[Federal Register Volume 83, Number 108 (Tuesday, June 5, 2018)]
[Rules and Regulations]
[Pages 25881-25882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11946]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 83, No. 108 / Tuesday, June 5, 2018 / Rules
and Regulations
[[Page 25881]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Parts 702 and 723
RIN 3133-AE89
Commercial Lending
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule.
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SUMMARY: The NCUA Board (Board) is amending the definition of member
business loan (MBL) in its MBL rule with respect to 1- to 4- family
dwellings. This regulatory change conforms to a recent amendment to the
Federal Credit Act (FCU Act) by the Economic Growth, Regulatory Relief,
and Consumer Protection Act (Economic Growth Act).
DATES: This rule is effective June 5, 2018.
FOR FURTHER INFORMATION CONTACT: Justin M. Anderson, Senior Staff
Attorney, Office of General Counsel, 1775 Duke Street, Alexandria, VA
22314-3428 or telephone (703) 518-6540.
SUPPLEMENTARY INFORMATION:
I. Background
II. Good Cause Exception
III. Regulatory Procedures
I. Background
On May 24, 2018, the President signed the Economic Growth Act,\1\
which among other things, amended the definition section of the MBL
provisions of the FCU Act.\2\ Prior to the Economic Growth Act, the FCU
Act defined an MBL, in relevant part, as any loan, line of credit, or
letter of credit, the proceeds of which will be used for a commercial,
corporate or other business investment property or venture, or
agricultural purpose but does not include an extension of credit that
is fully secured by a lien on a 1-to 4- family dwelling that is the
primary residence of a member.\3\
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\1\ Economic Growth, Regulatory Relief, and Consumer Protection
Act, S.2155, 115th Cong. (2018).
\2\ Id. at sec. 105.
\3\ 12 U.S.C. 1757a(c)(1)(B)(i).
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The Economic Growth Act removed from that definition the words
``that is the primary residence of a member.'' As a result, the
definition of an MBL now excludes all extensions of credit that are
fully secured by a lien on a 1- to 4- family dwelling regardless of the
borrower's occupancy status. Because these kinds of loans are no longer
considered MBLs, they do not count towards the aggregate MBL cap
imposed on each federally insured credit union by the FCU Act.
This statutory amendment became effective upon enactment of the
Economic Growth Act. The Board is issuing this final rule to conform
the NCUA's MBL rule to the revised FCU Act.
This final rule also revises the NCUA's Prompt Corrective Action
rule, part 702,\4\ by amending outdated citations to the NCUA's MBL
rule. These changes are technical in nature and will not have any
substantive effect.
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\4\ 12 CFR part 702.
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II. Good Cause Exception
The Board is issuing this rule as final, without having first
provided notice and an opportunity for public comment because the NCUA
for good cause finds that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest pursuant
to the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(B). This
rule implements a mandated statutory change that provides the NCUA with
no choice and no discretion. The Board finds these reasons are good
cause to dispense with the APA's notice and comment requirements.
III. Regulatory Procedures
1. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501, et seq.) (PRA), the NCUA may not conduct or
sponsor, and the respondent is not required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (OMB) control number. The information collection
requirements associated with part 723 are currently approved by OMB and
assigned OMB control number 3133-0101. This rule will not impose any
new paperwork burdens or amend existing paperwork burdens, as defined
by the PRA.
2. Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) provides generally for congressional review of agency rules. A
reporting requirement is triggered in instances where the NCUA issues a
final rule as defined by Section 551 of the APA. The NCUA believe this
final rule is ``major'' within the meaning of the relevant sections of
SBREFA. The NCUA has submitted the rule to the Office of Management and
Budget for its determination in that regard.
3. Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests. 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.
4. 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, 1999, Public Law 105-277, 112 Stat. 2681
(1998).
List of Subjects
12 CFR Part 702
Credit unions, Reporting and recordkeeping requirements.
12 CFR Part 723
Credit, Credit unions, Reporting and recordkeeping requirements.
[[Page 25882]]
By the National Credit Union Administration Board on May 30,
2018.
Gerard Poliquin,
Secretary of the Board.
For the reasons discussed above, the NCUA amends 12 CFR parts 702
and 723 as follows:
PART 702--CAPITAL ADEQUACY
0
1. The authority citation for part 702 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1790d.
Sec. 702.104 [Amended]
0
2. In Sec. 702.104, amend paragraphs (a), (b), and (g) by removing the
citation ``12 CFR 723.1'' and adding in its place ``12 CFR 723.8(b)''
and by removing the citation ``12 CFR 723.20'' and adding in its place
``12 CFR 723.10'' wherever they appear.
PART 723--MEMBER BUSINESS LOANS; COMMERCIAL LENDING
0
3. The authority citation for part 723 continues to read as follows:
Authority: 12 U.S.C. 1756, 1757, 1757A, 1766, 1785, 1789.
0
4. In Sec. 723.8, add paragraph (b)(3) and revise paragraph (c) to
read as follows:
Sec. 723.8 Aggregate member business loan limit; exclusions and
exceptions.
* * * * *
(b) * * *
(3) Any loan that is fully secured by a lien on a 1- to 4- family
dwelling.
(c) Exception. Any loan secured by a vehicle manufactured for
household use that will be used for a commercial, corporate, or other
business investment property or venture, or agricultural purpose, is
not a commercial loan but it is a member business loan (if the
outstanding aggregate net member business loan balance is $50,000 or
greater) and must be counted toward the aggregate limit on a federally
insured credit union's member business loans.
* * * * *
[FR Doc. 2018-11946 Filed 6-4-18; 8:45 am]
BILLING CODE 7535-01-P