposed Rulemaking Regarding Accuracy of
Advertising'' in the email subject line.
Fax: (703) 518-6319. Use the subject line described above
for email.
Mail: Address to Gerard S. Poliquin, Secretary of the
Board, National Credit Union Administration, 1775 Duke Street,
Alexandria, Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
Public inspection: You may 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: Marvin Shaw, Staff Attorney, Office of
General Counsel, at the above address or telephone (703) 518-6553.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Credit Union Act (Act) requires each FICU to display
NCUA's ``official sign'' regarding National Credit Union Share
Insurance Fund insurance of the FICU's share accounts. The sign
includes language that the coverage is backed by the full faith and
credit of the United States Government.\1\ Regulations implementing
this statutory requirement are at 12 CFR part 740. Part 740 of NCUA's
regulations also includes requirements relating to NCUA's official
advertising statement as discussed in more detail below.
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\1\ 12 U.S.C. 1785.
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A. Part 740 Requirements
Part 740 applies to all FICUs. It prescribes requirements for both
the NCUA's official sign that FICUs must display and the NCUA's
official advertisement statement that FICUs must make when advertising.
In relevant part, part 740 prohibits any FICU from using advertising
\2\ or making any representation which is inaccurate or deceptive or
which misrepresents its services, contracts, financial condition, or
the Truth in Savings requirements.
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\2\ This includes print, electronic and broadcast media,
displays, signs, and stationary and other promotional material.
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NCUA's official advertising statement is ``This credit union is
federally insured by the National Credit Union Administration'' or the
shorter version ``Federally insured by the NCUA.'' As a third option,
the official sign may be displayed in advertisements in lieu of the
advertising statement.
Section 740.5(c) of NCUA's regulations enumerates several kinds of
advertisements that, for practical reasons, are exempted from the
general rule requiring the use of the official advertising statement.
With respect to these exempted advertisements, the Board is focusing on
the exemptions relating to radio advertisements that are less than 15
seconds in duration \3\ and television advertisements that are less
than 15 seconds in duration.\4\
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\3\ 12 CFR 740.5(c)(7).
\4\ 12 CFR 740.5(c)(8).
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B. Regulatory History
For many years, NCUA's advertising and official sign regulations
were essentially the same as those of the Federal Deposit Insurance
Corporation (FDIC).\5\ In 2011, however, the Board amended part 740 by
making NCUA's advertising rules more stringent than FDIC's rules.
Specifically, in 2011, while banks needed only to include the FDIC
advertising statement in radio and television ads that exceeded 30
seconds, the 2011 NCUA rule change required FICUs to include NCUA's
official advertising statement in radio and television ads that
exceeded 15 seconds.\6\ This additional requirement, which the Board
now believes is unnecessary, affected more FICU ads and disrupted the
balance between bank and FICU regulatory burden in this context.
According to some FICUs, it also made it more difficult for FICUs to
produce effective ads.
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\5\ 12 CFR 328.
\6\ 76 FR 30521 (May 26, 2011).
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The 2011 NCUA rule change also required FICUs to include the
advertising statement on statements of condition required to be
published by law, whereas banks are exempt from this. The Board also
proposes to relieve FICUs from this additional burden, which the Board
believes is unnecessary.
[[Page 46174]]
Additionally, as a result of information we have received from the
public, the Board proposes to amend part 740 to permit a fourth
iteration of the official advertising statement, namely by stating
``Insured by NCUA.'' This change would provide FICUs with more
flexibility without diminishing the purpose of the rule.
The current part 740 addresses conventional forms of advertising
such as print, radio, and television. The Board requests comment about
whether the regulation should be modified to facilitate the trend in
advertising via new types of social media, mobile banking, text
messaging and other digital communication platforms, including Twitter
and Instagram. The comments should focus on specific recommendations
that balance the regulation's goal to inform the public with space and
other constraints inherent in new forms of advertising.
II. Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact a regulation may have on a
substantial number of small entities.\7\ For purposes of this analysis,
NCUA considers small credit unions to be those having under $100
million in assets. The proposed amendments provide regulatory relief
and thus do not impose a significant burden on small credit unions.
Accordingly, NCUA has determined and certifies that the proposed rule,
if adopted, will not have a significant economic impact on a
substantial number of small credit unions within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601-612.
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\7\ 5 U.S.C. 603(a).
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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.\8\ 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. The proposed rule does not constitute a ``collection of
information'' within the meaning of section 3502(3) and would not
increase paperwork requirements under the PRA or regulations of the
Office of Management and Budget.
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\8\ 44 U.S.C. 3507(d); 5 CFR part 1320.
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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 proposed rule would not have substantial
direct effect 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 proposed rule does not constitute a policy that
has federalism implications for purposes of the executive order.
The Treasury and General Government Appropriations Act of 1999--
Assessment of Federal Regulations and Policies on Families
NCUA has determined that this proposed rule will not affect family
well-being within the meaning of Section 654 of the Treasury and
General Government Appropriations Act, 1999.\9\
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\9\ Public Law 105-277, 112 Stat. 2681 (1998).
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List of Subjects in 12 CFR Part 740
Advertisements, Credit unions, Share insurance, Signs and symbols.
By the National Credit Union Administration Board on September
28, 2017.
Gerard S. Poliquin,
Secretary of the Board.
For the reasons discussed above, the NCUA Board proposes to amend
12 CFR part 740 as follows:
PART 740--ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS
0
1. The authority for part 740 continues to read as follows:
Authority: 12 U.S.C. 1766, 1781, 1785, and 1789.
0
2. Amend Sec. 740.5 by revising paragraphs (a), (b), (c)(7) and (c)(8)
to read as follows:
Sec. 740.5 Requirements for the official advertising statement.
(a) Each insured credit union must include the official advertising
statement, prescribed in paragraph (b) of this section, in all of its
advertisements, including on its main Internet page, except as provided
in paragraph (c) of this section.
(b) The official advertising statement is in substance one of the
following:
(1) This credit union is federally insured by the National Credit
Union Administration;
(2) Federally insured by NCUA;
(3) Insured by NCUA; or
(4) A reproduction of the official sign as described in Sec.
740.4(b) may be used in lieu of the other statements included in this
section. If the official sign is used as the official advertising
statement, an insured credit union may alter the font size to ensure
its legibility as provided in Sec. 740.4(b)(2).
(5) The official advertising statement must be in a size and print
that is clearly legible and may be no smaller than the smallest font
size used in other portions of the advertisement intended to convey
information to the consumer.
(c) * * *
(7) Advertisements by radio that are less than thirty (30) seconds
in time;
(8) Advertisements by television, other than display
advertisements, that are less than thirty (30) seconds in time;
* * * * *
[FR Doc. 2017-21316 Filed 10-3-17; 8:45 am]
BILLING CODE 7535-01-P