Rule2022-16009
Asset Threshold for Determining the Appropriate Supervisory Office
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 27, 2022
Effective
January 1, 2023
Issuing agencies
National Credit Union Administration
Abstract
The NCUA Board (Board) is amending its regulations to revise the $10 billion asset threshold used for assigning supervision of consumer federally insured credit unions (FICUs) to the Office of National Examinations and Supervision (ONES). The rule only applies to FICUs whose assets are $10 billion or more (covered credit unions). The rule provides that covered credit unions with less than $15 billion in total assets (tier I credit unions) will be supervised by the appropriate NCUA Regional Office. Covered credit unions with $15 billion or more in total assets (tier II and tier III credit unions) continue to be supervised by ONES. The rule does not alter any regulatory requirements for covered credit unions.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 143 (Wednesday, July 27, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 143 (Wednesday, July 27, 2022)]
[Rules and Regulations]
[Pages 45005-45010]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-16009]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 /
Rules and Regulations
[[Page 45005]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Parts 700, 701, 702, 708a, 708b, 750, and 790
RIN 3133-AF41
Asset Threshold for Determining the Appropriate Supervisory
Office
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The NCUA Board (Board) is amending its regulations to revise
the $10 billion asset threshold used for assigning supervision of
consumer federally insured credit unions (FICUs) to the Office of
National Examinations and Supervision (ONES). The rule only applies to
FICUs whose assets are $10 billion or more (covered credit unions). The
rule provides that covered credit unions with less than $15 billion in
total assets (tier I credit unions) will be supervised by the
appropriate NCUA Regional Office. Covered credit unions with $15
billion or more in total assets (tier II and tier III credit unions)
continue to be supervised by ONES. The rule does not alter any
regulatory requirements for covered credit unions.
DATES: The final rule is effective January 1, 2023.
FOR FURTHER INFORMATION CONTACT: Dale Klein, Senior Financial Analyst,
and Christopher DiBenedetto, Financial Analysts, Office of National
Examinations and Supervision; or Rachel Ackmann, Senior Staff Attorney,
Office of General Counsel, 1775 Duke Street, Alexandria, VA 22314-3428.
Dale Klein can also be reached at (703) 518-6629, Christopher
DiBenedetto can be reached at (703) 518-6628, and Rachel Ackmann can be
reached at (703) 548-2601.
SUPPLEMENTARY INFORMATION:
I. Background
Part 702 Capital Planning and Stress Testing Requirements
Part 702, subpart C, of the NCUA's regulations (part 702)
implements the NCUA's capital planning and stress testing requirements
for consumer FICUs.\1\ As discussed previously, a consumer FICU is
defined as a covered credit union if it has $10 billion or more in
total assets.\2\ Covered credit unions are then further divided into
the following three asset tiers:
---------------------------------------------------------------------------
\1\ 12 CFR 702.301. The term consumer FICU is being used instead
of the term natural person FICU. This terminology is being used for
clarity; however, the term natural person FICU will continue to be
used for the accompanying regulatory text changes for consistency
with other sections of the NCUA's regulations.
\2\ 12 CFR 702.302.
---------------------------------------------------------------------------
<bullet> A tier I credit union is a covered credit union that has
less than $15 billion in total assets;
<bullet> A tier II credit union is a covered credit union that has
$15 billion or more in total assets, but less than $20 billion in total
assets, or is otherwise designated as a tier II credit union by the
NCUA; and
<bullet> A tier III credit union is a covered credit union that has
$20 billion or more in total assets, or is otherwise designated as a
tier III credit union by the NCUA.
Incremental levels of regulatory requirements are based on the
three tiers. For example, only tier II and tier III credit unions are
subject to stress testing requirements.
Agency Structure
In 2012, the NCUA established the Office of National Examinations
and Supervision (ONES), and reorganized its central and field office
structure. As part of its internal restructuring, the NCUA transferred
the responsibility for supervising covered credit unions to ONES from
the Regional Offices.\3\ Initially, covered credit unions were
transferred to ONES on January 1, 2014. Annually thereafter, FICUs
newly reporting assets of $10 billion or more on March 31 of a given
calendar year are reassigned to ONES on the first day of the following
calendar year.
---------------------------------------------------------------------------
\3\ In general, Regional Office means the office of NCUA located
in the designated geographical areas in which the office of the FICU
is located.
---------------------------------------------------------------------------
COVID-19 Pandemic
Many FICUs have experienced significant balance sheet growth as a
result of the COVID-19 pandemic and the corresponding policy
response.\4\ For example, FICUs nearing the $10 billion asset threshold
incurred balance sheet growth of about 14 percent on average during the
COVID-19 pandemic, and in one case more than 34 percent. In contrast,
similarly sized FICUs had an average asset growth rate of only nine
percent in 2019.
---------------------------------------------------------------------------
\4\ See generally, 86 FR 15397 (Mar. 23, 2021).
---------------------------------------------------------------------------
In March 2021, the Board temporarily modified its rules for FICUs
meeting certain asset thresholds through an interim final rule (Asset
Threshold IFR).\5\ The Asset Threshold IFR permitted FICUs to continue
to use financial data as of March 31, 2020, to determine the
applicability of certain regulations for calendar years 2021 and 2022,
instead of assets reported as of March 31, 2021. The Asset Threshold
IFR also made a conforming amendment to the measurement date for
determining ONES supervision. Under the Asset Threshold IFR, the NCUA
used financial data as of March 31, 2020, instead of March 31, 2021, to
determine the appropriate supervisory office of FICUs for calendar year
2022. As a result, no FICU was transitioned to ONES supervision for
calendar year 2022, even if the FICU had $10 billion or more in total
assets as of March 31, 2021.
---------------------------------------------------------------------------
\5\ Id.
---------------------------------------------------------------------------
The next effective measurement period to determine whether a FICU
is subject to capital planning and stress testing requirements and ONES
supervision was March 31, 2022. Eight new FICUs met or exceeded the $10
billion threshold as of March 31, 2022, and will become subject to ONES
supervision beginning January 1, 2023, unless the threshold is changed.
II. The Proposed Rule
On February 17, 2022, the Board published a proposed rule that
reconsidered its policy of assigning all covered credit unions to ONES
supervision.\6\ The Board received five comments on the proposed rule.
Comments were received from a credit union, a credit union league, two
trade associations, and an association of state
[[Page 45006]]
credit union supervisors. All of the commenters were generally
supportive of increasing the threshold used for determining whether a
covered credit union will be subject to ONES supervision, and some
commenters reiterated the rationale for the change discussed in the
proposed rule. All commenters, however, raised additional
considerations for the Board, and some commenters recommended specific
changes to the proposed rule. The comments are discussed in detail in
the next section.
---------------------------------------------------------------------------
\6\ 87 FR 11996 (Mar. 3, 2022).
---------------------------------------------------------------------------
III. The Final Rule
The Board has reconsidered its policy of assigning all covered
credit unions to ONES supervision and is adopting the proposed rule as
final. Under the final rule, tier II and tier III credit unions remain
subject to ONES supervision. The Board, however, will not assign tier I
credit unions to ONES supervision.\7\ Tier I credit unions will remain
subject to Regional Office supervision until they become tier II credit
unions.
---------------------------------------------------------------------------
\7\ As discussed in the Reservation of Authority section, the
Board has the option of using its existing reservation of authority
in part 702 to designate a FICU as subject to ONES or Regional
Office supervision, or a tier I, II, or III credit union.
---------------------------------------------------------------------------
As discussed in the proposed rule, the Board has reconsidered its
position that all covered credit unions should transition to ONES for
two reasons. First, the agency can more effectively manage its
resources by continuing to supervise most tier I credit unions through
the Regional Offices. Second, the Board has reconsidered the level of
risk to the National Credit Union Share Insurance Fund (NCUSIF) posed
by tier I credit unions. To implement the change, the rule creates a
new definition of ``ONES credit union'' to distinguish between covered
credit unions subject to ONES supervision and covered credit unions
subject to Regional Office supervision.\8\ The term ONES credit union
is defined as all tier II and tier III credit unions.
---------------------------------------------------------------------------
\8\ In the proposed rule, the definition of ``ONES credit
union'' was added to part 702. One commenter recommended a technical
change to include the proposed definition of ``ONES credit union''
in Sec. 700.2 instead of part 702. The Board agrees with this
recommendation and has moved the defined term ``ONES credit union''
to part 700 instead of part 702. This change does not alter the
substance of the provision.
---------------------------------------------------------------------------
One commenter recommended increasing the threshold for ONES
supervision from $15 billion, as proposed, to $20 billion to better
reflect growth of insured shares. The commenter stated that a $20
billion threshold would better align the scope of ONES supervision with
the risk of the industry's largest credit unions. As support, the
commenter stated that both the insured share base and the NCUSIF have
increased by 95 percent since 2013, so a $10 billion FICU in 2013 would
pose the same risk to the NCUSIF as a $20 billion FICU would today.
This commenter further requested that if the Board does not increase
the threshold for ONES supervision from the proposed $15 billion, the
NCUA should include a more complete description of the agency's risk
assumptions, including a description of whether the historical loss
rate has changed significantly over time, in the final rule. The
commenter stated the current thresholds are conservative and requested
additional support for the thresholds.
The Board has not made changes to the final rule in response to
this comment. The Board does not believe that tier II credit unions,
which conduct credit union-run supervisory stress tests, should be
supervised by the Regional Offices, regardless of the growth of insured
assets or the NCUSIF. The Board continues to believe that ONES is the
more appropriate office to supervise credit unions that are subject to
credit union-run stress testing requirements due to the resources and
specialization required to oversee supervisory stress tests.
In addition to increasing the threshold for ONES supervision, two
commenters requested that the Board raise the asset-based thresholds in
part 702 related to the substantive requirements. One commenter
suggested increasing the range for all three asset tiers by $5 billion.
Another commenter noted that credit unions are subject to stress
testing at a smaller size than banks and stated that if the tier I
threshold is increased to $20 billion, then the other thresholds should
increase as well.
The Board has not made any changes to the final rule in response to
these comments. First, as discussed in a previous rulemaking, the Board
does not consider the risks that banks pose to the Deposit Insurance
Fund as analogous to the risks that covered credit unions pose to the
NCUSIF, and therefore, does not believe that at this time the size
thresholds for banks are an appropriate analogy for size thresholds for
covered credit unions.\9\ Second, the Board believes that size is one
of the primary indicators of systemic risk to the NCUSIF. Given the
change in relative risk of tier I credit unions to the NCUSIF and the
NCUA's advancement of large credit union supervisory tools, the Board
does not believe that Regional Office supervision of tier I credit
unions results in undue risk to the NCUSIF. However, the Board believes
the absolute risk of a tier I credit union remains a material exposure
to the NCUSIF and increasing the tier I asset threshold for the
regulatory requirements would unduly increase the NCUSIF's contributed
capital at risk. For example, the NCUSIF's capital at risk to a tier I
credit union is estimated at roughly 20 percent of the NCUSIF's
contributed capital. Therefore, the Board continues to believe that
covered credit unions with $10 billion or more in total assets
represent sufficient risk to the NCUSIF such that capital planning and
stress testing requirements are warranted.
---------------------------------------------------------------------------
\9\ 83 FR 17901 (Apr. 25, 2018).
---------------------------------------------------------------------------
Under the proposed rule, tier I credit unions that were supervised
by ONES were grandfathered and remained subject to ONES supervision.
Two commenters expressly agreed with grandfathering tier I credit
unions currently subject to ONES supervision. In response to a specific
question in the preamble, one of these commenters requested a technical
change to the final rule to clarify that tier I credit unions that are
not grandfathered are excluded from the definition of ``ONES credit
union.'' Another commenter did not support grandfathering all tier I
credit unions and, instead, recommended that tier I credit unions
currently supervised by ONES have the option of either remaining under
ONES supervision or being transferred to the appropriate Regional
Offices.
The Board is finalizing the rule without the grandfather clause for
tier I credit unions already supervised by ONES, as this provision has
become unnecessary. All credit unions currently supervised by ONES have
reported assets of $15 billion or more as of March 31, 2022.
Accordingly, all credit unions assigned to ONES will be categorized as
tier II or tier III effective January 1, 2023, and remain with ONES
under this final rule.\10\
---------------------------------------------------------------------------
\10\ The effective date of the final rule is January 1, 2023.
This date aligns with part 702 as a credit union that crosses the
asset threshold as of March 31 of a given calendar year is not
subject to the applicable requirements of part 702 until the
following calendar year. Here, credit unions that crossed any asset
tier threshold on March 31, 2022, would not be subject to any newly
applicable requirements of part 702 until January 1, 2023.
---------------------------------------------------------------------------
Under the final rule, all covered credit unions remain subject to
enhanced capital planning and stress testing data collections.\11\ One
commenter provided comments about subjecting all covered
[[Page 45007]]
credit unions to the enhanced data collection. First, the commenter
recommended limiting the number of specialized data collections
applicable to tier I credit unions. The commenter expressed concerns
about the usefulness of the data if the Regional Offices would not be
using it to perform specialized examinations. The commenter also was
concerned about the Regional Offices' ability to manage and
contextualize the data collected. Second, the commenter requested that
the NCUA clarify that ONES will be managing the data collection process
for all tier I credit unions and that ONES will be the point of contact
for resolving any data collection issues. The commenter was concerned
with ONES acting as the aggregator of all data collections due to the
resource limitations discussed in the proposed rule.
---------------------------------------------------------------------------
\11\ 12 CFR 702.306(d). The Board notes that the final rule
includes a clarifying edit related to 12 CFR 702.306(d) to clarify
that the data collection applies to all covered credit unions, which
reflects current NCUA practice. See also, 12 U.S.C. 1756 and 1784;
and 12 CFR 741.1.
---------------------------------------------------------------------------
Data collection is part of the NCUA's strategic initiative to
enhance supervision and is used to inform qualitative and quantitative
assessments of covered credit unions. The Board does not believe the
data collection presents an undue burden to covered credit unions as
the data is the type of information the Board expects covered credit
unions to be analyzing and considering on their own regardless of
whether the NCUA collects the information. In regard to the commenter's
concern on the continued use of the data, ONES will share the analysis
and reporting with Regional Offices, and the data will continue to be
used by the agency to assess a covered credit union's capital adequacy
through review of its capital plan. Additionally, the ongoing
coordination between ONES and Regional Offices has included discussions
on the analysis and use of collected data to inform the supervisory
process. The Board also notes that the collected data can drive
supervisory efficiencies for covered credit unions that may reduce
regulatory burden, as the data provides insight for offsite supervision
and enables timely risk identification and mitigation. For example, the
data may lead to more targeted supervisory work resulting in less time
on-site at covered credit unions.
Finally, the Board confirms that ONES will be managing the data
collection process for all tier I credit unions and that ONES will be
the point of contact for resolving any data collection issues, in
collaboration with the assigned Regional Office. The Board believes
that ONES has sufficient resources to manage the data collection
process for all covered credit unions, including those that will be
supervised by the Regional Offices. Therefore, the final rule has not
amended the current data collection requirements.
A few commenters also raised general concerns about coordination
between regional and ONES examiners and training regional examiners to
oversee tier I credit unions' capital plans. One commenter encouraged
ONES to periodically assess the consistency of capital planning
supervision conducted by Regional Offices to ensure capital planning
practices are aligned with ONES' expectations. The commenter was
concerned about the potential for covered credit unions to be
confronted with different standards when they advance to ONES
supervision. Another commenter expressed concern about risk to the
NCUSIF and urged the Board to closely monitor for any unintended
consequences of the change and ensure there is sufficient specialized
expertise at the Regional Office level to properly supervise tier I
credit unions. The commenter urged the agency to ensure close
collaboration between ONES and the Regional Offices on an indefinite
basis.
The Board agrees with commenters on the need for close
collaboration between ONES and Regional Offices to ensure continuity
and sound supervision for covered credit unions. As discussed
previously, the Board intends for the coordination between ONES and
Regional Offices to be ongoing. The Board notes that ONES is providing
a capital plan training program to Regional Offices to ensure
consistency of review across the NCUA. And while the Regional Offices
are equipped to provide sound supervision of tier 1 credit unions, the
Board will explore ongoing enhancements to the supervisory capabilities
and approaches for large credit unions assigned to the Regional
Offices.
The Board also notes that the scope of Regional Office examinations
will remain consistent with the scope of ONES' examinations as both
offices are subject to the same national examination standards. As
such, the Board does not expect the review of capital plans or the
general supervision of tier I credit unions to be materially different
under the Regional Offices. The NCUA has also implemented various
supervisory tools that enhance offsite monitoring of covered credit
union risk. Under the final rule, these tools remain in use for the
supervision of tier I credit unions regardless of their supervisory
office, including enhanced data collection. Additionally, as discussed
in the proposed rule, there are no changes to the enhanced regulatory
requirements for covered credit unions. Therefore, the Board does not
believe that Regional Office supervision of tier I credit unions
results in undue risk to the NCUSIF.
Two commenters raised the issue of coordination with the Consumer
Financial Protection Bureau (CFPB). Specifically, these commenters
urged the Board to ensure that coordination exists between the Regional
Offices and the CFPB to prevent instances of examination overlap or
confusion resulting from the application of differing standards and
expectations. The Board understands the importance of both ongoing
interagency and intra-agency coordination and will ensure there is
coordination between the appropriate NCUA supervisory office and the
CFPB.
Another commenter recommended that the Board consider a longer-term
strategy for managing the scope of ONES supervision. The commenter
stated that as long as industry assets continue to grow, it is only a
matter of time before the number of ONES-supervised credit unions
increases. The commenter stated that adopting a larger tier I asset
threshold is one way for the agency to make the most of existing
resources while undertaking a more comprehensive analysis of how best
to allocate supervisory resources as industry assets continue to grow.
The Board agrees with the commenter that longer-term strategic planning
is an important part of its resource allocation. The Board notes that
the annual budget process has been one tool used to evaluate its long-
term resource needs.
Reservation of Authority
The Board may use existing reservations of authority in part 702 to
designate a FICU as subject to ONES or Regional Office supervision, or
a tier I, II, or III credit union. For example, the Board could use its
reservation of authority to subject a tier I credit union that would
otherwise be supervised by a Regional Office to ONES supervision. Or,
in contrast, the Board may exercise its reservation of authority to
have a tier II credit union remain subject to Regional Office
supervision. Independent of its use of the reservation of authority to
designate an appropriate supervisory office, the Board may also use its
reservation of authority to designate a credit union as a tier I, II,
or III credit union.
In response to a specific solicitation of comments on this issue,
four commenters discussed the Board's potential use of its reservation
of authority. Two commenters had concerns that the use of this
authority may lack appropriate guardrails and suggested the Board adopt
specific
[[Page 45008]]
guidelines on when this authority could be used. The Board is declining
to adopt specific written guidelines at this time. The Board has not
proposed changes to its current reservation of authority and believes
that the existing rule provides sufficient information on factors the
Board would consider before using its authority. The proposed rule
stated that when making any such determination, the Board will consider
all relevant factors affecting the covered credit union's safety and
soundness, such as its activities, business model, risk-management
practices, and the types of assets held. The proposed rule also stated
that any exercise of authority under this section by the NCUA will be
in writing and consider the financial condition, size, complexity, risk
profile, scope of operations, and level of net worth of the covered
credit union, in addition to any other relevant factors. The Board
believes any additional guidelines on use of the reservation of
authority would unnecessarily reduce the Board's flexibility to address
the riskiness of a credit union. The Board notes, however, that this
authority has never been used and that the Board expects use of such
authority would continue to be limited.
These commenters also asked the Board to clarify the appeal rights
of a covered credit union in any situation when the reservation of
authority is invoked. The Board has declined adopting an appeal process
because the Board has not delegated this authority and would itself
exercise the reservation of authority. Another commenter generally
stated that it is important that the NCUA have a clearly demonstrated
rationale for using the reservation of authority, but acknowledged that
instances may arise that require the NCUA to employ greater oversight
over a credit union. When deciding to use its authority, the Board
would consider all relevant factors affecting the complex credit
union's safety and soundness and would state its rationale to the
credit union. The Board expects to provide a credit union subject to
proposed use of the reservation of authority with an opportunity to
present evidence on why the agency should not proceed with use of the
authority.
Finally, one commenter stated that the reservation of authority
should include an express requirement that the NCUA would consult and
cooperate with state regulators before transferring a tier I state-
chartered FICU (FISCU) to ONES. The Board does not believe an express
requirement is necessary; however, it expects consultation with state
regulators would occur prior to exercising its authority under the
final rule.
Comments Outside the Scope of the Proposed Rule
One commenter recommended that the Board harmonize when a credit
union is designated as a covered credit union with the CFPB's
calculation of its $10 billion asset threshold. Specifically, the NCUA
should calculate total assets as the average of the covered credit
union's total assets as reported on its Call Reports for the preceding
four quarters.
One commenter recommended considering making a change to the asset-
size threshold for FISCUs' examination cycles. According to this
commenter, under a 2016 NCUA policy, NCUA examines every FISCU with
assets of $1 billion or greater every 8-12 months. The commenter
recommended raising the threshold to $3 billion or greater.
These comments were outside the scope of the proposed rule.
However, the Board will take them into consideration for future
rulemakings or policy updates.
IV. Legal Authority
The Board is issuing this final rule pursuant to its authority
under the Federal Credit Union Act (FCU Act).\12\ Under the FCU Act,
the NCUA is the chartering and supervisory authority for Federal credit
unions (FCUs) and the Federal supervisory authority for FICUs. The FCU
Act grants the NCUA a broad mandate to issue regulations governing both
FCUs and FICUs. Section 120 of the FCU Act is a general grant of
regulatory authority and authorizes the Board to prescribe regulations
for the administration of the FCU Act.\13\ Section 209 of the FCU Act
is a plenary grant of regulatory authority to the NCUA to issue
regulations necessary or appropriate to carry out its role as share
insurer for all FICUs.\14\ Accordingly, the FCU Act grants the Board
broad rulemaking authority to ensure that the credit union industry and
the NCUSIF remain safe and sound.
---------------------------------------------------------------------------
\12\ 12 U.S.C. 1751 et seq.
\13\ 12 U.S.C. 1766(a).
\14\ 12 U.S.C. 1789.
---------------------------------------------------------------------------
V. Regulatory Procedures
Effective Date
The effective date of the final rule is January 1, 2023. This date
aligns with part 702 as a credit union that crosses the asset threshold
as of March 31 of a given calendar year is not subject to the
applicable requirements of part 702 until the following calendar year.
Here, credit unions that crossed any asset tier threshold on March 31,
2022, would not be subject to any newly applicable requirements of part
702 until January 1, 2023.
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
reporting, recordkeeping, or a third-party disclosure requirement,
referred to as an information collection. The final rule does not
affect any existing or impose any new information collection
requirements.
The information collection requirement that tier I credit unions
retain a record of their annual capital plan will remain in effect
regardless of a covered credit union's supervisory office and is
approved under Office of Management and Budget (OMB) control number
3133-0199, Capital Planning and Stress Testing.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires that when
an agency issues a proposed rule or a final rule pursuant to the
Administrative Procedure Act or another law, the agency must prepare a
regulatory flexibility analysis that meets the requirements of the RFA
and publish such analysis in the Federal Register. Specifically, the
RFA normally requires agencies to describe the impact of a rulemaking
on small entities by providing a regulatory impact analysis. For
purposes of the RFA, the Board considers credit unions with assets less
than $100 million to be small entities.\15\ A regulatory flexibility
analysis is not required, however, if the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities and publishes its certification and a short,
explanatory statement in the Federal Register together with the rule.
The final rule affects the supervisory office assigned to oversee FICUs
with $10 billion or more in total assets. Therefore, the Board
certifies that it does not have a significant economic impact on a
substantial number of small credit unions.
---------------------------------------------------------------------------
\15\ NCUA Interpretive Ruling and Policy Statement 15-1, 80 FR
57512 (Sept. 24, 2015).
---------------------------------------------------------------------------
Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
[[Page 45009]]
consider the impact of their actions on state and local interests. The
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the executive order to adhere to fundamental
federalism principles.
This final rule does not have substantial direct effects on the
states, on the relationship between the National Government and the
states, or on the distribution of power and responsibilities among the
various levels of government. The NCUA has therefore determined that
this rule does not constitute a policy that has federalism implications
for purposes of the Executive order.
Assessment of Federal Regulations and Policies on Families
The NCUA has determined that this final rule does not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999.\16\
---------------------------------------------------------------------------
\16\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) generally provides for congressional review of agency
rules.\17\ A reporting requirement is triggered in instances where the
NCUA issues a final rule as defined in the Administrative Procedure
Act.\18\ Besides being subject to congressional oversight, an agency
rule may also be subject to a delayed effective date if it is a ``major
rule.'' The NCUA believes that this final rule is not a ``major rule.''
As required by SBREFA, the NCUA will submit this final rule to the
Office of Management and Budget for it to determine if it is a ``major
rule'' for purposes of SBREFA. The NCUA also will file appropriate
reports with Congress and the Government Accountability Office so this
rule may be reviewed.
---------------------------------------------------------------------------
\17\ 5 U.S.C. 551.
\18\ Id.
---------------------------------------------------------------------------
List of Subjects
12 CFR Part 700
Credit unions.
12 CFR Part 701
Credit, Credit unions, Reporting and recordkeeping requirements.
12 CFR Part 702
Credit unions, Reporting and recordkeeping requirements.
12 CFR Part 708a
Credit unions, Reporting and recordkeeping requirements.
12 CFR Part 708b
Bank deposit insurance, Credit unions, Reporting and recordkeeping
requirements.
12 CFR Part 750
Credit unions, Golden parachute payments, Indemnity payments.
12 CFR Part 790
Organization and functions (Government agencies).
By the NCUA Board on July 21, 2022.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons discussed in the preamble, the Board amends 12 CFR
parts 700, 701, 702, 708a, 708b, 750, and 790 as follows:
PART 700--DEFINITIONS
0
1. The authority citation for part 700 continues to read as follows:
Authority: 12 U.S.C. 1752, 1757(6), 1766.
0
2. In Sec. 700.2, add a definition of ``ONES credit union'' in
alphabetical order and revise the definitions of ``Regional Director''
and ``Regional Office'' to read as follows:
Sec. 700.2 Definitions.
* * * * *
ONES credit union means a credit union subject to supervision by
the Office of National Examinations and Supervision (ONES) and includes
tier II and tier III credit unions, as defined under part 702 of this
chapter. Tier I credit unions are subject to supervision by the
appropriate Regional Office.
* * * * *
Regional Director means the representative of NCUA in the
designated geographical area in which the office of the federally
insured credit union is located or, for ONES credit unions, the
Director of the Office of National Examinations and Supervision.
Regional Office means the office of NCUA located in the designated
geographical areas in which the office of the federally insured credit
union is located or, for ONES credit unions, the Office of National
Examinations and Supervision.
* * * * *
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
0
3. The authority citation for part 701 continues to read as follows:
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759,
1761a, 1761b, 1766, 1767, 1782, 1784, 1785, 1786, 1787, 1788, 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
4. In Sec. 701.14, revise paragraph (c)(3)(i) 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.
* * * * *
(c) * * *
(3) * * *
(i) Where to file. Notices will be filed with the appropriate
Regional Director or, in the case of a corporate credit union or a ONES
credit union under part 700 of this chapter, with the Director of the
Office of National Examinations and Supervision. All references to
Regional Director will, for corporate credit unions and ONES credit
unions under part 700 of this chapter, mean the Director of Office of
National Examinations and Supervision. State-chartered federally
insured credit unions will also file a copy of the notice with their
state supervisor.
* * * * *
PART 702--CAPITAL ADEQUACY
0
5. The authority citation for part 702 is revised to read as follows:
Authority: 12 U.S.C. 1766(a), 1784(a), 1786(e), 1790d.
0
6. In Sec. 702.306, revise paragraph (d) to read as follows:
Sec. 702.306 Annual supervisory stress testing.
* * * * *
(d) Information collection. Upon request, the covered credit union
must provide NCUA with any relevant qualitative or quantitative
information requested by NCUA pertinent to the capital plans or stress
tests under this part.
* * * * *
PART 708a--BANK CONVERSIONS AND MERGERS
0
7. The authority citation for part 708a continues to read as follows:
Authority: 12 U.S.C. 1766, 1785(b), and 1785(c).
0
8. In Sec. 708a.101, revise the second sentence of the definition of
``Regional Director'' to read as follows:
Sec. 708a.101 Definitions.
* * * * *
[[Page 45010]]
Regional Director * * * For corporate credit unions and natural
person credit unions defined as ONES credit unions under part 700 of
this chapter, Regional Director means the Director of NCUA's Office of
National Examinations and Supervision.
* * * * *
0
9. In Sec. 708a.301, revise the second sentence of the definition of
``Regional Director'' to read as follows:
Sec. 708a.301 Definitions.
* * * * *
Regional Director * * * For corporate credit unions and natural
person credit unions defined as ONES credit unions under part 700 of
this chapter, Regional Director means the Director of NCUA's Office of
National Examinations and Supervision.
* * * * *
PART 708b--MERGERS OF INSURED CREDIT UNIONS INTO OTHER CREDIT
UNIONS; VOLUNTARY TERMINATION OR CONVERSION OF INSURED STATUS
0
10. The authority citation for part 708b continues to read as follows:
Authority: 12 U.S.C. 1752(7), 1766, 1785, 1786, 1789.
0
11. In Sec. 708b.2, revise the second sentence of the definition of
``Regional Director'' to read as follows:
Sec. 708b.2 Definitions.
* * * * *
Regional Director * * * For corporate credit unions and natural
person credit unions defined as ONES credit unions under part 700 of
this chapter, Regional Director means the Director of NCUA's Office of
National Examinations and Supervision.
* * * * *
PART 750--GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS
0
12. The authority citation for part 750 continues to read as follows:
Authority: 12 U.S.C. 1786(t).
0
13. In Sec. 750.6, revise the third sentence of paragraph (a) to read
as follows:
Sec. 750.6 Filing instructions; appeal.
(a) * * * In the case of a Federal or state-chartered corporate
credit union or a ONES credit union under part 700 of this chapter,
such written requests must be submitted to the Director of the Office
of National Examinations and Supervision. * * *
* * * * *
PART 790--DESCRIPTION OF NCUA; REQUESTS FOR AGENCY ACTION
0
14. The authority citation for part 790 continues to read as follows:
Authority: 12 U.S.C. 1766, 1789, 1795f.
0
15. In Sec. 790.2, revise the first sentence of paragraph (c)(2) to
read as follows:
Sec. 790.2 Central and field office organization.
* * * * *
(c) * * *
(2) * * * Similar to a Regional Director, the Director of the
Office of National Examinations and Supervision manages NCUA's
supervisory program over credit unions; however, it oversees the
activities for corporate credit unions and of natural person credit
unions defined as ONES credit unions under part 700 of this chapter, in
accordance with established policies. * * *
[FR Doc. 2022-16009 Filed 7-26-22; 8:45 am]
BILLING CODE 7535-01-P
</pre></body>
</html>Indexed from Federal Register on July 27, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.