This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

1826 

Vol. 86, No. 6 

Monday, January 11, 2021 

1 12 CFR part 701, Appendix B. 

2 12 U.S.C. 1750 et. seq. 

3 Id. 1759(f)(2), (c)(2). 

4 Id. (f)(1)(B). 

5Chartering Manual, § 2.IV.A.1. 

6 Id. § 2.IV.A.1. 

7 12 U.S.C. 1759(c)(2)(B). 

8Chartering Manual, § 2.III.F. 

9 Id. § 3.III.F. 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 701 

RIN 3133–AF23 

Chartering and Field of Membership— 

Shared Facility Requirements 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule. 

SUMMARY: The NCUA Board (Board) 

proposes to amend its chartering and 

field of membership (‘‘FOM’’) rules to 

modernize requirements related to 

service facilities for multiple common 

bond (‘‘MCB’’) federal credit unions 

(‘‘FCUs’’). The Board is proposing to 

include any shared branch, shared 

ATM, or shared electronic facility in the 

definition of ‘‘service facility’’ for an 

FCU that participates in a shared 

branching network. The FCU need not 

be an owner of the shared branch 

network for the shared branch or shared 

ATM to be a service facility. These 

changes would apply to the definition of 

service facility both for additions of 

select groups to MCB FCUs and for 

expansions into underserved areas. 

DATES: Comments must be received on 

or before February 10, 2021. 

ADDRESSES: You may submit written 

comments, identified by RIN 3133– 

AF23, by any of the following methods 

(Please send comments by one method 

only): 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (703) 518–6319. Include 

‘‘[Your Name]—Comments on Proposed 

Rule: Field of Membership—Shared 

Facility Requirements’’ in the 

transmittal. 

• Mail: Address to Melane ConyersAusbrooks, Secretary of the Board, 

National Credit Union Administration, 

1775 Duke Street, Alexandria, Virginia 

22314–3428. 

Public inspection: You may view all 

public comments on the Federal 

eRulemaking Portal at http://

www.regulations.gov as submitted, 

except for those we cannot post for 

technical reasons. The NCUA will not 

edit or remove any identifying or 

contact information from the public 

comments submitted. Due to social 

distancing measures in effect, the usual 

opportunity to inspect paper copies of 

comments in the NCUA’s law library is 

not currently available. After social 

distancing measures are relaxed, visitors 

may make an appointment to review 

paper copies by calling (703) 518–6540 

or emailing OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Wirick, Senior Staff Attorney, 

Office of General Counsel, at 1775 Duke 

Street, Alexandria, VA 22314 or 

telephone: (703) 518–6545. 

SUPPLEMENTARY INFORMATION: 

I. Background 

II. Legal Authority 

III. Summary of the Proposed Rule 

IV. Regulatory Procedures 

I. Background 

NCUA’s Chartering and Field of 

Membership Manual, incorporated as 

Appendix B to part 701 of its 

regulations (‘‘Chartering Manual’’),1

implements the FOM requirements and 

limitations established by the Federal 

Credit Union Act (‘‘the Act’’) 2 for FCUs. 

The Act permits an FCU to have one of 

three charter types: a single common 

bond comprised of a group whose 

members all share the same 

occupational or associational common 

bond; a multiple common bond in 

which each group has a distinct 

occupational or associational common 

bond among its own members; and a 

community common bond. With the 

Board’s approval, a MCB FCU may add 

additional groups and underserved 

areas to its FOM.3 This proposal would 

amend the Chartering Manual so that 

the facilities of any shared branch 

network in which an FCU participates, 

regardless of ownership interest, would 

qualify as a service facility. 

One of the Act’s several requirements 

for adding a group to a MCB FCU is that 

the credit union must be ‘‘within 

reasonable proximity to the location of 

the group whenever practicable and 

consistent with reasonable standards for 

the safe and sound operation of the 

credit union.’’ 4 The Chartering Manual 

interprets the term ‘‘reasonable 

proximity’’ as requiring the group to be 

‘‘within reasonable geographic 

proximity’’ of the credit union. The 

Chartering Manual then explains this 

means that the group ‘‘must be within 

the service area of one of the credit 

union’s service facilities.’’ 5 For 

purposes of group additions, the current 

definition of a service facility is: 

a place where shares are accepted for 

members’ accounts, loan applications are 

accepted or loans are disbursed. This 

definition includes a credit union owned 

branch, a mobile branch, an office operated 

on a regularly scheduled weekly basis, a 

credit union owned ATM, or a credit union 

owned electronic facility that meets, at a 

minimum, these requirements. A service 

facility also includes a shared branch or a 

shared branch network if either: (1) The 

credit union has an ownership interest in the 

service facility either directly or through a 

CUSO or similar organization; or (2) the 

service facility is local to the credit union 

and the credit union is an authorized 

participant in the service center. This 

definition does not include the credit union’s 

internet website.6

Among the Act’s requirements for 

adding an underserved area to a MCB 

FCU is that ‘‘the credit union establishes 

and maintains an office or facility’’ in 

the underserved area.7 The Chartering 

Manual implements this provision of 

the Act by requiring a credit union 

adding an underserved area to its FOM 

to ‘‘establish within two years, and 

maintain, an office or service facility in 

the community.’’ 8 For purposes of 

underserved area additions, the current 

Chartering Manual definition of a 

service facility is: 

a place where shares are accepted for 

members’ accounts, loan applications are 

accepted and loans are disbursed. By 

definition, a service facility includes a credit 

union-owned branch, a shared branch, a 

mobile branch, or an office operated on a 

regularly scheduled weekly basis or a credit 

union owned electronic facility that meets, at 

a minimum, the above requirements. This 

definition does not include an ATM or the 

credit union’s internet website.9

A third definition of service facility, 

which combines the two definitions, 


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10Compare Chartering Manual § 2.IV.A.1. (a 

service facility is ‘‘a place where shares are 

accepted for members’ accounts, loan applications 

are accepted or loans are disbursed’’) with 

Chartering Manual § 3.III.F (a service facility is ‘‘a 

place where shares are accepted for members’ 

accounts, loan applications are accepted and loans 

are disbursed’’) (emphasis added). 

11 65 FR 64512, 64513 (Oct. 27, 2000). 

12 Id. 

13 68 FR 18334, 18335 (April 15, 2003). 14 Id. 

15 12 U.S.C. 1759(c)(2)(B). 

16 Id. 1752–1775. 

17 Id. 1766(a). 

appears in the ‘‘Glossary’’ appendix to 

the Chartering Manual. 

Although the Chartering Manual 

requires a service facility for both group 

and underserved area additions, it 

currently incorporates a different 

definition of the term ‘‘service facility’’ 

for each context. For example, under the 

current rule, an ATM is a service facility 

for purposes of select group additions 

but not for purposes of underserved area 

additions. In addition, the definition of 

service facility for select group 

additions requires that a facility provide 

at least one service from a list of 

services, but the definition of service 

facility for underserved area additions 

requires that a facility provide all of the 

listed services.10

The provisions of the Act authorizing 

the existence of MCB FCUs were 

adopted in 1998, in the Credit Union 

Membership Access Act (‘‘CUMAA’’). 

From the first Chartering Manual the 

NCUA promulgated after CUMAA’s 

enactment, the NCUA took the position 

that group additions could only occur 

around service facilities in which the 

credit union had an ownership 

interest.11 Although the required 

proportion of ownership was initially 

unspecific, in 2000 the Board 

promulgated a rule requiring a MCB to 

have at least a five percent interest in a 

facility to add groups based on the 

location of the shared facility.12

In 2003, the Board revised the 

Chartering Manual to delete the five 

percent ownership interest requirement, 

describing the change as follows: 

In response to some commenters, the 

NCUA Board is clarifying in the final rule 

that the requisite ownership interest can be 

in a shared service center, a shared service 

network, or similar organization. Therefore, 

as long as the credit union has an ownership 

interest in the service center, network, or 

similar organization, the credit union can 

expand around any of them. The credit union 

does not need to have an ownership interest 

in the specific service facility. This means, 

for example, that, if the credit union has an 

ownership interest in a CUSO, it can expand 

around any service center connected to the 

CUSO. This also would allow a participating 

credit union with an ownership interest in 

the service facility to expand around other 

service facilities connected to the shared 

service network or similar organization.13

Even while eliminating the five 

percent requirement tied to each 

specific location, the Board continued to 

assert, ‘‘[A]n ownership interest is 

crucial in analyzing the reasonable 

proximity requirement for ATMs and 

shared service facilities.’’ 14

The Board has now determined that 

an ownership requirement related to 

shared facilities and ATMs is needlessly 

restrictive, and the Board is proposing 

to remove this requirement. The 

structure of shared branching has 

changed dramatically since the NCUA 

adopted and amended the ownership 

requirement. Shared branches 

originated as physical locations 

specifically designed for shared use, 

jointly owned by a small group of 

participating credit unions operating in 

adjacent areas. Participating credit 

unions now use their existing branches 

and ATMs as shared locations, generally 

without separate facilities designated as 

shared branches. Entities offering shared 

branching services have also 

consolidated over time. In this changed 

environment, obtaining an ownership 

interest in a shared branch network may 

be difficult or a practical impossibility 

for credit unions not already owners of 

a shared branching network. 

The ownership requirement restricts 

the use of shared locations for FOM 

expansions, without enhancing the 

utility of the shared location for FCU 

members. Member access to services 

from a shared branch is the same 

whether or not the FCU has an 

ownership interest in the shared 

branching network. Nor does being a 

part owner of a shared branching 

network confer any more permanence to 

a shared location than being an 

authorized participant in the shared 

branching network. In light of these 

factors, the Board has determined that 

the Chartering Manual’s current 

requirement that the credit union have 

‘‘an ownership interest in the service 

facility either directly or through a 

CUSO’’ needlessly limits MCB FCU 

services to additional groups and their 

members and ignores the way business 

is done in the current marketplace. The 

FCU Act places few conditions on what 

constitutes ‘‘reasonable proximity.’’ If a 

MCB FCU participates in a shared 

branching network, and has access to a 

location based on contractual 

agreements with the network, the Board 

believes the FCU is in reasonable 

proximity to a group that is within the 

service area of the shared location. The 

change to this definition will expand 

FOM eligibility to groups that are within 

the service area of the shared branches 

and ATMs to which a MCB FCU has 

access through a shared branching 

network. 

For similar reasons, the Board is also 

proposing to permit MCB FCUs to add 

underserved areas based on the location 

of a shared branch or ATM of a network 

in which the FCU participates. The Act 

permits an underserved area addition if 

the credit union establishes and 

maintains ‘‘an office or facility’’ in the 

underserved area ‘‘at which credit union 

services are available.’’ 15 ATMs and 

shared branch locations provide credit 

union services. As noted above, credit 

union members have the same access to 

services at shared locations, regardless 

of whether the FCU has an ownership 

interest in the shared branching network 

or is an authorized participant in the 

network. With continuing technological 

advances, members will be able to 

obtain the services they need through 

using ATMs or other electronic facilities 

combined with telephone or email 

communications with credit union staff. 

In light of the changes to the ways 

consumers access financial services 

since CUMAA’s enactment, the Board 

believes its former policies were 

needlessly restrictive. 

In summary, the financial services 

world has undergone significant 

changes since the Board adopted the 

various requirements related to shared 

locations and shared branching 

networks some decades ago. For these 

reasons, the Board believes it is now 

appropriate to revise its policy about the 

types of shared facilities that can be 

considered in the context of the Act’s 

requirement for ‘‘reasonable proximity’’ 

for both additions of groups and 

additions of underserved areas. The 

proposed changes will also provide 

regulatory relief by conforming the 

several definitions of ‘‘service facility’’ 

in the Chartering Manual. 

II. Legal Authority 

The Board is issuing this proposed 

rule pursuant to its authority under the 

FCU Act. Under the FCU Act, the NCUA 

is the chartering and supervisory 

authority for FCUs and the Federal 

supervisory authority for all federally 

insured credit unions (‘‘FICUs’’).16 The 

FCU Act grants the NCUA a broad 

mandate to issue regulations governing 

both FCUs and FICUs. Section 120 of 

the FCU Act is a general grant of 

regulatory authority and authorizes the 

Board to prescribe rules and regulations 

for the administration of the FCU Act.17


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1828 Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Proposed Rules 

18 12 U.S.C. 1759(d)(3). 

19 Id. 1759(c). 

20 63 FR 71998, 72002 (Dec. 30, 1998); 68 FR 

18334, 18335 (April 15, 2003). 

21Perez v. Mortgage Bankers Ass’n, 575 U.S. 92, 

101 (2015). 

22Nat’l Family Planning and Reproductive Health 

Ass’n, Inc. v. Sullivan, 979 F.2d 227, 236 (D.C. Cir. 

1992). (‘‘[The agency] may not constructively 

rewrite the regulation, which was expressly based 

upon a specific interpretation of the statute, through 

internal memoranda or guidance directives that 

incorporate a totally different interpretation and 

effect a totally different result’’); Clean Ocean 

Action v. York, 57 F.3d 328 (3d Cir. 1995). 

23Chartering Manual, § IV.A.1. 

24 Id. § 3.III.F. 

25Because this change will not add any increased 

burden, the Board is not providing the usual 60-day 

comment period before finalizing this rule. See 

NCUA Interpretive Ruling and Policy Statement 

(IRPS) 87–2, as amended by IRPS 03–2 and IRPS 

15–1. 80 FR 57512 (Sept. 24, 2015), available at 

https://www.ncua.gov/files/publications/irps/ 

IRPS1987-2.pdf. 

26 68 FR 18334, 18352 (April 15, 2003). 

27 63 FR 71998, 712002 (Dec. 30, 1998). 

28OGC Op. No. 11–0965 (Aug. 2012), available at 

https://www.ncua.gov/regulation-supervision/legalopinions/2012/video-teller-machine. Should this 

proposed rule become final, this opinion will be 

superseded, as there would no longer be an 

advantage to having a video teller machine, as 

opposed to an ATM. 

The Act requires the Board to develop 

regulations to establish the criteria for 

additions of groups 18 and requires the 

Board to approve a MCB FCU’s addition 

of underserved areas.19 The Act does 

not use the term ‘‘service facility.’’ 

Rather, the Board adopted the term 

‘‘service facility’’ to define the limits of 

reasonable proximity.20

The position that an FCU’s 

participation in a shared branch 

network constitutes a sufficient interest 

to make the shared branch a service 

facility for purposes of MCB expansion 

is a reversal from a position the agency 

initiated over two decades ago. The 

Chartering Manual has consistently 

required ownership either in the shared 

service facility itself or the network 

operating the shared facility in order to 

permit a MCB FCU to add a group based 

on the location of the shared facility for 

any facilities that are not local to the 

FCU. Similarly, the Chartering Manual 

has consistently required that a MCB 

FCU seeking to add an underserved area 

must, at a minimum, establish and 

maintain a shared branch (with 

ownership in the branch), or a credit 

union-owned electronic facility in the 

area. As discussed above, the Act does 

not dictate the agency’s prior positions 

requiring ownership in a shared 

branching network or excluding ATMs 

from the definition of service facility for 

purposes of underserved area 

expansion, and there are now sound 

policy reasons for the reversal. 

Agencies must ‘‘use the same 

procedures when they amend or repeal 

a rule as they used to issue the rule in 

the first instance.’’ 21 Accordingly, 

agencies cannot reverse rules adopted 

by notice-and-comment rulemaking by 

other, less transparent methods.22 The 

term ‘‘service facility’’ appears in the 

Chartering Manual, which the Board has 

promulgated and amended using notice 

and comment rulemaking. The Board is 

now engaging in a notice and comment 

rulemaking to change its position, 

proposing to remove ownership 

requirements when considering shared 

branch networks and allowing ATMs to 

qualify as service facilities in 

underserved areas. 

III. Summary of the Proposed Rule 

As highlighted above, the Chartering 

Manual defines ‘‘service facility’’ 

differently for group additions than for 

underserved area additions. The 

proposed rule would conform these 

definitions. 

A. Changes to the Definition of Service 

Facility for Purposes of Group Additions 

For group additions, FCU-owned 

electronic facilities that accept deposits, 

take loan applications, or disburse loans 

are service facilities.23 Credit unionowned branches, mobile branches, 

offices operated on a regularly 

scheduled weekly basis, and video teller 

machines also meet the criteria for 

service facilities. Finally, shared 

branching network facilities also meet 

the criteria for service facilities for 

group additions, provided the credit 

union has an ownership interest in the 

shared branching network. The proposal 

would leave the definition of service 

facility intact, but would remove the 

ownership requirement for shared 

branch networks. 

B. Change to the Definition of Service 

Facility for Purpose of Underserved 

Area Additions 

For underserved areas, the current 

definition of ‘‘service facility’’ is more 

limited and allows fewer kinds of 

facilities to qualify. More specifically, 

for underserved areas, a service facility 

includes credit union-owned electronic 

facilities (other than ATMs) that take 

deposits, accept loan applications, and 

disburse loans.24 Credit union branches, 

certain shared branches, mobile 

branches, and offices operated on a 

regularly scheduled weekly basis also 

meet the current criteria for a service 

facility in an underserved area 

expansion. Under the current definition, 

shared locations to which an FCU has 

access by virtue of participating in a 

shared branching network without an 

ownership interest do not meet the 

criteria for a service facility in an 

underserved area. ATMs are excluded, 

even if wholly owned by the FCU. The 

proposal would change the definition to 

allow shared facilities to qualify as 

service facilities, without any 

requirement for shared ownership. The 

proposal would also permit ATMs to 

qualify as service facilities, whether 

wholly owned by an FCU or part of a 

shared branch network in which the 

FCU participates. 

The proposal would make the 

definition of service facility for 

purposes of adding underserved areas 

identical to the definition of service 

facility for purposes of adding groups. 

The proposal also makes the definition 

of service facility in the glossary section 

of the Chartering Manual consistent 

with the other definitions. The Board 

emphasizes that neither the current rule 

nor this proposal permit a credit union’s 

transactional website to count as a 

service facility for purposes of adding a 

group or an underserved area. 

The NCUA invites comments on all 

aspects of the proposal.25

IV. Additional Request for Comment 

Over time, the Board’s definitions of 

terms like ‘‘service facility’’ have 

evolved, consistent with the underlying 

constraints of the FCU Act, to reflect the 

increasing role of technology in the 

provision of financial services. For 

example, the Board determined that a 

credit union-owned ATM was a service 

facility for purposes of group additions 

to MCB FCUs in 2003,26 although it had 

initially not viewed an ATM as a service 

facility.27 Similarly, in a 2012 Opinion 

Letter, the NCUA’s Office of General 

Counsel concluded that a video teller 

machine which permits real-time 

interaction between a person and an 

FCU member is a service facility both 

for additions of groups and for additions 

of underserved areas.28 The proposed 

amendments to the chartering manual 

outlined above represent a further 

evolution, reflecting technological 

advances as well as changes in 

consumer behaviors. 

The Board is also now requesting 

comment on another possible evolution 

in the definition of service facility, 

specifically, whether a credit union’s 

transactional website and mobile 

banking applications should be 

included in the definition of service 

facility. The Board previously proposed 

to amend the definition of ‘‘service 

facility’’ for group additions to MCB 


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Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Proposed Rules 1829 

29 80 FR 76748, 76752 (Dec. 10, 2015). 

30 Id. 

31 81 FR 88412, 88420 (Dec. 7, 2016). 

32An additional 26 percent of consumers report 

mobile devices are their most frequently used 

banking method. ABA Banking Journal blog (Sept. 

21, 2017), https://bankingjournal.aba.com/2017/09/ 

aba-survey-two-thirds-of-americans-use-digitalbanking-channels-most-often/. 

33As summarized by Jim Marous, Financial 

Brand blog, (April 27, 2020), https://

thefinancialbrand.com/95735/digital-onlinebanking-coronavirus/. 

34Roy Urrico, ‘‘Digital Transformation in the 

COVID–19 Age, Credit Union Times (April 30, 

2020), https://www.cutimes.com/2020/04/30/ 

digital-transformation-in-the-covid-19-age/. 

35Stephanie Walden and Daphne Forman, ‘‘5 

Fintech Trends Likely to Stick Around After the 

Pandemic,’’ Forbes Advisor (Sept. 28, 2020), https:// 

www.forbes.com/advisor/banking/fintech-trendsafter-the-pandemic/. 36 44 U.S.C. 3507(d); 5 CFR part 1320. 

FCUs to include online financial 

services, including computer-based and 

mobile phone channels meeting certain 

criteria for access.29 In support of its 

proposal, the Board cited extensive data 

showing the increasing use of online 

and mobile banking.30 After analyzing 

the comments it received on the 

proposal, the Board deferred action on 

it to a later date.31

The Board is now renewing its 

consideration of this issue. In the four 

years since the Board deferred action on 

its initial proposal, the proportion of 

financial services delivered through 

transactional websites has continued to 

increase. For example, in 2017, 40% of 

consumers reported primarily using 

online banking to manage their 

accounts.32 The pandemic has 

accelerated the trend toward providing 

financial services digitally. According to 

the J.D. Power 2020 Retail Banking 

Satisfaction Survey, 35% of consumers 

report increased online banking using a 

computer since the pandemic began, 

with 17% reporting much more use. The 

pandemic also caused 30% of 

consumers to increase their use of 

mobile banking apps, with 11% stating 

they used mobile banking much more.33

Additionally, as of April 2020, 39% of 

adults planned to make an online 

banking transaction such as account 

opening or debt consolidation in the 

next 30 days.34 The transition to online 

financial services is expected to outlast 

the pandemic.35 In light of the 

inexorably increasing use of digital 

financial services, the Board believes it 

is now appropriate to reconsider 

including transactional websites and 

mobile banking applications in the 

definition of service facilities. 

V. Regulatory Procedures 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires that, in connection 

with a notice of proposed rulemaking, 

an agency prepare and make available 

for public comment an initial regulatory 

flexibility analysis that describes the 

impact of a proposed rule on small 

entities. A regulatory flexibility analysis 

is not required, however, if the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities 

(defined for purposes of the RFA to 

include FICUs with assets less than 

$100 million) and publishes its 

certification and a short, explanatory 

statement in the Federal Register 

together with the rule. 

The proposed rule changes the criteria 

for service facilities and facilitates the 

provision of credit union services to 

additional groups and underserved 

areas by MCB FCUs. As of September 

30, 2020, there are 1,373 MCB FCUs, of 

which 974 have assets less than $100 

million. Of these 974 MCB FCUs with 

assets less than $100 million, 286 are 

already participating in a shared 

branching network. This means that the 

remaining 688 MCB FCUs under $100 

million may have additional incentive 

to participate in shared branching, as 

they will be able to use shared locations 

as a basis for expanding their FOM to 

additional groups or underserved areas. 

Any benefit to small FCUs from the 

ability to add additional members is 

likely minimal. The negative effect on 

small FCUs whose members gain 

eligibility for membership in another 

credit union under these changes is also 

likely minimal. Although this rule is 

anticipated to economically benefit 

FCUs that choose to expand their FOMs, 

NCUA certifies that it will not have a 

significant economic impact on small 

credit unions. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) applies to rulemakings in which 

an agency creates a new or amends 

existing information collection 

requirements.36 For purposes of the 

PRA, an information collection 

requirement may take the form of a 

reporting, recordkeeping, or a thirdparty disclosure requirement. The 

NCUA may not conduct or sponsor, and 

the respondent is not required to 

respond to an information collection 

unless it displays a valid Office of 

Management and Budget (‘‘OMB’’) 

control number. The current 

information collection requirements for 

the Chartering Manual are approved 

under OMB control number 3133–0015. 

This rule proposes to amend Chapter 2, 

Chapter 3 and Appendix 1 of Appendix 

B to Part 701 by changing the definition 

of service facilities for MCB FCUs 

seeking to add select groups or 

underserved areas. The proposed rule 

creates new strategic opportunities for 

MCB FCUs while not changing the 

information FCUs are required to supply 

to take advantage of these opportunities. 

Nevertheless, the total information 

collection burden will increase because 

the change means more FCUs will 

qualify to add select groups or 

underserved areas, which will lead to 

additional applications. 

There are currently 1,373 multiple 

common bond FCUs, of which 594 

participate in shared branching. The 

proposed change is estimated to 

increase the number of applications/ 

amendments by an additional 90 

respondents. 

OMB Control Number: 3133–0015. 

Title of information collection: 

Chartering and Field of Membership 

Manual, 12 CFR 701.1, App. B to Part 

701. 

Estimated number respondents: 8,245. 

Estimated number of responses per 

respondent: 1. 

Estimated total annual responses: 

8,245. 

Estimated total annual burden per 

response: 1.97. 

Estimated total annual burden: 

16,223. 

The NCUA invites comments on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information, including the validity of 

the methodology and assumptions used; 

(c) ways to enhance the quality, utility 

and clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on those who are to respond, including 

through the use of appropriate 

automated, electronic, mechanical, or 

other technological collection 

techniques or other forms of information 

technology; and (e) estimates of capital 

or start-up costs and cost of operation, 

maintenance, and purchase of services 

to provide information. 

All comments are a matter of public 

record. Interested persons are invited to 

submit written comments to (1) 

www.reginfo.gov/public/do/PRAMain. 

Find this particular information 

collection by selecting the Agency 

under ‘‘Currently under Review’’ and to 

(2) Dawn Wolfgang, National Credit 

Union Administration, 1775 Duke 

Street, Suite 6032, Alexandria, Virginia 

22314; Fax No. 703–519–8579; or email 


jbell on DSKJLSW7X2PROD with PROPOSALS
1830 Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Proposed Rules 

37Public Law 105–277, 112 Stat. 2681 (1998). 

at PRAComments@ncua.gov. Given the 

limited in-house staff because of the 

COVID–19 pandemic, email comments 

are preferred. 

C. Executive Order 13132 

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, the 

NCUA, an independent regulatory 

agency as defined in 44 U.S.C. 3502(5), 

voluntarily complies with the executive 

order. This rulemaking will not have a 

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. The NCUA has 

determined that this proposal does not 

constitute a policy that has federalism 

implications for purposes of the 

executive order. 

D. Assessment of Federal Regulations 

and Policies on Families 

The NCUA has determined that this 

final rule will not affect family wellbeing within the meaning of Section 654 

of the Treasury and General 

Government Appropriations Act, 

1999.37

List of Subjects in 12 CFR Part 701 

Credit, Credit unions, Reporting and 

recordkeeping requirements. 

By the National Credit Union 

Administration Board on December 17, 2020. 

Melane Conyers-Ausbrooks, 

Secretary of the Board. 

For the reasons stated above, the 

Board proposes to amend 12 CFR part 

701, Appendix B as follows: 

PART 701—ORGANIZATION AND 

OPERATION OF FEDERAL CREDIT 

UNIONS 

■ 1. The authority citation for part 701 

continues to read as follows: 

Authority: 12 U.S.C. 1752(5), 1755, 1756, 

1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 

1782, 1784, 1785, 1786, 1787, 1788, 1789. 

Section 701.6 is also authorized by 15 U.S.C. 

3717. Section 701.31 is also authorized by 15 

U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601– 

3610. Section 701.35 is also authorized by 42 

U.S.C. 4311–4312. 

■ 2. In Appendix B to Part 701, revise 

Chapter 2 Section IV.A.1 to read as 

follows: 

Appendix B to Part 701—Chartering 

and Field of Membership Manual 

* * * * * 

IV—Multiple Occupational/Associational 

Common Bonds 

IV.A.1—General 

A federal credit union may be chartered to 

serve a combination of distinct, definable 

single occupational and/or associational 

common bonds. This type of credit union is 

called a multiple common bond credit union. 

Each group in the field of membership must 

have its own occupational or associational 

common bond. For example, a multiple 

common bond credit union may include two 

unrelated employers, or two unrelated 

associations, or a combination of two or more 

employers or associations. Additionally, 

these groups must be within reasonable 

geographic proximity of the credit union. 

That is, the groups must be within the service 

area of one of the credit union’s service 

facilities. These groups are referred to as 

select groups. A multiple common bond 

credit union cannot include a TIP or expand 

using single common bond criteria. 

Employment in a corporation or other legal 

entity which is related to another legal entity 

(such as a company under contract to, and 

possessing a strong dependency relationship 

with, the other company) makes that person 

part of the occupational common bond of a 

select employee group within a multiple 

common bond. In this context, a ‘‘strong 

dependency relationship’’ is a relationship in 

which the entities rely on each other as 

measured by a pattern of regularly doing 

business with each other, for example, as 

documented by the number, the term length, 

and the dollar volume of prior and pending 

contracts between them. 

A multiple common bond credit union’s 

charter may also combine individual 

occupational groups that each consist of 

employees of a retailer or other business 

tenant of an industrial park, a shopping mall, 

office park or office building (each ‘‘a park’’). 

To be able to have this type of clause in its 

charter, the multiple common bond credit 

union first must receive a request from an 

authorized representative of the group or the 

park to establish credit union service. The 

park must be within the multiple common 

bond credit union’s service area, and each 

occupational group must have fewer than 

3,000 employees, who are eligible for 

membership only for so long as each is 

employed by a park tenant. Under this 

clause, a multiple common bond credit union 

can enroll group employees only while the 

group’s retail or business employer is a park 

tenant, but such credit unions are free to 

serve employees of new groups under the 

above conditions as each respective employer 

becomes a park tenant. 

A federal credit union’s service area is the 

area that can reasonably be served by the 

service facilities accessible to the groups 

within the field of membership. The service 

area will most often coincide with that 

geographic area primarily served by the 

service facility. Additionally, the groups 

served by the credit union must have access 

to the service facility. The non-availability of 

other credit union service is a factor to be 

considered in determining whether the group 

is within reasonable proximity of a credit 

union wishing to add the group to its field 

of membership. 

A service facility for multiple common 

bond credit unions is defined as a place 

where shares are accepted for members’ 

accounts, loan applications are accepted or 

loans are disbursed. This definition includes 

a credit union branch, a mobile branch, an 

office operated on a regularly scheduled 

weekly basis, a credit union owned ATM, or 

a credit union owned electronic facility that 

meets, at a minimum, these requirements. A 

service facility also includes a shared branch 

or a shared branch network location, 

including a shared ATM or electronic 

facility, if the credit union participates in a 

shared branching network. This definition 

does not include the credit union’s internet 

website. 

The select group as a whole will be 

considered to be within a credit union’s 

service area when: 

• A majority of the persons in a select 

group live, work, or gather regularly within 

the service area; 

• The group’s headquarters is located 

within the service area; or 

• The group’s ‘‘paid from’’ or ‘‘supervised 

from’’ location is within the service area. 

■ 3. In Appendix B to Part 701, revise 

Chapter 3 Section III.F to read as 

follows: 

Appendix B to Part 701—Chartering 

and Field of Membership Manual 

* * * * * 

III.F—Service Facility 

Once an ‘‘underserved area’’ has been 

added to a federal credit union’s field of 

membership, the credit union must establish 

within two years, and maintain, an office or 

service facility in the community. A service 

facility is defined as a place where shares are 

accepted for members’ accounts, loan 

applications are accepted or loans are 

disbursed. By definition, a service facility 

includes a credit union-owned branch, a 

shared branch, a mobile branch, an office 

operated on a regularly scheduled weekly 

basis, a credit union owned ATM, or an 

electronic facility that meets, at a minimum, 

the above requirements. A service facility 

also includes a shared branch or a shared 

branch network location, including a shared 

ATM or other electronic facility, if a credit 

union participates in a shared branching 

network. 

This definition does not include the credit 

union’s internet website. 

■ 4. In Appendix B to Part 701 revise 

the entry for ‘‘service facility’’ in the 

Glossary section to read as follows: 

Appendix B to Part 701—Chartering 

and Field of Membership Manual 

* * * * * 

Appendix 1—Glossary 

* * * * * 

Service facility—A place where shares are 

accepted for members’ accounts, loan 

applications are accepted or loans are 

disbursed. This definition includes a credit 

union owned branch, a mobile branch, an 

office operated on a regularly scheduled 

weekly basis, a credit union owned ATM, or 


jbell on DSKJLSW7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 6 / Monday, January 11, 2021 / Proposed Rules 1831 

a credit union owned electronic facility that 

meets, at a minimum, these requirements. A 

service facility also includes a shared branch 

or a shared branch network location, 

including a shared ATM or other electronic 

facility, if a credit union participates in a 

shared branching network. This definition 

does not include the credit union’s internet 

website. 

* * * * * 

[FR Doc. 2020–28277 Filed 1–8–21; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF LABOR 

Employees’ Compensation Appeals 

Board 

20 CFR Part 501 

RIN 1290–AA37 

Rules of Practice and Procedure 

AGENCY: Employees’ Compensation 

Appeals Board, Department of Labor. 

ACTION: Notice of proposed rulemaking; 

request for comments. 

SUMMARY: The Department of Labor 

(DOL or Department) is issuing this 

Notice of Proposed Rulemaking (NPRM) 

to seek public comments on a proposal 

to require electronic filing (e-filing) and 

electronic service (e-service) for 

attorneys and lay representatives 

representing parties in proceedings 

before the Employees’ Compensation 

Appeals Board (ECAB or the Board). 

These proposed regulations would 

establish e-filing and e-service rules of 

practice and procedure for the Board 

that would apply where a governing 

statute, regulation, or executive order 

does not establish contrary rules of 

practice or procedure. The rule would 

mandate e-filing, makes e-service 

automatic of documents for parties 

represented by attorneys and duly 

authorized lay representatives, and 

provides an option for pro se/selfrepresented parties to utilize these 

capabilities. It would also allow the 

Board, in its discretion, to hold oral 

arguments by videoconference. 

DATES: The Department invites 

interested persons to submit comments 

on the proposed rules of practice and 

procedure. To ensure consideration, 

comments must be in writing and must 

be received by February 10, 2021. 

ADDRESSES: You may send comments, 

identified by Regulatory Identification 

Number (RIN) 1290–AA37, only by the 

following method: Electronic 

Comments. Submit comments through 

the Federal eRulemaking Portal http://

www.regulations.gov. To locate the 

proposed rule, use docket number DOL– 

2020–0017 or key words such as 

‘‘Administrative practice and 

procedure’’ or ‘‘Workers’ 

compensation.’’ Follow the instructions 

for submitting comments. All comments 

must be received by 11:59 p.m. on the 

date indicated for consideration in this 

rulemaking. 

Instructions: All submissions received 

must include the agency name and 

docket number or Regulatory 

Information Number (RIN) for this 

rulemaking. All comments received will 

generally be posted without change to 

https://www.regulations.gov, including 

any personal information provided. If 

you need assistance to review the 

comments or the proposed rule, the 

Department will consider providing the 

comments and the proposed rule in 

other formats upon request. For 

assistance to review the comments or 

obtain the proposed rule in an alternate 

format, contact Mr. Thomas Shepherd, 

Clerk of the Appellate Boards, at (202) 

693–6319. Individuals with hearing or 

speech impairments may access the 

telephone number above by TTY by 

calling the toll-free Federal Information 

Relay Service at (800) 877–8339. 

FOR FURTHER INFORMATION CONTACT: 

Thomas Shepherd, Clerk of the 

Appellate Boards, at 202–693–6319 or 

ECAB-Inquiries@dol.gov. 

SUPPLEMENTARY INFORMATION: This 

preamble is divided into four sections: 

Section I explains the process of issuing 

a proposed rule concurrently with a 

companion direct final rule; Section II 

provides general background 

information on the development of the 

proposed rulemaking; Section III is a 

section-by-section summary and 

discussion of the proposed regulatory 

text; and Section IV covers the 

administrative requirements for this 

proposed rulemaking. 

I. Proposed Rule Published 

Concurrently With Companion Direct 

Final Rule 

The Department is simultaneously 

publishing with this proposed rule an 

identical ‘‘direct final’’ rule elsewhere 

in this issue of the Federal Register. In 

direct final rulemaking, an agency 

publishes a final rule with a statement 

that the rule will go into effect unless 

the agency receives significant adverse 

comment within a specified period. If 

the agency receives no significant 

adverse comment in response to the 

direct final rule, the rule goes into 

effect. If the agency receives significant 

adverse comment, the agency withdraws 

the direct final rule and treats such 

comment as submissions on the 

proposed rule. The proposed rule then 

provides the procedural framework to 

finalize the rule. An agency typically 

uses direct final rulemaking when it 

anticipates the rule will be noncontroversial. 

The Department has determined that 

this rule is suitable for direct final 

rulemaking. The proposed revisions to 

the Board’s procedural regulations 

would require representatives to use the 

Board’s electronic system for filing and 

serving documents unless exempted by 

the Board for good cause. Some 

represented parties are already filing 

documents through the Board’s existing 

electronic system on a voluntary basis. 

Moreover, this system is similar to those 

used by courts and other administrative 

agency electronic systems and will thus 

be familiar to the representatives. The 

proposed rule would also give selfrepresented (pro se) appellants the 

option to file and serve documents 

through the electronic system or via 

conventional methods. It would also 

allow the Board to hear oral argument 

by videoconference under the same 

discretionary criteria outlined in its 

2008 proposal. These changes to the 

Board’s procedures and practices are not 

expected to be controversial and are 

consistent with its statements in its 

2008 proposal. 73 FR 35103 (‘‘[T]he 

Board has anticipated that technological 

advances may, in the future, allow the 

filing, notice, service and presentation 

of documents and argument by 

electronic means.’’). 

The comment period for this 

proposed rule runs concurrently with 

the comment period for the direct final 

rule. Any comments received in 

response to this proposed rule will also 

be considered as comments regarding 

the direct final rule and vice versa. For 

purposes of this rulemaking, a 

significant adverse comment is one that 

explains (1) why the rule is 

inappropriate, including challenges to 

the rule’s underlying premise or 

approach; or (2) why the direct final 

rule will be ineffective or unacceptable 

without a change. In determining 

whether a significant adverse comment 

necessitates withdrawal of this direct 

final rule, the Department will consider 

whether the comment raises an issue 

serious enough to warrant a substantive 

response had it been submitted in a 

standard notice-and-comment process. 

A comment recommending an addition 

to the rule will not be considered 

significant and adverse unless the 

comment explains how this direct final 

rule would be ineffective without the 

addition. 

The Department requests comments 

on all issues related to this rule, 

including economic or other regulatory 


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