[Federal Register Volume 82, Number 108 (Wednesday, June 7, 2017)]
[Proposed Rules]
[Pages 26378-26391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11319]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 82, No. 108 / Wednesday, June 7, 2017 / 
Proposed Rules

[[Page 26378]]



NATIONAL CREDIT UNION ADMINISTRATION

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

RIN 3133-AE68


Appeals Procedures

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule.

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SUMMARY: The NCUA Board (Board) proposes to adopt procedures to govern 
appeals to the Board that would apply to agency regulations that 
currently have their own embedded appeals provisions and will replace 
those current provisions. The procedures would apply in cases in which 
a decision rendered by a regional director or other program office 
director is subject to appeal to the Board. The proposed procedures are 
intended to result in greater efficiency, consistency, and better 
understanding of the way in which matters under covered regulations may 
be appealed to the Board.
    Excluded from the scope of this proposal are formal adjudications 
required under the Administrative Procedure Act (APA) to be accompanied 
by ``notice and an opportunity for a hearing on the record.'' Matters 
that are not covered include formal enforcement actions, challenges to 
orders imposing prompt corrective action and matters that are within 
the jurisdiction of the NCUA's Supervisory Review Committee (SRC). With 
the issuance of this proposed rule, the Board is also proposing a new 
rule to govern the SRC, including the appeal to the Board of adverse 
determinations made by the SRC.

DATES: Comments must be received on or before August 7, 2017.

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: https://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 Appeals Procedures'' 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/RegulationsOpinionsLaws/comments 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: Michael J. McKenna, General Counsel, 
Ross P. Kendall, Special Counsel to the General Counsel, or Benjamin M. 
Litchfield, Staff Attorney, at the above address, or telephone: (703) 
518-6540.

SUPPLEMENTARY INFORMATION:

Executive Summary

    If adopted, new part 746, subpart B will govern most authorized 
appeals to the Board of adverse determinations made at program office 
levels under agency regulations that permit such an appeal. The 
agency's discussion of the proposed changes details which rules would 
be affected but the Board specifically requests comments on any other 
agency rules that should provide for an appeal and thus be covered 
under the proposal. The following actions or determinations would not 
be covered under the proposal because appeals relating to them are 
already covered under different agency procedures but the Board 
nonetheless seeks comments on their proposed exclusion:
     Formal enforcement actions;
     Creditor claims in liquidation, to the extent that the 
claimant has requested and the Board has agreed to consider the appeal 
formally on the record;
     Material supervisory determination within the jurisdiction 
of the Supervisory Review Committee, including appeals of SRC 
determination to the Board (addressed under a separate agency proposal 
issued with this proposal);
     Challenges to actions imposed under the prompt corrective 
action regime; and
     Appeals of matters that are delegated by rule to an 
officer or position below the Board for final, binding agency action.

I. Background

    The Board is committed to providing credit unions, and other 
persons or entities that are affected by agency decisions, with an 
opportunity to obtain meaningful review of those decisions. At present, 
procedures for obtaining that review are embedded in and scattered 
throughout NCUA's regulations and, in many cases, are slightly 
different from one another. For example, time frames for seeking higher 
level review may differ and deadlines within which final agency action 
is to be rendered may also be different.\1\ In this proposal, the Board 
has developed a more uniform set of procedures to govern those rules in 
which an appeal to the Board is permitted. The Board seeks to strike a 
balance that will afford the appellant fair consideration of the issues 
while avoiding procedures that are overly burdensome, time consuming, 
and expensive for either the petitioner or the agency. The Board 
invites comment on all aspects of this proposal.
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    \1\ See, e.g., 12 CFR 701.32(b)(5), 701.34(a)(4), 741.11(d), 
703.111(d).
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    The proposed procedures would apply to federal credit unions 
(FCUs), federally insured, state-chartered credit unions (FISCUs), or 
certain institution-affiliated parties (IAPs) such as officers or 
directors when appealing an agency determination under one of the rules 
to which proposed part 746, subpart B would apply. For example, FCUs 
and FISCUs appealing a waiver determination by a regional director 
under the loan participations rule

[[Page 26379]]

would be subject to these procedures.\2\ These procedures would also 
apply to an IAP appealing an adverse determination relating to a change 
in officials.\3\
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    \2\ 12 CFR 701.22.
    \3\ 12 CFR 701.14.
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II. Summary of Regulations Affected by Part 746

    Several NCUA regulations contain appeals procedures in addition to 
their substantive provisions. These procedures generally lack 
uniformity and may be confusing for those seeking an appeal. To improve 
the appeals process that applies under the covered rules, the Board 
proposes to promulgate a more uniform set of appeals procedures 
contained in subpart B of part 746 to replace the current inconsistent 
appeals procedures that now apply to agency determinations under the 
affected regulations. The Board proposes to include in each of the 
affected rules a cross-reference to the proposed procedures to be 
located in subpart B of part 746.
    The following is a bulleted list of the various regulations that 
have appeals procedures that would be replaced by the proposed 
procedures in subpart B of part 746.
     Claims of a Creditor of an Insolvent FICU Under an NCUA 
Alternative Resolution Dispute Process. Within 60 days from the date 
that NCUA's Asset Management and Assistance Center (AMAC) issues a 
notice of disallowance, a creditor of an insolvent FICU may file or 
continue a lawsuit in U.S. district court or seek review by the 
Board.\4\ Claimants seeking Board review may request a hearing on the 
record in accordance with part 747 of NCUA's regulations and the formal 
adjudicatory procedures set forth in the APA.\5\ Alternatively, a 
claimant seeking review by the Board may submit to an alternative 
dispute resolution process.\6\ The proposed amendments supplant those 
procedures currently in part 709 of NCUA's regulations \7\ and replace 
them with a reference to new subpart B to part 746.
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    \4\ 12 U.S.C. 1787(b)(6).
    \5\ 12 U.S.C. 1787(b)(7)(A).
    \6\ 12 U.S.C. 1787(b)(7)(B).
    \7\ 12 CFR 709.8(c).
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     Payment of Claims Regarding Federally Insured Shares or 
Deposits. The FCU Act provides that the Board is to make payment of the 
insured shares or deposits as soon as possible following a 
liquidation.\8\ The FCU Act authorizes the Board to require a proof of 
claim to be filed with it before making payment, and it contemplates 
that the Board may ``approve or reject'' such claims.\9\ The FCU Act 
also provides that the Board may, by regulation, prescribe procedures 
to resolve disputed claims.\10\ No conditions or limitations are 
imposed by statute on this resolution process, although the FCU Act 
does provide that the agency's final determination of an insurance 
claim is subject to judicial review in accordance with the relevant 
provisions of the APA.\11\ Subpart B to part 745 currently implements 
this authority. The proposed amendments would replace the current 
procedures.
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    \8\ 12 U.S.C. 1787(d)(1).
    \9\ 12 U.S.C. 1787(d)(2).
    \10\ 12 U.S.C. 1787(d)(3).
    \11\ Id.
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     Chartering and Field of Membership. NCUA's Office of 
Consumer Financial Protection and Access (OCFPA) is responsible for 
making certain determinations regarding chartering and field of 
membership, and these determinations are appealable to the Board. The 
FCU Act does not provide any specific right to a hearing on the record 
in connection with any of these determinations, and the procedures do 
not call for such a proceeding. The Board proposes to delete from 
NCUA's Chartering and Field of Membership Manual all descriptions of 
the current procedures for challenging OCFPA determinations, such as 
the denial of initial charter applications (including proposed senior 
officials), requests for expansion or spinoff, requests to add an 
underserved area, and conversion requests. The Board proposes that all 
of these procedures be governed by new subpart B to part 746.
     Community Development Loans. In accordance with part 705 
of NCUA's regulations, qualifying credit unions may apply for loans 
from NCUA's Community Development Revolving Loan Fund.\12\ A credit 
union failing to qualify may appeal to the Board. Part 705 specifies 
that the appeal must be taken within 30 days of the notice of 
disqualification, and it provides that the Board's review is limited to 
the threshold question of qualification.\13\ The Board proposes to 
replace these procedures with new subpart B to part 746.
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    \12\ 12 CFR part 705.
    \13\ 12 CFR 705.6(f)(1).
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     Golden Parachutes. Pursuant to part 750 of NCUA's 
regulations, FICUs are limited in the amount of severance plan 
arrangements that are permissible for senior level officials.\14\ 
Credit unions are permitted to request from the regional director or 
the Office of National Examinations and Supervision (ONES) Director, as 
appropriate, the authority to make an otherwise impermissible severance 
payment. If the request is denied, part 750 specifies a process by 
which the credit union may appeal to the Board.\15\ The Board proposes 
to replace that process with the procedures in subpart B to part 746.
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    \14\ 12 CFR part 750.
    \15\ 12 CFR 750.6(b.).
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     Investment Authority. An FCU may appeal decisions by the 
regional director or ONES Director rejecting its request for expanded 
investment authority or authority to engage in derivatives investment 
activity.\16\ In each case, the investment rule is silent as to the 
appeals procedures other than timing. The Board proposes that these 
appeals be governed by the procedures in new subpart B to part 746.
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    \16\ 12 CFR 703.20(d); 703.111(d); 703.114(c).
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     Change of Officials for Troubled or Newly Chartered Credit 
Unions. A `troubled' or newly chartered FICU may appeal an adverse 
determination regarding a change of an official or officials to the 
Board. Procedures governing this review are in Sec.  701.14 of NCUA's 
regulations. The regulation refers to subpart J of part 747 of NCUA's 
regulations which contains explicit guidance on the appeals 
process.\17\ There is no express statutory right to a hearing on the 
record in this circumstance. The Board proposes to replace the current 
procedures with the procedures in new subpart B to part 746. The 90-day 
time frame within which the Board must decide an appeal under Sec.  
701.14 would be preserved, as would other shorter time frames currently 
included in subpart J.
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    \17\ 12 CFR 747.901 et seq.
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     Conversions and Mergers. NCUA administers the processes by 
which a FICU may convert to a mutual savings bank or merge into a 
bank.\18\ Part 708a specifies that the appropriate NCUA official will 
oversee the methods and procedures of the conversion or merger. If the 
appropriate NCUA official disapproves the methods by which the vote was 
taken or the procedures applicable to the vote, the FICU may appeal 
that disapproval to the Board.\19\ For conversions, a FICU may appeal a 
determination within 30 days and the Board must act within 90 days.\20\ 
For mergers, a FICU may appeal a determination within 30 days and the 
Board must act within 120 days.\21\ The Board proposes to replace these

[[Page 26380]]

procedures with the appeals procedures in new subpart B to part 746. 
The Board specifically invites comment on whether the extension of 
these deadlines would pose an undue hardship on credit unions 
converting to mutual savings banks or merging with banks.
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    \18\ 12 CFR part 708a.
    \19\ 12 CFR 708a.108(d).
    \20\ Id.
    \21\ 12 CFR 708a.308(d).
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     Other Miscellaneous Regulations Affected by Subpart B to 
Part 746. The following is a list of additional regulations that 
contain appeals procedures that would be replaced with the proposed 
appeals procedures in subpart B of part 746.
     NCUA's general lending rule.\22\
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    \22\ 12 CFR 701.21(h)(3).
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     NCUA's eligible obligations rule.\23\
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    \23\ 12 CFR 701.23(h)(3).
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     NCUA's loan participations rule.\24\
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    \24\ 12 CFR 701.22(c).
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     Section 701.32 of NCUA's regulations regarding public unit 
and nonmember shares.\25\
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    \25\ 12 CFR 701.32(b)(5).
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     Section 701.34 of NCUA's regulations regarding the low 
income designation.\26\
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    \26\ 12 CFR 701.34(a)(4).
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     Section 741.11 of NCUA's regulations regarding branch 
offices outside the United States.\27\
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    \27\ 12 CFR 741.11(d).
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III. Exclusions

    New subpart B to part 746 is designed to govern appeals under the 
regulations addressed above. There are five areas that are excluded 
from the scope of the proposed rule. Each of these is discussed below.
    Enforcement Actions. Appeals that involve an agency hearing on the 
record and the development of an initial decision by a hearing officer 
or administrative law judge and are governed by formal procedural 
requirements described in secs. 7 and 8 of the APA.\28\ These formal 
requirements are applicable only where the Federal Credit Union Act 
(FCU Act) \29\ specifically calls for the agency's adjudication ``to be 
determined on the record after opportunity for an agency hearing.'' 
\30\
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    \28\ 5 U.S.C. 556, 557.
    \29\ 12 U.S.C. 1751 et seq.
    \30\ 5 U.S.C. 554(a).
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    Section 206 of the FCU Act addresses enforcement actions that the 
NCUA may take against an insured institution or its IAPs.\31\ Of these, 
four specifically include an opportunity for the affected entity or 
individual to be heard before the action becomes effective. These 
include actions to terminate the institution's insured status (sec. 
206(c)), cease and desist actions (sec. 206(e)), removal actions (sec. 
206(g)), and civil money penalties (sec. 206(k)), including any actions 
to obtain enforcement of an outstanding order issued under sec. 206 or 
under the prompt corrective action provisions in sec. 216 of the FCU 
Act.\32\ There are two enforcement actions that may be taken by NCUA 
with immediate effectiveness and an agency hearing is not required 
(temporary cease and desist actions (sec. 206(f)) and actions to 
appoint a conservator (sec. 206(h)). Each of these carries with it an 
opportunity for the affected entity or individual to proceed 
immediately to court to file a challenge to the NCUA's action.
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    \31\ 12 U.S.C. 1786.
    \32\ 12 U.S.C. 1790d.
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    Other formal enforcement measures are found in sec. 131 of the FCU 
Act, which provides that FCUs convicted of money laundering, cash 
transaction reporting, or certain other related offenses are subject to 
forfeiture of their charter after a pre-termination hearing conducted 
on the record.\33\ In addition, FICUs fined for failure to file 
accurate call reports may request a hearing on the record under sec. 
202(a)(3) of the FCU Act.\34\ Similarly, FISCUs fined for failure to 
submit accurate certified statements in connection with calculating 
National Credit Union Share Insurance Fund premium charges may request 
a hearing on the record under sec. 202(d)(2)(E) of the FCU Act.\35\ 
Finally, in accordance with sec. 304(e)(3) of the FCU Act, the Board 
may terminate a FICU's membership in the Central Liquidity Facility 
(CLF) for non-compliance with statutory or regulatory requirements 
pertaining to the CLF, but only after providing the opportunity for an 
agency hearing.\36\
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    \33\ 12 U.S.C. 1772d.
    \34\ 12 U.S.C. 1782(a)(3).
    \35\ 12 U.S.C. 1782(d)(2)(E).
    \36\ 12 U.S.C. 1795c(e)(3).
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    Actions under sec. 206(i) of the FCU Act to suspend, remove, or 
prohibit individuals who have engaged in certain criminal acts are 
treated somewhat differently. In these instances, the affected 
individual is removed immediately, but is given the opportunity to 
appear before the Board to show that his or her continued service on 
behalf of the FICU does not pose a threat to the interests of the 
credit union or its members.\37\ The FCU Act directs the Board to fix a 
time and place at which the party may appear, in person or through 
counsel, to submit written material and make oral presentations and, 
with the agreement of the Board, oral testimony.\38\
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    \37\ 12 U.S.C. 1786(i)(3).
    \38\ Id.; 12 CFR part 747, subpart D. In a case involving a 
challenge to an immediate removal of a bank executive by the FDIC, 
acting under its similar authority, the Supreme Court held that the 
absence of the right to a pre-removal hearing was constitutionally 
sufficient and did not violate the due process clause of the Fifth 
Amendment. FDIC v. Mallen, 486 U.S. 230 (1988).
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    For these types of actions, NCUA has promulgated explicit rules of 
procedure, which provide safeguards such as representation by counsel, 
document production, discovery, testimony from witnesses, an official 
record of the proceedings, and the development of a recommended 
decision by an administrative law judge for the consideration of the 
Board.\39\ Such procedures regarding these enforcement actions would 
not be covered by new subpart B to part 746.
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    \39\ 12 CFR part 747.
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    Creditor claims in liquidation that are litigated or reviewed by 
the Board under formal agency adjudication procedures. The FCU Act 
specifies that a person appealing an initial creditor claim 
determination by the liquidating agent of an insolvent FICU may either: 
(1) File an action in federal court (or renew an action that had been 
pending before the liquidation began) seeking a de novo judicial 
determination of the merits of his claim; or (2) they may request that 
the Board review the claim.\40\ The FCU Act also specifies that, if the 
Board agrees to the review request, the Board must consider the claim 
after opportunity for a hearing on the record.\41\ Part 709 of NCUA's 
regulations implements this provision by providing that the formal 
adjudication provisions set out in part 747, subpart A will govern the 
process.\42\ These provisions remain in place and are not affected by 
new subpart B to part 746. However, as discussed above, alternatively a 
petitioner may request an appeal under the proposed provisions in 
subpart B to part 746.
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    \40\ 12 U.S.C. 1787(b)(6), (7). The FCU Act also permits the 
Board to establish alternative dispute resolution procedures, which 
it has done in Sec.  709.8(c). As discussed below, those procedures 
will be replaced by new subpart B to part 746.
    \41\ 12 U.S.C. 1787(b)(7).
    \42\ 12 CFR 709.8(b).
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    Material Supervisory Determinations. As required by the Riegle 
Community Development and Regulatory Improvement Act of 1994,\43\ NCUA 
established an SRC to provide a forum for FICUs to appeal an examiner's 
material supervisory determinations. Procedures followed by the SRC are 
described in Interpretive Ruling and Policy Statement (IRPS) 11-1, as 
amended by IRPS 12-1. Subjects that may be appealed to the SRC include 
examination ratings, the adequacy of

[[Page 26381]]

loan loss reserve provisions, and loan classifications on loans that 
are significant to the institution.\44\ The Board expanded the 
jurisdiction of the SRC in April 2011 by adding appeals of 
determinations by the Director of the Office of Small Credit Union 
Initiatives to deny a reimbursement request made in connection with a 
technical assistance grant.\45\ As proposed, the provisions in new 
subpart B to part 746 would not apply to issues that are reviewable by 
the SRC. Along with the issuance of this proposed rule, the Board is 
seeking comments on a separate proposal that contains significant 
changes to the SRC, including how adverse determinations made by the 
SRC may be appealed to the Board. If adopted, those proposed changes to 
the SRC would be contained in a new subpart A to part 746.
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    \43\ Public Law 103-325, 108 Stat. 2160 (Sept. 23, 1994).
    \44\ Id.
    \45\ 76 FR 3674 (Jan. 20, 2011).
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    Prompt Corrective Action. Under the FCU Act, FICUs are subject to 
mandatory and discretionary supervisory actions, based on their net 
worth position.\46\ Mandatory actions are not subject to appeal, but 
discretionary actions are. Under the FCU Act, these discretionary 
measures are considered ``material supervisory determinations'' and 
could have been made subject to the jurisdiction of the SRC.\47\ The 
FCU Act, however, permits the Board to establish a separate appeals 
process regarding these determinations. Exercising this authority, the 
Board determined previously that challenges to determinations made by a 
regional director or ONES Director and imposed under the prompt 
corrective action regime are more appropriately covered by the 
procedures in subpart L to part 747.\48\ These procedures are informal 
but specialized, ranging from the submission of written materials (in 
the case of orders imposing discretionary supervisory action) \49\ to 
requesting a hearing before a presiding officer designated by the Board 
(for orders reclassifying a credit union on safety and soundness 
criteria, as well as orders to dismiss a director or senior executive 
officer). In the context of discretionary supervisory actions, the 
Board will respond to the written challenge.\50\ In the context of 
challenges to reclassification and dismissal of officials or directors, 
the rules provide for a hearing at which the appellant is entitled to 
be represented by counsel, to introduce relevant documents, and to make 
oral presentations. Witness testimony is permissible with the consent 
of the presiding officer.\51\ The hearing is recorded, and the 
appellant is entitled to receive a transcript upon request and payment 
of the cost thereof. The presiding officer makes a recommendation to 
the Board, which has 60 days in which to decide the issue.\52\
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    \46\ 12 U.S.C. 1790d; 12 CFR part 702.
    \47\ 12 U.S.C. 1790d(k).
    \48\ See 12 CFR part 747, subpart L.
    \49\ The affected credit union also has the option under this 
procedure to request the recommendation of NCUA's Ombudsman 
concerning the matters at issue.
    \50\ 12 CFR 747.2002.
    \51\ The presiding officer is an individual designated by the 
NCUA Board to hold informal hearings under subpart L to part 747.
    \52\ 12 CFR 747.2003, 743.2004.
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    Because the determinations made by a regional director or the ONES 
Director and imposed under the prompt corrective action regime are 
addressed separately, they are not subject to proposed subpart B to 
part 746. Similar determinations involving exclusively corporate credit 
unions are set forth in subpart M to part 747 and are likewise 
unaffected by this proposal. However, the Board seeks specific comments 
as to whether appeals provisions relating to prompt corrective action 
are sufficient and whether such provisions should be consolidated with 
the proposed part 746.
    Other Exclusions. By rule, appeals of adverse determinations under 
the Freedom of Information Act are decided by the General Counsel.\53\ 
The General Counsel also decides on requests made under NCUA's Touhy 
regulation \54\ and appeals of initial determinations made under the 
Privacy Act.\55\ None of these areas would be affected by this proposed 
rule but the Board seeks comments on their exclusion.
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    \53\ 12 CFR 792.28.
    \54\ Touhy regulations prohibit the unauthorized release of 
information by current (and typically former) agency employees and 
provide a procedure for centralized agency decision-making 
concerning how the agency will respond to a subpoena or other 
request for testimony or documents served on a current or former 
agency employee. See United States ex rel. Touhy v. Ragen, 340 U.S. 
462, 468 (1951); see also 5 U.S.C. 301.
    \55\ 12 CFR 792.46, 792.59.
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    The proposed procedures in subpart B to part 746 would also not 
affect how consumer complaints are processed by the NCUA.\56\ On 
September 30, 2010, the Board delegated the authority to examine and 
supervise federal credit unions for compliance with consumer laws and 
regulations to OCFPA. As a result of this delegation, consumers may not 
appeal determinations by OCFPA's Director of the Division of Consumer 
Affairs to the Board. The Board invites comment on this exclusion.
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    \56\ NCUA's current consumer complaint procedures are set forth 
in NCUA Letter to Credit Unions 15-CU-04 (June 2015).
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IV. Section Analysis

Subpart B to Part 746--Informal Appeals Procedures

    The Board is proposing to add subpart B to part 746 to address 
procedures that govern informal appeals of agency decisions under 
specific regulations. As discussed above, the proposed rule would amend 
existing NCUA regulations to include a cross-reference to the 
procedures contained in this subpart. The Board proposes to adopt these 
procedures to improve and streamline the appeals process as it applies 
to decisions under the covered rules.

Section 746.201--Authority, Purpose, and Scope

    The first section of proposed subpart B to part 746 states the 
Board's authority for issuing the rule as well as its scope and 
purpose.
201(a) Authority
    The Board is issuing this proposed rule pursuant to authority 
granted to it by secs. 120, 207, and 209 of the FCU Act. Section 120 of 
the FCU Act is a general grant of regulatory authority over FCUs. 
Section 207 of the FCU Act is a specific grant of authority over share 
insurance coverage, conservatorships, and liquidations. Section 209 of 
the FCU Act is a plenary grant of regulatory authority to issue rules 
and regulations necessary or appropriate to carry out its role as share 
insurer for all FICUs.
Section 746.201(b) Purpose
    As stated above, the purpose of the proposed rule is to provide 
uniform procedures for appeals to the Board under affected agency 
regulations. The Board believes the creation of uniform rules will help 
ensure that appellants receive appropriate due process and that agency 
decisions are made in a prompt and efficient manner.
Section 746.201(c) Scope
    Paragraph (c) first lists each of the regulations with current 
appeal procedures that would be covered under the new rule. The section 
would also clarify that there are five categories of agency actions 
that are excluded from the scope of the rule. Because this rule would 
only apply to informal agency adjudications, formal adjudications would 
be excluded. Likewise, creditor claim appeals where the claimant has 
requested a hearing on the record would be excluded. In addition, the 
rule would not cover appeals of prompt corrective action determinations 
or material

[[Page 26382]]

supervisory determinations appealable to NCUA's SRC. Finally, the rule 
would not cover the appeal of FOIA determinations, Privacy Act 
determinations, or determinations made under NCUA's Touhy regulation.

Section 746.202--Definitions

    In Sec.  746.202, the Board proposes to define certain terms. 
Unless otherwise defined, the Board expects FICUs and other affected 
parties to interpret terms or phrases according to their plain meaning.
Initial Agency Determination
    The proposed rule would define ``initial agency determination'' to 
clarify that the rule only applies to certain agency decisions made by 
personnel below the Board level. The rule does not apply to any action 
that results in the formulation of a rule, regulation, guidance 
document, or policy statement.
Petitioner
    The term ``petitioner'' would refer to a natural person or legal 
entity seeking review of an initial agency determination. Several of 
NCUA's regulations use different terminology when referring to parties 
appealing determinations to the Board. For example, a party appealing 
the denial a creditor claim is a ``claimant,'' \57\ while a party 
appealing a denial of share insurance coverage is referred to as an 
``accountholder.'' \58\ Rather than use all of these different terms, 
the Board is proposing to adopt a uniform term to describe all classes 
of individuals or legal entities appealing determinations to the Board.
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    \57\ See 12 CFR 709.7.
    \58\ See 12 CFR 745.202.
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Program Office
    Similarly, the Board is proposing to adopt a uniform term ``program 
office'' to refer to all offices within NCUA responsible for making 
initial agency determinations. Several NCUA offices below the Board 
level are responsible for administering various NCUA regulations. For 
example, chartering and field of membership determinations are made by 
OCFPA, while waivers and safety and soundness determinations are made 
by the appropriate regional office or ONES. Rather than use different 
terminology, the Board is proposing to adopt ``program office'' as a 
uniform term to describe the different NCUA offices responsible for 
making initial agency determinations.

Section 746.203--Request for Reconsideration

    Proposed Sec.  746.203 would set forth procedures for requesting 
reconsideration from a program office prior to filing an appeal with 
the Board. Several regulations issued by the NCUA Board permit affected 
parties to request reconsideration. This process is a useful, 
relatively inexpensive, and efficient method of resolving most 
disputes. It also limits the overall number of matters appealed to the 
Board. Therefore, the Board proposes to make this optional procedure 
available for any matter that could otherwise be appealed to the Board 
under part 746, subpart B and seeks comments on this approach.
Section 746.203(a) Reconsideration
    The reconsideration process promotes greater efficiency by allowing 
matters to be resolved at the program office level where possible. In 
general, the Board anticipates that the disposition of a request for 
reconsideration will either resolve the matter entirely or clarify the 
issues that remain for resolution at the Board level. Ordinarily, the 
Board anticipates that one request for reconsideration will be 
sufficient, and that the next appropriate step for a party still 
seeking resolution of the issues will be to appeal to the Board. The 
rule recognizes, however, that there may be cases involving extenuating 
circumstances, such as the discovery of new evidence or documentation, 
and that a second request for reconsideration may be appropriate in 
such circumstances. Absent such circumstances, a second request for 
reconsideration would be treated as an appeal to the Board.
Section 746.203(e); (f); (g) Determination of Program Office; Notice of 
Determination; Failure To Make a Determination
    Paragraph (e) would require the program office to issue a written 
determination within 30 calendar days of receiving a first request for 
reconsideration. Paragraph (f) would specify that the written 
determination must include a description of any right to appeal a 
determination to the Board. In the case of creditor claims, paragraph 
(f)(2) would require a description of the right to file or continue a 
lawsuit in federal court.
    In the Board's experience, 30 calendar days is a sufficient amount 
of time for a program office to consider new information and reach a 
determination after reconsideration. If the program office fails to 
make a determination within 30 calendar days, proposed paragraph (g) 
would treat the request for reconsideration as if it had been denied. 
To avoid undue prejudice, the denial of a request for reconsideration 
is treated as an initial agency determination for purposes of the 
deadline to file an appeal with the Board in proposed Sec.  746.204. If 
the petitioner obtains new information or there are reasonable, 
mitigating circumstances that precluded the presentation of existing 
information in connection with the first request for reconsideration, 
as determined solely by the program office in its reasonable judgment, 
the petitioner may request a second reconsideration prior to a Board 
appeal.

Section 746.204--Appeal to the Board

    Proposed Sec.  746.204 would state the procedures for filing an 
appeal with the Board. The provision would also list the information 
that must be included as part of the appeal. These requirements would 
be similar to the current requirements for creditor claims and share 
insurance claims, including the requirement that any appeal must be 
filed with the Secretary of the Board within 60 calendar days of the 
date of the initial agency determination or, if applicable, any 
determination following a request for reconsideration. However, the 
Board may grant extensions for timely filing in response to a 
petitioner's request base on the petitioner's reasonable, extenuating 
circumstances.
Section 746.204(c) Failure To File a Timely Appeal
    In order to establish subject matter jurisdiction, federal courts 
typically require affected parties to exhaust administrative 
remedies.\59\ For example, in creditor and share insurance cases, the 
failure to exhaust administrative remedies is a jurisdictional bar 
preventing affected parties from seeking judicial review of their 
claims in federal court.\60\ Proposed paragraph (c) would clarify that, 
absent mitigating circumstances, a petitioner who fails to file a 
timely request for an appeal would be considered to have waived claims 
that may be adjudicated under part 746, subpart B.
---------------------------------------------------------------------------

    \59\ See Avocados Plus, Inc. v. Veneman, 370 F.3d 1243 (D.C. 
Cir. 2004); Volvo GM Heavy Truck Corp. v. Dep't of Labor, 118 F.3d 
205, 209-211 (4th Cir. 1997).
    \60\ See Freeman v. FDIC, 56 F.3d 1394 (D.C. Cir. 1994).
---------------------------------------------------------------------------

204(d); (e); (f) Content of Request; Burden of Proof; Amending or 
Supplementing the Appeal
    Proposed paragraph (d) would outline the content requirements for 
an appeal

[[Page 26383]]

to the Board. To ensure the Board is able to review an appeal in a 
timely and efficient manner, this paragraph would require a petitioner 
to provide a statement of the facts on which an appeal is based, any 
objections to the basis on which the program office made its initial 
determination, and any additional evidence that may be relevant to the 
matter that was not previously provided to the program office. Proposed 
paragraph (e) would address the burden of proof at the appeal level.
    Proposed paragraph (f) would describe the right of the petitioner 
to file supplemental materials within 45 calendar days of filing an 
appeal. In addition to the authority of the Board to request additional 
information, the petitioner may amend or supplement the written record. 
If the petitioner does amend or supplement the record, the Board is 
permitted to request additional information. A petitioner's failure to 
provide information requested by the Board could serve as a basis for 
denial of an appeal.
Section 746.204(g) Request for Oral Hearing
    Section 746.204(g) would specify that a petitioner may request an 
oral hearing before the Board and provides cross-references to proposed 
Sec.  746.207, which sets out the procedures that govern oral hearings. 
The petitioner may request to appear before the Board, in person or 
through or with counsel. This request should be filed with the initial 
appeal documents. On his or her own initiative or at the request of the 
petitioner, the Chairman may in his or her sole discretion allow for a 
hearing to be conducted via teleconference or video conference 
facilities.

Section 746.205--Preliminary Considerations Regarding the Appeal

    This section of the proposed rule describes preliminary internal 
processes for reviewing appeals. Additional information from the 
petitioner may be requested by the agency in order to provide the Board 
with a more full and complete administrative record but such requests 
must be reasonable and timely to facilitate the processing of the 
appeal, not to delay it.

Section 746.206 Administration of the Appeal

    Proposed Sec.  746.206 would set out the standard procedures 
followed by the Board when it receives a timely appeal. These proposed 
procedures would be, in some respects, a codification of informal 
practices that the Board currently follows when reviewing appeals.
Section 746.206(a) Review by the Special Counsel
    Proposed paragraph (a) would describe procedures followed by the 
Special Counsel when reviewing an appeal. After receiving a timely 
appeal, the Special Counsel would be responsible for gathering relevant 
evidence from the appropriate program office and conducting an 
independent review of these materials along with any materials provided 
by the petitioner. The Special Counsel would then provide a written 
recommendation to the Board and, at the request of the Board, make an 
oral presentation in an official meeting concerning the recommendation. 
The duties of the Special Counsel under this provision must be 
fulfilled in a timely manner and all requests for additional 
information must be reasonable, to facilitate the appeal.
Section 746.206(b) Determination on Appeal
    Proposed paragraph (b) would require the Board to render a written 
decision stating the reasons for the decision within 90 calendar days 
from the date of receipt of an appeal by the Secretary of the Board. 
Such a decision would constitute a final agency action permitting the 
petitioner to seek review in federal court under the APA. In the 
discretion of the Chairman, the time for the Board's decision may be 
extended as the Chairman may consider necessary or appropriate for a 
full and fair consideration of the issues, including accommodation of 
an oral hearing. If the Board does not reach a decision within 90 
calendar days from the date of receipt, or within any extension of time 
as established by the Chairman, the appeal will be deemed to be denied. 
The deadline will help ensure that the Board has adequate time to 
decide a matter on appeal while avoiding any undue prejudice to 
petitioners from unnecessary delays.

Section 746.207--Procedures for Oral Hearing

    This section of the proposed rule sets out the process for 
requesting and conducting an oral hearing. The Board recognizes that, 
in some unusual cases, the opportunity to make a presentation in person 
is necessary or useful to assure a thorough understanding of the issues 
in a case.
Section 746.207(a); (b); (c) Request for Oral Hearing; Action on 
Request; Effect of Denial
    Paragraph (a) would describe the process for requesting an oral 
hearing. The request would accompany the notice of appeal itself, set 
out in a separate document entitled ``Request for Oral Hearing.'' The 
petitioner must show good cause as to why the NCUA should hold an oral 
hearing, stating reasons why the case cannot be presented adequately 
with only written statements. Proposed paragraph (b) would specify that 
an oral hearing would be scheduled provided at least one Board member 
agrees to hear the appeal, but specifies that the action by a Board 
member to approve an oral hearing must be taken within 20 days of the 
receipt of the appeal by the Board Secretary. The Special Counsel would 
notify the petitioner of the Board's determination whether to approve a 
request for an oral hearing. Proposed paragraph (c) would specify that, 
in the event the request does not receive the support of at least one 
Board member, the appeal will proceed on the basis of the written 
record.
Section 746.207(d) Procedures for Oral Hearing
(d)(1) Scheduling; Location
    Oral hearings will be held at NCUA headquarters in Alexandria, 
Virginia, except that on his or her own initiative or at the request of 
the petitioner, the Chairman may in his or her sole discretion allow 
for a hearing to be conducted via teleconference or video conference 
facilities.
(d)(2) Appearances; Representation
    At an oral hearing, the petitioner would be permitted to be 
represented by not more than two officers, employees, or other 
representatives (including counsel) unless the Chairman, in his or hers 
sole discretion, allows a greater number of participants. This proposed 
paragraph recognizes the general right granted in the APA for 
individuals appearing in person before an agency to be ``accompanied, 
represented, and advised by counsel or, if permitted by the agency, by 
other qualified representative[s].'' \61\ In general, courts have found 
the right to counsel to be a fundamental aspect of procedural due 
process in both informal and formal agency adjudications.\62\
---------------------------------------------------------------------------

    \61\ 5 U.S.C. 555(b).
    \62\ See Goldberg v. Kelly, 397 U.S. 254, 270 (1970) (``The 
right to be heard would be, in many cases, of little avail if it did 
not comprehend the right to be heard by counsel. We do not say that 
counsel must be provided at the pre-termination hearing, but only 
that the recipient must be allowed to retain an attorney if he so 
desires. Counsel can help delineate the issues, present factual 
contentions in an orderly manner, conduct cross-examination, and 
generally safeguard the interests of the recipient.'').

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

[[Page 26384]]

(d)(3) Conduct of Oral Hearing
    Proposed paragraph (d)(3) addresses procedures at the oral hearing 
and would permit the use of presentations based on written evidence 
submitted as part of the appeal documents filed with the Secretary of 
the Board. The petitioner would be given the opportunity to present 
first, followed by a representative of the program office. The 
petitioner would be permitted to rebut information presented by the 
program office.

V. Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact a rule may have on a 
substantial number of small entities (primarily those under $100 
million in assets). This proposed rule only provides enhanced voluntary 
opportunities for credit unions to appeal agency determinations. 
Accordingly, it will not have a significant economic impact on a 
substantial number of small credit unions, and therefore, no regulatory 
flexibility analysis is required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in 
which an agency by rule creates a new paperwork burden on regulated 
entities or modifies an existing burden. 44 U.S.C. 3507(d). For 
purposes of the PRA, a paperwork burden may take the form of a either a 
reporting or a recordkeeping requirement, both referred to as 
information collections. Proposed new Subpart B to part 746 establishes 
procedures by which credit unions or other entities affected by an 
initial decision by an NCUA program office may seek and obtain the 
review of that decision by the NCUA Board.
    The rule proposes to consolidate the information collection 
requirements of the informal appeals process under a new part; as such, 
NCUA intends to remove the burden allocated to the appeals process 
currently under OMB control numbers 3133-0141, -0127, -0114, -0117, -
0133, and -0138, upon promulgation of this new rule, and requests a new 
OMB control number for the information collection requirements under 
part 746.
    Estimated Number of Respondents:
    Requests for Reconsideration: 24; Appeals: 10.
    Frequency:
    Requests for Reconsideration: 1; Appeals: 1.
    Estimated Burden per Response:
    Requests for Reconsideration: 10 hours; Appeals: 20 hours.
    Estimated Annual Burden:
    Requests for Reconsideration: 240 hours; Appeals: 200 hours.
    Total: 440 hours.
    The PRA and OMB regulations require that the public be provided an 
opportunity to comment on the paperwork requirements, including an 
agency's estimate of the burden of the paperwork requirements. The 
Board invites comment on: (1) Whether the paperwork requirements are 
necessary; (2) the accuracy of NCUA's estimates on the burden of the 
paperwork requirements; (3) ways to enhance the quality, utility, and 
clarity of the paperwork requirements; and (4) ways to minimize the 
burden of the paperwork requirements.

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

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

Executive Order 13132

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

List of Subjects

12 CFR Part 701

    Credit, Credit unions, Reporting and recordkeeping requirements.

12 CFR Part 703

    Credit unions, Investments.

12 CFR Part 705

    Credit unions, grants, loans, revolving fund.

12 CFR Part 708a

    Credit unions, Reporting and recordkeeping requirements

12 CFR Part 709

    Claims, Credit unions.

12 CFR Part 741

    Credit unions, Reporting and recordkeeping requirements, Share 
insurance.

12 CFR Part 745

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

12 CFR Part 746

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

12 CFR Part 747

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

12 CFR Part 750

    Credit unions, Golden parachute payments, Indemnity payments.

    By the National Credit Union Administration Board, this 25th day 
of May, 2017.
Gerard Poliquin,
Secretary of the Board.

    For the reasons discussed above, the NCUA Board proposes to amend 
12 CFR parts 701, 703, 705, 708a, 709, 741, 745, 747, and 750; and to 
amend 12 CFR part 746, as proposed to be added elsewhere in this issue 
of the Federal Register, as follows:

PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS

0
1. 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.

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


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

* * * * *

[[Page 26385]]

    (e) Notice of disapproval. NCUA may disapprove the individual 
serving as a director, committee member or senior executive officer if 
it finds that the competence, experience, character, or integrity of 
the individual with respect to whom a notice under this section is 
submitted indicates that it would not be in the best interests of the 
members of the credit union or of the public to permit the individual 
to be employed by, or associated with, the credit union. The Notice of 
Disapproval will advise the parties of their rights to request 
reconsideration from the regional director and/or file an appeal with 
the NCUA Board in accordance with the procedures set forth in subpart B 
to part 746 of this chapter.
0
3. Revise Sec.  701.21(h)(3) to read as follows:


Sec.  701.21  Loans to Members and Lines of Credit to Members.

* * * * *
    (h) * * *
    (3) A regional director will provide a written determination on a 
waiver request within 45 calendar days after receipt of the request; 
however, the 45-day period will not begin until the requesting credit 
union has submitted all necessary information to the regional director. 
If the regional director does not provide a written determination 
within the 45-day period the request is deemed denied. A credit union 
may request the regional director to reconsider a denied waiver request 
and/or file an appeal with the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.
* * * * *
0
4. Revise Sec.  701.22(c) to read as follows:


Sec.  701.22  Loan participations.

* * * * *
    (c) To seek a waiver from any of the limitations in paragraph (b) 
of this section, a federally insured credit union must submit a written 
request to its regional director with a full and detailed explanation 
of why it is requesting the waiver. Within 45 calendar days of receipt 
of a completed waiver request, including all necessary supporting 
documentation and, if appropriate, any written concurrence, the 
regional director will provide the federally insured credit union a 
written response. The regional director's decision will be based on 
safety and soundness and other considerations; however, the regional 
director will not grant a waiver to a federally insured, state-
chartered credit union without the prior written concurrence of the 
appropriate state supervisory authority. A federally insured credit 
union may request the regional director to reconsider a denied waiver 
request and/or file an appeal with the NCUA Board in accordance with 
the procedures set forth in subpart B to part 746 of this chapter.
* * * * *
0
5. Revise Sec.  701.23(h)(3) to read as follows:


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

* * * * *
    (h) * * *
    (3) Appeal to NCUA Board. A federal credit union may request the 
regional director to reconsider a denied request for expanded authority 
and/or file an appeal with the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.
0
6. Revise Sec.  701.32(b)(5) to read as follows:


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

* * * * *
    (b) * * *
    (5) The regional director will provide a written determination on 
an exemption request within 30 calendar days after receipt of the 
request. The 30-day period will not begin to run until all necessary 
information has been submitted to the regional director. A credit union 
may request the regional director to reconsider a denied exemption 
request and/or file an appeal with the NCUA Board in accordance with 
the procedures set forth in subpart B to part 746 of this chapter.
* * * * *
0
7. Revise Sec.  701.34(a)(4) to read as follows:


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

    (a) * * *
    (4) If NCUA determines a low-income designated federal credit union 
no longer meets the criteria for the designation, NCUA will notify the 
federal credit union in writing, and the federal credit union must, 
within five years, meet the criteria for the designation or come into 
compliance with the regulatory requirements applicable to federal 
credit unions that do not have a low-income designation. The 
designation will remain in effect during the five-year period. If a 
federal credit union does not requalify and has secondary capital or 
nonmember deposit accounts with a maturity beyond the five-year period, 
NCUA may extend the time for a federal credit union to come into 
compliance with regulatory requirements to allow the federal credit 
union to satisfy the terms of any account agreements. A federal credit 
union may request NCUA to reconsider a determination that it no longer 
meets the criteria for the designation and/or file an appeal with the 
NCUA Board in accordance with the procedures set forth in subpart B to 
part 746 of this chapter.
* * * * *
0
8. Appendix B to part 701 is amended as follows:
0
a. Section VII.D of Chapter 1 is revised.
0
b. Section II.C.5 of Chapter 2 is revised.
0
c. Section III.C.5 of Chapter 2 is revised.
0
d. Section IV.C.5 of Chapter 2 is revised.
0
e. Section V.C.5 of Chapter 2 is revised.
0
f. Section IV.B of Chapter 3 is revised.
0
g. Section II.C.6 of Chapter 4 is revised.
0
h. Section II.D--Application for a Federal Charter of Chapter 4 is 
redesignated as Section II.D.2--Application for a Federal Charter and 
revised.
0
i. Section III.D.6 of Chapter 4 is revised.
    The revisions read as follows:

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

Chapter 1--Federal Credit Union Chartering

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

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

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

* * * * *

[[Page 26386]]

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

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

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

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

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

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

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

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

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

* * * * *

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

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

Chapter 4--Charter Conversions

* * * * *

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

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

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

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

[[Page 26387]]

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

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

* * * * *

PART 703--INVESTMENT AND DEPOSIT ACTIVITIES

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

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

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


Sec.  703.20   Request for additional authority.

* * * * *
    (d) Appeal to NCUA Board. A federal credit union may request the 
regional director to reconsider any part of the determination made 
under paragraph (c) and/or file an appeal with the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
0
11. Revise Sec.  703.111(d) to read as follows:


Sec.  703.111   NCUA approval.

* * * * *
    (d) Right to appeal. A federal credit union may request the 
regional director to reconsider a determination made under paragraph 
(a) or (c) of this section and/or file an appeal with the NCUA Board in 
accordance with the procedures set forth in subpart B to part 746 of 
this chapter.
0
12. Revise Sec.  703.112(c) to read as follows:


Sec.  703.112   Applying for additional products or characteristics.

* * * * *
    (c) A federal credit union may request the regional director to 
reconsider a denial of an application for additional products or 
characteristics and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.
0
13. Revise Sec.  703.114(c) to read as follows:


Sec.  703.114   Regulatory violation.

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

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

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

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

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


Sec.  705.10   Appeals.

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

PART 708a--BANK CONVERSIONS AND MERGERS

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

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

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


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

* * * * *
    (d) A converting credit union may request the regional director to 
reconsider a determination regarding the methods and procedures of the 
membership vote and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.
0
18. Revise Sec.  708a.304(h) to read as follows:


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

* * * * *
    (h) Appeal of adverse decision. If the regional director 
disapproves a merger proposal, the credit union may request 
reconsideration and/or file an appeal with the NCUA Board in accordance 
with the procedures set forth in subpart B to part 746 of this chapter.
0
19. Revise Sec.  708a.308(d) to read as follows:


Sec.  708a.308   NCUA approval of merger.

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

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

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

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

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


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

    (a) General. A claimant may either request agency review of an 
initial determination of the liquidating agent to disallow a claim or 
seek a de novo judicial determination of claims. In order to receive 
agency review of an initial determination, a claimant must request an 
administrative appeal before the NCUA Board. In order to seek a 
judicial determination, a claimant must file suit (or continue an 
action

[[Page 26388]]

commenced before the appointment of the liquidating agent) in the 
district or territorial court of the United States for the district 
within which the credit union's principal place of business is located 
or the United States District Court for the District of Columbia.
    (b) Procedures for agency review. A claimant requesting an 
administrative appeal may request a hearing on the record conducted 
pursuant to the procedures set forth in subpart A of part 747 of this 
chapter. The determination of whether to agree to a request for a 
hearing on the record shall rest solely with the NCUA Board, which 
shall notify the claimant of its decision in writing. Alternatively, a 
claimant may request an appeal before the NCUA Board pursuant to the 
procedures set forth in subpart B to part 746 of this chapter.
    (c) Deadline to request agency review or file suit. A claimant must 
request agency review of an initial determination or file suit (or 
continue an action commenced before the appointment of the liquidating 
agent) within 60 days from the mailing of the initial determination or 
the expiration of the time period for the liquidating agent to 
determine claims under Sec.  709.6(c), whichever is earlier. A request 
for a hearing on the record will suspend the 60-day period for filing a 
lawsuit (or continuing an action commenced before the appointment of 
the liquidating agent) from the date of the claimant's request to the 
date of the NCUA Board's decision regarding that request. If a claimant 
fails to either request a hearing on the record or an appeal to the 
Board or file suit (or continue an action commenced before the 
appointment of the liquidating agent) within the 60-day period, any 
disallowance of claims shall be final and the claimant shall have no 
further rights or remedies with respect to such claims.
    (d) Reconsideration. Prior to requesting agency review or filing or 
continuing a lawsuit, a claimant may request reconsideration of the 
initial determination of the liquidating agent in accordance with the 
procedures set forth in subpart B to part 746 of this chapter. The 
deadline to request agency review or file suit (or continue an action 
commenced before the appointment of the liquidating agent) in paragraph 
(c) of this section will be suspended from the date of the claimant's 
request to the date of the liquidating agent's decision regarding that 
request.
0
22. Remove Sec.  709.8 and redesignate Sec. Sec.  709.9 through 709.13 
as Sec. Sec.  709.8 through 709.12, respectively.

PART 741--REQUIREMENTS FOR INSURANCE

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

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

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


Sec.  741.11  Foreign branching.

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

PART 745--SHARE INSURANCE AND APPENDIX

0
25. The authority citation for part 745 continues to read as follows:

    Authority:  12 U.S.C. 1752(5), 1757, 1765, 1766, 1781, 1782, 
1787, 1789; title V, Pub. L. 109-351, 120 Stat. 1966.

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


Sec.  745.201   Processing of insurance claims.

* * * * *
    (c) Reconsideration and appeals. An accountholder may request 
reconsideration from the Liquidating Agent of the initial determination 
and/or file an appeal with the NCUA Board in accordance with the 
procedures set forth in subpart B to part 746 of this chapter.
0
27. Remove Sec.  745.202 and redesignate Sec.  745.203 as Sec.  
745.202.

PART 746--APPEALS PROCEDURES THAT DO NOT BY LAW REQUIRE A BOARD 
HEARING

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

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

0
29. Add subpart B to part 746 to read as follows:
Subpart B--Appeals Procedures That Do Not by Law Require a Board 
Hearing
Sec.
746.201 Authority, purpose, and scope.
746.202 Definitions.
746.203 Request for reconsideration.
746.204 Appeal to the Board.
746.205 Preliminary considerations regarding the appeal.
746.206 Administration of the appeal.
746.207 Procedures for oral hearing.

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


Sec.  746.201   Authority, purpose, and scope.

    (a) Authority. This part is issued pursuant to sections 120, 207, 
and 209 of the Federal Credit Union Act (12 U.S.C. 1766, 1787, and 
1789).
    (b) Purpose. Part 746, subpart B provides generally uniform 
procedures by which petitioners may appeal initial agency 
determinations to the NCUA Board under this part.
    (c) Scope. This part covers the appeal of initial agency 
determinations by a program office which the petitioner has a right to 
appeal to the NCUA Board under the following regulations: 701.14(e), 
701.21(h)(3), 701.22(c), 701.23(h)(3), 701.32(b)(5), 701.34(a)(4), 
Appendix B to part 701, Chapters 1-4, Sec. Sec.  703.20(d), 703.111(d), 
703.112(c), 703.114(c), 705.10(a), 708a.108(d), 708a.304(h), 
708a.308(d), 709.7, 741.11(d), 745.201(c), subpart J to part 747, and 
Sec.  750.6(b).
    (d) This part does not apply to:
    (1) Actions by the agency to develop regulations, policy 
statements, or guidance documents;
    (2) Formal enforcement actions, the review of material supervisory 
determinations that come under the jurisdiction of NCUA's Supervisory 
Review Committee, or the appeal of any agency determination made 
pursuant to part 792 of this chapter;
    (3) Challenges to determinations under the prompt corrective action 
regime in parts 702 and 704 of this chapter and subparts L and M to 
part 747; and
    (4) Creditor claims arising from the liquidation of an insured 
credit union to the extent that the creditor has requested, and the 
NCUA Board has agreed, for the claim to be handled through a hearing on 
the record pursuant to 12 U.S.C. 1787(b)(7)(A) and subpart A of part 
747 of this chapter.


Sec.  746.202  Definitions.

    For purposes of this part:
    Appeal means a process by which a petitioner may obtain the review 
by the Board of an initial agency determination.

[[Page 26389]]

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


Sec.  746.203  Request for reconsideration.

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


Sec.  746.204  Appeal to the Board.

    (a) Filing. Within 60 calendar days of the date of an initial 
agency determination, or, as applicable, a determination by the program 
office on any request for reconsideration, a petitioner may file an 
appeal seeking review of the determination by the Board. The request 
must be in writing and filed with the Secretary of the Board, National 
Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-
3428.
    (b) Special rule regarding change in officials. Notwithstanding 
paragraph (a) of this section, an appeal of an initial agency 
determination disapproving an individual serving as a director, 
committee member or senior executive officer pursuant to Sec.  701.14 
of this chapter must be filed with the Secretary of the Board within 15 
calendar days of the date of the initial agency determination.
    (c) Failure to file a timely appeal. Absent extenuating 
circumstances, as determined by the Board in its sole discretion, a 
petitioner who fails to file an appeal within the specified 60-day 
period shall be deemed to have waived all claims pertaining to the 
matters in issue.
    (d) Content of request. Any appeal filed with the Board must 
include:
    (1) A statement summarizing the underlying facts that form the 
basis of the appeal, together with copies of all pertinent documents, 
records, and materials on which the petitioner relies in support of the 
appeal.
    (2) A statement outlining why the petitioner objects to the 
conclusions in the initial agency determination, including any errors 
alleged to have been made by the program office in reaching its 
determination.

[[Page 26390]]

    (3) Any other materials or evidence relied upon by the petitioner 
that were not previously provided to the appropriate program office.
    (e) Burden of proof. The burden of proof to lead the Board to 
modify or reverse an initial agency determination shall rest solely 
upon the petitioner.
    (f) Amending or supplementing the appeal. Within 45 calendar days 
from the date the Secretary of the Board receives an appeal, the 
petitioner may amend or supplement the appeal in writing.
    (g) Request for oral hearing. In accordance with Sec.  746.207, the 
petitioner may request an opportunity to appear before the Board, in 
person, or via teleconference or videoconference, to make an oral 
presentation in support of the appeal.


Sec.  746.205  Preliminary considerations regarding the appeal.

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


Sec.  746.206  Administration of the appeal.

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


Sec.  746.207  Procedures for oral hearing.

    (a) Request for oral hearing. The petitioner may request to appear 
before the Board to make an oral presentation in support of the appeal. 
The request must be submitted with the initial appeal documents and 
should be in the form of a separate written document titled ``Request 
for Oral Hearing.'' The request must show good cause for an oral 
presentation and state reasons why the appeal cannot be presented 
adequately in writing.
    (b) Action on the request. The Board shall determine whether to 
grant the request for oral hearing and shall direct the Special Counsel 
to serve notice of the Board's determination in writing to the 
petitioner. A request for oral hearing shall be granted with the 
approval of any Board member. The determination by a Board member 
approving an oral hearing must be taken within 20 days of the Board 
Secretary's receipt of the appeal.
    (c) Effect of denial. In the event no Board member approves of 
holding an oral hearing, the request for an oral hearing is deemed to 
be denied, and the appeal shall be reviewed and determined by the Board 
on the basis of the written record.
    (d) Procedures for oral hearing. The following procedures shall 
govern the conduct of any oral hearing:
    (1) Scheduling of oral hearing; location. The Special Counsel shall 
notify the petitioner and the program office of the date and time for 
the oral hearing, making sure to provide reasonable lead time and 
schedule accommodations. The oral hearing will be held at NCUA 
headquarters in Alexandria, Virginia; provided, however, that on his or 
her own initiative or at the request of the petitioner, the Chairman 
may in his or her sole discretion allow for a hearing to be conducted 
via teleconference or video conference facilities.
    (2) Appearances; representation. The petitioner and the NCUA 
program office shall submit a notice of appearance identifying the 
individual(s) who will be representing them at the oral presentation. 
The petitioner shall designate not more than two officers, employees, 
or other representatives (including counsel), unless otherwise 
authorized by the Chairman. The NCUA program office shall designate not 
more than two individuals (one of whom may be a litigation and 
enforcement attorney from NCUA's Office of General Counsel), unless 
otherwise authorized by the Chairman.
    (3) Conduct of oral hearing. The oral hearing shall consist 
entirely of oral presentations. The introduction of written evidence or 
witness testimony at the hearing shall not be permitted. The petitioner 
shall present first, followed by the NCUA program office. Each side 
shall be allotted a specified and equal amount of time for its 
presentation, of which a portion may be reserved for purposes of 
rebuttal. This time limit shall be set by the Board and will be based 
on the complexity of the appeal. Members of the Board may ask questions 
of any individual appearing before the Board.
    (4) Transcript. The oral hearing shall be on the record and 
transcribed by a stenographer, who will prepare a transcript of the 
proceedings. The stenographer will make the transcript available to the 
petitioner upon payment of the cost thereof.
    (e) Confidentiality. An oral hearing as provided for herein 
constitutes a meeting of the Board within the meaning of the Government 
in the Sunshine Act (5 U.S.C. 552b). The NCUA Chairman shall preside 
over the conduct of the oral hearing. The meeting will be closed to the 
public to the extent that one or more of the exemptions from public 
meetings apply as certified by

[[Page 26391]]

NCUA's Office of General Counsel. The Board shall maintain the 
confidentiality of any information or materials submitted or otherwise 
obtained in the course of the procedures outlined herein, subject to 
applicable law and regulations.
    (f) Conclusion of the oral hearing. The Board shall take the oral 
presentations under advisement. The Board shall render its decision on 
the appeal in accordance with Sec.  746.206.

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

0
30. 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.

0
31. Remove and reserve subpart J of part 747.

PART 750--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS

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

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

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


Sec.  750.6   Filing instructions; appeal.

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

[FR Doc. 2017-11319 Filed 6-6-17; 8:45 am]
 BILLING CODE 7535-01-P