**7535-01-U**

**NATIONAL CREDIT UNION ADMINISTRATION**

**12 CFR Part 740**

**RIN 3133-AD45**

**The Official Advertising Statement**

**AGENCY:** National Credit Union Administration (NCUA).

**ACTION:** Final rule.

**SUMMARY:** NCUA is revising the requirements for use of the official
insurance sign and official advertising statement to permit insured
credit unions to use the basic form of the official advertising
statement, a shortened form, or the official sign in advertisements. The
rule will give credit unions added flexibility in advertisements by
allowing them to use the shortened form or the official insurance sign
in advertisements as alternatives to the basic official advertising
statement.

**DATES:** This rule is effective October 31, 2008.

**FOR FURTHER INFORMATION CONTACT:** Moisette I. Green, Staff Attorney,
Office of General Counsel, National Credit Union Administration, 1775
Duke Street, Alexandria, Virginia 22314-3428, or telephone: (703)
518-6540.

**SUPPLEMENTARY INFORMATION:**

In April 2008, NCUA proposed an amendment revising the requirements for
use of the official insurance sign and official advertising statement to
permit insured credit unions to use the basic form of the official
advertising statement, a shortened form, or the official sign in
advertisements. 73 FR 22839 (April 28, 2008). Additionally, the proposed
amendment clarified the font of the text in the official sign may be
altered to ensure it is legible when it is used as the official
advertising statement. The proposal resulted from NCUA's 2007 regulatory
review, and was identified to provide insured credit unions greater
flexibility in how they meet the requirement of giving notice of their
insured status.

The Federal Credit Union Act (Act) requires insured credit unions to
display signs at their places of business indicating accounts are
insured and also to include in all advertisements a statement to the
effect that accounts are insured. 12 U.S.C. 1785(a). The Act authorizes
the NCUA Board to promulgate regulations governing the substance of the
official insurance sign and the manner it is displayed or used and,
also, to address the practicality of including the official statement on
insured status in advertisements. [Id]{.underline}. NCUA implements this
authority in part 740 of its regulations and, in §740.5, NCUA requires
insured credit unions to include the official advertising statement in
all advertisements, including on their main internet pages, with certain
exceptions.

NCUA received a total of eight comments on the proposed rule from credit
unions and trade associations. All the commenters supported the rule. On
September 10, 2008, NCUA received notice that one comment letter
submitted via the Federal eRulemaking Portal regarding this rulemaking
had not been forwarded to NCUA. This was due to a minor software problem
that has been corrected.[^1] The comment period for this rule closed on
June 27, 2008. As noted above, all eight comment letters NCUA received
fully supported the amendments and the Board believes, given the
identity of these commenters, which includes major credit union trade
associations and individual credit unions, that these comment letters
broadly and fairly represent the views of interested parties.

The Board believes it is appropriate and fair in these circumstances to
proceed with the final rule rather than delay implementation. This rule
creates no burden for FCUs, but merely provides an alternative for
insured credit unions to meet the advertising requirement regarding the
existence of federal account insurance. For these reasons, the Board
concludes there is no need to reopen the comment period and the interest
of the public and FCUs is served by proceeding with the final rule.

One commenter suggested NCUA further condense the advertising statement
and permit credit unions to use a brief statement such as, "NCUA
Insured" or "Insured by NCUA." Credit unions may use the shortened
version of the official advertising statement, which is "Federally
insured by NCUA." Keeping the word "federally" in the shortened version
ensures those who may not be familiar with credit unions, NCUA, or the
National Credit Union Share Insurance Fund receive notice that member
shares are backed by the full faith and credit of the United States
government, especially when the shortened statement is used alone.

Accordingly, NCUA adopts the proposed rule, published at 73 FR 22839
(April 28, 2008), as a final rule.

**Regulatory Procedures**

[Regulatory Flexibility Act]{.underline}

The Regulatory Flexibility Act requires NCUA to prepare an analysis to
describe any significant economic impact any regulation may have on a
substantial number of small credit unions (those under \$10 million in
assets). The final amendment merely expands the options credit unions
have to comply with the requirement to notify members and the public of
their insured status in advertisements. Accordingly, the NCUA has
determined and certifies that the final rule will not have a significant
economic impact on a substantial number of small credit unions within
the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612.

[Small Business Regulatory Enforcement Fairness Act]{.underline}

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996,
Pub. L. 104-121, provides generally for congressional review of agency
rules. A reporting requirement is triggered in instances where NCUA
issues a final rule as defined by Section 551 of the Administrative
Procedures Act. 5 U.S.C. 551. The Office of Information and Regulatory
Affairs, an office within OMB, has determined that, for purposes of
SBREFA, this is not a major rule.

[Paperwork Reduction Act]{.underline}

The final rule does not contain a "collection of information" within the
meaning of section 3502(3) of the Paperwork Reduction Act of 1995, 44
U.S.C. 3502(3), and would not increase paperwork requirements under the
Paperwork Reduction Act of 1995 or regulations of the Office of
Management and Budget.

[Executive Order 13132]{.underline}

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. The final rule would not have 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 final rule does not constitute a policy that has
federalism implications for purposes of the executive order.

[The Treasury and general Government Appropriations Act, 1999 --
Assessment of Federal Regulations and Policies on Families]{.underline}

NCUA has determined that this final rule would not affect family
well-being within the meaning of section 654 of the Treasury and General
Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 2681
(1998).

**List of Subjects in 12 CFR Part 740**

Advertisements, Credit unions, Signs and symbols.

By the National Credit Union Administration Board on September 25, 2008.

Mary F. Rupp

Secretary of the Board

For the reasons stated above, NCUA amends 12 CFR part 740 as follows:

**PART 740 -- ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS**

1\. The authority citation for part 740 is revised to read as follows:

Authority: 12 U.S.C. 1766, 1781, 1785, and 1789.

2.  Amend §740.5 by revising paragraph (b) to read as follows:

**§ 740.5 Requirements for the official advertising statement.**

\* \* \* \* \*

\(b\) The official advertising statement is in substance as follows:
"This credit union is federally insured by the National Credit Union
Administration." Insured credit unions, at their option, may use the
short title "Federally insured by NCUA" or a reproduction of the
official sign, as described in §740.4(b), as the official advertising
statement. The official advertising statement must be in a size and
print that is clearly legible. If the official sign is used as the
official advertising statement, an insured credit union may alter the
font size to ensure its legibility as provided in §740.4(b)(2).

\* \* \* \* \*

[^1]: The interagency "eRulemaking Program" launched the website
    [www.regulations.gov](http://www.regulations.gov/) in January 2003
    to provide access and an opportunity to comment on all proposed
    federal regulations at one online portal. NCUA's understanding is
    that the software problem has been corrected and safeguards are now
    in place to ensure this error will not occur for future proposed
    rules. Questions about this matter may be directed to John Moses,
    Chief, eRulemaking Program Branch, Environmental Protection Agency,
    1200 Pennsylvania Ave., NW., Washington, DC 20460, 202/566-1352,
    Moses.John@epamail.epa.gov.