[Federal Register Volume 85, Number 192 (Friday, October 2, 2020)]
[Rules and Regulations]
[Pages 62207-62214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17372]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Parts 700, 701, 702, 704, 705, 707, 708a, 708b, 709, 717, 
725, 740, 741, 747, 748, and 750

RIN 3133-AF22


Technical Amendments

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule and final rule; correction.

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SUMMARY: The NCUA Board (Board) is issuing a final rule to make 
technical amendments to various provisions of the NCUA's regulations. 
These amendments correct minor technical problems and improve clarity.

DATES: The final rule is effective on October 2, 2020, except for the 
corrections to the final rule amending 12 CFR part 702, published at 80 
FR 66626, which was delayed on November 6, 2018 (83 FR 55467) and 
December 17, 2019 (84 FR 68781), which are effective on January 1, 
2022.

FOR FURTHER INFORMATION CONTACT: Justin Anderson, Senior Staff 
Attorney; Gira Bose, Staff Attorney, Division of Regulations and 
Legislation, Office of General Counsel, at 1775 Duke Street, 
Alexandria, VA 22314 or telephone: (703) 518-6540.

SUPPLEMENTARY INFORMATION:

I. Background

    The Board periodically issues a technical amendments rule 
correcting minor typographical errors, inaccurate legal citations, or 
superfluous or outdated regulatory provisions throughout the NCUA's 
regulations. Because these changes are technical in nature, and do not 
affect federally insured credit unions in a substantive manner, the 
Board issues these technical amendments rules as final rules without 
notice and comment typically required by the Administrative Procedure 
Act (APA).\1\ Accordingly, the Board is issuing this final rule to 
address those matters.
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    \1\ 5 U.S.C. 553(b)(A), (B).
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II. Legal Authority

    The Board has the legal authority to issue this final rule pursuant 
to its plenary rulemaking authority under the Federal Credit Union Act 
(FCU Act) \2\ and its specific rulemaking authority under the various 
acts the Board administers.
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    \2\ 12 U.S.C. 1766, 1789.
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III. Section-by-Section Analysis

General Wording, Style, and Cross-Reference Changes

    The final rule makes general wording, style, and cross-reference 
changes throughout the NCUA's regulations. For example, the final rule 
corrects various typographical errors. Technical amendments of this 
nature will apply throughout the NCUA's regulations. Therefore, the 
preamble does not address these types of stylistic changes in the 
section-by-section analysis below.

[[Page 62208]]

Parts 700, 701, 702, 704, 705, 707, 708a, 708b, 709, 717, 725, 740, 
741, 747, 748, and 750

    The final rule amends one of the definitions listed in Sec.  700.2 
of the NCUA's regulations that was erroneously changed. The definitions 
in part 700 apply throughout chapter VII of title 12 of the Code of 
Federal Regulations ``unless the context indicates otherwise.'' \3\ A 
``Noninsured credit union'' is currently defined by regulation as ``a 
credit union chartered under the laws of any State, the District of 
Columbia, the several territories and possessions of the United States, 
the Panama Canal Zone, or the Commonwealth of Puerto Rico, whose member 
accounts are not insured by NCUA.'' This term mirrors the Federal 
Credit Union Act definition.\4\ A final technical amendments rule 
issued in 2018 amended several references to ``Non-federally insured 
credit unions'' changing them to ``Noninsured credit unions.'' Although 
this change conformed the regulatory definition to the statutory 
definition, it also inadvertently created internal inconsistencies in 
the regulations and created unintended confusion and consequences. The 
Board has determined that the erroneous technical amendment issued in 
2018 needs to be reversed to correct the inadvertent regulatory 
inconsistencies. This will restore clarity that the term ``Non-
federally insured credit unions,'' consistent with the Federal Credit 
Union Act, includes credit unions whose member accounts are insured by 
agencies or entities other than the NCUA, such as state or private 
share insurers, as well as credit unions whose member accounts are not 
insured by any party. Accordingly, the final rule makes this change in 
Sec.  700.2 and in other parts where the term ``Noninsured credit 
union'' currently appears--parts 704, 705, 708b, and 740.
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    \3\ 12 CFR 700.2.
    \4\ 12 U.S.C. 1752(7).
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Section 701.34 Designation of Low Income Status; Acceptance of 
Secondary Capital Accounts by Low-Income Designated Credit Unions

    Section 701.34(a)(6) provides the definition of ``median family 
income'' and ``total median earnings for individuals'' by referring to 
data from the Census Bureau. The current definition points to the 
Census Bureau's American FactFinder site with a specific hyperlink. The 
Census Bureau no longer houses this data at that specific site. 
Accordingly, this final rule replaces the ``FactFinder'' reference with 
``American Community Survey'' and provides a more general link to the 
Census Bureau's website. This change is not intended to alter the 
reliance on Census Bureau data for these statistics.

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

    The final rule amends certain provisions to update the NCUA office 
responsible for a certain activity. For instance, the Office of Credit 
Union Resources and Expansion (CURE) has replaced the Regional Office 
as the responsible office at Chapter 1, Section III. The final rule 
also updates references to the Regional Offices to reflect the agency's 
realignment that was finalized in 2019, as well as an update to the 
name of one of the credit union trade associations noted in the 
Chartering Manual.

Part 702--Capital Adequacy

    In addition to typographical corrections, the final rule includes 
corrections to the amendatory instructions from the 2015 final rule on 
risk-based capital \5\ to ensure that cross-references to other 
provisions that the Board has since been amended will be correctly 
reflected in this part when the 2015 final rule goes into effect, as it 
is scheduled to do on January 1, 2022.\6\ These corrections do not make 
any substantive change to the 2015 final rule.
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    \5\ 80 FR 66626 (Oct. 29. 2015).
    \6\ See 84 FR 68781 (Dec. 17, 2019).
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Part 704--Corporate Credit Union

    Throughout part 704, corporate credit unions are frequently 
referred to as ``corporates.'' The final rule amends several sections 
in this part to replace ``corporate'' or ``corporates'' with 
``corporate credit union'' or ``corporate credit unions'' to avoid 
confusion and to be more precise.
    In addition, a reference to ``notational principal balance'' has 
been corrected to ``notional principal balance.''

Part 707--Truth in Savings

    This final rule makes a notable change relating to the model 
clauses and forms in appendix B to this part, which addresses Truth in 
Savings. Specifically, appendix B refers several times to a chart of 
accounts in a specific section of the NCUA's Accounting Manual for 
Federal Credit Unions. This publication no longer contains this chart 
of accounts, but this chart served as the model for the sample forms. 
Accordingly, the final rule adds a statement to this effect in the 
prefatory language to this appendix to avoid confusion for those 
referring to the current version of the Accounting Manual.
    In addition, the final rule redesignates several paragraphs in 
appendix C to this part to correct duplicate paragraph numbering that 
resulted from prior amendments. This change does not affect or add to 
the substance of these provisions. The final rule will also correct 
minor wording or typographical errors.

Part 708a--Bank Conversions and Mergers

    Section 708a.304 addresses the notice that a credit union must file 
with the NCUA within 30 days of its board adopting a proposal to merge. 
This provision refers to an asset threshold set by the Federal Trade 
Commission (FTC) under the Hart-Scott Rodino Act that triggers a 
premerger notification to the FTC. The threshold amount listed in the 
current regulation is outdated. Because the FTC will continue to update 
this threshold, removing the specific dollar amount from this 
regulation will help to avoid confusion or alternatively, the need for 
the NCUA to update its regulation each time the FTC updates the 
threshold. Credit unions should refer to the FTC's announcements of the 
threshold amounts on that agency's website and in the Federal Register.

Part 747--Administrative Actions, Adjudicative Hearings, Rules of 
Practice and Procedure, and Investigations

    The final rule makes two notable clarifications and updates to this 
part. In Sec.  747.0, which sets forth the scope of this part, the 
final rule adds a defined term for the Uniform Rules when that subject 
is first discussed in order to provide clarity. In Sec.  747.207, which 
addresses notices of termination of insured status, the final rule 
updates a reference to the standard maximum share insurance amount from 
$100,000 to $250,000 to reflect the statutory change that Congress 
enacted in 2010.\7\
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    \7\ Public Law 111-203, sec. 335(b).
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IV. Regulatory Procedures

Administrative Procedure Act

    Generally, the APA requires a Federal agency to provide the public 
with notice and an opportunity to comment on agency rulemakings.\8\ The 
APA, however, creates an exception in cases where an agency for good 
cause determines ``that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public

[[Page 62209]]

interest.'' \9\ Because all of the changes in this final rule involve 
only minor, technical amendments to the NCUA's existing regulations, 
the Board has determined that notice and comment would be unnecessary 
and contrary to the public interest.
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    \8\ 5 U.S.C. 553(b).
    \9\ Id. at 553(b)(B).
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    Furthermore, the APA generally provides that a final rule may not 
become effective until at least 30 days after its publication in the 
Federal Register unless the agency determines that good cause exists to 
dispense with this requirement.\10\ As noted above, given that the rule 
does not impose new requirements on federally insured credit unions and 
only involves minor, technical amendments to existing regulations, the 
Board finds sufficient good cause exists to dispense with the 30-day 
effective date requirement. The rule will, therefore, be effective 
immediately upon publication.
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    \10\ 5 U.S.C. 553(d). For the same reasons, the Board is not 
providing the usual 60-day comment period before finalizing this 
rule. See NCUA Interpretive Ruling and Policy Statement (IRPS) 87-2, 
as amended by IRPS 03-2 and IRPS 15-1. 80 FR 57512 (Sept. 24, 2015), 
available at https://www.ncua.gov/files/publications/irps/IRPS1987-2.pdf.
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Regulatory Flexibility Act

    The Regulatory Flexibility Act requires the NCUA to prepare an 
analysis of any significant economic impact a regulation may have on a 
substantial number of small entities (primarily those under $100 
million in assets).\11\ As discussed previously, consistent with the 
APA,\12\ the Board has determined for good cause that general notice 
and opportunity for public comment is unnecessary, and therefore the 
Board is not issuing a notice of proposed rulemaking. Rules that are 
exempt from notice and comment procedures are also exempt from the RFA 
requirements, including conducting a regulatory flexibility analysis, 
when among other things the agency for good cause finds that notice and 
public procedure are impracticable, unnecessary, or contrary to the 
public interest. Accordingly, the Board has concluded that the RFA's 
requirements relating to initial and final regulatory flexibility 
analysis do not apply.
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    \11\ 5 U.S.C. 601-612.
    \12\ 5 U.S.C. 553(b)(3)(B).
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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 increases an existing burden.\13\ For purposes of the PRA, 
a paperwork burden may take the form of a reporting or recordkeeping 
requirement, both referred to as information collections. As the final 
rule makes only minor, technical amendments to the NCUA's existing 
regulations, the NCUA has determined it does not increase paperwork 
requirements under the PRA.
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    \13\ 44 U.S.C. 3501-3521.
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Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) provides generally for congressional review of agency 
rules.\14\ A reporting requirement is triggered in instances where the 
NCUA issues a ``final rule'' as defined by statute.\15\ As required by 
SBREFA, the NCUA will submit this rule to the Office of Management and 
Budget for it to determine if the final rule is a ``major rule'' for 
purposes of SBREFA. The NCUA does not believe the rule is major.
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    \14\ 5 U.S.C. 801-808.
    \15\ 5 U.S.C. 551, 804.
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Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this rule will not affect family well-
being within the meaning of section 654 of the Treasury and General 
Government Appropriations Act.\16\
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    \16\ Public Law 105-277, sec. 654, 112 Stat. 2681, 2681-528 
(1998).
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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.\17\ 
The 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. The final rule does not have 
substantial direct effects 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. The NCUA 
has therefore determined that this final rule does not constitute a 
policy that has federalism implications for purposes of the Executive 
order.
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    \17\ ``Federalism,'' E.O. 13,132 (Aug. 10, 1999).
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List of Subjects

12 CFR Part 700

    Credit unions.

12 CFR Part 701

    Advertising, Aged, Civil rights, Credit, Credit unions, Fair 
housing, Individuals with disabilities, Insurance, Marital status 
discrimination, Mortgages, Religious discrimination, Reporting and 
recordkeeping requirements, Sex discrimination, Signs and symbols, 
Surety bonds.

12 CFR Part 702

    Credit unions, Reporting and recordkeeping requirements.

12 CFR Part 704

    Credit unions, Reporting and recordkeeping requirements, Surety 
bonds.

12 CFR Part 705

    Community programs, Credit unions, Grants, Loans, Low income, 
Revolving fund.

12 CFR Part 707

    Advertising, Credit unions, Reporting and recordkeeping 
requirements, Truth in lending.

12 CFR Part 708a

    Credit unions, Reporting and recordkeeping requirements.

12 CFR Part 708b

    Bank deposit insurance, Credit unions, Reporting and recordkeeping 
requirements.

12 CFR Part 709

    Claims, Credit unions.

12 CFR Part 717

    Consumer protection, Credit unions, Information, Privacy, Reporting 
and recordkeeping requirements.

12 CFR Part 725

    Central liquidity facility.

12 CFR Part 740

    Advertisements, Credit unions, Share insurance, Signs and symbols.

12 CFR Part 741

    Bank deposit insurance, Credit unions, Reporting and recordkeeping 
requirements.

12 CFR Part 747

    Administrative practice and procedure, Bank deposit insurance, 
Claims, Credit unions, Crime, Equal access to justice, Investigations, 
Lawyers, Penalties.

12 CFR Part 748

    Credit unions, Reporting and recordkeeping requirements, Security 
measures.

12 CFR Part 750

    Credit unions, Golden parachute payments, Indemnity payments.


[[Page 62210]]


    By the National Credit Union Administration Board on June 25, 
2020.
Gerard Poliquin,
Secretary of the Board.

Correction

    In FR Doc. 2015-26790, appearing on page 66626 in the Federal 
Register of Thursday, October 29, 2015, the following corrections are 
made:


Sec.  702.1  [Corrected]

0
1. On page 66706, in the third column, revise Sec.  702.1(a) by 
removing ``12 U.S.C. 1776'' adding in its place ``12 U.S.C. 1766''.

0
2. On page 66722, in the first column, remove instruction 11.


Sec.  702.305  [Corrected]

0
3. On page 66722, in the first column, correct instruction 12 to read 
as follows: ``Amend newly redesignated Sec.  702.305(b)(4) by removing 
the citation ``Sec.  702.504'' and adding in its place ``Sec.  
702.304''
    For the reasons discussed above, the Board is correcting FR Doc. 
2015-26790, as set forth above, and amending 12 CFR parts 700, 701, 
702, 704, 705, 707, 708a, 708b, 709, 717, 725, 740, 741, 747, 748, and 
750 as follows:

PART 700--DEFINITIONS

0
1. The authority citation for part 700 continues to read as follows:

    Authority: 12 U.S.C. 1752, 1757(6), 1766.


0
2. Amend Sec.  700.2 by:
0
a. Removing the definition of ``Noninsured credit union''; and
0
b. Adding in alphabetical order the definition of ``Non-federally 
insured credit union''.
    The addition reads as follows:


Sec.  700.2   Definitions

* * * * *
    Non-federally insured credit union means a credit union chartered 
under the laws of any State, the District of Columbia, the several 
territories and possessions of the United States, the Panama Canal 
Zone, or the Commonwealth of Puerto Rico, whose member accounts are not 
insured by the NCUA.
* * * * *

PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS

0
3. The authority citation for part 701 continues 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.


Sec.  701.22  [Amended]

0
4. In Sec.  701.22, amend paragraph (e) by removing the citation 
``(b)(1)(ii)'' and adding in its place the citation ``(b)(5)(ii)''.

0
5. Amend Sec.  701.34 by revising paragraph (a)(6) to read as follows:


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

* * * * *
    (a) * * *
    (6) Definitions. The following definitions apply to this section:
    Median family income and total median earnings for individuals are 
income statistics reported by the U.S. Census Bureau. The applicable 
income data can be obtained via the American Community Survey on the 
Census Bureau's web page at http://www.census.gov.
    Metropolitan area means an area designated by the Office of 
Management and Budget pursuant to 31 U.S.C. 1104(d), 44 U.S.C. 3504(c), 
and Executive Order 10253 (June 13, 1951) (as amended).
* * * * *

0
6. Amend appendix B to part 701 by revising the first sentence of the 
second paragraph under the heading ``III --Subscribers'', Appendix 3, 
and Appendix 5 to read as follows:

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

* * * * *

III--Subscribers

* * * * *
    Persons interested in organizing a Federal credit union should 
contact one of the credit union trade associations or the NCUA 
Office of Credit Union Resources and Expansion. * * *
* * * * *

Appendix 3

NCUA Offices

Office of Credit Union Resources and Expansion (CURE)
1775 Duke Street, Alexandria, VA 22314-3428
Phone: 703-518-1150
Fax: 703-518-6672
Email: [email protected]

    The Divisions of Consumer Access (East, Central, and West) 
within CURE share the responsibility for chartering and field-of-
membership matters, low-income designations, charter conversions, 
and bylaw amendments.

Eastern Region--Alexandria
1775 Duke Street, Alexandria, VA 22314-3428
Phone: 703-519-4600
Fax: 703-519-6674
Email: [email protected]

    States in the Eastern Region include: Connecticut, Delaware, the 
District of Columbia, Maine, Maryland, Massachusetts, Michigan, New 
Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, 
Vermont, Virginia, and West Virginia.

Southern Region--Austin
4807 Spicewood Springs Road, Suite 5200, Austin, TX 78759-8490
Phone: 512-342-5600
Fax: 512-342-5620
Email: [email protected]

    States in the Southern Region include: Alabama, Arkansas, 
Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, North 
Carolina, South Carolina, Oklahoma, Tennessee, and Texas, as well as 
Puerto Rico and the U.S. Virgin Islands.

Western Region--Tempe
1230 West Washington Street, Suite 301, Tempe, AZ 85281
Phone: 602-302-6000
Fax: 602-302-6024
Email: [email protected]

    States in the Western Region include: Alaska, Arizona, 
California, Colorado, Hawaii, Idaho, Illinois, Iowa, Kansas, 
Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, 
Nevada, Oregon, South Dakota, Utah, Washington, Wisconsin, and 
Wyoming, as well as Guam.
* * * * *

Appendix 5

Trades Associations

Credit Union National Association (CUNA)
www.cuna.org
P.O. Box 431, Madison, WI 53701, 800-356-9655

National Association of Federally-Insured Credit Unions (NAFCU)
www.nafcu.org
3138 N 10th Street, Suite 300, Arlington, VA 22201-2149, 800-336-
4644

National Association of State Credit Union Supervisors (NASCUS)
www.nascus.org
1655 North Fort Myer Drive, Suite 650, Arlington, VA 22209, 703-528-
8351

Inclusiv
https://www.inclusiv.org/
39 Broadway, Suite 2140, New York, NY 10006-3063, 212-809-1850

PART 702--CAPITAL ADEQUACY

0
7. The authority citation for part 702 continues to read as follows:

    Authority: 12 U.S.C. 1766(a), 1790d.


Sec.  702.306  [Amended]

0
8. In Sec.  702.306(a)(1)(i), remove the word ``the-present'' and add, 
in its place, the word ``then-present''.

[[Page 62211]]

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.  703.14(k) to read as follows:


Sec.  703.14  Permissible investments.

* * * * *
    (k) Derivatives. A Federal credit union may only enter into the 
following derivatives transactions:
* * * * *


Sec.  703.112  [Amended]

0
11. In Sec.  703.112, amend paragraph (a) by removing the word 
``fescribed'' and adding, in its place, the word ``described''.

PART 704--CORPORATE CREDIT UNIONS

0
12. The authority citation for part 704 continues to read as follows:

    Authority: 12 U.S.C. 1766(a), 1781, 1789.


Sec.  704.1  [Amended]

0
13. In Sec.  704.1, amend paragraph (a) by removing in the second 
sentence the words ``Noninsured corporate credit unions'' and adding, 
in their place, the words ``Non-federally insured corporate credit 
unions''.


Sec.  704.4  [Amended]

0
14. Amend Sec.  704.4 by adding the words ``credit union'' after 
``corporate'' in the last sentence of paragraph (e)(1)(ii)(5).


Sec.  704.5  [Amended]

0
15. In Sec.  704.5 amend paragraph (e)(4) by adding the words ``credit 
union'' after ``corporate'' in the last sentence.

0
16. Amend Sec.  704.6 by revising paragraph (f)(2) to read as follows.


Sec.  704.6  Credit risk management.

* * * * *
    (f) * * *
    (2) A corporate credit union must identify and monitor any changes 
in credit quality of the investment and retain appropriate supporting 
documentation as long as the corporate credit union owns the 
investment.
* * * * *

0
17. Amend Sec.  704.8 by revising paragraphs (j)(1) and (k) to read as 
follows:


Sec.  704.8   Asset and liability management.

* * * * *
    (j) Limit breaches. (1)(i) If a corporate credit union's decline in 
NEV, base case NEV ratio, or any NEV ratio calculated under paragraph 
(d) of this section exceeds established or permitted limits, or the 
corporate credit union is unable to satisfy the tests in paragraph (f) 
or (g) of this section, the operating management of the corporate 
credit union must immediately report this information to its board of 
directors and ALCO; and
    (ii) If the corporate credit union cannot adjust its balance sheet 
to meet the requirements of paragraph (d), (f), or (g) of this section 
within 10 calendar days after detection by the corporate credit union, 
the corporate credit union must notify in writing the Director of the 
Office of National Examinations and Supervision.
* * * * *
    (k) Overall limit on business generated from individual credit 
unions. On or after April 22, 2013, a corporate credit union is 
prohibited from accepting from any member, or any nonmember credit 
union, any investment, including shares, loans, PCC, or NCAs if, 
following that investment, the aggregate of all investments from that 
entity in the corporate credit union would exceed 15 percent of the 
corporate credit union's moving daily average net assets.

0
18. Amend Sec.  704.11 by:
0
a. Adding the words ``credit union'' after the second use of the word 
``corporate'' in the last sentence of paragraph (b)(2);
0
b. Adding the words ``credit union'' after ``corporate'' in the first 
sentence of paragraph (b)(3);
0
c. Adding the word ``from'' between the words ``activity'' and ``the'' 
in paragraph (e)(2); and
0
d. Revising paragraph (g)(7).
    The revision reads as follows:


Sec.  704.11   Corporate Credit Union Service Organizations (Corporate 
CUSOs).

* * * * *
    (g) * * *
    (7) Will inform the corporate credit union, at least quarterly, of 
all the compensation paid by the CUSO to its employees who are also 
employees of the corporate credit union; and
* * * * *

0
19. Amend Sec.  704.14 by revising paragraphs (a)(4) and (8) to read as 
follows:


Sec.  704.14   Representation.

    (a) * * *
    (4) No individual may be elected or appointed to serve on the board 
if, after such election or appointment, any member of the corporate 
credit union would have more than one representative on the board of 
the corporate credit union;
* * * * *
    (8) In the case of a corporate credit union whose membership is 
composed of more than 25 percent non-credit unions, the majority of 
directors serving as representatives of member credit unions, including 
the chair, must be elected only by member credit unions; and
* * * * *

0
20. Revise Sec.  704.19(a) introductory text to read as follows:


Sec.  704.19   Disclosure of executive compensation.

    (a) Annual disclosure. A corporate credit union must annually 
prepare and maintain a disclosure of the dollar amount of compensation 
paid to its most highly compensated employees, including compensation 
from any corporate CUSO in which the corporate credit union has 
invested or made a loan, in accordance with the following schedule:
* * * * *


Sec.  704.20  [Added and Reserved]

0
21. Add reserved Sec.  704.20.

0
22. Amend Sec.  704.22 by revising paragraph (b) to read as follows:


Sec.  704.22   Membership fees.

* * * * *
    (b) The corporate credit union must calculate the fee uniformly for 
all members as a percentage of each member's assets, except that the 
corporate credit union may reduce the amount of the fee for members 
that have contributed capital to the corporate credit union. Any 
reduction must be proportional to the amount of the member's 
nondepleted contributed capital.
* * * * *

Appendix A to Part 704 [Amended]

0
23. Amend appendix A to part 704 as follows:
0
a. In Part I, add the words ``credit union'' between the words 
``corporate'' and ``on'' in the first sentence;
0
b. In Part I, add the words ``credit union'' between the words 
``corporate'' and ``before'' in the first sentence;
0
c. In Part II, Model Form C, add the words ``credit union'' after the 
word ``corporate'' in the second sentence of paragraph (3); and
0
d. In Part II, Model Form D, add the words ``credit union'' after the 
word ``corporate'' in the second sentence of paragraph (3).

[[Page 62212]]

Appendix B to Part 704 [Amended]

0
24. Amend appendix B to part 704 as follows:
0
a. In paragraph titled ``Base-Plus'', add the words ``credit union'' 
after the word ``corporate'';
0
b. In paragraph (b)(1) of Part III, remove the word ``corporate's'' and 
add, in its place, ``corporate credit union's'';
0
c. In paragraph (b)(2) of Part III, add the words ``credit union'' 
between the words ``corporate'' and ``must'';
0
d. In paragraph (b)(2) of Part III, remove the word ``corporate's'' and 
add, in its place, ``corporate credit union's'';
0
e. In paragraph (b)(3) of Part III, add the words ``credit union'' 
after the word ``corporate'';
0
f. In paragraph (b)(4) of Part III, add the words ``credit union'' 
between the words ``corporate'' and ``must''; and
0
g. In paragraph (b)(4) of Part III, remove the word ``corporate's'' and 
add, in its place, ``corporate credit union's''.

Appendix C to Part 704 [Amended]

0
25. Amend appendix C to part 704 by:
0
a. In Part I, paragraph (b):
0
i. Revising the definition of ``Face amount;'' and
0
ii. Revising paragraph (2) of the definition of ``Qualifying mortgage 
loan;''
0
b. In Part II, paragraph (a)(6), in the first sentence, remove the word 
``corporate's'' and add, in its place, ``corporate credit union's'';
0
c. In Part II, paragraph (b)(2)(ii), in the last sentence, remove the 
word ``or'' and add, in its place, the word ``of''; and
0
d. In Part II, paragraph (c)(3)(i), in the last sentence, remove the 
word ``corporate's'' and add, in its place, the words ``corporate 
credit union's''.
    The revisions read as follows:

Appendix C to Part 704--*

* * * * *

Part I

* * * * *
    (b) * * *
    Face amount means the notional principal, or face value, amount 
of an off-balance sheet item or the amortized cost of an on-balance 
sheet asset.
* * * * *
    Qualifying mortgage loan * * *
    (2) Is underwritten in accordance with prudent underwriting 
standards, including standards relating to the ratio of the loan 
amount to the value of the property (LTV ratio), as presented in the 
Interagency Guidelines for Real Estate Lending Policies (December 
31, 1992). A nonqualifying mortgage loan that is paid down to an 
appropriate LTV ratio (calculated using value at origination, 
appraisal obtained within the prior six months, or updated value 
using an automated valuation model) may become a qualifying loan if 
it meets all other requirements of this definition;
* * * * *

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

0
26. 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.


Sec.  Sec.  705.2 and 705.7   [Amended]

0
27. Amend Sec. Sec.  705.2 and 705.7(b)(3) by removing ``noninsured 
credit union'' and adding in its place ``Non-federally insured credit 
union''.

PART 707--TRUTH IN SAVINGS

0
28. The authority citation for part 707 continues to read as follows:

    Authority: 12 U.S.C. 4311.


0
29. Amend appendix B to part 707 by:
0
a. Adding a paragraph at the end of the introductory text;
0
b. In the note to B-6 Sample Form (REGULAR SHARE ACCOUNT DISCLOSURES), 
revising ``Nonfederally'' to read as ``Non-federally'',
0
c. In B-9 ``Sample Form (TERM SHARE (CERTIFICATE) ACCOUNT 
DISCLOSURES)'':
0
i. In paragraph 3, removing the word ``minium'' in the first non-
italicized sentence, and adding in its place the word ``minimum''; and
0
ii. In the ``NOTE'' in the last sentence, removing the word ``if'', and 
adding in its place, the word ``is''.
    The addition reads as follows:

Appendix B to Part 707--Model Clauses and Sample Forms

* * * * *
    Note also that certain information that appeared in previous 
versions of the NCUA Accounting Manual for FCUs that served as a 
model for this appendix do not appear in the current version of that 
publication.
* * * * *

0
30. Amend appendix C to part 707 by:
0
a. In Section 707.2:
0
i. Under ``(i) Dividend and Dividends'' revise paragraph 4.D;
0
ii. Under ``(z) Variable-Rate Account'', revise the first sentence of 
paragraph 2;
0
b. In Section 707.4,
0
i. Under ``(a)(2)(i)'' revise paragraph (2;
0
ii. Under ``(b)(6)(ii)'' revise paragraph (2)(i);
0
c. In Section 707.7, revise the heading for ``(a)(2)'';
0
d. In Section 707.9, under ``(c)Record retention'', revise paragraph 
(1)(ii);
0
e. In Section 707.11, under ``(a)(1) General'':
0
i. Redesignate sections (a)(1)(2) through (a)(1)(6) as (a)(1)(3) 
through (a)(1)(7); and
0
ii. redesignate the second section numbered (1) as (2).
    The revisions read as follows:

Appendix C to Part 707--Official Staff Interpretations

* * * * *

Section 707.2--Definitions

* * * * *

(i) Dividend and Dividends

* * * * *
    4. * * *
    D. I further certify that the Board of Directors of this Credit 
Union has, and at the time of adoption of this resolution had, full 
power and lawful authority to adopt the foregoing resolutions and 
that this resolution revokes any prior resolution.
* * * * *

(z) Variable-Rate Account

* * * * *
    2. Differences between fixed-rate and variable-rate accounts. 
All accounts must either be fixed-rate or variable-rate accounts. 
Classifying an account as variable-rate affects credit unions three 
ways:
* * * * *

Section 707.4--Account Disclosures

* * * * *

(a)(2) Requests

(a)(2)(i)

* * * * *
    2. General requests. When members or potential members request 
disclosures about a type of account (a share draft account, for 
example), a credit union that offers several variations may provide 
disclosures for any one of them. No disclosures need be made to 
nonmembers, though a credit union may provide disclosures to 
nonmembers within its sole discretion.
* * * * *

(b) Content of Account Disclosures

* * * * *

(b)(6)(ii) Early Withdrawal Penalties

* * * * *
    2. * * *
    i. Monetary penalties, such as a specific dollar amount (e.g., 
``$10.00'') or a specific days' worth of dividends (e.g., ``seven 
days' dividends plus accrued but uncredited dividends, but only if 
the account is closed'').
* * * * *

Section 707.7--Payment of Dividends

* * * * *

(a2) Determination of Minimum Balance To Earn Dividends

* * * * *

[[Page 62213]]

Section 707.9--Enforcement and Record Retention

(c) Record retention

* * * * *
    ii. Retained sample disclosures for each type of account offered 
to members, such as account-opening disclosures, copies of 
advertisements, and change-in-term notices; and information 
regarding the dividend rates and annual percentage yields offered.
* * * * *

PART 708a--BANK CONVERSIONS AND MERGERS

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

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


Sec.  708a.304  [Amended]

0
36. In Sec.  708a.304(a)(13), remove the words ``currently $63.4 
million,''.

PART 708b--MERGERS OF INSURED CREDIT UNIONS INTO OTHER CREDIT 
UNIONS; VOLUNTARY TERMINATION OR CONVERSION OF INSURED STATUS

0
32. The authority citation for part 708b continues to read as follows:

    Authority: 12 U.S.C. 1752(7), 1766, 1785, 1786, 1789.



0
33. Throughout part 708b, remove the terms ``nonfederal'', 
``noninsured'', ``noninsured credit union'', and ``noninsured state 
credit union'' and add in their place ``non-Federal'', ``non-federally 
insured'', ``Non-federally insured credit union'', and ``Non-federally 
insured credit union'', respectively.


Sec.  708b.1  [Amended]

0
34. Amend Sec.  708b.1 as follows:
0
a. In paragraph (a), remove the word ``partprescribes'', and, add in 
its place, the phrase ``part prescribes''.
0
b. In paragraph (b), remove the word ``partprescribes'', and, add in 
its place, the phrase ``part prescribes''.
0
c. In paragraph (d), remove the word ``partrestricts'', and, add in its 
place, the phrase ``part restricts''.


Sec.  708b.205  [Amended]

0
35. In Sec.  708b.205 amend paragraph (c) by removing the word 
``state'' and adding, in its place, ``state-chartered''.

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

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

    Authority: 12 U.S.C. 1757, 1766, 1767, 1786(h), 1786(t), and 
1787(b)(4), 1788, 1789, 1789a.


Sec.  709.8  [Amended]

0
37. In Sec.  709.8 amend paragraph (f) by in the first sentence, adding 
the word ``is'' between the words ``request'' and ``filed''.


Sec.  709.9  [Amended]

0
38. In Sec.  709.9 amend paragraph (b)(5)(ii)(B) by, in the last 
sentence, removing the word ``all'' after the word ``existing''.

PART 717--FAIR CREDIT REPORTING

0
39. The authority citation for part 717 continues to read as follows:

    Authority: 12 U.S.C. 1766(a), 1789; 15 U.S.C. 1681m(e).


Sec.  717.82  [Amended]

0
40. In Sec.  717.82(a), add the word ``a'' between words ``is'' and 
``federal''.

PART 725--NATIONAL CREDIT UNION ADMINISTRATION CENTRAL LIQUIDITY 
FACILITY

0
41. The authority citation for part 725 continues to read as follows:

    Authority: 12 U.S.C. 1795f(a)(2).


Sec.  725.4  [Amended]

0
42. Amend Sec.  725.4 as follows:
0
a. In paragraph (b)(4), add the word ``the'' between the words ``of'' 
and ``Facility''; and
0
b. In paragraph (e), remove the word ``agent'' and add in its place 
``Agent'' in the first sentence.


Sec.  725.18  [Amended]

0
43. In Sec.  725.18(c), in the first sentence, add a closing quotation 
mark after the word ``insolvency''.

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

0
44. The authority citation for part 740 continues to read as follows:

    Authority: 12 U.S.C. 1766, 1781, 1785, and 1789.


0
45. Throughout part 740, remove the term ``nonfederally'' and add in 
its place the word ``Non-federally''.

0
46. Revise Sec.  740.5(c)(6) to read as follows:


Sec.  740.5  *.

* * * * *
    (c) * * *
    (6) Joint or group advertisements of credit union services where 
the names of federally insured credit unions and Non-federally insured 
credit unions are listed and form a part of such advertisement;
* * * * *

PART 741--REQUIREMENTS FOR INSURANCE

0
47. 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.


Sec.  741.4  [Amended]

0
48. In Sec. Sec.  741.4(i)(2) and (j)(1), remove the word 
``nonfederally'' and add in its place the word ``non-federally''.


Sec.  741.204  [Amended]

0
49. In Sec.  741.204(c), add the word ``union'' after the word 
``credit'' in the first sentence the first time that word appears.

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

0
50. 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.


Sec.  747.0  [Amended]

0
51. In Sec.  747.0, in the second sentence, add the words ``(Uniform 
Rules)'' after the words ``uniform rules of practice and procedure''.


Sec.  747.29  [Amended]

0
52. In Sec.  747.29(a)(2), remove the word ``part'' and add in its 
place the word ``party''.


Sec.  747.207  [Amended]

0
53. In Sec.  747.207, amend paragraph 3 of the sample notice, by 
removing ``$100,000'' and adding, in its place, ``$250,000'';


Sec.  747.306  [Amended]

0
54. In Sec.  747.306(b), in the first sentence, remove the words 
``state with'' the second time they appear;

[[Page 62214]]

Sec.  747.402  [Amended]

0
55. In Sec.  747.402(b), remove the word ``or'' between the words 
``dissipation'' and ``credit'' and add in its place the word ``of''.

PART 748--SECURITY PROGRAM, REPORT OF SUSPECTED CRIMES, SUSPICIOUS 
TRANSACTIONS, CATASTROPHIC ACTS AND BANK SECRECY ACT COMPLIANCE

0
56. The authority citation for part 748 continues to read as follows:

    Authority: 12 U.S.C. 1766(a), 1786(q); 15 U.S.C. 6801-6809; 31 
U.S.C. 5311 and 5318.

Appendix B to Part 748 [Amended]

0
57. Amend appendix B to part 748 as follows:
0
a. In footnote 34, remove the word ``identify'' and add, in its place, 
the word ``identity'';
0
b. In footnote 39, remove the word ``Suspiciouis'' and add, in its 
place, the word ``Suspicious''; and
0
c. In footnote 39, remove the word ``Isues'' and add, in its place, the 
word ``Issues''.

PART 750--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS

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

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


Sec.  750.5  [Amended]

0
59. In Sec.  750.5(a)(3), add a space between the word ``in'' and 
``Sec.  750.1(j)''.


Sec.  750.6  [Amended]

0
60. In Sec.  750.6(a), in the first sentence, add a space between the 
word ``to'' and ``Sec.  750.1(d)(2)(v)''.

[FR Doc. 2020-17372 Filed 10-1-20; 8:45 am]
BILLING CODE 7535-01-P