Federal Register / Vol. 78, No. 105 / Friday, May 31, 2013 / Rules and Regulations 32547 

1Public Law 111–203, 124 Stat. 1376 (2010). 

2 78 FR 11279 (Feb. 15, 2013). 

3 Dodd-Frank Act section 1400(c), 15 U.S.C. 1601 

note. 

■ 54. Revise §§ 792.51(a) through (d) to 

read as follows: 

§ 792.51 Procedures. 

(a) Mandatory review. All 

declassification requests made by a 

member of the public, by a government 

employee or by an agency shall be 

handled by the Executive Director or the 

Executive Director’s designee. Under no 

circumstances shall the Executive 

Director refuse to confirm the existence 

or nonexistence of a document under 

the Freedom of Information Act or the 

mandatory review provisions of other 

applicable law, unless the fact of its 

existence or nonexistence would itself 

be classifiable under applicable law. 

Although NCUA has no authority to 

classify or declassify information, it 

occasionally handles information 

classified by another agency. The 

Executive Director shall refer all 

declassification requests to the agency 

that originally classified the 

information. The Executive Director or 

the Executive Director’s designee shall 

notify the requesting person or agency 

that the request has been referred to the 

originating agency and that all further 

inquiries and appeals must be made 

directly to the other agency. 

(b) Handling and safeguarding 

national security information. All 

information classified ‘‘Top Secret,’’ 

‘‘Secret,’’ and ‘‘Confidential’’ shall be 

delivered to the Executive Director or 

the Executive Director’s designee 

immediately upon receipt. The 

Executive Director shall advise those 

who may come into possession of such 

information of the name of the current 

designee. If the Executive Director is 

unavailable, the designee shall lock the 

documents, unopened, in the 

combination safe located in the secure 

facility of the Office of the Executive 

Director. If the Executive Director or the 

Executive Director’s designee is 

unavailable to receive such documents, 

the documents shall be delivered in 

accordance with NCUA’s mail handling 

procedures for classified information. 

Under no circumstances shall classified 

materials that cannot be delivered to the 

Executive Director or the Executive 

Director’s designee be stored in a 

location other than in the safe 

designated by the Executive Director for 

information classified ‘‘Top Secret,’’ 

‘‘Secret,’’ and ‘‘Confidential.’’ 

(c) Storage. All classified documents 

shall be stored in the safe designated by 

the Executive Director for information 

classified ‘‘Top Secret,’’ ‘‘Secret,’’ and 

‘‘Confidential.’’ The combination shall 

be known only to the Executive Director 

and the Executive Director’s designee 

holding the proper security clearance. 

(d) Employee education. (1) The 

Executive Director shall send a memo to 

every NCUA employee who: 

(i) Has a security clearance; and 

(ii) May handle classified materials. 

(2) This memo shall describe NCUA 

procedures for handling, reproducing 

and storing classified documents. The 

Executive Director shall require each 

such employee to review applicable 

Executive Orders on the classification of 

national security information. 

* * * * * 

[FR Doc. 2013–12640 Filed 5–30–13; 8:45 am] 

BILLING CODE 7535–01–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

[Docket No. CFPB–2013–0013] 

RIN 3170–AA37 

Loan Originator Compensation 

Requirements Under the Truth in 

Lending Act (Regulation Z); Prohibition 

on Financing Credit Insurance 

Premiums; Delay of Effective Date 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; Delay of Effective 

Date. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is issuing 

a final rule delaying the June 1, 2013, 

effective date of a prohibition on 

creditors financing credit insurance 

premiums in connection with certain 

consumer credit transactions secured by 

a dwelling. The prohibition was 

adopted in the Loan Originator 

Compensation Requirements under the 

Truth in Lending Act (Regulation Z) 

Final Rule, issued on January 20, 2013, 

and published in the Federal Register 

on February 15, 2013. The Bureau is 

delaying the effective date until January 

10, 2014, to permit the Bureau to clarify, 

before the provision takes effect, its 

applicability to transactions other than 

those in which a lump-sum premium is 

added to the loan amount at closing. 

The new effective date will be January 

10, 2014, but the Bureau will solicit 

comment on the appropriate effective 

date at the same time that it seeks 

comment on clarifications. (The Bureau 

is not contemplating extending the 

effective date beyond January 10, 2014.) 

DATES: The final rule published 

February 15, 2013, at 78 FR 11280, is 

effective January 10, 2014, with the 

exception of the amendments to 12 CFR 

1026.36(h) and (i), which are effective 

June 1, 2013. This rule delays the 

effective date of the amendment to 12 

CFR 1026.36(i) until January 10, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Richard Arculin or Daniel Brown, 

Counsels, Office of Regulations, at (202) 

435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In January 2013, the Bureau issued 

several final rules concerning mortgage 

markets in the United States, pursuant 

to the Dodd-Frank Wall Street Reform 

and Consumer Protection Act (DoddFrank Act).1 One of these final rules was 

the Loan Originator Compensation 

Requirements Under the Truth in 

Lending Act (Regulation Z) (Final 

Rule).2 The Final Rule implemented 

Dodd-Frank Act amendments to the 

Truth in Lending Act (TILA) addressing 

loan originator compensation; 

qualifications of, and registration or 

licensing of loan originators; 

compliance procedures for depository 

institutions; mandatory arbitration; and 

the financing of single-premium credit 

insurance. With regard to the financing 

of single-premium credit insurance, the 

Final Rule included a provision 

implementing the Dodd-Frank Act 

section 1414 amendment that added 

new TILA section 129C(d), 15 U.S.C. 

1639c(d). That provision prohibits 

creditors from financing premiums or 

fees for certain credit insurance 

products in connection with certain 

consumer credit transactions secured by 

a dwelling. The Bureau implemented 

this provision by adopting § 1026.36(i). 

A. Title XIV Rulemaking Effective Dates 

In enacting the Dodd-Frank Act, 

Congress significantly amended the 

statutory requirements governing a 

number of mortgage practices, including 

loan originator compensation. Under the 

statute, most of these new requirements 

would have taken effect automatically 

on January 21, 2013, if the Bureau had 

not issued implementing regulations by 

that date.3 To avoid uncertainty and 

potential disruption in the national 

mortgage market at a time of economic 

vulnerability, the Bureau issued several 

final rules (Title XIV Rulemakings) in 

January 2013, including the Final Rule 

issued on January 20, 2013, to 

implement these new statutory 

provisions and provide for an orderly 

transition. To allow the mortgage 

industry sufficient time to comply with 

the new rules, the Bureau established 

January 10, 2014—one year after 


tkelley on DSK3SPTVN1PROD with RULES
32548 Federal Register / Vol. 78, No. 105 / Friday, May 31, 2013 / Rules and Regulations 

4Consumer Financial Protection Bureau Lays Out 

Implementation Plan for New Mortgage Rules. Press 

Release. Feb. 13, 2013. 5 15 U.S.C. 1639C(d). 

6 77 FR 55272 (Sept. 7, 2012). 

7 Id. 

issuance of the earliest of the Title XIV 

Rulemakings—as the effective date for 

most of the Title XIV Rulemakings, 

including most provisions of the Final 

Rule. However, the Bureau identified 

certain provisions that it believed did 

not present significant implementation 

burdens for industry, including 

§ 1026.36(h) on mandatory arbitration 

clauses and waivers of certain consumer 

rights and § 1026.36(i) on financing 

single-premium credit insurance, as 

adopted by the Final Rule. For these 

provisions, the Bureau set an earlier 

effective date of June 1, 2013. 

B. Implementation Initiative for New 

Mortgage Rules 

On February 13, 2013, the Bureau 

announced an initiative to support 

implementation of its new mortgage 

rules (Implementation Plan),4 under 

which the Bureau would work with the 

mortgage industry to ensure that the 

Title XIV Rulemakings can be 

implemented accurately and 

expeditiously. The Implementation Plan 

included (1) coordination with other 

agencies; (2) publication of plainlanguage guides to the new rules; (3) 

publication of updates, such as 

additional corrections, adjustments, and 

clarifications of the new rules, as 

needed; (4) publication of readiness 

guides for the new rules; and (5) 

education of consumers on the new 

rules. 

This final rule, which delays the 

effective date of the provision on 

financing single-premium credit 

insurance, is one of several updates to 

the Title XIV Rulemakings. The purpose 

of these updates is to address important 

questions raised by industry, consumer 

groups, or other agencies. The update 

addressed by this final rule was given 

priority because the effective date for 

§ 1026.36(i) was June 1, 2013, and 

certainty regarding compliance is a 

matter of some urgency. The Bureau 

intends to publish a proposal shortly to 

seek further comment on clarifications 

to the provision as discussed further 

below. 

II. Legal Authority 

On July 21, 2011, section 1061 of the 

Dodd-Frank Act transferred to the 

Bureau the ‘‘consumer financial 

protection functions’’ previously vested 

in certain other Federal agencies, 

including the Board of Governors of the 

Federal Reserve System. The term 

‘‘consumer financial protection 

function’’ is defined to include ‘‘all 

authority to prescribe rules or issue 

orders or guidelines pursuant to any 

Federal consumer financial law, 

including performing appropriate 

functions to promulgate and review 

such rules, orders, and guidelines.’’ 12 

U.S.C. 5581(a)(1). TILA is a Federal 

consumer financial law. Dodd-Frank 

Act section 1002(14), 12 U.S.C. 5481(14) 

(defining ‘‘Federal consumer financial 

law’’ to include the ‘‘enumerated 

consumer laws’’ and the provisions of 

title X of the Dodd-Frank Act); DoddFrank Act section 1002(12), 12 U.S.C. 

5481(12) (defining ‘‘enumerated 

consumer laws’’ to include TILA). 

Accordingly, the Bureau has authority 

to issue regulations pursuant to TILA. 

As amended by the Dodd-Frank Act, 

TILA section 105(a), 15 U.S.C. 1604(a), 

directs the Bureau to prescribe 

regulations to carry out the purposes of 

TILA and provides that such regulations 

may contain additional requirements, 

classifications, differentiations, or other 

provisions, and may provide for such 

adjustments and exceptions for all or 

any class of transactions, that the 

Bureau judges are necessary or proper to 

effectuate the purposes of TILA, to 

prevent circumvention or evasion 

thereof, or to facilitate compliance. 

Further, under Dodd-Frank Act section 

1022(b)(1), 15 U.S.C. 5512(b)(1), the 

Bureau has general authority to 

prescribe rules as may be necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of the Federal consumer 

financial laws, and to prevent evasions 

thereof. The Bureau is delaying the 

effective date until January 10, 2014, 

pursuant to its TILA section 105(a) and 

Dodd-Frank Act section 1022(b)(1) 

authority. The Bureau believes such a 

delay will facilitate compliance and 

help ensure that the Final Rule does not 

have adverse unintended consequences. 

In particular, the delay will permit the 

Bureau to clarify, before § 1026.36(i) 

takes effect, its applicability to 

transactions other than those in which 

a lump-sum premium is added to the 

loan amount at closing. 

III. Effective Date 

As discussed above, Dodd-Frank Act 

section 1414 added TILA section 

129C(d), which generally prohibits a 

creditor from financing any premiums 

or fees for credit insurance in 

connection with any residential 

mortgage loan or with any extension of 

credit under an open-end consumer 

credit plan secured by the consumer’s 

principal dwelling.5 The prohibition 

applies to credit life, credit disability, 

credit unemployment, credit property 

insurance, and other similar products. 

The same provision states, however, 

that the prohibition does not apply to 

credit insurance for which premiums or 

fees are calculated and paid in full on 

a monthly basis or to credit 

unemployment insurance for which the 

premiums are reasonable, the creditor 

receives no compensation, and the 

premiums are paid pursuant to a 

separate insurance contract and are not 

paid to the creditor’s affiliate. 

In a proposed rule published on 

September 7, 2012,6 the Bureau 

proposed to implement this provision 

through § 1026.36(i), which generally 

tracks the statutory language. In the 

proposal, the Bureau stated its belief 

that the provision was generally 

straightforward but sought comment on 

whether any issues raised by the 

provision required clarification. 

Anticipating that few, if any, 

clarifications would be necessary and 

that accordingly industry would not 

require significant time to accommodate 

any clarifications of the final rule, the 

Bureau also sought comment on 

whether the provision should become 

effective sooner than January 2014.7

The Bureau received very few public 

comments on the substance of the 

proposed prohibition or the earlier 

effective date. Consumer groups sought 

clarification on the provision’s 

applicability to certain factual scenarios 

where credit insurance premiums are 

charged periodically, rather than as a 

lump-sum added to the loan amount at 

closing. They also urged the Bureau to 

provide an early effective date for the 

provision. The Bureau did not receive 

any public comments from the credit 

insurance industry. The Bureau 

received some limited comments from 

creditors concerning the general 

prohibition, but these comments did not 

address the applicability of the 

provision to transactions in which 

premiums are charged periodically. In 

the preamble to the Final Rule, the 

Bureau provided some explanation 

concerning the provision’s applicability 

to credit insurance premiums charged 

periodically, rather than as a lump-sum 

added to the loan amount at closing. 

A. Post-Final Rule Concerns 

Since publication of the Final Rule, 

industry stakeholders have expressed 

concern that the regulation text and 

preamble left substantial uncertainty 

about whether, and under what 

circumstances, premiums for certain 

credit insurance products can be 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 78, No. 105 / Friday, May 31, 2013 / Rules and Regulations 32549 

8The term ‘‘levelized’’ premiums refers to a flat 

monthly payment that is derived from a decreasing 

monthly premium alternative arrangement, and the 

term ‘‘level’’ premium refers to premiums for which 

there is no decreasing monthly premium alternative 

arrangement available, such as for level mortgage 

life insurance. 9 78 FR 27308 (May 10, 2013). 

charged on a periodic basis in 

connection with a covered consumer 

credit transaction secured by a dwelling. 

Specifically, representatives of credit 

unions and credit insurers have raised 

a concern that the Final Rule could be 

interpreted to prohibit any level or 

levelized credit insurance premiums, 

which they believe are not financed by 

the creditor and/or should be 

permissible as calculated and paid in 

full on a monthly basis.8 These 

stakeholders pointed out that the 

preamble to the Final Rule states that 

‘‘charging a fixed monthly charge for the 

credit insurance that does not decline as 

the loan balance declines would fail to 

meet the requirement for the premium 

to be ‘calculated . . . on a monthly 

basis’ [and] . . . [a]s a result, this 

practice would fail to satisfy the 

conditions for the exclusion from what 

constitutes ‘financ[ing], directly or 

indirectly’ credit insurance premiums.’’ 

Thus, absent clarification by the Bureau, 

the Final Rule could be interpreted to 

assume that any level or levelized 

premiums are both financed by the 

creditor and not calculated and paid on 

a monthly basis—and therefore they are 

prohibited. 

Credit insurance company 

representatives raised several 

interpretive questions relating to this 

concern, which they have urged the 

Bureau to address. They stated that 

levelized premiums are, in fact, 

‘‘calculated . . . on a monthly basis,’’ 

because an actuarially derived rate is 

multiplied by a fixed monthly principal 

and interest payment to derive the 

monthly insurance premium. They also 

stated that level premiums are 

‘‘calculated . . . on a monthly basis’’ 

because an actuarially derived rate is 

multiplied by the consumer’s original 

loan amount to derive the monthly 

insurance premium. Accordingly, they 

believe that level and levelized credit 

insurance premiums should be 

excluded from the prohibition on 

creditors financing credit insurance 

premiums so long as they are also paid 

in full on a monthly basis. In addition 

they stated that, even if the Bureau 

concludes that level or levelized credit 

insurance premiums are not 

‘‘calculated’’ on a monthly basis within 

the meaning of the exclusion from the 

prohibition, they are not ‘‘financed’’ by 

a creditor and thus are not prohibited by 

the statutory provision. 

Accordingly, they have requested 

clarification on § 1026.36(i)’s 

applicability to these credit insurance 

products and also have expressed 

concern regarding their ability to 

comply timely, given that the Final Rule 

provided an effective date for 

§ 1026.36(i) of June 1, 2013. 

In light of the interpretive questions 

that have arisen since publication of the 

Final Rule, the Bureau intends to 

publish a proposal to seek further 

comment on the provision shortly. In 

that proposal, the Bureau intends, 

among other things to seek public 

comment, including from industry 

stakeholders and consumers, on (1) the 

applicability of the prohibition to 

transactions in which credit insurance 

premiums are charged periodically; and 

(2) given these proposed clarifications to 

§ 1026.36(i), what effective date would 

be appropriate. 

B. May 10, 2013 Proposal To Delay 

Effective Date 

On May 10, 2013, the Bureau issued 

a proposed rule seeking comment on a 

temporary delay of the June 1, 2013 

effective date of § 1026.36(i).9 The 

Bureau made clear in the proposal that 

it contemplated delaying the effective 

date only as long as necessary for any 

clarifications to be proposed, finalized, 

and implemented, and sought public 

comment on two issues: (1) whether the 

effective date should be delayed; and (2) 

if so, what the new effective date should 

be. The Bureau also stated it was 

concerned that, if the effective date were 

not delayed, creditors could face 

uncertainty about whether and under 

what circumstances credit insurance 

premiums may be charged periodically 

in connection with covered consumer 

credit transactions secured by a 

dwelling, which could result in a 

substantial compliance burden to 

industry. Finally, the Bureau noted that 

it intends to propose and again seek 

comment on the effective date for any 

clarifications to § 1026.36(i) as part of 

the forthcoming proposal. 

C. Public Comments 

The Bureau received approximately 

70 comments from credit unions and 

other industry members supporting the 

proposal to delay the effective date. 

These commenters agreed that 

interpretive questions exist regarding 

the application of the provision to credit 

insurance premiums charged 

periodically, in particular to level or 

levelized premiums. These commenters 

strongly supported the proposal to delay 

the effective date while those questions 

are addressed in the upcoming proposal, 

and they generally suggested a delay of 

the effective date until January 10, 2014, 

or alternatively 6 to 12 months after the 

upcoming proposal is finalized. The 

Bureau also received a joint comment 

from consumer groups opposing the 

proposal. The consumer groups stated 

that they did not believe any real 

interpretive questions exist that require 

a delay of the effective date or an 

additional proposal. 

D. Final Rule 

Upon consideration of these public 

comments, the Bureau is finalizing the 

proposal to delay the effective date for 

§ 1026.36(i). The Bureau is persuaded 

that significant interpretive questions 

exist regarding the application of the 

provision to credit insurance charged 

periodically, which it intends to address 

in a forthcoming proposal. The Bureau 

also agrees with industry commenters 

that, if the effective date were not 

delayed, creditors would face 

uncertainty about whether and under 

what circumstances credit insurance 

premiums may be charged periodically 

in connection with covered consumer 

credit transactions secured by a 

dwelling, which could result in a 

substantial compliance burden to 

industry. 

Rather than suspend the effective date 

indefinitely pending the clarification, 

the Bureau believes it is appropriate to 

adopt a new effective date for 

§ 1026.36(i) of January 10, 2014, which 

is consistent with the effective date for 

most of the Title XIV Rulemakings. 

Thus, § 1026.36(i) will be effective for 

any transactions where applications 

were received by the creditor on or after 

January 10, 2014. 

However, with respect to the January 

10, 2014 effective date, the Bureau 

emphasizes that it intends to issue a 

new proposal shortly that will, among 

other things, specifically seek comment 

on the appropriate effective date in light 

of the proposal to provide additional 

clarifying amendments. The Bureau is 

mindful of the public comments it 

received in connection with this notice 

that suggest creditors will need time to 

adjust certain credit insurance premium 

billing practices once the clarifications 

are finalized. However, any such 

amendments will not be finalized until 

the Bureau has proposed amendments 

to § 1026.36(i), appropriately considered 

public comment, and issued a final rule 

in connection with the upcoming 

proposal. The Bureau is also mindful of 

the fact that the protections provided by 

Congress would have applied effective 

January 21, 2013, had the Bureau not 

promulgated implementing regulations. 


tkelley on DSK3SPTVN1PROD with RULES
32550 Federal Register / Vol. 78, No. 105 / Friday, May 31, 2013 / Rules and Regulations 

10Section 1022(b)(2)(A) of the Dodd-Frank Act, 

12 U.S.C. 5521(b)(2), directs the Bureau, when 

prescribing a rule under the Federal consumer 

financial laws, to consider the potential benefits 

and costs of regulation to consumers and covered 

persons, including the potential reduction of access 

by consumers to consumer financial products or 

services; the impact on insured depository 

institutions and credit unions with $10 billion or 

less in total assets as described in section 1026 of 

the Dodd-Frank Act; and the impact on consumers 

in rural areas. Section 1022(b)(2)(B) of the DoddFrank Act directs the Bureau to consult with 

appropriate prudential regulators or other Federal 

agencies regarding consistency with prudential, 

market, or systemic objectives that those agencies 

administer. 

11The Bureau has discretion in any rulemaking 

to choose an appropriate scope of analysis with 

respect to potential benefits and costs and an 

appropriate baseline. 

12 5 U.S.C. 601 et seq. 13 5 U.S.C. 603(a). For purposes of assessing the 

impacts of the final rule on small entities, ‘‘small 

entities’’ is defined in the RFA to include small 

businesses, small not-for-profit organizations, and 

small government jurisdictions. 5 U.S.C. 601(6). A 

‘‘small business’’ is determined by application of 

Small Business Administration regulations and 

reference to the North American Industry 

Classification System (NAICS) classifications and 

size standards. 5 U.S.C. 601(3). A ‘‘small 

organization’’ is any ‘‘not-for-profit enterprise 

which is independently owned and operated and is 

not dominant in its field.’’ 5 U.S.C. 601(4). A ‘‘small 

governmental jurisdiction’’ is the government of a 

city, county, town, township, village, school 

district, or special district with a population of less 

than 50,000. 5 U.S.C. 601(5). 

14 5 U.S.C. 605(b). 

15 5 U.S.C. 605(c). 

16 5 U.S.C. 609. 

The Bureau expects that industry will 

use the intervening time to review 

systems and begin making appropriate 

modifications to facilitate the 

implementation process as quickly as 

practicable once the additional 

clarifications are finalized. 

Accordingly, the Bureau is delaying 

the June 1, 2013 effective date for the 

provision to January 10, 2014, while the 

Bureau considers addressing 

interpretive questions concerning the 

provision’s applicability to transactions 

other than those in which a lump-sum 

premium is added to the loan amount at 

consummation. 

This final rule will be effective on 

June 1, 2013. Under section 553(d) of 

the Administrative Procedure Act 

(APA), the required publication or 

service of a substantive rule shall be 

made not less than 30 days before its 

effective date, except for (1) a 

substantive rule which grants or 

recognizes an exemption or relieves a 

restriction; (2) interpretive rules and 

statements of policy; or (3) as otherwise 

provided for good cause found and 

published with the rule. 5 U.S.C. 553(d). 

This final rule does not establish any 

requirements, but rather delays the 

effective date of § 1026.36(i) until 

January 10, 2014. Therefore, under 

553(d)(1) of the APA, the Bureau is 

publishing this final rule less than 30 

days before its effective date because it 

is a substantive rule which grants or 

recognizes an exemption or relives a 

restriction. 5 U.S.C. 553(d)(1). Further, 

making the delay effective on June 1, 

2013, will ensure that § 1026.36(i) does 

not take effect until the Bureau has an 

opportunity to clarify the provision’s 

applicability to transactions other than 

those in which a lump-sum premium is 

added to the loan amount at closing, 

facilitating compliance with the statute 

and helping to ensure that the Final 

Rule does not have adverse unintended 

consequences. Therefore, The Bureau 

further finds it has good cause pursuant 

to section 553(d)(3) of the APA to 

dispense with the 30 day delayed 

effective date requirement because, on 

balance, the need to implement 

immediately the delay of the June 1, 

2013 effective date of § 1026.36(i) 

outweighs the need for affected parties 

to prepare for this delay. 

IV. Section 1022(b)(2) of the DoddFrank Act 

In developing the final rule, the 

Bureau has considered the potential 

benefits, costs, and impacts.10 The 

Bureau requested comment on its 

preliminary analysis as well as 

submissions of additional data that 

could inform the Bureau’s analysis of 

the benefits, costs, and impacts of the 

final rule. The Bureau has consulted, or 

offered to consult with, the prudential 

regulators, HUD, USDA, FHFA, the 

Federal Trade Commission, and the 

Department of the Treasury, including 

regarding consistency with any 

prudential, market, or systemic 

objectives administered by such 

agencies. 

In part VII of the Final Rule, the 

Bureau previously considered the costs, 

benefits, and impact of § 1026.36(i) as 

adopted by the Final Rule. The Bureau 

believes that, compared to the baseline 

established by the Final Rule,11 the 

delay of the effective date for 

§ 1026.36(i) will generally benefit 

creditors and the credit insurance 

industry by delaying the start of ongoing 

compliance costs, and allowing time for 

a process to clarify the scope and 

compliance requirements of the 

regulation. Creditors and the credit 

insurance industry will benefit to the 

extent that the changes eliminate any 

disruptions in the provision of credit 

insurance products to consumers while 

interpretive questions concerning 

§ 1026.36(i) are addressed. The Bureau 

believes that delaying the effective date 

of § 1026.36(i) will also delay the 

consumer benefit that would result from 

allowing the rule to take effect. 

Specifically, delaying the effective date 

would delay the prohibition on lumpsum credit insurance premiums added 

to the loan amount at closing, which 

Congress prohibited through TILA 

section 129C(d). 

In addition, the final rule is not 

expected to have a differential impact 

on depository institutions and credit 

unions with $10 billion or less in total 

assets as described in section 1026 of 

the Dodd-Frank Act or on consumers in 

rural areas. The Bureau does not believe 

that the final rule will meaningfully 

reduce consumers’ access to consumer 

products and services. 

V. Regulatory Flexibility Act Analysis 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to conduct 

an initial regulatory flexibility analysis 

(IRFA) and a final regulatory flexibility 

analysis (FRFA) of any rule subject to 

notice-and-comment rulemaking 

requirements.12 These analyses must 

‘‘describe the impact of the final rule on 

small entities.’’ 13 An IRFA or FRFA is 

not required if the agency certifies that 

the rule will not have a significant 

economic impact on a substantial 

number of small entities,14 or if the 

agency considers a series of closely 

related rules as one rule for purposes of 

complying with the IRFA or FRFA 

requirements.15 The Bureau also is 

subject to certain additional procedures 

under the RFA involving the convening 

of a panel to consult with small 

business representatives prior to 

proposing a rule for which an IRFA is 

required.16

The Bureau did not perform an IFRA 

for the proposed rule because it 

determined and certified that the 

proposed rule, if adopted, would not 

have a significant economic impact on 

a substantial number of small entities. 

The Bureau did not receive any 

comments regarding its certification of 

no significant economic impact. The 

Bureau concludes that a FRFA is not 

required for this final rule because it 

will not have a significant impact on a 

substantial number of small entities. As 

discussed above, the final rule will 

delay the June 1, 2013 effective date of 

§ 1026.36(i), as adopted by the Final 

Rule, until January 10, 2014. The delay 

in effective date will benefit small 

creditors by delaying the start of any 

ongoing compliance costs. 

Accordingly, the undersigned hereby 

certifies that the final rule will not have 

a significant economic impact on a 

substantial number of small entities. 


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Federal Register / Vol. 78, No. 105 / Friday, May 31, 2013 / Rules and Regulations 32551 

VI. Paperwork Reduction Act Analysis 

The Bureau may not conduct or 

sponsor, and, notwithstanding any other 

provision of law, a respondent is not 

required to respond to, an information 

collection unless it displays a currently 

valid OMB control number. Regulation 

Z currently contains collections of 

information approved by OMB. The 

Bureau’s OMB control number for 

Regulation Z is 3170–0015. However, 

the Bureau has determined that this 

final rule will not materially alter these 

collections of information or impose any 

new recordkeeping, reporting, or 

disclosure requirements on the public 

that would constitute collections of 

information requiring approval under 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. 

Dated: May 29, 2013. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–13023 Filed 5–30–13; 8:45 am] 

BILLING CODE 4810–25–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2013–0024; Directorate 

Identifier 2000–NE–12–AD; Amendment 39– 

17469; AD 2013–11–09] 

RIN 2120–AA64 

Airworthiness Directives; Turbomeca 

S.A. Turboshaft Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: We are superseding an 

existing airworthiness directive (AD) for 

Turbomeca S.A. Arrius 2B, 2B1, and 2F 

turboshaft engines. That AD currently 

requires replacement of injector 

manifolds and borescope-inspection of 

the flame tube and the high-pressure 

(HP) turbine area for possible damage. 

This new AD requires, depending on the 

engine model, repetitive replacements 

of fuel injection manifolds and the 

privilege injector, or, repetitive 

replacements of the privilege injector. 

This AD was prompted by a report that 

the corrective actions of the existing AD 

were insufficient to eliminate the unsafe 

condition. We are issuing this AD to 

prevent an uncommanded in-flight 

shutdown of Arrius 2B1 and 2F 

turboshaft engines and damage to the 

helicopter. 

DATES: This AD is effective July 5, 2013. 

ADDRESSES: For service information 

identified in this AD, contact 

Turbomeca, 40220 Tarnos, France; 

phone: 33 (0)5 59 74 40 00; telex: 570 

042; fax: 33 (0)5 59 74 45 15. You may 

view this service information at the 

FAA, Engine & Propeller Directorate, 12 

New England Executive Park, 

Burlington, MA. For information on the 

availability of this material at the FAA, 

call 781–238–7125. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Operations office between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. The AD docket 

contains this AD, the regulatory 

evaluation, any comments received, and 

other information. The address for the 

Docket Office (phone: 800 647 5527) is 

Document Management Facility, U.S. 

Department of Transportation, Docket 

Operations, M 30, West Building 

Ground Floor, Room W12 140, 1200 

New Jersey Avenue SE., Washington, 

DC 20590. 

FOR FURTHER INFORMATION CONTACT: 

James Lawrence, Aerospace Engineer, 

Engine Certification Office, FAA, Engine 

& Propeller Directorate, 12 New England 

Executive Park, Burlington, MA 01803; 

phone: 781–238–7176; fax: 781–238– 

7199; email: james.lawrence@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Discussion 

We issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 to supersede AD 2001–08–14R1, 

Amendment 39 14423 (71 FR 2993, 

January 19, 2006). That AD applies to 

Turbomeca S.A. Arrius 2B, 2B1, and 2F 

turboshaft engines. The Arrius 2B 

engine model is no longer listed because 

it is no longer in service and has been 

removed from the engine Type 

Certificate Data Sheet No. E34NE, as 

requested by the manufacturer. The 

NPRM published in the Federal 

Register on February 7, 2013 (78 FR 

9007). That NPRM proposed to require, 

depending on the engine model, 

repetitive replacements of fuel injection 

manifolds and the privilege injector, or, 

repetitive replacements of the privilege 

injector. 

Comments 

We gave the public the opportunity to 

participate in developing this AD. The 

following presents the comments 

received on the proposal and the FAA’s 

response to each comment. 

Request To Change Paragraphs (f)(1) 

and (g)(1) 

Turbomeca USA requested that we 

change compliance paragraph (f)(1) by 

deleting ‘‘or since last inspection of the 

fuel injection manifolds and privilege 

injector, whichever comes first.’’ The 

commenter also requested that we 

change paragraph (g)(1) by deleting ‘‘or 

since last inspection of the privilege 

injector, whichever comes first.’’ The 

commenter stated that paragraphs (f)(1) 

and (g)(1) speak to initial replacement 

where subsequent replacements are 

addressed in paragraphs (f)(3) and (g)(3). 

There is no required inspection for this 

reason prior to reaching the allocated 

hours of operation time-since-new 

(TSN) so there will be no ‘‘last 

inspection’’ at this point. The fuel 

injection manifolds and privilege 

injector (Arrius 2B1 engines) and, the 

privilege injector (Arrius 2F engines) 

will not have been in service long 

enough to have an inspection 

performed. Also, an inspection (unless 

leading to a replacement) if done for 

whatever reason, will not ‘‘reset’’ the 

allocated hours (200 or 400) of operation 

TSN counter. Only a replacement will, 

which is why the commenter thinks the 

allocated hours (200 or 400) of operation 

TSN limit is sufficient. 

We agree. Because there is no specific 

inspection requirement, fuel injection 

manifolds and privilege injectors 

(Arrius 2B1 enignes) and, privilege 

injectors (Arrius 2F engines) can be 

removed from one Arrius 2B1 engine 

and installed in another Arrius 

2B1engine or from one Arrius 2F engine 

and installed in another Arrius 2F 

engine as noted in their respective 

service bulletins (SBs). We anticipated 

that those used components would 

undergo an inspection and flow check, 

prior to reinstallation. However, the fuel 

injection manifolds and privilege 

injectors are limited to the allocated 

hours (200 or 400) of operation TSN 

regardless of reuse. We changed 

paragraphs (f)(1) and (g)(1) of the AD as 

requested above. 

Request To Change Compliance 

Paragraphs (f)(2) and (g)(2) 

Turbomeca USA requested that we 

change compliance paragraph (f)(2) by 

adding ‘‘when replacing the fuel 

injection manifolds and privilege 

injector for the first time.’’ The 

commenter also requested that we 

change paragraph (g)(2) by adding 

‘‘when replacing the privilege injector 

for the first time.’’ The commenter 

stated that without adding these words, 

these paragraphs would require a 

borescope inspection each time the 


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