AGENCY:

National Credit Union Administration (NCUA).

ACTION:

Final rule.

SUMMARY:

The NCUA Board (Board) is issuing a final rule to make technical amendments to various provisions of the NCUA's regulations. These technical amendments correct minor drafting errors and inaccurate legal citations and remove unnecessary regulatory provisions no longer applicable to federally insured credit unions (FICUs).

DATES:

The final rule is effective on February 5, 2019.

FOR FURTHER INFORMATION CONTACT:

Benjamin M. Litchfield, Staff Attorney, Division of Regulations and Legislation, Office of General Counsel, at 1775 Duke Street, Alexandria, VA 22314 or telephone: (703) 518-6540.

SUPPLEMENTARY INFORMATION:

I. Background

II. Legal Authority

III. Section-by-Section Analysis

IV. Regulatory Procedures

I. Background

Occasionally, the Board will issue a technical amendments rule correcting minor drafting errors, inaccurate legal citations, or superfluous regulatory provisions throughout the NCUA's regulations. Because these changes are technical in nature, and do not affect FICUs in a substantive manner, the Board issues these technical amendments rules as final rules without notice and comment typically required by the Administrative Procedure Act (APA).^[1] The NCUA's Office of General Counsel has identified a number of minor drafting errors and inaccurate citations and other technical problems throughout the NCUA's regulations for correction. Accordingly, the Board is issuing this final rule to address those matters.

II. Legal Authority

The Board has the legal authority to issue this final rule pursuant to its plenary rulemaking authority under the Federal Credit Union Act (FCU Act) ^[2] and its specific rulemaking authority under the various acts the Board administers.^[3]

III. Section-by-Section Analysis

General Wording, Style, and Cross-Reference Changes

The final rule makes general wording, style, and cross-reference changes throughout the NCUA's regulations. For example, the final rule replaces the term “federally-insured” with “federally insured” wherever it appears to promote uniformity. Technical amendments of this nature will apply throughout the NCUA's regulations. Therefore, the preamble does not address these types of stylistic changes in the section-by-section analysis below.

Section 700.2—Definitions

The final rule amends the definitions listed in § 700.2 of the NCUA's regulations. These definitions apply throughout chapter VII of title 12 of the Code of Federal Regulations “unless the context indicates otherwise.” ^[4]

Specifically, the final rule revises the definition of “Act” to read “Federal Credit Union Act (12 U.S.C. 1751, et seq.).” The current definition, which reads “Federal Credit Union Act (73 Stat. 628, 84 Stat. 944, 12 U.S.C. 1751 through 1790),” is inaccurate because it fails to include Title III of the FCU Act.^[5] The revised citation ensures that the definition of “Act” covers the entire FCU Act.

The final rule also replaces the term “Administration” with “NCUA” to avoid confusion. The term “Administration” only appears in § 700.2 and one other section of the NCUA's regulations. The final rule makes conforming amendments to the definitions of “Regional Director” and “Regional Office.”

Moreover, the final rule amends the definition of “credit union” to conform to the definition in the FCU Act.^[6] Because several of the NCUA's regulations refer to “federally insured credit unions,” “insured credit unions,” or otherwise reference the insured status of a credit union, the final rule adds definitions for “federally insured credit union” and “noninsured credit union” to clarify those terms where they are not separately defined in specific rules. These definitions mirror the definitions of those terms in the FCU Act.^[7]

Finally, the final rule combines the definitions of “paid-in and unimpaired capital and surplus” and “unimpaired capital and surplus” to avoid repetition. Section 700.2 currently defines “unimpaired capital and surplus” as “the same as `paid-in and unimpaired capital and surplus,' as defined in paragraph (f) of this section.” The final rule replaces these separate definitions with a single definition that reads “paid-in and unimpaired capital and surplus or unimpaired capital and surplus.”

Section 701.6—Fees Paid by Federal Credit Unions

The final rule replaces references to “the Administration” with “NCUA” in § 701.6 and simplifies the regulatory text. This provision governs the assessment of operating fees on federal credit unions (FCUs) and the imposition of administrative fees and interest for delinquent payments.^[8] While the final rule modernizes the language of this section, the substantive requirements remain the same.

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

The final rule makes technical amendments to the Chartering and Field of Membership Manual (Chartering Manual). The Board recently issued two final rules related to FCU chartering and field of membership. The Board published a final rule in the Federal Register on December 7, 2016 (“FOM I”) that, in relevant part, expands the Chartering Manual's definitions of “well-defined local community” and “rural district.” ^[9] The Board published a second rule in the Federal Register on June 28, 2018 (“FOM II”) that, in relevant part, adopts a narrative approach for FCUs seeking to expand or convert to a community charter.^[10]

Both of these final rules contain typographical errors in the regulatory text including improperly labelled subheadings and extraneous punctuation. The final rule corrects those mistakes. Furthermore, the final rule reincorporates definitions from FOM I for a “well-defined local community” and “rural district,” which were inadvertently excluded from the regulatory text of the Chartering Manual when FOM II was published.

Part 702—Capital Adequacy

The final rule removes amendatory instruction 11 from the NCUA's risk-based capital rule.^[11] That instruction directs the Federal Register to edit a section reference in § 702.504(b)(4) of the NCUA's regulations. However, the Board recently removed § 702.504(b)(4) and redesignated paragraphs (b)(5) and (6) as (b)(4) and (5), respectively, as part of the capital planning and stress testing rule.^[12] Accordingly, there is no longer a corresponding section reference for the Federal Register to amend. To avoid an editorial note in § 702.504 highlighting this discrepancy, the final rule withdraws instruction 11.

Sections 703.2 and 703.8—Investment and Deposit Activities

The final rule makes technical amendments to §§ 703.2 and 703.8 of the NCUA's regulations to recognize a change in nomenclature. On March 19, 2007, the National Association of Securities Dealers, Inc. (NASD) consolidated with NYSE Regulation, Inc. to create the Financial Industry Regulatory Authority (FINRA), a self-regulatory organization charged with policing the conduct of broker-dealers under federal securities laws.^[13] Therefore, the final rule replaces references to “National Association of Securities Dealers” with “Financial Industry Regulatory Authority” and “NASD” with “FINRA” wherever they appear.

Part 708a—Bank Conversions and Mergers

Part 708a contains the NCUA's regulations governing the conversion of a FICU into a mutual savings bank and the merger of a FICU into a bank. This final rule updates cross-references in the rule to reflect the redesignation of sections that are now contained in Subpart A of the bank conversions and mergers rule.^[14]

Part 717—Fair Credit Reporting

The final rule removes and reserves several subparts and appendices to part 717, the NCUA's regulation implementing the Fair Credit Reporting Act (FCRA).^[15] Historically, the federal banking agencies, the NCUA, and the Federal Trade Commission shared rulemaking authority for various aspects of the FCRA. Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred most rulemaking authority for the FCRA to the Bureau of Consumer Financial Protection (BCFP) effective July 21, 2011.^[16] The BCFP published a new Regulation V (Fair Credit Reporting), 12 CFR part 1022, on December 21, 2011, implementing those provisions of the FCRA.^[17] Therefore, the Board is removing all subparts and appendices to part 717 issued under rulemaking authority in the FCRA that the Dodd-Frank Act transferred to the BCFP.

Part 741—Requirements for Insurance

The final rule corrects an inaccurate cross-reference in § 741.3(b)(5) of the NCUA's regulations.^[18] That provision directs stakeholders to Appendix B to part 741 for guidance on how to develop an interest rate risk (IRR) policy and an effective IRR program. The NCUA's equity distribution rule eliminated Appendix A to part 741 and redesignated Appendix B as Appendix A. Accordingly, the Board is amending § 741.3(b)(5) to include the correct cross-reference to current Appendix A to part 741 which contains the NCUA's guidance on IRR policies.

Part 746—Appeals Procedures

The final rule also remedies an inadvertent drafting error in the NCUA's supervisory review committee (SRC) rule.^[19] The SRC rule permits a FICU to appeal a material supervisory determination made by the NCUA to various appellate bodies within the agency. The SRC rule provides FICUs with specific deadlines by which the credit union must file an appeal in order for the appellate body to hear an appeal. The SRC rule bases these deadlines on when the FICU receives notice of the material supervisory determination or the decision on appeal. Section 746.106, which governs appeal to the Director of the Office of Examination and Insurance (E&I), inadvertently establishes a deadline based on when the material supervisory determination was rendered by the NCUA rather than when it was received by the FICU.^[20] The final rule corrects this drafting error to clarify that the SRC rule bases the deadline to appeal to the Director of E&I on when the FICU receives the material supervisory determination not when the decision is rendered.

Part 790—Description of NCUA; Requests for Agency Action

Part 790 contains a description of the NCUA's organization and the procedures for public requests for action by the Board.^[21] This part relates solely to the practices of the NCUA and does not apply to FICU operations. In July 2017, the Board announced a plan to streamline and consolidate certain of the NCUA's functions and offices in an effort to reduce the NCUA's budget and increase efficiency. This plan includes the elimination of two NCUA Regional Offices effective December 31, 2018. The final rule amends part 790 to reflect the closure of those two offices as well as the creation of the Office of Business Innovation.^[22]

IV. Regulatory Procedures

Administrative Procedure Act

Generally, the APA requires a federal agency to provide the public with notice and an opportunity to comment on agency rulemakings.^[23] The APA, however, creates an exception in cases where an agency for good cause determines “that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” ^[24] Because all of the changes in this final rule involve only minor, technical amendments to the NCUA's existing regulations, the Board has determined that notice and comment would be unnecessary and contrary to the public interest.

Furthermore, the APA generally provides that a final rule may not become effective until at least 30 days after its publication in the Federal Register unless the agency determines that good cause exists to dispense with this requirement.^[25] As noted above, given that the rule does not impose new requirements on federally insured credit unions and only involves minor, technical amendments to existing regulations, the Board finds sufficient good cause exists to dispense with the 30-day effective date requirement. The rule will, therefore, be effective immediately upon publication.

Regulatory Flexibility Act

The Regulatory Flexibility Act requires the NCUA to prepare an analysis of any significant economic impact a regulation may have on a substantial number of small entities (primarily those under $100 million in assets).^[26] This final rule will have no economic impact on small credit unions because it only makes minor, technical amendments to NCUA's existing regulations. Accordingly, the NCUA certifies the rule will not have a significant economic impact on a substantial number of small credit unions.

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 increases an existing burden.^[27] For purposes of the PRA, a paperwork burden may take the form of a reporting or recordkeeping requirement, both referred to as information collections. As the final rule only makes minor, technical amendments to the NCUA's existing regulations, we have determined it does not increase paperwork requirements under the PRA.

Small Business Regulatory Enforcement Fairness Act

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) provides generally for congressional review of agency rules.^[28] A reporting requirement is triggered in instances where the NCUA issues a final rule as defined by section 551 of the APA. As required by SBREFA, NCUA has submitted this rule to the Office of Management and Budget for it to determine if the final rule is a “major rule” for purposes of SBREFA. The NCUA does not believe the rule is major.

Assessment of Federal Regulations and Policies on Families

The NCUA has determined that this rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act.^[29]

Executive Order 13132

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests.^[30] The NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The final rule does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The NCUA has therefore determined that this final rule does not constitute a policy that has federalism implications for purposes of the executive order.

List of Subjects

12 CFR Part 700

• Credit unions

12 CFR Part 701

• Advertising
• Aged
• Civil rights
• Credit
• Credit unions
• Fair housing
• Individuals with disabilities
• Insurance
• Marital status discrimination
• Mortgages
• Religious discrimination
• Reporting and recordkeeping requirements
• Sex discrimination
• Signs and symbols
• Surety bonds

12 CFR Part 702

• Credit unions
• Reporting and recordkeeping requirements

12 CFR Part 703

• Credit unions
• Investments

12 CFR Part 704

• Credit unions
• Reporting and recordkeeping requirements
• Surety bonds

12 CFR Part 705

• Credit unions
• Loans
• Grants
• Revolving fund
• Community programs
• Low income

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 709

• Claims
• Credit unions

12 CFR Part 710

• Administrative practice and procedure
• Credit unions
• Reporting and recordkeeping requirements

12 CFR Part 715

• Accounting
• Credit unions
• Reporting and recordkeeping requirements

12 CFR Part 717

• Consumer protection
• Credit unions
• Information
• Privacy
• Reporting and recordkeeping requirements

12 CFR Part 723

• Credit
• Credit unions
• Member business loans
• Reporting and recordkeeping requirements

12 CFR Part 725

• Credit unions
• Reporting and recordkeeping requirements

12 CFR Part 741

• Bank deposit insurance
• Credit unions
• Reporting and recordkeeping requirements

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
• Bank deposit insurance
• Claims
• Credit unions
• Crime
• Equal access to justice
• Investigations
• Lawyers
• Penalties

12 CFR Part 748

• Credit unions
• Reporting and recordkeeping requirements
• Security measures

12 CFR Part 749

• Archives and records
• Credit unions
• Reporting and recordkeeping requirements

12 CFR Part 750

• Credit unions
• Golden parachute payments
• Indemnity payments

12 CFR Part 760

• Credit unions
• Mortgages
• Flood insurance
• Reporting and recordkeeping requirements

12 CFR Part 790

• Organization and functions (Government agencies)

12 CFR Part 791

• Administrative practice and procedure
• Sunshine Act

12 CFR Part 792

• Classified information
• Confidential business information
• Courts
• Freedom of information
• Government employees
• Privacy

For the reasons discussed above, the Board is amending 12 CFR parts 700, 701, 702, 703, 704, 705, 708a, 708b, 709, 710, 715, 717, 723, 725, 741, 745, 746, 747, 748, 749, 750, 760, 790, 791, and 792 as follows:

PART 700—DEFINITIONS

1. The authority citation for part 700 continues to read as follows:

Authority: 12 U.S.C. 1752, 1757(6), 1766.

2. In § 700.2:

a. Revise the definitions of “Act,” “Board,” and “Credit union”;

b. Add definitions for “Federally insured credit union,” “NCUA,” “and Noninsured credit union” in alphabetical order; and

c. Revise the definitions of “Paid-in and unimpaired capital and surplus,” “Regional Director,” and “Regional Office”.

The revisions and additions read as follows:

PART 701—ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS

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, 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.

4. Revise § 701.6(a) to read as follows:

5. In § 701.21(h)(1), remove “federally-insured” and add in its place “federally insured”.

6. In § 701.22, remove “Federally insured, state-chartered credit unions” and add in its place “Federally insured state-chartered credit unions” in the introductory text; and remove “federally insured, state-chartered credit union” and add in its place “federally insured state-chartered credit union” wherever it appears.

7. Amend § 701.23(b) by removing “federally-insured” and adding in its place “federally insured” wherever it appears.

8. Amend Appendix B to part 701 as follows:

a. Amend Section III of Chapter 1 by removing the bullet after “and” but before the sentence beginning with “The fact that the certificate is made”.

b. Amend Section IV.D of Chapter 1 by removing the bullet after “Continuity plan for directors, committee members and management staff” but before the sentence beginning “Operating facilities”.

c. Amend Section V.B.1 of Chapter 1 by removing the bullet after “Organization Certificate, NCUA 4008” but before “Report of Official and Agreement to Serve, NCUA 4012”.

d. Revise the heading of Section V.B.5 of Chapter 1 titled “Certification of Resolutions, NCUA 9501” to read “V.B.6—Certification of Resolutions, NCUA 9501”.

e. Revise the heading of Section I.A. 2 of Chapter 2 to read “ I.A.2—Special Low-Income Rules”.

f. Amend Section II.A.1 of Chapter 2 by removing the bullet after the sentence beginning with “Employees of Johnson Soap Company” but before the sentence beginning “Employees of MMLLJS contractor”.

g. Revise the heading of Section II.A.2 of Chapter 2 to read “ II.A.2—Trade, Industry, or Profession”.

h. Amend Section II.B.1 of Chapter 2 by removing the bullet after “A single occupational common bond to a single associational common bond” but before “A single occupational common bond to a community charter”.

i. Revise the heading of Section II.B of Chapter 2 titled “Restructuring” to read “ II.B.2—Restructuring”.

j. Revise the heading of Section II.B of Chapter 2 titled “Documentation Requirements” to read “ II.B.4—Documentation Requirements”.

k. Revise the heading of Section II.D of Chapter 2 titled “Emergency Mergers” to read “ II.D.2—Emergency Mergers”.

l. Amend newly designated Section II.D.2 by removing the bullet after “Serious and persistent recordkeeping problems; or” but before “Serious and persistent operational concerns”.

m. Revise the heading of Section II.D of Chapter 2 titled “Purchase and Assumption (P&A)” to read “ II.D.3—Purchase and Assumption (P&A)”.

n. Revise the heading of Section II.E of Chapter 2 titled “Organizational Restructuring” to read “ II.E.2—Organizational Restructuring”.

o. Amend Section II.H of Chapter 2 by removing the bullet after “Members of the immediate family or household” but before the sentence beginning “Honorably discharged veterans”.

p. Amend Section III.A.1.a of Chapter 2 by removing the number “1.” after paragraph 2. but before paragraph 3.

q. Revise the heading of Section III.A.1 of Chapter 2 titled “Pre-Approved Groups” to read “III.A.1.b—Pre-Approved Groups”.

r. Amend Section III.A.1 of Chapter 2 titled “Pre-Approved Groups” by removing the number “(1)” after paragraph (4) but before paragraph (5).

s. Amend Section III.A.1 of Chapter 2 titled “Pre-Approved Groups” by redesiganting paragraphs (1) through (12) as 1. through 12.

t. Amend Section III.A.3 of Chapter 2 by removing the bullet after “Members of the Shalom Congregation in Chevy Chase, Maryland” but before the sentence beginning with “Regular members of the Corporate Executives Association”.

u. Revise the heading of Section III.B of Chapter 2 titled “Organizational Restructuring” to read “III.B.2—Organizational Restructuring”.

v. Revise the heading of Section III.B of Chapter 2 titled “Documentation Requirements” to read “III.B.4—Documentation Requirements”.

w. Revise the heading of Section III.C.C.2 of Chapter 2 to read “III.C.2—Office of Credit Union Resources and Expansion Director Decision”.

x. Revise the heading of Section III.D of Chapter 2 titled “Emergency Mergers” to read “III.D.2—Emergency Mergers”.

y. Revise the heading of Section III.D of Chapter 2 titled “Purchase and Assumption (P&A) to read “III.D.3—Purchase and Assumption (P&A)”.

z. Revise the heading of Section III.E of Chapter 2 titled “Organizational Restructuring” to read “III.E.2—Organizational Restructuring”.

aa. Amend Section III.H of Chapter 2 by removing the bullet after “Members of the immediate family or household” but before the sentence beginning “Honorably discharged veterans”.

bb. Revise the heading of Section IV.B of Chapter 2 titled “Documentation Requirements” to read “IV.B.3—Documentation Requirements”.

cc. Revise the heading of Section IV.B of Chapter 2 titled “Restructuring” to read “IV.B.4—Restructuring”.

dd. Amend Section IV.C.4 of Chapter 2 by removing the bullet after “Specific reasons for the action” but before “Options to consider, if appropriate, for gaining approval”.

ee. Revise the heading of Section IV.D of Chapter 2 titled “Voluntary Mergers” to read “IV.D.1—Voluntary Mergers”.

ff. Revise the heading of Section IV.D of Chapter 2 titled “Emergency Mergers” to read “IV.D.3—Emergency Mergers”.

gg. Revise the heading of Section IV.D of Chapter 2 titled “Purchase and Assumption (P&A)” to read “IV.D.4—Purchase and Assumption (P&A)”.

hh. Revise the heading of Section IV.E of Chapter 2 titled “Overlap Issues as a Result of Organizational Restructuring” to read “IV.E.2—Overlap Issues as a Result of Organizational Restructuring”.

ii. Revise section V.A.2 of Chapter 2.

jj. Revise the heading of Section V.A of Chapter 2 titled “Business Plan Requirements for a Community Credit Union” to read “V.A.4—Business Plan Requirements for a Community Credit Union”.

kk. Revise the heading of Section V.A of Chapter 2 titled “Ample Community Fields of Membership” to read “V.A.7—Ample Community Fields of Membership”.

ll. Revise the heading of Section V.D of Chapter 2 titled “Mergers” to read “V.D.1—Mergers”.

mm. Revise the heading of Section V.D of Chapter 2 titled “Emergency Mergers” to read “V.D.2—Emergency Mergers”.

nn. Revise the heading of Section V.D of Chapter 2 titled “Purchase and Assumption (P&A)” to read “V.D.3—Purchase and Assumption (P&A)”.

oo. Revise the heading of Section V.E of Chapter 2 titled “Exclusionary Clauses” to read “V.E.2—Exclusionary Clauses”.

pp. Revise the heading of Section II.B of Chapter 3 to read “II.B—Special Programs”.

qq. Revise the heading of Section II.C of Chapter 3 to read “II.C—Low-Income Documentation”.

rr. Revise the heading of Section II.D of Chapter 3 to read “II.D—Third-Party Assistance”.

ss. Revise the heading of Section II.E of Chapter 3 to read “II.E—Special Rules for Low-Income Federal Credit Unions”.

tt. Revise Section III.A of Chapter 3 by removing “12” and adding in its place “12 U.S.C. 1759(c)(2)” in the first paragraph and removing “U.S.C. 1759(c)(2).” from the second paragraph.

uu. Revise the heading of Section III.B.2 of Chapter 3 titled “Economic Distress Criteria” to read “III.B.2.a—Economic Distress Criteria”.

vv. Amend Section III.B.2 of Chapter 3 titled “Economic Distress Criteria” by removing the bullet after “Other Criterion. Any other economic distress criterion the CDFI Fund may adopt in the future.” but before the sentence “Id. § 1805.201(b)(3)(ii)(D)(1), (2)(ii) and (3) (2008).”

ww. Revise the heading of Section II.C.4 of Chapter 4 to read “II.C.4—Notification”.

xx. Revise the heading of Section II.D of Chapter 4 titled “Application for a Federal Charter” to read “II.D.2—Application for a Federal Charter”.

yy. Revise the heading of Section II.E of Chapter 4 titled “Effective Date of Conversion” to read “II.E.1—Effective Date of Conversion”.

zz. Revise the heading of Section II.E of Chapter 4 titled “Reports to NCUA” to read “II.E.5—Reports to NCUA”.

aaa. Revise the heading of Section III.D.UA of Chapter 4 to read “III.D.5—Disapproval”.

The revision reads as follows:

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

V.A.2—Definition of Well-Defined Local Community and Rural District

In addition to the documentation requirements in Chapter 1 to charter a credit union, a community credit union applicant must provide additional documentation addressing the proposed area to be served and community service policies.

An applicant has the burden of demonstrating to NCUA that the proposed community area meets the statutory requirements of being: (1) Well-defined, and (2) a local community or rural district.

For an applicant seeking a community charter for an area with multiple political jurisdictions with a population of 2.5 million people or more, the Office of Credit Union Resources and Expansion (CURE) shall: (1) Publish a notice in the Federal Register seeking comment from interested parties about the proposed community and (2) conduct a public hearing about this application.

“Well-defined” means the proposed area has specific geographic boundaries. Geographic boundaries may include a city, township, county (single, multiple, or portions of a county) or a political equivalent, school districts, or a clearly identifiable neighborhood.

The well-defined local community requirement is met if:

• Single Political Jurisdiction—The area to be served is a recognized Single Political Jurisdiction, i.e., a city, county, or their political equivalent, or any single portion thereof.
• Statistical Area—A statistical area is all or an individual portion of a Core-Based Statistical Area (CBSA) designated by the U.S. Census Bureau, including a Metropolitan Statistical Area. To meet the well-defined local community requirement, the CBSA or a portion thereof, must be contiguous and have a population of 2.5 million or less people. An individual portion of a statistical area need not conform to internal boundaries within the area, such as metropolitan division boundaries within a Core-Based Statistical Area.
• Compelling Evidence of Common Interests or Interaction—In lieu of a statistical area as defined above, this option is available when a credit union seeks to initially charter a community credit union; to expand an existing community; or to convert to a community charter. Under this option, the credit union must demonstrate that the areas in question are contiguous and further demonstrate a sufficient level of common interests or interaction among area residents to qualify the area as a local community. For that purpose, an applicant must submit for NCUA approval a narrative, supported by appropriate documentation, establishing that the area's residents meet the requirements of a local community.

To assist a credit union in developing its narrative, Appendix 6 of this Manual identifies criteria a narrative should address, and which NCUA will consider in deciding a credit union's application to: initially charter a community credit union; to expand an existing community, including by an adjacent area addition; or to convert to a community charter. In any case, the credit union must demonstrate, through its business and marketing plans, its ability and commitment to serve the entire community for which it seeks NCUA approval.

An area of any geographic size qualifies as a Rural District if:

• The proposed district has well-defined, contiguous geographic boundaries;
• The total population of the proposed district does not exceed 1,000,000.
• Either more than 50% of the proposed district's population resides in census blocks or other geographic units that are designated as rural by either the Consumer Financial Protection Bureau or the United States Census Bureau, OR the district has a population density of 100 persons or fewer per square mile; and
• The boundaries of the well-defined rural district do not exceed the outer boundaries of the states that are immediately contiguous to the state in which the credit union maintains its headquarters (i.e., not to exceed the outer perimeter of the layer of states immediately surrounding the headquarters state).

The common bond affinity groups that apply to well-defined local communities also apply to Rural Districts.

The requirements in Chapter 2, Sections V.A.4 through V.G. also apply to a credit union that serves a rural district.

PART 702—CAPITAL ADEQUACY

9. The authority citation for part 702 is revised to read as follows:

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

10. In part 702, revise all references to “federally-insured” to read “federally insured”.

11. In § 702.504(b)(4), revise the citation “§ 702.306(c)” to read “§ 702.506(c)”.

PART 703—INVESTMENT AND DEPOSIT ACTIVITIES

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

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

13. In § 703.2, in the definition of “Associated personnel,” remove “National Association of Securities Dealers (NASD)” or “NASD” and add in their place “Financial Industry Regulatory Authority (FINRA)” or “FINRA” wherever they appear.

14. In § 703.8(b)(2) remove “National Association of Securities Dealers” and add in its place “Financial Industry Regulatory Authority”.

PART 704—CORPORATE CREDIT UNIONS

15. The authority citation for part 704 continues to read as follows:

Authority: 12 U.S.C. 1766(a), 1781, 1789.

16. In § 704.1(a) remove “Non federally insured corporate credit unions” and add in its place “Noninsured corporate credit unions”.

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

17. 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.

18. In part 705, revise all references to “non-federally insured, state-chartered credit union” and “non-federally insured state-chartered credit union” to read “noninsured credit union”.

PART 708a—BANK CONVERSIONS AND MERGERS

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

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

20. Amend § 708a.101 by revising the definitions of “Credit union,” “Federal banking agencies,” and “Mutual savings bank and savings association” to read as follows:

22. Amend § 708a.104 as follows:

a. In paragraph (a), remove “§ 708a.3” and add in its place “§ 708a.103”; and

b. In paragraph (f)(6), remove “§ 708a.4(f)” and add in its place “§ 708a.104(f)”.

23. Amend § 708a.105 as follows:

a. In paragraph (a)(1), remove “§§ 708a.3 and 708a.4” and add in its place “§§ 708a.103 and 708a.104”.

b. In paragraph (a)(3), remove “§ 708a.5(a)” and add in its place “§ 708a.105(a)”.

c. In paragraph (b), remove “§ 708a.6” and add in its place “§ 708a.106”.

24. In § 708a.106(b), remove “§ 708a.3” and add in its place “§ 708a.103”.

25. In § 708a.107(b), by remove “§ 708a.5” and add in its place “§ 708a.105”.

26. In § 708a.108(b), by remove “§ 708a.7” and add in its place “§ 708a.107” and remove “§ 708a.10” and add in its place “§ 708a.110.”

27. Amend § 708a.110 as follows:

a. In paragraph (a), remove “§ 708a.8” and add in its place “§ 708a.108” and remove “§ 708a.9” and add in its place “§ 708a.109”.

b. In paragraph (b), remove “§ 708a.8” and add in its place “§ 708a.108”.

28. In § 708a.113(d)(3), remove “§ 708a.12 of this part” and add in its place “§ 708a.112”.

29. Amend § 708a.305 as follows:

a. In paragraph (c)(3), remove the phrase “because of” the second time it appears; and

b. In paragraph (c)(4) remove “; and” and add in its place a period.

30. In § 708a.312(a), revise “Federally insured State chartered credit unions” to read “Federally insured state-chartered credit unions”.

PART 708b—MERGERS OF INSURED CREDIT UNIONS INTO OTHER CREDIT UNIONS; VOLUNTARY TERMINATION OR CONVERSION OF INSURED STATUS

31. The authority citation for part 708b continues to read as follows:

Authority: 12 U.S.C. 1752(7), 1766, 1785, 1786, 1789.

32. Revise the heading of part 708b to read as set forth above.

33. In part 708b, revise all references to “federally-insured”, “Federally-insured”, “nonfederally-insured”, and “Nonfederally-insured” to read “federally insured”, “Federally insured”, “noninsured”, and “Nonfederally insured” respectively.

34. Amend § 708b.2 by adding introductory text to read as follows:

Subpart C—[Amended]

35. Amend Subpart C of part 708b by revising all references to “$100,000” to read “$250,000” wherever they occur.

36. In § 708b.303(c), remove the word “and” and add in its place the word “an” in the first sentence of Item 5 of the form Certification of Vote.

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

37. 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.

38. In part 709, revise all references to “federally-insured” to read “federally insured”.

39. In § 709.4(c)(10), remove “state-chartered federally insured credit union” and add in its place “federally insured state-chartered credit union”.

PART 710—VOLUNTARY LIQUIDATION

40. The authority citation for part 710 continues to read as follows:

Authority: 12 U.S.C. 1766(a), 1786, and 1787.

41. In part 710, revise all references to “Federally insured state credit union” or “Federally insured state credit unions” to read “Federally insured state-chartered credit union” or “Federally insured state-chartered credit unions”, respectively.

PART 715—SUPERVISORY COMMITTEE AUDITS AND VERIFICATIONS

42. The authority citation for part 715 continues to read as follows:

Authority: 12 U.S.C. 1761(b), 1761d, 1782(a)(6).

43. In § 715.4(c), remove the phrase “NCUA form” and add in its place the phrase “NCUA Form”.

44. In § 715.10(a), remove the phrase “National Credit Union Administration (“NCUA”)” and add in its place the term “NCUA”.

PART 717—FAIR CREDIT REPORTING

45. The authority citation for part 717 is revised to read as follows:

Authority: 12 U.S.C. 1766(a), 1789; 15 U.S.C. 1681m(e).

Subpart A—[Removed and Reserved]

46. Remove and reserve subpart A, consisting of §§ 717.1 through 717.3.

Subpart C—[Removed and Reserved]

47. Remove and reserve subpart C, consisting of §§ 717.20 through 717.28.

Subpart D—[Removed and Reserved]

48. Remove and reserve subpart D, consisting of §§ 717.30 through 717.32.

Subpart E—[Removed and Reserved]

49. Remove and reserve subpart E, consisting of §§ 717.40 through 717.43.

Appendix C—[Removed and Reserved]

50. Remove and reserve Appendix C to part 717.

PART 723—MEMBER BUSINESS LOANS; COMMERCIAL LENDING

51. The authority citation for part 723 continues to read as follows:

Authority: 12 U.S.C. 1756, 1757, 1757A, 1766, 1785, 1789.

52. In part 723, revise all references to “federally insured, state-chartered credit union” or “federally insured, state-chartered credit unions” to read “federally insured state-chartered credit union” or “federally insured state-chartered credit unions”, respectively.

PART 725—NATIONAL CREDIT UNION ADMINISTRATION CENTRAL LIQUIDITY FACILITY

53. The authority citation for part 725 is revised to read as follows:

Authority: 12 U.S.C. 1795f(a)(2).

54. In part 725:

a. Revise all references to “federally-chartered” or “federally-insured” to read “federally chartered” and “federally insured”, respectively; and

b. Revise all references to “central credit union” or “central credit unions” to read “corporate credit union” or “corporate credit unions”, respectively.

55. In § 725.2(h)(2), remove “or Federal Savings and Loan Insurance Corporation”.

56. In § 725.3(a)(2), remove footnote 1.

57. In § 725.4, remove footnote 3 from paragraph (a)(2) and, in paragraph (f), add the word “or” between the words “chartered” and “within”.

PART 741—REQUIREMENTS FOR INSURANCE

58. 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.

59. In part 741:

a. Revise all references to “federally-insured” and “nonfederally-insured” to read “federally insured” and “nonfederally insured” respectively; and

b. Revise all references to “federally insured, state-chartered” or “federally-insured state-chartered” to read “federally insured state-chartered”.

60. In § 741.3(b)(5), remove “Appendix B” and add in its place “Appendix A”.

61. Revise § 741.8(c) to read as follows:

62. In § 741.201(a), remove “part 713 of this chapter” and add “§§ 713.3, 713.5, and 713.6” in its place.

63. In § 741.219(b), remove the phrase “or the Director of the Office of National Examinations and Supervision.”

PART 745—SHARE INSURANCE AND APPENDIX

64. 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.

65. In part 745:

a. Revise all references to “federally-insured” to read “federally insured”; and

b. Revise all references to “state credit union” or “state credit unions” to read “state-chartered credit union” or “state-chartered credit unions”, respectively.

66. Revise § 745.202(b) to read as follows:

PART 746—APPEALS PROCEDURES

Subpart A—Procedures for Appealing Material Supervisory Determinations

67. The authority citation for part 746, subpart A, continues to read as follows:

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

68. Revise § 746.106(a) to read as follows:

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

69. 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.

70. In part 747:

a. Revise all references to “federally-insured” to read “federally insured”; and

b. Revise all references to “state credit union” or “state credit unions” to read “state-chartered credit union” or “state-chartered credit unions”, respectively.

PART 748—SECURITY PROGRAM, REPORT OF SUSPECTED CRIMES, SUSPICIOUS TRANSACTIONS, CATASTROPHIC ACTS AND BANK SECRECY ACT COMPLIANCE

71. The authority citation for part 748 continues to read as follows:

Authority: 12 U.S.C. 1766(a), 1786(q); 15 U.S.C. 6801-6809; 31 U.S.C. 5311 and 5318.

72. In part 748, revise all references to “federally-insured” to read “federally insured”.

Appendix A to Part 748 [Amended]

73. Amend Appendix A by removing “G. Implement the Standards” from the table of contents under section III.

PART 749—RECORDS PRESERVATION PROGRAM AND APPENDICES—RECORD RETENTION GUIDELINES; CATASTROPHIC ACT PREPAREDNESS GUIDELINES

74. The authority citation for part 749 continues to read as follows:

Authority: 12 U.S.C. 1766, 1783 and 1789; 15 U.S.C. 7001(d).

75. In part 749, revise all references to “federally-insured” to read “federally insured”.

PART 750—GOLDEN PARACHUTE AND INDEMNIFICATION PAYMENTS

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

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

77. In part 750, revise all references to “Federally insured” to read “federally insured”.

PART 760—LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS

78. Revise the authority citation for part 760 to read as follows:

Authority: 12 U.S.C. 1757, 1784(e), 1789; 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.

PART 790—DESCRIPTION OF NCUA; REQUESTS FOR AGENCY ACTION

79. The authority citation for part 790 continues to read as follows:

Authority: 12 U.S.C. 1766, 1789, 1795f.

80. In § 790.2, add paragraph (b)(18) and revise paragraph (c) to read as follows:

PART 791—RULES OF NCUA BOARD PROCEDURE; PROMULGATION OF NCUA RULES AND REGULATIONS; PUBLIC OBSERVATION OF NCUA BOARD MEETINGS

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

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

82. In § 791.8(b)(4), revise “state-chartered federally-insured credit union” to read “federally insured state-chartered credit union”.

PART 792—REQUESTS FOR INFORMATION UNDER THE FREEDOM OF INFORMATION ACT AND PRIVACY ACT, AND BY SUBPOENA; SECURITY PROCEDURES FOR CLASSIFIED INFORMATION

83. The authority citation for part 792 continues to read as follows:

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

84. In § 792.30, revise “federally-insured” to read “federally insured”.

Footnotes