[Federal Register Volume 80, Number 246 (Wednesday, December 23, 2015)]
[Notices]
[Pages 79953-79956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32167]
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NATIONAL CREDIT UNION ADMINISTRATION
Regulatory Publication and Review Under the Economic Growth and
Regulatory Paperwork Reduction Act of 1996
AGENCY: National Credit Union Administration.
ACTION: Notice of regulatory review; request for comments.
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SUMMARY: The NCUA Board (Board) is continuing its comprehensive review
of its regulations to identify outdated, unnecessary, or burdensome
regulatory requirements imposed on federally insured credit unions, as
contemplated by section 2222 of the Economic Growth and Regulatory
Paperwork Reduction Act of 1996 (EGRPRA). This second decennial review
of regulations began when the Board issued its first EGRPRA notice on
May 22, 2014, covering the two categories of ``Applications and
Reporting'' and ``Powers and Activities.'' \1\ The second notice
followed, covering the three categories of ``Agency Programs,''
``Capital,'' and ``Consumer Protection,'' which was published on
December 19, 2014.\2\ The third notice was published on June 24, 2015,
and covered the next three categories of rules: ``Corporate Credit
Unions,'' ``Directors, Officers and Employees,'' and ``Money
Laundering.'' \3\ This fourth and final notice covers the remaining two
categories: ``Rules of Procedure'' and ``Safety and Soundness.'' This
review process presents a significant opportunity to consider the
possibilities for burden reduction in groups of similar regulations.
The Board welcomes comment on the categories, the order of review, and
all other aspects of this initiative in order to maximize the review's
effectiveness.
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\1\ 79 FR 32121 (June 4, 2014).
\2\ 79 FR 79763 (December 19, 2014).
\3\ 80 FR 36252 (June 24, 2015).
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DATES: Comment must be received on or before March 22, 2016.
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/regulation-supervision/Pages/rules/proposed.aspx. Follow the instructions for submitting
comments.
Email: Address to [email protected]. Include ``[Your
name] Comments on Regulatory Review pursuant to EGRPRA'' in the email
subject line.
Fax: (703) 518-6319. Use the subject line described above
for email.
Mail: Address to Gerard Poliquin, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria,
Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
Public Inspection: All public comments are available on the
agency's Web site at http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx
as submitted, except as may not be possible for technical reasons.
Public comments will not be edited to remove any identifying or contact
information. Paper copies of comments may be inspected in NCUA's law
library at 1775 Duke Street, Alexandria, Virginia 22314, by appointment
weekdays between 9:00 a.m. and 3:00 p.m. To make an appointment, call
(703) 518-6546 or send an email to [email protected].
FOR FURTHER INFORMATION CONTACT: Ross P. Kendall, Special Counsel to
the General Counsel, at the above address, or telephone: (703) 518-
6562.
SUPPLEMENTARY INFORMATION:
I. Introduction
Congress enacted EGRPRA \4\ as part of an effort to minimize
unnecessary government regulation of financial institutions consistent
with safety and soundness, consumer protection, and other public policy
goals. Under EGRPRA, the appropriate federal banking agencies (Office
of the Comptroller of the Currency, Board of Governors of the Federal
Reserve System, and Federal Deposit Insurance Corporation; herein
Agencies \5\) and the Federal Financial Institutions Examination
Council (FFIEC) must review their regulations to identify outdated,
unnecessary, or unduly burdensome requirements imposed on insured
depository institutions. The Agencies are required, jointly or
individually, to categorize regulations by type, such as ``consumer
regulations'' or ``safety and soundness'' regulations. Once the
categories have been established, the Agencies must provide notice and
ask for public comment on one or more of these regulatory categories.
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\4\ Pub. L. 104-208, Div. A, Title II, Sec. 2222, 110 Stat.
3009 (1996); codified at 12 U.S.C. 3311.
\5\ The Office of Thrift Supervision was still in existence at
the time EGRPRA was enacted and was included in the listing of
Agencies. Since that time, the OTS has been eliminated and its
responsibilities have passed to the Agencies and the Consumer
Financial Protection Bureau.
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NCUA is not technically required to participate in the EGRPRA
review process, since NCUA is not an ``appropriate Federal banking
agency'' as specified in EGRPRA. In keeping with the spirit of the law,
however, the Board has once again elected to participate in the review
process. Thus, NCUA has participated along with the Agencies in the
planning process, but has developed its own regulatory categories that
are comparable with
[[Page 79954]]
those developed by the Agencies. Because of the unique circumstances of
federally insured credit unions and their members, the Board is issuing
a separate notice from the Agencies. NCUA's notice is consistent and
comparable with the Agencies' notice, except on issues that are unique
to credit unions. The Agencies' fourth notice, like this one, includes
rules of procedure and safety and soundness. In addition, their fourth
notice includes the category of securities, as to which there is no
credit union counterpart.
In accordance with the objectives of EGRPRA, the Board asks the
public to identify areas of its regulations that are outdated,
unnecessary, or unduly burdensome. The EGRPRA review supplements and
complements the reviews of regulations that NCUA conducts under other
laws and its internal policies.\6\
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\6\ Interpretive Ruling and Policy Statement (IRPS) 87-2, 52 FR
35231 (Sept. 8, 1987) as amended by IRPS 03-2, 68 FR 32127 (May 29,
2003.)(Reflecting NCUA's commitment to ``periodically update,
clarify and simplify existing regulations and eliminate redundant
and unnecessary provisions.'')
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As the Board noted in its initial EGRPRA notice, the creation of
the Consumer Financial Protection Bureau (CFPB) resulted in the
transfer to it of responsibility for certain consumer protection rules
that had previously been the responsibility of the Agencies and/or
NCUA, such as Regulation Z and rules governing consumer privacy.
Because the CFPB is not covered by EGRPRA or required to participate in
this regulatory review process, the Agencies and NCUA excluded certain
consumer protection regulations from the scope of the current
review.\7\
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\7\ In addition to rules that have been transferred to the CFPB,
insured credit unions are also subject to certain other regulations
that are not required to be reviewed under the EGRPRA process, such
as regulations issued by the Department of the Treasury's Financial
Crimes Enforcement Network. Any comment received during the EGRPRA
process that pertains to such a rule will be forwarded to the
appropriate agency.
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EGRPRA contemplates a two-part regulatory response. First, NCUA
will publish in the Federal Register a summary of the comments
received, identifying and discussing the significant issues raised.
Second, the law directs the Agencies to ``eliminate unnecessary
regulations to the extent that such action is appropriate.'' As was
done during the initial decennial review process, the Board anticipates
that it will prepare its response separately from the Agencies, but at
around the same time.
EGRPRA further requires the FFIEC to submit a report to the
Congress within 30 days after NCUA and the Agencies publish the comment
summary and analysis in the Federal Register. This report must
summarize any significant issues raised by the public comments and
discuss the relative merits of those issues. The report also must
analyze whether the appropriate federal financial regulator involved is
able to address the regulatory burdens associated with the issues by
regulation, or whether the burdens must be addressed by legislation.
The FFIEC report submitted to Congress following the initial decennial
EGRPRA review included an Agency section discussing banking sector
issues and a separate section devoted to NCUA and credit union issues.
It is likely that the FFIEC will follow a similar approach in this
second decennial EGRPRA review and report process.
II. The EGRPRA Review's Special Focus
The regulatory review contemplated by EGRPRA provides a significant
opportunity for the public and the Board to consider groups of related
regulations and identify possibilities for streamlining. The EGRPRA
review's overall focus on the totality of regulations will offer a new
perspective in identifying opportunities to reduce regulatory burden.
For example, the EGRPRA review may facilitate the identification of
regulatory requirements that are no longer consistent with the way
business is conducted and that therefore might be eliminated. Of
course, reducing regulatory burden must be consistent with ensuring the
continued safety and soundness of federally insured credit unions and
appropriate consumer protections.
EGRPRA also recognizes that burden reduction must be consistent
with NCUA's statutory mandates, many of which currently require certain
regulations. One of the significant aspects of the EGRPRA review
program is the recognition that effective burden reduction in certain
areas may require legislative change. The Board will be soliciting
comment on, and reviewing the comments and regulations carefully for,
the relationship among burden reduction, regulatory requirements, and
statutory mandates. This will be a key aspect of the report to
Congress.
The Board views the approach of considering the relationship of
regulatory and statutory change on regulatory burden, in concert with
EGRPRA's provisions calling for grouping regulations by type, to
provide the potential for particularly effective burden reduction. The
Board believes the EGRPRA review can also significantly contribute to
its on-going efforts to reduce regulatory burden. Since 1987, a
formally adopted NCUA policy has required the Board to review each of
its regulations at least once every three years with a view toward
eliminating, simplifying, or otherwise easing the burden of each
regulation.\8\ Further, the Board addresses the issue of regulatory
burden every time it proposes and adopts a rule. Under the Paperwork
Reduction Act of 1995,\9\ the Regulatory Flexibility Act,\10\ and
internal agency policies, NCUA examines each rulemaking to minimize the
burdens it might impose on the industry and considers various
alternatives.
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\8\ IRPS 87-2, 52 FR 35231 (Sept. 8, 1987) as amended by IRPS
03-2, 68 FR 32127 (May 29, 2003).
\9\ 44 U.S.C. 3501 et seq.
\10\ 5 U.S.C. 601 et seq.
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The Board is particularly sensitive to the impact of agency rules
on small institutions. At its September, 2015 meeting, the Board
formally increased the threshold for meeting the ``small''
classification to having assets of less than $100 million.\11\ The
Board is cognizant that each new or amended regulation has the
potential for requiring significant expenditures of time, effort, and
money to achieve compliance, and also that this burden can be
particularly difficult for institutions of smaller asset size, with
fewer resources available.
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\11\ 80 FR 57512 (September 24, 2015).
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III. The Board's Proposed Plan
EGRPRA contemplates the categorization of regulations by ``type.''
During the initial decennial review, the Board developed and published
for comment ten categories for NCUA's rules, including some that had
been issued jointly with the Agencies. The Board believes these initial
categories worked well for the purpose of presenting a framework for
the review and so has retained them for this second review.\12\ The
categories, in alphabetical order, are: Agency Programs; Applications
and Reporting; Capital; Consumer Protection; Corporate Credit Unions;
Directors, Officers and Employees; Money Laundering; Powers and
Activities; Rules of Procedure; and Safety and Soundness. As noted
above, some of the rules in the consumer protection category are now
under CFPB's jurisdiction and administration, and those affected rules
have been eliminated. Any rules adopted for the first time since 2006
have been included
[[Page 79955]]
in the appropriate category.\13\ Rules still in proposed form are not
included in this review; commenters may be assured that comments
submitted directly in response to proposed rules will be given due
consideration within that process.
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\12\ Consistent with EGRPRA's focus on reducing burden on
insured credit unions, the Board has not included internal,
organizational or operational regulations in this review. These
regulations impose minimal, if any, burden on insured credit unions.
\13\ Commenters should note, in this respect, that for new
regulations that have only recently gone into effect, some passage
of time may be necessary before the burden associated with the
regulatory requirements can be fully and properly understood.
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As the Board noted during the initial decennial review, although
there are other possible ways of categorizing its rules, these ten
categories ``are logical groupings that are not so broad such that the
number of regulations presented in any one category would overwhelm
potential commenters. The categories also reflect recognized areas of
industry interest and specialization or are particularly critical to
the health of the credit union system.'' As was also noted during the
initial review, some regulations, such as lending, pertain to more than
one category and are included in all applicable categories.
The Board remains convinced that publishing its rules for public
comment separately from the Agencies is the most effective method for
achieving EGRPRA's burden reduction goals for federally insured credit
unions. Owing to differences in the credit union system as compared to
the banking system, there is not a direct, category by category,
correlation between NCUA's rules and those of the Agencies. For
example, credit unions deal with issues such as membership, credit
union service organizations, and corporate credit unions, all of which
are unique to credit union operations. Similarly, certain categories
identified by the Agencies have limited or no applicability in the
credit union sector, such as community reinvestment, international
operations, and securities. The categories developed by the Board and
the Agencies reflect these differences. The Board intends to maintain
comparability with the Agencies' notices to the extent there is overlap
or similarity in the issues and the categories.
After the conclusion of the comment period for each EGRPRA notice
published in the Federal Register, the Board will review the comments
it has received and decide whether further action is appropriate with
respect to the categories of regulations included in that notice.
The Board has prepared a chart to assist public understanding of
the organization of its review. The chart, set forth at Section V
below, presents the two categories of regulations on which NCUA is
requesting burden reduction recommendations in this final notice. The
two categories are shown in the left column. In the middle column are
the subject matters that fall within the categories and in the far
right column are the regulatory citations.
IV. Request for Burden Reduction Recommendations About the Categories
of Regulations: ``Rules of Procedure'' and ``Safety and Soundness''
The Board seeks public comment on regulations within the following
two categories--``Rules of Procedure'' and ``Safety and Soundness''--
that may impose outdated, unnecessary, or unduly burdensome regulatory
requirements on federally insured credit unions. Comments that cite
particular provisions or language, and provide reasons why such
provisions should be changed, would be most helpful to NCUA's review
efforts. Suggested alternative provisions or language, where
appropriate, would also be helpful. If the implementation of a comment
would require modifying a statute that underlies the regulation, the
comment should, if possible, identify the needed statutory change.
Specific issues for commenters to consider. While all comments
related to any aspect of the EGRPRA review are welcome, the Board
specifically invites comment on the following issues:
Need and purpose of the regulations. Do the regulations in
these categories fulfill current needs? Has industry or other
circumstances changed since a regulation was written such that the
regulation is no longer necessary? Have there been shifts within the
industry or consumer actions that suggest a re-focus of the underlying
regulations? Do any of the regulations in these categories impose
burdens not required by their authorizing statutes?
Need for statutory change. Do the statutes impose
unnecessary requirements? Are any of the statutory requirements
underlying these categories redundant, conflicting or otherwise unduly
burdensome? If so, how should the statutes be amended?
Overarching approaches/flexibility of the regulatory
standards. Generally, is there a different approach to regulating that
the Board could use that would achieve statutory goals while imposing
less burden? Do any of the regulations in these categories or the
statutes underlying them impose unnecessarily inflexible requirements?
Effect of the regulations on competition. Do any of the
regulations in these categories or the statutes underlying them create
competitive disadvantages for credit unions compared to another part of
the financial services industry? If so, how should these regulations be
amended?
Reporting, recordkeeping and disclosure requirements. Do
any of the regulations in these categories or the statutes underlying
them impose particularly burdensome reporting, recordkeeping or
disclosure requirements? Are any of these requirements similar enough
in purpose and use so that they could be consolidated? What, if any, of
these requirements could be fulfilled electronically to reduce their
burden? Please provide specific recommendations.
Consistency and redundancy. Do any of the regulations in
these categories impose inconsistent or redundant regulatory
requirements that are not warranted by the circumstances?
Clarity. Are the regulations in these categories and the
underlying statutes drafted in clear and easily understood language?
Are there specific regulations or underlying statutes that need
clarification?
Scope of rules. Is the scope of each rule in these
categories consistent with the intent of the underlying statute(s)?
Could we amend the scope of a rule to clarify its applicability or to
reduce the burden, while remaining faithful to statutory intent? If so,
specify which regulation(s) should be clarified.
Burden on small insured institutions. The Board has a
particular interest in minimizing burden on small insured credit unions
(those with less than $100 million in assets). NCUA solicits comment on
whether any regulations within these categories should be continued
without change, amended or rescinded in order to minimize any
significant economic impact the regulations may have on a substantial
number of small federally insured credit unions.
V. Regulations About Which Burden Reduction Recommendations Are
Requested Currently
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Rules of Procedure.............. Liquidation 12 CFR 709 and
(involuntary and 710.
voluntary).
Uniform rules of 12 CFR 747,
practice and subpart A.
procedure.
Local rules of 12 CFR 747,
practice and subparts B
procedure. through J.
[[Page 79956]]
Inflation 12 CFR 747,
adjustment of subpart K.
civil money
penalties.
Issuance, review 12 CFR 747,
and enforcement subparts L and M.
of orders
imposing prompt
corrective action.
Safety and Soundness............ Lending........... 12 CFR 701.21.
Investment and 12 CFR 703.
Deposit
Activities.
Supervisory 12 CFR 715.
committee audit.
Security programs. 12 CFR 748.0.
Guidelines for 12 CFR 748,
safeguarding Appendices A and
member B.
information and
responding to
unauthorized
access to member
information.
Records 12 CFR 749.
preservation
program and
appendices.
Appraisals........ 12 CFR 722.
Examination....... 12 CFR 741.1.
Liquidity and 12 CFR 741.12.
contingency
funding plans.
Regulations 12 CFR 741,
codified subpart B.
elsewhere in
NCUA's
regulations as
applying to
federal credit
unions that also
apply to
federally insured
state-chartered
credit unions.
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By the National Credit Union Administration Board on December
17, 2015.
Gerard Poliquin,
Secretary of the Board.
[FR Doc. 2015-32167 Filed 12-22-15; 8:45 am]
BILLING CODE 7535-01-P