7535-01-U

**NATIONAL CREDIT UNION ADMINISTRATION**

**12 C.F.R. Part 711**

**Management Official Interlocks Threshold Change**

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

**ACTION:** Final Rule.

**SUMMARY:** The NCUA is amending its management interlocks rule to
conform it to a change the Financial Services Regulatory Relief Act of
2006 (FSRAA) made in the dollar threshold that triggers the prohibition
on management officials serving at unaffiliated depository
organizations. This final rule changes the threshold from \$20 million
to \$50 million.

**DATES:** This rule is effective as of October 15, 2007.

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

**SUPPLEMENTARY INFORMATION:**

**A. Background**

The Depository Institution Management Interlocks Act (Interlocks Act)
prohibits individuals from simultaneously serving as a management
official at two unaffiliated depository institutions or their holding
companies (collectively, depository organizations) under certain
circumstances. 12 U.S.C. 3201 *[et]{.underline}* *[seq]{.underline}*.
Section 203(1) of the Interlocks Act prohibits interlocks between
unaffiliated depository organizations if each depository organization or
its affiliate has an office in the same relevant metropolitan
statistical area (RMSA prohibition), unless each of the depository
organizations or affiliates involved has total assets below a specified
threshold. Before enactment of FSRRA, this asset threshold was \$20
million, however, section 610 of FSRRA amended the Interlocks Act by
raising this asset threshold to \$50 million, effective October 13,
2006.

This final rule tracks changes the other federal financial institution
regulators have made in their management interlocks rules. 72 FR 38753
(July 16, 2007).

**B. Regulatory Changes**

NCUA is amending §711.3(b) to implement section 610 of FSRRA.
Specifically, the final rule modifies the RMSA prohibition to allow a
management official of one depository organization to serve as a
management official of an unaffiliated depository organization that has
an office in the same RMSA as the first organization if each of the
depository organizations or affiliates involved has total assets of less
than \$50 million.

**C. Regulatory Procedures**

[Final Rule Under the Administrative Procedure Act]{.underline}

Generally, the Administrative Procedure Act (APA) requires a federal
agency to provide the public with notice and the opportunity to comment
on agency rulemakings. The amendment in this rule is not substantive but
technical in that it merely incorporates into NCUA's regulations a
statutory increase in the threshold. The APA permits an agency to forego
the notice and comment period under certain circumstances, such as when
a rulemaking is technical and not substantive. For these reasons, NCUA
finds good cause that notice and public comment are unnecessary under
Section 553(b)(3)(B) of the APA, 5 U.S.C. 553(b)(3)(B), and also finds
good cause to dispense with the 30-day delayed effective date
requirement under Section 553(d)(3) of the APA. 5 U.S.C. 553(d)(3). The
rule will, therefore, be effective upon publication.

[Regulatory Flexibility Act]{.underline}\
The Regulatory Flexibility Act requires NCUA to prepare an analysis to
describe any significant economic impact a rule may have on a
substantial number of small entities (those credit unions under ten
million dollars in assets). This rule changes NCUA's regulation to
conform to a statutory change. This rule will not have a significant
economic impact on a substantial number of small credit unions, and,
therefore, a regulatory flexibility analysis is not required.\
 

[Paperwork Reduction Act]{.underline}\
NCUA has determined that this rule will not increase paperwork
requirements under the Paperwork Reduction Act of 1995 and 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](http://www.lexis.com/research/buttonTFLink?_m=6a971c9d890055e7a89186b5033192bb&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B66 FR 33211 %5D%5D><%2Fcite>&_butType=4&_butStat=0&_butNum=12&_butInline=1&_butinfo=44 USC 3502&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVtz-zSkAk&_md5=1c8323a9467e4b8f30a00da420ef71a6)(5),
voluntarily complies with the executive order. This rule will 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. NCUA has
determined that this 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}\
The NCUA has determined that this rule will not affect family well-being
within the meaning of section 654 of the Treasury and General Government
Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 2681 (1998).

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

The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L.
104-121) (SBREFA) 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 APA. 5 U.S.C. 551.
The Office of Management and Budget is currently reviewing this rule as
it pertains to SBREFA.

**List of Subjects**\
 

**12 CFR part 711**

Antitrust, banks, banking, credit unions.   

By the National Credit Union Administration Board on October 9, 2007.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Mary Rupp

Secretary of the Board

For the reasons discussed above, NCUA is amending Part 711 as follows:

**PART 711 -- MANAGEMENT OFFICIAL INTERLOCKS**

1\. The authority citation for part 711 continues to read as follows:

**Authority:** 12 U.S.C. 1757 and 3201-3208.\
\
2. Section 711.3(b) is amended by removing the number "20" and adding
the number "50."