[Federal Register Volume 77, Number 187 (Wednesday, September 26, 2012)]
[Proposed Rules]
[Pages 59139-59144]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23662]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Parts 702, 741 and 791

RIN 3133-AE07


Prompt Corrective Action, Requirements for Insurance, and 
Promulgation of NCUA Rules and Regulations

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule and Interpretive Ruling and Policy Statement 12-2 
with request for comments.

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SUMMARY: The NCUA Board (Board) proposes to amend Interpretive Ruling 
and Policy Statement (IRPS) 87-2, as amended by IRPS 03-2, and two NCUA 
regulations that apply asset thresholds to grant relief from risk-based 
net worth and interest rate risk requirements. The amended IRPS would 
result in more robust consideration of regulatory relief for more small 
credit unions in future rulemakings. The amended regulations would 
grant immediate and prospective relief from regulatory burden to a 
larger group of small credit unions.

DATES: Send your comments to reach us on or before October 26, 2012. We 
may not consider comments received after the above date in making our 
decision on the proposed rule.

ADDRESSES: You may submit comments by any of the following methods 
(Please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web Site: http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx. Follow the instructions for submitting comments.
     Email: Address to regcomments@ncua.gov. Include ``[Your 
name]--Comments on Proposed Rule 702, 741, 791 and IRPS 12-2'' in the 
email subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for email.
     Mail: Address to Mary Rupp, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.
    Public Inspection: You can view all public comments on NCUA's Web 
site at http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as 
submitted, except for those we cannot post for technical reasons. NCUA 
will not edit or remove any identifying or contact information from the 
public comments submitted. You may inspect paper copies of comments in 
NCUA's law library at 1775 Duke Street, Alexandria, Virginia 22314, by 
appointment weekdays between 9 a.m. and 3 p.m. To make an appointment, 
call (703) 518-6546 or send an email to OGCMail@ncua.gov.

FOR FURTHER INFORMATION CONTACT: Kevin Tuininga, Trial Attorney, Office 
of General Counsel, National Credit Union Administration, 1775 Duke 
Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6543.

SUPPLEMENTARY INFORMATION:

I. Background
II. The Rule as Proposed
III. Regulatory Procedures

I. Background

A. What changes does this proposed rule make?

    The Regulatory Flexibility Act, Public Law 96-354, as amended 
(RFA), generally requires federal agencies to determine and consider 
the impact of proposed and final rules on small entities. Since 2003, 
the Board has defined ``small entity'' in this context as a credit 
union with less than $10 million in assets.\1\ This proposed rule and 
IRPS 12-2 redefines ``small entity'' as a credit union with less than 
$30 million in assets. The proposed rule also amends 12 CFR 702.103, 
where a $10 million asset threshold is used to define a ``complex'' 
credit union for determining whether risk-based net worth requirements 
apply, and 12 CFR 741.3(b)(5)(i), set to go into effect September 30, 
2012, where an asset range of $10 million to $50 million is used as 
part of the determination of whether a federally-insured credit union 
(FICU) is subject to certain interest rate risk rule requirements.
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    \1\ IRPS 03-2, 68 FR 31949 (May 29, 2003).
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B. Why is the Board proposing this rule?

    The Board is proposing this rule and IRPS to implement an updated 
measure of immediate and prospective regulatory relief for small FICUs 
across multiple applications, while avoiding undue risk to the National 
Credit Union Share Insurance Fund (NCUSIF). The Board believes the $10 
million asset threshold used to define ``small entity'' for purposes of 
the RFA and for other provisions in NCUA's regulations where the Board 
has discretion to set asset thresholds is outdated. Increasing these 
thresholds will account for industry asset growth, consolidation, and 
inflation. It will provide an updated, reasonable, and historically 
consistent threshold for FICUs with respect to RFA coverage, regulatory 
compliance relief, and risk to the NCUSIF.

C. What is the history and purpose of the RFA?

    Congress enacted the RFA in 1980 and amended it with the Small 
Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-
121. The RFA in part requires federal agencies to determine whether a 
proposed rule will have a significant economic impact on a substantial 
number of small entities.\2\ If so, agencies must prepare an analysis 
that describes the proposed rule's impact on small entities.\3\ The 
analysis must include descriptions of any significant alternatives that 
minimize the impact.\4\ This requirement encourages federal agencies to 
give special consideration to the ability of smaller entities to absorb 
compliance burden imposed by new rules.
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    \2\ 5 U.S.C. 603, 604, 605(b). The term ``small entity'' as used 
in the RFA includes small businesses, small organizations, and small 
government jurisdictions. 5 U.S.C. 601(6). Credit unions fall within 
the definition of organization. 5 U.S.C. 601(4). The RFA gives 
agencies authority to establish their own definition of ``small 
entity.'' Id.
    \3\ Id.
    \4\ Id.
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    In 1981, the Board initially defined ``small entity'' for purposes 
of the RFA as any credit union with less than $1 million in assets.\5\ 
IRPS 87-2 superseded IRPS 81-4 but retained the definition of ``small 
entity'' as a credit union with less than $1 million in

[[Page 59140]]

assets.\6\ The Board updated the definition in 2003 to include credit 
unions with less than $10 million in assets.\7\ IRPS 87-2 and 03-2 are 
incorporated by reference into NCUA's rule governing the promulgation 
of regulations.\8\
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    \5\ IRPS 81-4, 46 FR 29248 (June 1, 1981).
    \6\ 52 FR 35231 (September 18, 1987).
    \7\ 68 FR 31949 (May 29, 2003).
    \8\ 12 CFR 791.8(a).
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    When the Board updated its RFA threshold to $10 million, it noted 
that amendments to the Federal Credit Union Act (FCU Act) in 1998 
employed a $10 million threshold for multiple new provisions.\9\ These 
new provisions addressed the use of generally accepted accounting 
principles and voluntary audits; prompt corrective action for new 
credit unions; and assistance for small credit unions in filing net 
worth restoration plans.\10\ IRPS 03-2 made the threshold in NCUA's RFA 
definition consistent with the $10 million threshold in the new FCU Act 
provisions. The Board has not increased its RFA threshold since 2003.
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    \9\ 68 FR 31949, 31950 (May 29, 2003).
    \10\ 12 U.S.C. 1782(a)(6); 1790d.
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II. Rule as Proposed

    This proposed rule and IRPS 12-2 will amend IRPS 87-2 and partially 
supersede IRPS 03-2 by changing the definition of ``small entity'' to 
include credit unions with less than $30 million in assets. The 
increased threshold will cause NCUA to give special consideration to 
the economic impact of proposed and final regulations on an additional 
1,603 small credit unions, bringing the total covered by the RFA to 
4,041. IRPS 12-2 will also commit the Board to review and consider 
adjusting the RFA threshold every three years and will be incorporated 
by reference into 12 CFR 791.8(a).
    The asset threshold used as part of the definition of ``complex'' 
credit union in 12 CFR 702.103(a) will be increased to $30 million. 
This update will increase by 1,603, to a total of 4,041, the number of 
FICUs removed from the definition of ``complex'' based on asset size 
alone. This increase eliminates the possibility that these FICUs could 
become subject to PCA provisions, despite having at least six percent 
net worth.
    Finally, the proposed rule amends the asset range in 12 CFR 
741.3(b)(5)(i), NCUA's interest rate risk rule. In 12 CFR 
741.3(b)(5)(i)(B) and (C), the minimum asset threshold will be changed 
from $10 million to $30 million for the asset range governing whether a 
FICU must adopt a written interest rate risk policy and program based 
on its first mortgage loans and investment maturities. The asset 
threshold of $10 million in 12 CFR 741.3(b)(5)(i)(D), which determines 
whether a FICU is categorically excluded from interest rate risk policy 
and program requirements, will be changed to $30 million. This change 
will increase by 1,603, to a total of 4,041, the number of FICUs that 
are categorically exempt, based on asset size alone, from adopting an 
interest rate risk policy and program.
    As with IRPS 12-2, the Board intends to review and consider 
adjusting the thresholds in 12 CFR 702.103(a) and 741.3(b)(5)(i) at 
least once every three years.

A. Why is the period for public comment thirty days?

    As a matter of policy, the Board believes the public should be 
given at least sixty days to comment on a proposed regulation.\11\ In 
this case, however, the Board is issuing the proposed rule and IRPS 
with a thirty-day comment period to expedite regulatory relief for an 
additional group of small FICUs. Given the relatively narrow subject 
addressed in the proposed rule and IRPS, the Board believes thirty days 
appropriately balances the need for public comment and the collective 
interest in implementing near-term regulatory relief.
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    \11\ See IRPS 87-2, as amended by IRPS 03-2.
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B. How did the board identify $30 million as an appropriate asset 
threshold for this proposed rule and IRPS?

    The Board accounted for the following indicators in determining an 
appropriate threshold for the proposed rule and IRPS: (i) Industry 
percentages represented by FICUs with less than $10 million in assets 
at the time Congress implemented that threshold in various FCU Act 
provisions in 1998; (ii) the correlation of NCUSIF losses and FICU 
asset size; and (iii) FICU complexity and relative risk.
(i) Industry Percentages
    When Congress enacted a $10 million threshold in various provisions 
of the FCU Act in 1998, FICUs below that threshold represented 60.4 
percent of all FICUs and 5.5 percent of total system assets. In 2003, 
when the Board increased its RFA threshold to $10 million, these credit 
unions represented approximately 52 percent of all FICUs.\12\ As of 
June 30, 2012, credit unions with less than $10 million in assets 
represented only 35.0 percent of FICUs and accounted for one percent of 
total system assets. The table below compares the 1998 characteristics 
to the 2012 characteristics of FICUs with less than $10 million in 
assets.
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    \12\ 68 FR 31949, 31950 (May 29, 2003).

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                                   December 1998          June 2012
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Number of FICUs with < $10mm                6,636                2,438
 in assets....................
Percent of Total FICUs........                 60.4                 35.0
Total Assets..................    $21,376,801,396       $9,735,413,650
Percent of Total System Assets                  5.5                  1.0
Total Net Worth...............     $2,911,019,491       $1,396,317,929
Percent of System Net Worth...                  6.9                  1.4
Percent of NCUSIF.............                561.0                 86.7
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    From 1998 to 2012, the number of FICUs with less than $10 million 
in assets declined by 63 percent and their total assets declined by 
over 54 percent. Shifting industry characteristics resulted in fewer 
credit unions with fewer collective assets receiving regulatory relief 
as credit unions grew in size and smaller FICUs merged at a faster rate 
than large FICUs.
    As a principal reference point for determining a new asset 
threshold, the percentages of FICUs, assets, net worth, and NCUSIF 
equity that apply to a range of asset thresholds in 2012 are shown 
below, shaded where they most closely correspond to the 1998 
percentages for FICUs with less than $10 million in assets.

[[Page 59141]]



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                                                                   % System net
         Threshold ($mm)              % FICUs        % Assets          worth         % NCUSIF      Number FICUs
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25..............................            54.1             3.1             4.0           282.1           3,769
30..............................            58.1             3.9             4.9           348.3           4,041
40..............................            63.7             5.2             6.4           470.0           4,435
45..............................            65.9             5.9             7.1           528.0           4,588
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    In addition to the percentages in this table, the Board notes that, 
assuming average industry asset growth, the average FICU with $10 
million in assets in 1998 had $25.9 million in assets as of June 30, 
2012.
    Raising the RFA threshold to $30 million in assets will cause the 
percentage of FICUs under that threshold to be just over two percentage 
points less than the 1998 ratio. A $30 million threshold will also 
cause the percentage of system assets and net worth at FICUs under the 
threshold to be within two percentage points of the comparable 1998 
ratios. Although raising the threshold to $40 million would also 
approximate asset size and net worth percentages from 1998, it would 
cause the percentage of FICUs included to exceed the 1998 percentage. 
The Board believes more incremental increases are appropriate and 
prudent, especially in light of the scheduled three-year review period.
(ii) NCUSIF Loss History
    The following table shows the history of failures among credit 
unions of various asset sizes that caused NCUSIF losses from 1998 
through 2012.

 
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                                                                Number of failures               NCUSIF loss ($mm)          Percentage of total NCUSIF
                                                         ----------------------------------------------------------------             losses
                      Assets ($mm)                                                                                       -------------------------------
                                                           Failures for     Cumulative    Loss for asset    Cumulative      Percent for     Cumulative
                                                            asset range                        range                        asset range      (percent)
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< $10...................................................             202             202          $116.1          $116.1            12.3            12.3
$10 to < $20............................................              12             214            31.2           147.3             3.3            15.6
$20 to < $30............................................               8             222            22.8           170.1             2.4            18.0
$30 to < $40............................................               9             231            36.2           206.3             3.8            21.8
$40 to < $50............................................               4             235            11.3           217.6             1.2            23.3
$50 to < $60............................................               1             236             3.6           221.2             0.4            23.4
$60 to < $70............................................               0             236             0.0           221.2             0.0            23.4
$70 to < $80............................................               2             238            11.3           232.5             1.2            24.6
$80 to < $90............................................               4             242            22.5           255.0             2.4            27.0
$90 to < $100...........................................               3             243            64.9           319.9             6.9            33.8
$100 to < $200..........................................               9             254            76.2           396.1             8.1            41.9
$200 to < $500..........................................               7             261           513.2           909.3            54.3            96.2
>= $500.................................................               1             262            36.1           945.4             3.8           100.0
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    Since 1998, 202 FICUs with less than $10 million in assets failed, 
costing the NCUSIF $116 million, which represents only 12.3 percent of 
total period losses. Over the same period, FICUs with less than $30 
million in assets accounted for only 18 percent of losses, although 
accounting for 222, or over 84 percent, of period failures. In 
comparison, 40 FICUs with more than $30 million in assets failed, 
costing the NCUSIF $775.3 million or 82 percent of period losses. Thus, 
despite the higher number of failures among smaller FICUs, the NCUSIF 
experienced immensely greater losses from the far fewer FICUs with more 
than $30 million in assets that have failed. While the same general 
conclusion could be drawn for some thresholds higher than $30 million, 
the complexity index discussed below weighs against adjusting the 
threshold higher than $30 million based on loss history alone. These 
loss figures confirm that a $30 million threshold would likely not pose 
undue risk to the NCUSIF based on recent trends.
(iii) Credit Union Complexity and NCUSIF Risk
    The Board also evaluated asset thresholds in terms of credit union 
complexity. As an approximate measuring tool, NCUA generated a 
complexity index for FICUs by assigning points based on factors such as 
a FICU's cash and liquidity positions, whether it holds real estate or 
member business loans, and whether it invests in credit union service 
organizations. FICUs with a higher index tend to engage in a greater 
range of complex activities, which generally decreases the 
justification for regulatory relief. Using the complexity index, the 
$25 million to $30 million asset size approximates the point below 
which, on average, FICU complexity begins to decrease at the fastest 
rate. FICUs above $30 million in assets have a median complexity index 
value of 14, which is twice the median complexity index value of FICUs 
below $30 million in assets.

[[Page 59142]]

[GRAPHIC] [TIFF OMITTED] TP26SE12.004

    Based on industry percentage data, NCUSIF loss history data, and 
FICU complexity data, a $30 million threshold is reasonable and 
historically consistent. A $30 million threshold provides roughly the 
same percentage today of FICUs defined as small in 1998, representing a 
slightly lower proportion of total system assets and net worth. A $30 
million threshold also provides a significant degree of assurance that 
the NCUSIF would not be subject to undue risk based on loss history and 
credit union complexity. Finally, the three-year review period this 
proposed rule and IRPS requires will provide opportunity for more 
routine evaluation and supports increasing the threshold moderately at 
this time.

C. How did the Board decide on a three-year review period?

    The Board believes a scheduled review period is advisable to 
account for evolving industry characteristics. A three-year review 
period provides a reasonable time within which to discern new trends in 
percentage, loss, and complexity data. In addition, a three-year period 
is consistent with the long-standing review period NCUA uses for all 
its regulations. It provides sufficient time to avoid the uncertainty 
of a continuous cycle of rulemakings and policy adjustments that a 
shorter period could create.
    The Board acknowledges the proposed amendments and potential 
adjustments every three years would reestablish the variation that 
previously existed between the asset thresholds in multiple sections of 
the FCU Act and the asset thresholds in certain regulatory provisions 
and in NCUA's RFA definition of ``small entity.'' Unless the Board 
leaves the adjustable asset thresholds at $10 million, this variation 
is unavoidable. The Board does not have authority to amend the FCU Act 
or numerous NCUA regulations where the FCU Act specifies an applicable 
asset threshold or range. The Board believes the proposed updates and 
review period will provide immediate and prospective relief that 
outweighs concerns about threshold variation.

D. How will the proposed rule and IRPS affect credit unions?

    The change to the RFA threshold will ensure that regulatory relief 
will be more consistently and robustly considered for an additional 
1,603 FICUs. A total of 4,041 FICUs with less than $30 million in total 
assets would come within the RFA's mandates. Future regulations, 
including the proposed emergency liquidity regulation, 77 FR 44503 
(July 30, 2012), will be more thoroughly evaluated to determine whether 
FICUs below $30 million in assets should be exempted from some 
provisions or separately considered. The Board also intends to use the 
$30 million threshold when considering adjustments to examination 
schedules and developing policies and programs.
    The proposed $30 million threshold for defining ``complex'' credit 
unions would categorically exclude 1,603 more FICUs from the definition 
of ``complex'' based on asset size alone, bringing the total FICUs 
excluded to 4,041. NCUA currently defines a ``complex'' credit union in 
12 CFR 702.103 as one with more than $10 million in assets and with a 
risk-based net worth requirement of more than six percent. If a 
``complex'' credit union fails its risk-based net worth requirement 
despite having at least six percent net worth, the credit union is 
subject to mandatory prompt corrective action (PCA) requirements.\13\ 
These requirements govern earnings retention, net worth restoration 
plans, asset increases, and member business loans. Of the additional 
1,603 credit unions that would be excluded, 230 FICUs with at least six 
percent net worth that currently must meet a risk-based net worth 
requirement would no longer be subject to the requirement. These FICUs 
will be removed one step further from the possibility of PCA 
requirements.
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    \13\ 12 CFR 702.202(a).
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    By increasing the lower threshold in NCUA's interest rate risk rule 
to $30

[[Page 59143]]

million, 1,603 more FICUs would also be categorically excluded from 
complying with the interest rate risk rule based on asset size alone. 
Once again, this change would bring the total FICUs excluded to 4,041. 
The current version of the regulation, which goes into effect on 
September 30, 2012, will require all credit unions with more than $50 
million in assets to adopt and implement an interest rate risk policy. 
In addition, the current version will require credit unions between $10 
million and $50 million in assets holding combined first mortgages and 
investments with maturities greater than five years that equal or 
exceed net worth to adopt and implement an interest rate risk policy. 
Of the 1,603 additional FICUs that this proposed rule and IRPS would 
exclude, 620 that must adopt and implement an interest rate risk policy 
under the current rule would no longer be required to do so.
    Despite adopting the $10 million to $50 million asset range for 
interest rate risk purposes as recently as January 2012, the Board 
believes the risk analysis above supports increasing the lower 
threshold to $30 million. The increase would also remain consistent 
with the analysis in the preamble to the interest rate risk rule.\14\ A 
$30 million threshold is in the center of the $10 million to $50 
million asset range in which interest rate risk begins to escalate most 
significantly.\15\ The Board will separately consider whether the $50 
million upper threshold should be changed or eliminated. The Board will 
also separately weigh whether the $30 million threshold should affect 
examination schedules, policies, and programs.
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    \14\ 77 FR 5155, 5157-5159 (February 2, 2012).
    \15\ Id.
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III. Regulatory Procedures

A. Regulatory Flexibility Act

    The RFA requires NCUA to prepare an analysis to describe any 
significant economic impact a proposed rule may have on a substantial 
number of small entities (currently defined by NCUA as credit unions 
with under $10 million in assets). In this case, the proposed rule and 
IRPS expands the number of credit unions defined as small entities 
under the RFA. It also expands the number of credit unions eligible for 
relief from risk-based net worth and interest rate risk requirements. 
The proposed rule and IRPS therefore will not have a significant 
economic impact on a substantial number of credit unions under $10 
million in assets that are already eligible for this relief.
    With respect to additional credit unions that would be covered by 
the RFA, a significant component of the rule will provide prospective 
relief in the form of special and more robust consideration of their 
ability to handle compliance burden. This prospective relief is not yet 
quantifiable. Further, the proposed rule will reduce compliance burden 
for these credit unions and, therefore, will not raise costs in a 
manner that requires a regulatory flexibility analysis or a discussion 
of alternatives for minimizing the proposed rule's compliance burden. 
Accordingly, NCUA has determined and certifies that the proposed rule 
and IRPS will not have a significant economic impact on a substantial 
number of small entities. No regulatory flexibility analysis is 
required.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in 
which an agency creates a new paperwork burden on regulated entities or 
modifies an existing burden.\16\ For purposes of the PRA, a paperwork 
burden may take the form of either a reporting or a recordkeeping 
requirement, both referred to as information collections. The proposed 
changes to 12 CFR 702.103 and 741.3(b)(5)(i) will cause an immediate 
and prospective reduction in paperwork burden related to PCA 
requirements and interest rate risk policies for FICUs between $10 
million and $30 million in assets. The proposed changes to IRPS 87-2, 
as amended by IRPS 03-2, will not create any new paperwork burden for 
credit unions. Thus, NCUA has determined that the requirements of this 
proposed rule and IRPS do not increase the paperwork requirements under 
the PRA and regulations of the Office of Management and Budget.
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    \16\ 44 U.S.C. 3507(d).
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C. Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. 
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the executive order to adhere to fundamental 
federalism principles. This proposed rule and IRPS would not have a 
substantial direct effect on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government. NCUA has 
determined that this proposed rule does not constitute a policy that 
has federalism implications for purposes of the executive order.

D. Assessment of Federal Regulations and Policies on Families

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

E. Agency Regulatory Goal

    The Board's goal is to promulgate clear and understandable 
regulations that impose minimal regulatory burden. We request your 
comments on whether the proposed rule and IRPS is understandable and 
minimally intrusive if implemented as proposed.

List of Subjects

12 CFR Part 702

    Credit unions, Reporting and recordkeeping requirements.

12 CFR Part 741

    Credit unions, Requirements for insurance.

12 CFR Part 791

    Administrative practice and procedure, Sunshine Act.

    By the National Credit Union Administration Board on September 
20, 2012.
Mary Rupp,
Secretary of the Board.

Interpretive Ruling and Policy Statement 87-2

    For the reasons stated above, IRPS 12-2 amends IRPS 87-2 (52 FR 
35231, September 18, 1987) and partially supersedes IRPS 03-2 (68 FR 
31949, May 29, 2003) by revising the second sentence in Section II, 
paragraph 2 of IRPS 87-2 and adding a sentence to the end of Section 
II, paragraph 2 of IRPS 87-2 to read as follows:

II. Procedures for the Development of Regulations

* * * * *
    2. * * * NCUA will designate credit unions with less than $30 
million in assets as small entities. * * * Every three years, the NCUA 
Board will review and consider adjusting the asset threshold it uses to 
define small entities for purposes of analyzing whether a regulation 
will have a significant economic impact on a substantial number of 
small entities.
* * * * *
    For the reasons discussed above, the Board proposes to amend 12 CFR 
parts 702, 741 and 791 as follows:

[[Page 59144]]

PART 702--PROMPT CORRECTIVE ACTION

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

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

    2. Section 702.103 is amended by:
    a. Removing ``ten'' in paragraph (a) and replacing it with 
``thirty''.
    b. Removing ``($10,000,000)'' in paragraph (a) and replacing it 
with ``($30,000,000)''.

PART 741--REQUIREMENTS FOR INSURANCE

    3. The authority 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.  741.3  [Amended]

    4. Section 741.3 is amended by removing the number ``10'' and 
replacing it with ``30'' wherever it appears in paragraph (b)(5)(i).

PART 791--RULES OF NCUA BOARD PROCEDURES; PROMULGATION OF NCUA 
RULES AND REGULATIONS; PUBLIC OBSERVATION OF NCUA BOARD MEETINGS

    5. The authority for part 791 continues to read as follows:

    Authority: 12 U.S.C. 1766, 1789 and 5 U.S.C. 552b.


Sec.  791.8  [Amended]

    6. Section 791.8 paragraph (a) is revised to read as follows:
    NCUA's procedures for developing regulations are governed by the 
Administrative Procedure Act (5 U.S.C. 551 et seq.), the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.), and NCUA's policies for the 
promulgation of rules and regulations as set forth in its Interpretive 
Ruling and Policy Statement 87-2 as amended by Interpretive Ruling and 
Policy Statements 03-2 and 12-2.

[FR Doc. 2012-23662 Filed 9-25-12; 8:45 am]
BILLING CODE 7535-01-P