[Federal Register Volume 82, Number 208 (Monday, October 30, 2017)]
[Rules and Regulations]
[Pages 50288-50297]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23211]



[[Page 50287]]

Vol. 82

Monday,

No. 208

October 30, 2017

Part IV





National Credit Union Administration





-----------------------------------------------------------------------





12 CFR Parts 701, 703, 705, et al.





Appeals Procedures; Final Rule

Federal Register / Vol. 82 , No. 208 / Monday, October 30, 2017 / 
Rules and Regulations

[[Page 50288]]


-----------------------------------------------------------------------

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Parts 701, 703, 705, 708a, 709, 741, 745, 746, 747, and 750

RIN 3133-AE68


Appeals Procedures

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The NCUA Board (Board) is adopting this final rule to 
establish procedures to govern appeals to the Board. The rule 
establishes a uniform procedure that will apply to agency regulations 
that currently have their own embedded appeals provisions. Accordingly, 
this final rule will replace those current provisions. The procedures 
will apply in cases in which a decision rendered by a regional director 
or other program office director is subject to appeal to the Board. The 
procedures will result in greater efficiency, consistency, and a better 
understanding of the way in which matters under covered regulations may 
be appealed to the Board.

DATES: This final rule is effective on January 1, 2018.

FOR FURTHER INFORMATION CONTACT: Michael J. McKenna, General Counsel, 
Ross P. Kendall, Special Counsel to the General Counsel, or Benjamin M. 
Litchfield, Staff Attorney, at the above address, or telephone: (703) 
518-6540.

SUPPLEMENTARY INFORMATION: 

Background

    As outlined in its May 2017 proposed rule,\1\ the Board intends for 
new 12 CFR part 746, subpart B, to govern most authorized appeals to 
the Board. The proposed rule identified which rules would be affected 
by these new procedures. In addition, the Board specifically requested 
comment on any other agency rules that should be covered under the 
proposal. The proposed rule also specifically identified certain 
categories of actions or determinations that would not be covered under 
the proposal because appeals relating to them are already covered under 
different agency procedures. The Board invited comment on these 
proposed exclusions as well.
---------------------------------------------------------------------------

    \1\ 82 FR 26378 (June 7, 2017).
---------------------------------------------------------------------------

    As reflected in the proposed rule and as finalized herein, the 
Board is committed to providing credit unions, and other persons or 
entities that are affected by agency decisions, with an opportunity to 
obtain meaningful review of those decisions. The Board believes this 
final rule strikes an appropriate balance that will afford a petitioner 
fair consideration of the issues while avoiding procedures that are 
overly burdensome, time consuming, and expensive.

Comment Summary

    The Board received a total of seven comments to the proposed rule. 
All commenters noted broad, general support for the proposal. 
Beneficial results from the proposal identified by commenters included 
clearer and improved processes, the introduction of consistency into a 
process that is currently varied, a more uniform set of procedures to 
govern those rules in which an appeal is permitted, and the promotion 
of a more streamlined and efficient appeals process. One commenter 
applauded NCUA for what the commenter characterized as a visible and 
forceful commitment to the practice of transparency.
    As discussed more fully below, the Board received one comment 
suggesting that the appeals process be extended to include decisions 
involving capital planning and stress testing. There were no other 
suggestions of additional rules that should be covered. Similarly, the 
Board did not receive any comments on its proposal to exclude certain 
categories of actions or determinations from coverage under the new 
procedures. Accordingly, all of the proposed changes to existing 
regulations are adopted as proposed and without change. In addition, 
the Board confirms the exclusion of the following categories of actions 
from the scope of new part 746, subpart B:
     Formal enforcement actions;
     Creditor claims in liquidation, to the extent that the 
claimant has requested and the Board has agreed to consider the appeal 
formally on the record;
     Material supervisory determinations within the 
jurisdiction of the Supervisory Review Committee (SRC);
     Challenges to actions imposed under the prompt corrective 
action regime; and
     Appeals of matters that are delegated by rule to an 
officer or position below the Board for final, binding agency action.

Section by Section Analysis; Discussion of Specific Comments

    Section 746.201--Authority, Purpose, and Scope. No comments were 
received concerning this first section of proposed subpart B to part 
746, which outlines the Board's authority for issuing the rule as well 
as its scope and purpose. Accordingly, this section of the proposed 
rule is adopted in full without change from the proposal.
    Section 746.202--Definitions. One commenter recommended that the 
rule be modified to include a specific definition of the term 
``reconsideration'' in the definitions section. As proposed, this term 
is defined on a functional basis in Sec.  746.203, which describes the 
concept of reconsideration in detail. While the Board understands that 
the commenter believes including a definition of the term in the 
definitions section would be useful, the Board believes that the 
description of this term, as set out in detail in Sec.  746.203(a), 
provides a more useful, functional definition of the concept and should 
not be changed. Accordingly, this section of the proposed rule is 
adopted in full without change from the proposal.
    Section 746.203--Request for Reconsideration. As proposed, this 
section would set forth procedures for requesting reconsideration from 
a program office prior to filing an appeal with the Board. The rule 
specifies that the program office must make its determination on a 
request for reconsideration within 30 days, and that failure by the 
program office to do so within that time frame shall be deemed an 
affirmation of the initial agency determination. One commenter 
suggested that the rule as proposed was insufficient and should go 
further as to this point. According to the commenter, the rule should 
require the program office to notify the petitioner of its failure to 
timely act on the reconsideration request, provide a substantive 
response, and again notify the petitioner of the right to file an 
appeal with the Board.
    The Board believes that the proposal adequately covers this 
scenario. The Board anticipates that instances of failure by the 
program office to respond to a reconsideration request within the 
prescribed time frame will be rare. Furthermore, the Board notes that 
the provisions in Sec.  746.203(g) are designed to protect the 
petitioner from circumstances in which delay at the program office 
level would thwart the petitioner's ability to secure a higher level of 
review. As drafted, the provision effectively imposes an operational 
deadline for the program office to act. Accordingly, this section of 
the proposed rule is adopted in full without change from the proposal.
    Section 746.204--Appeal to the Board. As proposed, this section 
describes the procedures for filing an appeal with the Board, including 
timing constraints and a listing of the

[[Page 50289]]

information that must be included as part of the appeal. These 
requirements are similar to the current requirements for creditor 
claims and share insurance claims, including the requirement that any 
appeal must be filed with the Secretary of the Board within 60 calendar 
days of the date of the initial agency determination or, if applicable, 
any determination following a request for reconsideration. As proposed, 
the 60-day deadline would not apply to a decision rejecting a request 
by a troubled or newly chartered credit union to make a change at the 
senior official level. In such cases, a 15-day deadline would govern 
the appeal process.
    One commenter recommended that, for the sake of consistency, this 
appeals period should also be established at 60 days. Alternatively, 
according to the commenter, the rule should explicitly require the 
program office to notify credit unions affected by this provision of 
the notably shorter time frame for taking an appeal. Otherwise, 
according to the commenter, the movement toward standardization 
reflected in the rule could lead a credit union to assume that all 
appeals have the same 60-day deadline.
    The Board is not persuaded by this comment. Preserving the shorter 
time frame in this area recognizes the exigencies associated with 
management changes and helps assure that decisions affecting personnel 
are made quickly and subject to review within reasonable time frames. 
In this respect, the Board notes that the relatively shorter timeframe 
governing the change of officials is currently reflected in the 
existing rules that governs this area (Sec.  701.14 and part 747, 
subpart J) and is therefore familiar to credit unions generally. 
Furthermore, the Board notes that program offices include explicit 
references to this deadline in correspondence dealing with this issue 
currently, further minimizing the likelihood of confusion in this area. 
Accordingly, this section of the proposed rule is adopted in full 
without change from the proposal.
    Section 746.205--Preliminary Considerations Regarding the Appeal. 
As proposed, this section of the rule describes preliminary internal 
processes for reviewing appeals, and includes a description of the role 
of the Special Counsel to the General Counsel (Special Counsel) at this 
stage of the proceedings. Two commenters sought clarification as to 
this aspect. The proposed rule provides that the Special Counsel will 
conduct a preliminary review of the materials filed with the appeal 
(Sec.  746.205) and also perform a substantive, de novo review of the 
program office file and the materials submitted by the petitioner to 
make a recommendation to the Board regarding the disposition of the 
appeal (Sec.  746.206). Both commenters requested that the final rule 
provide clarification as to the distinction between these two functions 
and provide greater clarity as to the nature and purpose of the 
preliminary review. The Board acknowledges the validity of the point 
made by these commenters. In the final version of Sec.  746.205(a), 
language is now included that specifies in greater detail the nature of 
the preliminary review conducted by the Special Counsel, which is 
focused on whether the appeal is in good order procedurally. For 
example, the Special Counsel will assess the timeliness of the appeal 
and whether the issues identified in the appeal have become moot.
    Section 746.206 Administration of the Appeal. Aside from the 
comment, discussed above, seeking clarification as to the nature of the 
role of the Special Counsel, the Board did not receive any comments 
regarding Sec.  746.206. Accordingly, this section of the proposed rule 
is adopted in full without change from the proposal.
    Section 746.207--Procedures for Oral Hearing. This section sets out 
a detailed process by which a petitioner may request to appear before 
the Board to argue its appeal in person. As proposed, the rule requires 
that a petitioner make its request for an oral hearing through a 
separate writing that must be submitted at the time of the initial 
appeal (Sec.  746.207(a)). Two commenters opposed this requirement, and 
advocated that the Board should change the rule so that a petitioner 
might make its request for an oral hearing at any time before the Board 
has issued its decision on the appeal. One commenter opposed limiting 
the number of persons to two who may appear as representatives for the 
petitioner at the oral hearing. The commenter asserted that two would 
be insufficient, and advocated that the number be changed to five.
    The Board declines to make the changes requested by these 
commenters. In its proposed form, the rule recognizes that an oral 
hearing can be a logistical challenge requiring significant planning 
and effort, particularly in view of the goal of having the Board render 
its decision within 90 days of the filing of an appeal. This 
requirement also helps to prevent a petitioner from requesting a 
hearing as a device to delay or prolong appeal proceedings. Similarly, 
with regard to the request to allow more personnel to participate in 
the hearing, the Board believes the limitations as proposed will help 
to keep the oral hearing procedures manageable. The Board notes, 
however, that the rule grants the NCUA Chairman discretion to allow a 
greater number of representatives to participate in the oral hearing. 
Accordingly, this section of the proposed rule is adopted in full 
without change from the proposal.

Other Comments

    Role of the Ombudsman. Although the proposed rule made no mention 
of the NCUA Ombudsman and neither provided nor contemplated a role for 
the Ombudsman in the appeals process, two commenters recommended that 
consideration be given for such a role. One commenter opined that the 
full potential of the Ombudsman office is not being met, and that some 
role for the Ombudsman should be developed. In a similar vein, another 
commenter advocated a more robust role for the Ombudsman in the appeals 
process, but noted that greater independence of the Ombudsman, both in 
terms of appearance and in fact, would be necessary in order to further 
a fair and balanced appeals process. After due consideration, the Board 
concludes that, while the Ombudsman plays a valuable role in other 
contexts, a role for the Ombudsman is not necessary or useful in the 
appeals context. Accordingly, the Board has determined not to adopt 
this recommendation.
    Advisory Council. One commenter recommended the Board consider 
establishing an advisory council, comprised of credit unions, which 
could fulfill a role in the appeals process. After due consideration, 
the Board has determined that administration of the appeals process as 
contemplated by the rule does not lend itself to the involvement of an 
advisory council and so has elected not to adopt this recommendation.
    Operational Improvements. Although not directly related to the 
present proposal, one commenter suggested that NCUA focus on current 
operations in areas such as FOM-related applications to achieve 
improved efficiency and transparency in that area. In the view of the 
commenter, this would help to reduce the need for an eventual appeal of 
an adverse decision. The Board has taken this recommendation under 
advisement.
    Expansion of Scope of Proposal. One commenter recommended that the 
Board expand the scope of the proposed rule so that it would extend to 
both capital planning and stress testing,\2\

[[Page 50290]]

such that program office decisions in each of these areas would be 
specifically subject to appeal to the Board. After due consideration of 
this recommendation, the Board has determined that an adverse 
determination at the program office level concerning a credit union's 
capital plan would qualify as a material supervisory determination, 
within the meaning of NCUA's Supervisory Review Committee rule (part 
746, subpart A) (the rule is published elsewhere in this issue of the 
Federal Register). Similarly, a program office determination concerning 
the outcome of a required stress test carries with it potentially 
adverse consequences, in the event the credit union is determined to 
have failed the stress test. As such, either determination should be 
subject to appeal to the SRC. Corresponding adjustments to that rule to 
accommodate this approach are being made in coordination with the 
adoption of this rule.
---------------------------------------------------------------------------

    \2\ See 12 CFR part 702, subpart E.
---------------------------------------------------------------------------

    Publication of Decisions. One commenter encouraged NCUA to publish 
its appeal decisions (as well as its SRC appeal decisions), so that the 
industry can better understand the Board's policy goals and statutory 
and regulatory interpretations. Another commenter suggested that NCUA 
should establish an annual reporting requirement that would inform 
stakeholders of the utility of pursuing an appeal by including an 
evaluation of results of appeals that have been taken during the 
reporting period. The Board does, in fact, routinely publish on the 
NCUA Web site its decisions concerning matters that have been appealed. 
The Board has taken under advisement the suggestion to include results 
of appeals in its regular annual report.
    Codification in part 741. One commenter, whose focus is principally 
on the regulation of federally insured, State-chartered credit unions, 
recommended that the appeals rule be codified as a new subpart to part 
741, instead of in new part 746. The commenter notes that because part 
741 is ostensibly designed to contain all regulations to which such 
credit unions are subject, including the appeals rule in that part 
would be more convenient and useful to them. After due consideration of 
this suggestion, the Board concludes that this is best handled through 
a separate part (i.e., new part 746) devoted exclusively to appeals.
    Notice to State Supervisory Authorities. One commenter suggested 
that, with respect to federally insured, State-chartered credit unions, 
the rule should include a requirement that the State regulator be 
provided with a copy of any correspondence between NCUA and the credit 
union relating to an appeal. In view of the close relationship that 
NCUA enjoys with State regulatory authorities, the Board believes 
inclusion of a provision mandating cooperation and information sharing 
is unnecessary.

V. 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 $100 
million in assets). This rule only provides enhanced voluntary 
opportunities for credit unions to appeal agency determinations. 
Accordingly, it will not have a significant economic impact on a 
substantial number of small credit unions, and therefore, no regulatory 
flexibility analysis is required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) 
requires that the Office of Management and Budget (OMB) approve all 
collections of information by a Federal agency from the public before 
they can be implemented. Respondents are not required to respond to any 
collection of information unless it displays a current, valid OMB 
control number.
    In accordance with the PRA, the information collection requirements 
included in this final rule has been submitted to OMB for approval 
under control number 3133-0198.

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

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

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 rulemaking will not have a 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 proposal does not constitute a policy that has 
federalism implications for purposes of the executive order.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 \3\ 
(SBREFA) 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.\4\ NCUA does not believe this final rule is a ``major rule'' 
within the meaning of the relevant sections of SBREFA. NCUA has 
submitted the rule to the Office of Management and Budget for its 
determination in that regard.
---------------------------------------------------------------------------

    \3\ Public Law 104-121.
    \4\ 5 U.S.C. 551.
---------------------------------------------------------------------------

List of Subjects

12 CFR Part 701

    Credit, Credit unions, Reporting and recordkeeping requirements.

12 CFR Part 703

    Credit unions, Investments.

12 CFR Part 705

    Credit unions, Grants, Loans, Revolving fund.

12 CFR Part 708a

    Credit unions, Reporting and recordkeeping requirements.

12 CFR Part 709

    Claims, Credit unions.

12 CFR Part 741

    Credit unions, Reporting and recordkeeping requirements, Share 
insurance.

12 CFR Part 745

    Administrative practice and procedure, Claims, Credit unions, Share 
insurance.

12 CFR Part 746

    Administrative practice and procedure, Claims, Credit unions, 
Investigations.

12 CFR Part 747

    Administrative practice and procedure, Claims, Credit unions, 
Investigations.

12 CFR Part 750

    Credit unions, Golden parachute payments, Indemnity payments.


[[Page 50291]]


    By the National Credit Union Administration Board, this 19th day 
of October 2017.
Gerard Poliquin,
Secretary of the Board.

    For the reasons discussed above, the NCUA Board amends 12 CFR parts 
701, 703, 705, 708a, 709, 741, 745, 746, 747, and 750 as follows:

PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS

0
1. The authority citation for part 701 is revised to read as follows:

    Authority:  12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 
1761a, 1761b, 1766, 1767, 1782, 1784, 1786, 1787, 1789. Section 
701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also 
authorized by 15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3610. 
Section 701.35 is also authorized by 42 U.S.C. 4311-4312.


0
2. Revise Sec.  701.14(e) to read as follows:


Sec.  701.14  Change in official or senior executive officer in credit 
unions that are newly chartered or are in troubled condition.

* * * * *
    (e) Notice of disapproval. NCUA may disapprove the individual 
serving as a director, committee member or senior executive officer if 
it finds that the competence, experience, character, or integrity of 
the individual with respect to whom a notice under this section is 
submitted indicates that it would not be in the best interests of the 
members of the credit union or of the public to permit the individual 
to be employed by, or associated with, the credit union. The Notice of 
Disapproval will advise the parties of their rights to request 
reconsideration from the Regional Director and/or file an appeal with 
the NCUA Board in accordance with the procedures set forth in subpart B 
to part 746 of this chapter.

0
3. Revise Sec.  701.21(h)(3) to read as follows:


Sec.  701.21  Loans to members and lines of credit to members.

* * * * *
    (h) * * *
    (3) A regional director will provide a written determination on a 
waiver request within 45 calendar days after receipt of the request; 
however, the 45-day period will not begin until the requesting credit 
union has submitted all necessary information to the regional director. 
If the regional director does not provide a written determination 
within the 45-day period the request is deemed denied. A credit union 
may request the regional director to reconsider a denied waiver request 
and/or file an appeal with the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.
* * * * *

0
4. Revise Sec.  701.22(c) to read as follows:


Sec.  701.22  Loan participations.

* * * * *
    (c) To seek a waiver from any of the limitations in paragraph (b) 
of this section, a federally insured credit union must submit a written 
request to its regional director with a full and detailed explanation 
of why it is requesting the waiver. Within 45 calendar days of receipt 
of a completed waiver request, including all necessary supporting 
documentation and, if appropriate, any written concurrence, the 
regional director will provide the federally insured credit union a 
written response. The regional director's decision will be based on 
safety and soundness and other considerations; however, the regional 
director will not grant a waiver to a federally insured, State-
chartered credit union without the prior written concurrence of the 
appropriate State supervisory authority. A federally insured credit 
union may request the regional director to reconsider a denied waiver 
request and/or file an appeal with the NCUA Board in accordance with 
the procedures set forth in subpart B to part 746 of this chapter.
* * * * *

0
5. Revise Sec.  701.23(h)(3) to read as follows:


Sec.  701.23  Purchase, sale, and pledge of eligible obligations.

* * * * *
    (h) * * *
    (3) Appeal to NCUA Board. A Federal credit union may request the 
regional director to reconsider a denied request for expanded authority 
and/or file an appeal with the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.

0
6. Revise Sec.  701.32(b)(5) to read as follows:


Sec.  701.32  Payment on shares by public units and nonmembers.

* * * * *
    (b) * * *
    (5) The regional director will provide a written determination on 
an exemption request within 30 calendar days after receipt of the 
request. The 30-day period will not begin to run until all necessary 
information has been submitted to the Regional Director. A credit union 
may request the Regional Director to reconsider a denied exemption 
request and/or file an appeal with the NCUA Board in accordance with 
the procedures set forth in subpart B to part 746 of this chapter.
* * * * *

0
7. Revise Sec.  701.34(a)(4) to read as follows:


Sec.  701.34  Designation of low income status; Acceptance of secondary 
capital accounts by low-income designated credit unions.

    (a) * * *
    (4) If NCUA determines a low-income designated Federal credit union 
no longer meets the criteria for the designation, NCUA will notify the 
Federal credit union in writing, and the Federal credit union must, 
within five years, meet the criteria for the designation or come into 
compliance with the regulatory requirements applicable to Federal 
credit unions that do not have a low-income designation. The 
designation will remain in effect during the five-year period. If a 
Federal credit union does not requalify and has secondary capital or 
nonmember deposit accounts with a maturity beyond the five-year period, 
NCUA may extend the time for a Federal credit union to come into 
compliance with regulatory requirements to allow the Federal credit 
union to satisfy the terms of any account agreements. A Federal credit 
union may request NCUA to reconsider a determination that it no longer 
meets the criteria for the designation and/or file an appeal with the 
NCUA Board in accordance with the procedures set forth in subpart B to 
part 746 of this chapter.
* * * * *

0
8. Appendix B to part 701 is amended as follows:
0
a. Section VII.D of Chapter 1 is revised.
0
b. Section II.C.5 of Chapter 2 is revised.
0
c. Section III.C.5 of Chapter 2 is revised.
0
d. Section IV.C.5 of Chapter 2 is revised.
0
e. Section V.C.5 of Chapter 2 is revised.
0
f. Section IV.B of Chapter 3 is revised.
0
g. Section II.C.6 of Chapter 4 is revised.
0
h. Section II.D--Application for a Federal Charter of Chapter 4 is 
redesignated as Section II.D.2--Application for a Federal Charter and 
revised.
0
i. Section III.D.6 of Chapter 4 is revised.
    The revisions read as follows:

[[Page 50292]]

Appendix B to Part 701--Chartering and Field of Membership Manual

Chapter 1--Federal Credit Union Chartering

* * * * *

VII.D--Appeal of Office of Consumer Financial Protection and Access 
Director Decision

    If the Office of Consumer Financial Protection and Access 
Director denies a charter application, in whole or in part, that 
decision may be appealed to the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.
    Before appealing, the prospective group may, within 30 days of 
the denial, provide supplemental information to the Office of 
Consumer Financial Protection and Access Director for 
reconsideration. A request for reconsideration should contain new 
and material evidence addressing the reasons for the initial denial. 
The Office of Consumer Financial Protection and Access Director will 
have 30 days from the date of the receipt of the request for 
reconsideration to make a final decision. If the request is again 
denied, the applicant may proceed with the appeal process within 60 
days of the date of the last denial.
* * * * *

Chapter 2--Field of Membership Requirements for Federal Credit Unions

* * * * *

II.C.5--Appeal of Office of Consumer Financial Protection and 
Access Director Decision

    If the Office of Consumer Financial Protection and Access 
Director denies a field of membership expansion request, merger, or 
spin-off, that decision may be appealed to the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. A 
request for reconsideration should contain new and material evidence 
addressing the reasons for the initial denial. The Office of 
Consumer Financial Protection and Access Director will have 30 days 
from the date of the receipt of the request for reconsideration to 
make a final decision. If the request is again denied, the applicant 
may proceed with the appeal process within 60 days of the date of 
the last denial.
* * * * *

III.C.5--Appeal of Office of Consumer Financial Protection and 
Access Director Decision

    If the Office of Consumer Financial Protection and Access 
Director denies a field of membership expansion request, merger, or 
spin-off, that decision may be appealed to the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. A 
request for reconsideration should contain new and material evidence 
addressing the reasons for the initial denial or explain extenuating 
circumstances that precluded the inclusion of existing material 
evidence or information that should have been filed with the request 
for reconsideration. The Office of Consumer Financial Protection and 
Access Director will have 30 days from the date of the receipt of 
the request for reconsideration to make a final decision. If the 
request is again denied, the applicant may proceed with the appeal 
process within 60 days of the date of the last denial. A petitioner 
may seek a second reconsideration based on new material evidence or 
information or extenuating circumstances that precluded the 
inclusion of such information in the previous request.
* * * * *

IV.C.5--Appeal of Office of Consumer Financial Protection and 
Access Director Decision

    If the Office of Consumer Financial Protection and Access 
Director denies a field of membership expansion request, merger, or 
spin-off, that decision may be appealed to the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. A 
request for reconsideration should contain new and material evidence 
addressing the reasons for the initial denial or explain extenuating 
circumstances that precluded the inclusion of existing material 
evidence or information that should have been filed with the request 
for reconsideration. The Office of Consumer Financial Protection and 
Access Director will have 30 days from the date of the receipt of 
the request for reconsideration to make a final decision. If the 
request is again denied, the applicant may proceed with the appeal 
process within 60 days of the date of the last denial. A petitioner 
may seek a second reconsideration based on new material evidence or 
information or extenuating circumstances that precluded the 
inclusion of such information in the previous request.
* * * * *

V.C.5--Appeal of Office of Consumer Financial Protection and Access 
Director Decision

    If the Office of Consumer Financial Protection and Access 
Director denies a field of membership expansion request, merger, or 
spin-off, that decision may be appealed to the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. A 
request for reconsideration should contain new and material evidence 
addressing the reasons for the initial denial or explain extenuating 
circumstances that precluded the inclusion of existing material 
evidence or information that should have been filed with the request 
for reconsideration. The Office of Consumer Financial Protection and 
Access Director will have 30 days from the date of the receipt of 
the request for reconsideration to make a final decision. If the 
request is again denied, the applicant may proceed with the appeal 
process within 60 days of the date of the last denial. A petitioner 
may seek a second reconsideration based on new material evidence or 
information or extenuating circumstances that precluded the 
inclusion of such information in the previous request.
* * * * *

Chapter 3--Low-Income Credit Unions and Credit Unions Serving 
Underserved Areas

* * * * *

IV.B--Appeal of Office of Consumer Financial Protection and Access 
Director Decision

* * * * *
    If the Office of Consumer Financial Protection and Access 
Director denies an ``underserved area'' request, the Federal credit 
union may appeal that decision to the NCUA Board in accordance with 
the procedures set forth in subpart B to part 746 of this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. A 
request for reconsideration should contain new and material evidence 
addressing the reasons for the initial denial or explain extenuating 
circumstances that precluded the inclusion of existing material 
evidence or information that should have been filed with the request 
for reconsideration. The Office of Consumer Financial Protection and 
Access Director will have 30 days from the date of the receipt of 
the request for reconsideration to make a final decision. If the 
request is again denied, the applicant may proceed with the appeal 
process within 60 days of the date of the last denial. A petitioner 
may seek a second reconsideration based on new material evidence or 
information or extenuating circumstances that precluded the 
inclusion of such information in the previous request.
* * * * *

Chapter 4--Charter Conversions

* * * * *

II.C.6--Appeal of the Office of Consumer Financial Protection and 
Access Director Decision

    If a conversion to a Federal charter is denied by the Office of 
Consumer Financial Protection and Access Director, the applicant 
credit union may appeal that decision to the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. A 
request for reconsideration should contain new and material evidence 
addressing the reasons for

[[Page 50293]]

the initial denial or explain extenuating circumstances that 
precluded the inclusion of existing material evidence or information 
that should have been filed with the request for reconsideration. 
The Office of Consumer Financial Protection and Access Director will 
have 30 days from the date of the receipt of the request for 
reconsideration to make a final decision. If the request is again 
denied, the applicant may proceed with the appeal process within 60 
days of the date of the last denial. A petitioner may seek a second 
reconsideration based on new material evidence or information or 
extenuating circumstances that precluded the inclusion of such 
information in the previous request.
* * * * *

II.D.2--Application for a Federal Charter

    When the Office of Consumer Financial Protection and Access 
Director has received evidence that the board of directors has 
satisfactorily completed the actions described above, the Federal 
charter and new Certificate of Insurance will be issued.
    The credit union may then complete the conversion as discussed 
in the following section. A credit union may request the Office of 
Consumer Financial Protection and Access Director to reconsider a 
denial of a conversion application and/or appeal a denial to the 
NCUA Board. For more information, refer to Section II.C.6 of this 
chapter.
* * * * *

III.D.6--Appeal of Office of Consumer Financial Protection and 
Access Director Decision

    If the Office of Consumer Financial Protection and Access 
Director denies a conversion to a State charter, the Federal credit 
union may appeal that decision to the NCUA Board in accordance with 
the procedures set forth in subpart B to part 746 of this chapter.
    Before appealing, the credit union may, within 30 days of the 
denial, provide supplemental information to the Office of Consumer 
Financial Protection and Access Director for reconsideration. The 
Office of Consumer Financial Protection and Access Director will 
have 30 business days from the date of the receipt of the request 
for reconsideration to make a final decision. If the application is 
again denied, the credit union may proceed with the appeal process 
to the NCUA Board within 60 days of the date of the last denial by 
the Office of Consumer Financial Protection and Access Director.
* * * * *

PART 703--INVESTMENT AND DEPOSIT ACTIVITIES

0
9. The authority citation for part 703 continues to read as follows:

    Authority: 12 U.S.C. 1757(7), 1757(8), 1757(15).

0
10. Revise Sec.  703.20(d) to read as follows:


Sec.  703.20   Request for additional authority.

* * * * *
    (d) Appeal to NCUA Board. A Federal credit union may request the 
regional director to reconsider any part of the determination made 
under paragraph (c) of this section and/or file an appeal with the NCUA 
Board in accordance with the procedures set forth in subpart B to part 
746 of this chapter.

0
11. Revise Sec.  703.111(d) to read as follows:


Sec.  703.111  NCUA approval.

* * * * *
    (d) Right to appeal. A Federal credit union may request the field 
director to reconsider a determination made under paragraph (a) or (c) 
of this section and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.

0
12. Revise Sec.  703.112(c) to read as follows:


Sec.  703.112   Applying for additional products or characteristics.

* * * * *
    (c) A Federal credit union may request the regional director to 
reconsider a denial of an application for additional products or 
characteristics and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.

0
13. Revise Sec.  703.114(c) to read as follows:


Sec.  703.114   Regulatory violation.

* * * * *
    (c) A Federal credit union may request the regional director to 
reconsider a revocation of derivatives authority or an order to 
terminate existing derivatives positions and/or file an appeal with the 
NCUA Board in accordance with the procedures set forth in subpart B to 
part 746 of this chapter.
* * * * *

PART 705--COMMUNITY DEVELOPMENT REVOLVING LOAN FUND ACCESS FOR 
CREDIT UNIONS

0
14. The authority citation for part 705 continues to read as follows:

    Authority: 12 U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1782, 
1784, 1785 and 1786.


0
15. Revise Sec.  705.10(a) to read as follows:


Sec.  705.10   Appeals.

    (a) Appeals of non-qualification. A Qualifying Credit Union whose 
application for a loan or technical assistance grant has been denied 
under Sec.  705.7(f) for failure to satisfy any of the conditions set 
forth in Sec.  705.7(c), including any additional criteria set forth in 
the related notice of funding opportunity, may request the Director of 
the Office of Small Credit Union Initiatives to reconsider the denial 
and/or appeal that decision to the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter, subject 
to the following limitations:
    (1) Scope. The scope of the Board's review is limited to the 
threshold question of qualification and not the issue of whether, among 
qualified applicants, a particular loan or technical assistance grant 
is funded.
    (2) Appeals procedures inapplicable. The foregoing procedure 
applies during an open period in which funds are available and NCUA has 
called for applications. NCUA will reject any application submitted 
during a period in which NCUA has not called for applications, except 
for applications submitted under Sec.  705.8. Such rejections are not 
subject to appeal or review by the NCUA Board.
* * * * *

PART 708a--BANK CONVERSIONS AND MERGERS

0
16. The authority citation for part 708a continues to read as follows:

    Authority: 12 U.S.C. 1766, 1785(b), and 1785(c).


0
17. Revise Sec.  708a.108(d) to read as follows:


Sec.  708a.108   NCUA oversight of methods and procedures of membership 
vote.

* * * * *
    (d) A converting credit union may request the regional director to 
reconsider a determination regarding the methods and procedures of the 
membership vote and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.

0
18. Revise Sec.  708a.304(h) to read as follows:


Sec.  708a.304   Notice to NCUA and request to proceed with member 
vote.

* * * * *
    (h) Appeal of adverse decision. If the Regional Director 
disapproves a merger proposal, the credit union may request 
reconsideration and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.

0
19. Revise Sec.  708a.308(d) to read as follows:


Sec.  708a.308   NCUA approval of the merger.

* * * * *

[[Page 50294]]

    (d) A merging credit union may request the Regional Director to 
reconsider the disapproval of a merger proposal and/or file an appeal 
with the NCUA Board in accordance with the procedures set forth in 
subpart B to part 746 of this chapter.

PART 709--INVOLUNTARY LIQUIDATION OF FEDERAL CREDIT UNIONS AND 
ADJUDICATION OF CREDITOR CLAIMS INVOLVING FEDERALLY INSURED CREDIT 
UNIONS IN LIQUIDATION

0
20. The authority citation for part 709 continues to read as follows:

    Authority: 12 U.S.C. 1757, 1766, 1767, 1786(h), 1787, 1788, 
1789, 1789a.


0
21. Revise Sec.  709.7 to read as follows:


Sec.  709.7   Procedures for agency review or judicial determination of 
claims.

    (a) General. A claimant may either request agency review of an 
initial determination of the liquidating agent to disallow a claim or 
seek a de novo judicial determination of claims. In order to receive 
agency review of an initial determination, a claimant must request an 
administrative appeal before the NCUA Board. In order to seek a 
judicial determination, a claimant must file suit (or continue an 
action commenced before the appointment of the liquidating agent) in 
the district or territorial court of the United States for the district 
within which the credit union's principal place of business is located 
or the United States District Court for the District of Columbia.
    (b) Procedures for agency review. A claimant requesting an 
administrative appeal may request a hearing on the record conducted 
pursuant to the procedures set forth in subpart A of part 747 of this 
chapter. The determination of whether to agree to a request for a 
hearing on the record shall rest solely with the NCUA Board, which 
shall notify the claimant of its decision in writing. Alternatively, a 
claimant may request an appeal before the NCUA Board pursuant to the 
procedures set forth in subpart B to part 746 of this chapter.
    (c) Deadline to request agency review or file suit. A claimant must 
request agency review of an initial determination or file suit (or 
continue an action commenced before the appointment of the liquidating 
agent) within 60 days from the mailing of the initial determination or 
the expiration of the time period for the liquidating agent to 
determine claims under Sec.  709.6(c), whichever is earlier. A request 
for a hearing on the record will suspend the 60-day period for filing a 
lawsuit (or continuing an action commenced before the appointment of 
the liquidating agent) from the date of the claimant's request to the 
date of the NCUA Board's decision regarding that request. If a claimant 
fails to either request a hearing on the record or an appeal to the 
Board or file suit (or continue an action commenced before the 
appointment of the liquidating agent) within the 60-day period, any 
disallowance of claims shall be final and the claimant shall have no 
further rights or remedies with respect to such claims.
    (d) Reconsideration. Prior to requesting agency review or filing or 
continuing a lawsuit, a claimant may request reconsideration of the 
initial determination of the liquidating agent in accordance with the 
procedures set forth in subpart B to part 746 of this chapter. The 
deadline to request agency review or file suit (or continue an action 
commenced before the appointment of the liquidating agent) in paragraph 
(c) of this section will be suspended from the date of the claimant's 
request to the date of the liquidating agent's decision regarding that 
request.


Sec.  709.8  [Removed]

0
22. Remove Sec.  709.8.


Sec. Sec.  709.9 through 709.13  [Redesignated as Sec. Sec.  709.8 
through 709.12]

0
23. Redesignate Sec. Sec.  709.9 through 709.13 as Sec. Sec.  709.8 
through 709.12, respectively.

PART 741--REQUIREMENTS FOR INSURANCE

0
24. The authority citation for part 741 continues to read as follows:

    Authority:  12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31 
U.S.C. 3717.


0
25. Revise Sec.  741.11(d) to read as follows:


Sec.  741.11   Foreign branching.

* * * * *
    (d) Revocation of approval. A State regulator that revokes approval 
of the branch office must notify NCUA of the action once it issues the 
notice of revocation. The regional director may revoke approval of the 
branch office for failure to follow the business plan in a material 
respect or for substantive and documented safety and soundness reasons. 
If the regional director revokes the approval, the credit union will 
have six months from the date of the revocation letter to terminate the 
operations of the branch. The credit union can request reconsideration 
of the revocation and/or appeal this revocation to the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
* * * * *

PART 745--SHARE INSURANCE AND APPENDIX

0
26. 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; title V, Pub. L. 109-351, 120 Stat. 1966.


0
27. Revise Sec.  745.201(c) to read as follows:


Sec.  745.201  Processing of insurance claims.

* * * * *
    (c) Reconsideration and appeals. An accountholder may request 
reconsideration from the Liquidating Agent of the initial determination 
and/or file an appeal with the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.


Sec.  745.202   [Removed]

0
28. Remove Sec.  745.202.


Sec.  745.203   [Redesignated as Sec.  745.202]

0
29. Redesignate Sec.  745.203 as Sec.  745.202.

PART 746--APPEALS PROCEDURES

0
30. The authority citation for part 746 continues to read as follows:

    Authority:  12 U.S.C. 1766, 1787, and 1789.


0
31. Add subpart B to read as follows:
Subpart B--Appeals Procedures That Do Not by Law Require a Board 
Hearing
Sec.
746.201 Authority, purpose, and scope.
746.202 Definitions.
746.203 Request for reconsideration.
746.204 Appeal to the Board.
746.205 Preliminary considerations regarding the appeal.
746.206 Administration of the appeal.
746.207 Procedures for oral hearing.

Subpart B--Appeals Procedures That Do Not by Law Require a Board 
Hearing


Sec.  746.201   Authority, purpose, and scope.

    (a) Authority. This subpart is issued pursuant to sections 120, 
207, and 209 of the Federal Credit Union Act (12 U.S.C. 1766, 1787, and 
1789).
    (b) Purpose. This subpart provides generally uniform procedures by 
which petitioners may appeal initial agency determinations to the NCUA 
Board under this part.
    (c) Scope. This subpart covers the appeal of initial agency 
determinations by a program office which the petitioner has a right to 
appeal to the NCUA Board

[[Page 50295]]

under the following regulations: Sec. Sec.  701.14(e), 701.21(h)(3), 
701.22(c), 701.23(h)(3), 701.32(b)(5), and 701.34(a)(4), appendix B to 
part 701 of this chapter, Chapters 1-4, Sec. Sec.  703.20(d), 
703.111(d), 703.112(c), 703.114(c), 705.10(a), 708a.108(d), 
708a.304(h), 708a.308(d), 709.7, 741.11(d), and 745.201(c), subpart J 
to part 747 of this chapter, and Sec.  750.6(b).
    (d) Exclusions. This subpart does not apply to:
    (1) Actions by the agency to develop regulations, policy 
statements, or guidance documents;
    (2) Formal enforcement actions, the review of material supervisory 
determinations that come under the jurisdiction of NCUA's Supervisory 
Review Committee, or the appeal of any agency determination made 
pursuant to part 792 of this chapter;
    (3) Challenges to determinations under the prompt corrective action 
regime in parts 702 and 704 of this chapter and subparts L and M to 
part 747 of this chapter; and
    (4) Creditor claims arising from the liquidation of an insured 
credit union to the extent that the creditor has requested, and the 
NCUA Board has agreed, for the claim to be handled through a hearing on 
the record pursuant to 12 U.S.C. 1787(b)(7)(A) and subpart A of part 
747 of this chapter.


Sec.  746.202   Definitions.

    For purposes of this subpart:
    Appeal means a process by which a petitioner may obtain the review 
by the Board of an initial agency determination.
    Board means the NCUA Board.
    Initial agency determination means an agency action taken at a 
level below the Board with respect to an application, request, claim, 
or other matter in which a determination of rights or resolution of 
issues is rendered and the party affected by the determination has been 
provided with a right to appeal the determination to the NCUA Board. 
The initial agency determination shall notify the Petitioner of the 
right to request reconsideration or to file an appeal with the Board, 
and shall include a description of applicable filing deadlines and time 
frames for agency responses. Agency determinations involving the 
formulation of a regulation, guidance document, or policy statement are 
excluded from this definition.
    Oral hearing means an opportunity, granted at the sole discretion 
of the Board, by which a petitioner may make an oral presentation to 
the Board concerning issues pertinent to an appeal.
    Petitioner means the person or entity seeking Board review of an 
initial agency determination.
    Program office means the office within NCUA responsible for making 
an initial agency determination.
    Special Counsel to the General Counsel means an individual 
(referred to herein as the ``Special Counsel'') within NCUA's Office of 
General Counsel charged with administering appeals in accordance with 
the procedures set forth in this part.


Sec.  746.203   Request for reconsideration.

    (a) Reconsideration. Prior to submitting an appeal in accordance 
with Sec.  746.204, the petitioner may in its sole discretion make a 
written request to the appropriate program office to reconsider the 
initial agency determination.
    (b) Deadline to file. A request for reconsideration must be sent to 
the appropriate program office within 30 calendar days of the date of 
the initial agency determination. A petitioner who does not file a 
request for reconsideration in a timely manner is considered to have 
waived the right to request reconsideration.
    (c) Special rule regarding change in officials. Notwithstanding 
paragraph (a) of this section, a request for reconsideration of an 
initial agency determination disapproving an individual serving as a 
director, committee member or senior executive officer pursuant to 
Sec.  701.14 of this chapter must be sent to the appropriate program 
office within 15 calendar days of the date of the initial agency 
determination.
    (d) Content of request. Any request for reconsideration must 
include:
    (1) A statement of the facts on which the request for 
reconsideration is based;
    (2) A statement of the basis for the initial agency determination 
to which the petitioner objects and the alleged error in such 
determination; and
    (3) Any other support or evidence relied upon by the petitioner 
which was not previously provided to the appropriate program office.
    (e) Determination of program office. The appropriate program office 
will review its initial agency determination and reconsider the 
position initially taken in the light of the arguments and additional 
materials provided in the request for reconsideration. Within 30 
calendar days of its receipt of a request for reconsideration, the 
appropriate program office shall issue its determination either 
affirming in whole or in part the initial agency determination or 
rejecting it.
    (f) Notice of determination. The appropriate program office shall 
provide its decision concerning the reconsideration request to the 
petitioner in writing, stating the reasons for the decision. The 
decision shall be treated as an initial agency determination for 
purposes of Sec.  746.204(a).
    (1) In addition to a written statement of reasons for the decision, 
the appropriate program office shall provide the petitioner with 
written notice of the right to appeal the decision, in whole or in 
part, to the Board in accordance with the procedures set forth in Sec.  
746.204.
    (2) For creditor claims brought pursuant to sec. 207 of the Federal 
Credit Union Act (12 U.S.C. 1787), the appropriate program office shall 
provide the petitioner with written notice of the right, in the 
alternative to filing an appeal with the Board, to file suit or 
continue an action commenced before the appointment of the liquidating 
agent in the district or territorial court of the United States for the 
district within which the credit union's principal place of business 
was located or the United States District Court for the District of 
Columbia. For such claims, the 60-day period for filing a lawsuit in 
United States district court provided in 12 U.S.C. 1787(b)(6) shall be 
tolled from the date of the petitioner's request for reconsideration to 
the date of a determination pursuant to paragraph (e) of this section.
    (3) Upon a showing of extenuating circumstances, as determined by 
the program office in its reasonable judgment, a petitioner may be 
allowed to submit a second reconsideration request before filing an 
appeal with the Board. In such cases, the deadline for filing an appeal 
with the Board shall begin to run from the earlier of the date of the 
decision of the program office regarding the second reconsideration 
request or thirty calendar days from the date the second 
reconsideration request was accepted by the program office.
    (g) Failure to make a determination. Failure by the appropriate 
program office to issue a decision within the timeframe specified in 
paragraph (e) of this section shall be an affirmation of the original 
initial agency determination and shall be treated as an initial agency 
determination for purposes of Sec.  746.204(a).
    (h) Burden of proof. The burden of proof to lead the appropriate 
program office to modify or reverse an initial agency determination 
shall rest solely upon the petitioner.


Sec.  746.204   Appeal to the Board.

    (a) Filing. Within 60 calendar days of the date of an initial 
agency

[[Page 50296]]

determination, or, as applicable, a determination by the program office 
on any request for reconsideration, a petitioner may file an appeal 
seeking review of the determination by the Board. The request must be 
in writing and filed with the Secretary of the Board, National Credit 
Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428.
    (b) Special rule regarding change in officials. Notwithstanding 
paragraph (a) of this section, an appeal of an initial agency 
determination disapproving an individual serving as a director, 
committee member or senior executive officer pursuant to Sec.  701.14 
of this chapter must be filed with the Secretary of the Board within 15 
calendar days of the date of the initial agency determination.
    (c) Failure to file a timely appeal. Absent extenuating 
circumstances, as determined by the Board in its sole discretion, a 
petitioner who fails to file an appeal within the specified 60-day 
period shall be deemed to have waived all claims pertaining to the 
matters in issue.
    (d) Content of request. Any appeal filed with the Board must 
include:
    (1) A statement summarizing the underlying facts that form the 
basis of the appeal, together with copies of all pertinent documents, 
records, and materials on which the petitioner relies in support of the 
appeal.
    (2) A statement outlining why the petitioner objects to the 
conclusions in the initial agency determination, including any errors 
alleged to have been made by the program office in reaching its 
determination.
    (3) Any other materials or evidence relied upon by the petitioner 
that were not previously provided to the appropriate program office.
    (e) Burden of proof. The burden of proof to lead the Board to 
modify or reverse an initial agency determination shall rest solely 
upon the petitioner.
    (f) Amending or supplementing the appeal. Within 45 calendar days 
from the date the Secretary of the Board receives an appeal, the 
petitioner may amend or supplement the appeal in writing.
    (g) Request for oral hearing. In accordance with Sec.  746.207, the 
petitioner may request an opportunity to appear before the Board, in 
person, or via teleconference or videoconference, to make an oral 
presentation in support of the appeal.


Sec.  746.205  Preliminary considerations regarding the appeal.

    (a) Initial review. The Special Counsel shall review all appeals 
filed with the Secretary of the Board for conformance with the rules 
set forth in this subpart, including deadlines for submission of an 
appeal. The Special Counsel shall also make an evaluation concerning 
whether an appeal is moot or is otherwise not in good order, and shall 
make a recommendation for the disposition of all such appeals to the 
Board. The Special Counsel shall have the authority to dismiss an 
appeal upon the request of the petitioner.
    (b) Supplemental materials. Within 30 calendar days from the date 
the Secretary of the Board receives an appeal, the Special Counsel may 
request in writing that the petitioner submit additional evidence in 
support of the appeal. If additional evidence is requested, the 
petitioner shall have 30 calendar days from the date of issuance of 
such request to provide the requested information. Failure by the 
petitioner to provide such information may result in denial of the 
petitioner's appeal. The Special Counsel shall have the authority to 
request additional information from any other relevant source in order 
to provide the Board with a full and complete administrative record. 
All requests by the Special Counsel pursuant to this section must be 
reasonable and designed to facilitate the processing of the appeal, not 
to delay it.


Sec.  746.206   Administration of the appeal.

    (a) De novo review by Special Counsel. After receipt of a timely 
appeal, the Special Counsel shall contact the relevant NCUA program 
office and request a complete set of all pertinent materials, including 
internal memoranda, correspondence, and records having a bearing on the 
initial agency determination being appealed. The Special Counsel will 
conduct an independent review of these materials, along with all 
materials submitted by the petitioner in support of the appeal. The 
Special Counsel will make a recommendation to the Board as to the 
appropriate disposition of the appeal after having evaluated the 
applicable legal arguments and considered the facts and circumstances 
that pertain to the appeal. As directed by the Board, the Special 
Counsel may provide his or her recommendation in writing to the Board 
and may make an oral presentation before the Board.
    (b) Determination on appeal. Within 90 calendar days from the date 
of receipt of an appeal by the Secretary of the Board, or within any 
extension of time as established by the Chairman, the Board shall issue 
a decision allowing, in whole or in part, or disallowing the 
petitioner's appeal. The decision by the Board shall be in writing, 
stating the reasons for the decision, and shall constitute a final 
agency action for purposes of chapter 7 of title 5 of the United States 
Code. Failure by the Board to issue a decision on an appeal within the 
90-day period or within any extension of time as established by the 
Chairman shall be deemed to be a denial of the appeal.
    (c) Extension of time. In the discretion of the Chairman, the time 
frame for the Board's decision may be extended as the Chairman may 
consider necessary or appropriate for a full and fair consideration of 
the issues. For purposes of this paragraph (c), the Special Counsel is 
authorized to act on behalf of the Chairman and may, in that capacity, 
grant an extension of time.


Sec.  746.207  Procedures for oral hearing.

    (a) Request for oral hearing. The petitioner may request to appear 
before the Board to make an oral presentation in support of the appeal. 
The request must be submitted with the initial appeal documents and 
should be in the form of a separate written document titled ``Request 
for Oral Hearing.'' The request must show good cause for an oral 
presentation and state reasons why the appeal cannot be presented 
adequately in writing.
    (b) Action on the request. The Board shall determine whether to 
grant the request for oral hearing and shall direct the Special Counsel 
to serve notice of the Board's determination in writing to the 
petitioner. A request for oral hearing shall be granted with the 
approval of any Board member. The determination by a Board member 
approving an oral hearing must be taken within 20 days of the Board 
Secretary's receipt of the appeal.
    (c) Effect of denial. In the event no Board member approves of 
holding an oral hearing, the request for an oral hearing is deemed to 
be denied, and the appeal shall be reviewed and determined by the Board 
on the basis of the written record.
    (d) Procedures for oral hearing. The following procedures shall 
govern the conduct of any oral hearing:
    (1) Scheduling of oral hearing; location. The Special Counsel shall 
notify the petitioner and the program office of the date and time for 
the oral hearing, making sure to provide reasonable lead time and 
schedule accommodations. The oral hearing will be held at NCUA 
headquarters in Alexandria, Virginia; provided, however, that on his or 
her own initiative or at the request of the petitioner, the Chairman 
may in his or her sole discretion allow for a hearing

[[Page 50297]]

to be conducted via teleconference or video conference facilities.
    (2) Appearances; representation. The petitioner and the NCUA 
program office shall submit a notice of appearance identifying the 
individual(s) who will be representing them at the oral presentation. 
The petitioner shall designate not more than two officers, employees, 
or other representatives (including counsel), unless otherwise 
authorized by the Chairman. The NCUA program office shall designate not 
more than two individuals (one of whom may be a litigation and 
enforcement attorney from NCUA's Office of General Counsel), unless 
otherwise authorized by the Chairman.
    (3) Conduct of oral hearing. The oral hearing shall consist 
entirely of oral presentations. The introduction of written evidence or 
witness testimony at the hearing shall not be permitted. The petitioner 
shall present first, followed by the NCUA program office. Each side 
shall be allotted a specified and equal amount of time for its 
presentation, of which a portion may be reserved for purposes of 
rebuttal. This time limit shall be set by the Board and will be based 
on the complexity of the appeal. Members of the Board may ask questions 
of any individual appearing before the Board.
    (4) Transcript. The oral hearing shall be on the record and 
transcribed by a stenographer, who will prepare a transcript of the 
proceedings. The stenographer will make the transcript available to the 
petitioner upon payment of the cost thereof.
    (e) Confidentiality. An oral hearing as provided for herein 
constitutes a meeting of the Board within the meaning of the Government 
in the Sunshine Act (5 U.S.C. 552b). The NCUA Chairman shall preside 
over the conduct of the oral hearing. The meeting will be closed to the 
public to the extent that one or more of the exemptions from public 
meetings apply as certified by NCUA's Office of General Counsel. The 
Board shall maintain the confidentiality of any information or 
materials submitted or otherwise obtained in the course of the 
procedures outlined herein, subject to applicable law and regulations.
    (f) Conclusion of the oral hearing. The Board shall take the oral 
presentations under advisement. The Board shall render its decision on 
the appeal in accordance with Sec.  746.206.

PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF 
PRACTICE AND PROCEDURE, AND INVESTIGATIONS

0
32. The authority citation for part 747 continues to read as follows:

    Authority:  12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787, 1790a, 
1790d; 15 U.S.C. 1639e; 42 U.S.C. 4012a; Pub. L. 101-410; Pub. L. 
104-134; Pub. L. 109-351; Pub. L. 114-74.

Subpart J--[Removed and Reserved]

0
33. Remove and reserve subpart J.

PART 750--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS

0
34. The authority citation for part 750 continues to read as follows:

    Authority: 12 U.S.C. 1786(t).


0
35. Revise Sec.  750.6(b) to read as follows:


Sec.  750.6  Filing instructions; appeal.

* * * * *
    (b) A FICU whose request for approval by NCUA, in accordance with 
paragraph (a) of this section, has been denied may seek reconsideration 
of the request and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.

[FR Doc. 2017-23211 Filed 10-27-17; 8:45 am]
 BILLING CODE 7535-01-P