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

80364 

Vol. 75, No. 245 

Wednesday, December 22, 2010 

1Section 701.34 is the rule addressing low 

income designation and although it specifically 

addresses only federal credit unions, pursuant to 

§ 741.204(b) of the NCUA Regulations, a state 

chartered credit union may obtain a low-income 

designation from its state regulator, with the 

concurrence of the appropriate NCUA regional 

director, on the same basis as provided in 

§ 701.34(a). 

2NCUA’s geo-coding software, known within the 

agency as the ‘‘Low-Income Designation Assessment 

Tool,’’ is currently a stand-alone software program 

developed by NCUA’s Office of the Chief 

Information Officer with guidance from regional 

staff experienced in low-income designation. 

Regional staff as well as Economic Development 

Specialists currently use the tool as needed based 

on requests from credit unions. Eventually, the 

same software rules will be embedded into the 

NCUA AIRES examination software. The current 

version performs 30 different ratio calculations for 

each member based on a variety of factors and data 

to determine whether the member meets the lowincome definition. The variety of ratios is expansive 

in order to provide all of the possible options for 

members to meet the definition. Factors recognize 

the following: (1) Data sources include both 

decennial income data as well as American 

Community Survey income data; (2) different data 

is incorporated for metro vs. non-metro geographic 

areas; and (3) ratio options include comparisons of 

census tract and block group income data, to zip 

code, county, MSA, state, and national data, plus 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 701 

RIN 3133–AD76 

Sample Income Data To Meet the LowIncome Definition 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule. 

SUMMARY: The NCUA is proposing to 

permit federal credit unions (FCUs) that 

do not qualify for a low-income 

designation using the geo-coding 

software the NCUA has developed for 

that purpose to submit an analysis of a 

statistically valid sample of their 

member income data as evidence they 

qualify. The current rule requires, as an 

alternative to NCUA’s geo-coding 

software, that member data drawn from 

loan applications or member surveys be 

used to show a majority of the members 

are low-income. Permitting FCUs to use 

a statistically valid sample of member 

incomes drawn from loan files or a 

survey will ease the burden on FCUs 

attempting to qualify for a low-income 

designation. 

DATES: Comments must be received on 

or before February 22, 2011. 

ADDRESSES: You may submit comments 

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. 

• NCUA Web Site: http:// 

www.ncua.gov/news/proposed_regs/ 

proposed_regs.html. Follow the 

instructions for submitting comments. 

• E-mail: Address to 

regcomments@ncua.gov. Include ‘‘[Your 

name] Comments on Proposed Rule on 

Sample Data for Low-Income 

Designation’’ in the e-mail subject line. 

• Fax: (703) 518–6319. Use the 

subject line described above for e-mail. 

• Mail: Address to Mary Rupp, 

Secretary of the Board, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314– 

3428. 

• Hand Delivery/Courier: Same as 

mail address. 

• Public Inspection: All public 

comments are available on the agency’s 

Web site at http://www.ncua.gov/ 

RegulationsOpinionsLaws/comments as 

submitted, except as may not be 

possible for technical reasons. Public 

comments will not be edited to remove 

any identifying or contact information. 

Paper copies of comments may be 

inspected in NCUA’s law library at 1775 

Duke Street, Alexandria, Virginia 22314, 

by appointment weekdays between 

9 a.m. and 3 p.m. To make an 

appointment, call (703) 518–6546 or 

send an e-mail to OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: The 

following agency staff may be contacted 

at the address listed above or the 

telephone numbers provided here. 

Robert Leonard, Director of Consumer 

Access, Office of Consumer Protection, 

(703) 518–1143; Olga Bruslavski, 

Economist, Office of the Chief 

Economist, (703) 518–6495; Regina 

Metz, Staff Attorney, Office of General 

Counsel, (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

Background 

The Federal Credit Union Act (Act) 

authorizes the NCUA Board to define 

‘‘low-income members’’ so that credit 

unions with a membership 

predominantly consisting of low-income 

members can benefit from certain 

statutory relief and receive assistance 

from the Community Development 

Revolving Loan Fund. 12 U.S.C. 

1752(5), 1757a(b)(2)(A), 1757a(c)(2)(B), 

1772c–1. 

In 2008, the Board proposed 

substantial changes to the rule 

addressing low-income designation, 

which had previously been based on 

measuring median household income, 

with geographic differentials for certain 

areas with higher costs of living. 73 FR 

22836 (April 28, 2008).1 In brief, the 

Board proposed, and adopted in the 

final rule, replacement of median 

household income with median family 

income or median earnings for 

individuals as better measures, in line 

with standards used by other federal 

agencies. 73 FR 71909 (Nov. 26, 2008). 

NCUA also undertook as part of the 

regulatory changes to facilitate the lowincome designation process by 

eliminating the requirement for credit 

unions to apply for the designation. 

NCUA is in the process of implementing 

geo-coding software to automate the 

low-income designation process for 

credit unions during the examination 

process. 

NCUA will make the determination of 

whether a majority of an FCU’s members are 

low-income based on data it obtains during 

the examination process. This will involve 

linking member address information to 

publicly available information from the U.S. 

Census Bureau to estimate member earnings. 

Using automated, geo-coding software, 

NCUA will use member street addresses 

collected during FCU examinations to 

determine the geographic area and 

metropolitan area for each member account. 

NCUA will then use income information for 

the geographic area from the Census Bureau 

and assign estimated earnings to each 

member. 

73 FR at 71910–11. NCUA’s software 

ensures that the same categories of data 

available for estimated member income 

at a particular credit union are 

compared with like categories of 

statistical data on income from the 

Census Bureau. In particular, individual 

member earnings information is 

compared to median individual 

earnings data and family income 

information is compared to median 

family income data.2


srobinson on DSKHWCL6B1PROD with PROPOSALS
Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 80365 

comparisons of county income data to CBSA, state, 

and national income data. 

3NCUA’s regulation on Supervisory Committee 

Audits and Verifications, 12 CFR part 715, permits 

a Supervisory Committee or its designee to use a 

statistical method in performing member account 

and passbook verifications. 12 CFR 715.8(b)(2). The 

amendment in this proposed rule includes much of 

the same criteria as in that rule for an acceptable 

sample with some changes in language to fit the 

context of this rule. 

4Confidence levels and confidence intervals are 

statistical concepts that relate to the precision of the 

estimates produced by the sampling approach. 

Confidence level is the probability that the results 

of a sampling approach are within the confidence 

interval of the true answer. Confidence interval 

specifies the allowable margin of error around the 

true answer. There are a number of online resources 

that will compute required sample size given 

population, confidence levels, and confidence 

intervals including http://www.raosoft.com/ 

samplesize.html. 

5The interim final rule the Board issued in July 

2010 clarified that where a credit union submits its 

own information for purposes of qualifying for the 

designation, actual member data must be compared 

with a like category of statistical data, meaning 

individual income information for members must 

be compared to the median earnings for 

individuals. 75 FR 47171 (Aug. 5, 2010). 

Recently, the Board issued an interim 

final rule amending § 701.34(a)(1) to 

clarify that median family income and 

median earnings for individuals are 

alternative bases on which credit union 

members may qualify as low income. 75 

FR 47171 (Aug. 5, 2010). 

In addition, the interim final rule also 

addressed the subsection of the rule 

where the option for credit unions to 

submit their own information for 

purposes of qualifying for the 

designation was amended to clarify that 

actual member data must be compared 

with a like category of statistical data. 

For example, if a credit union provides 

individual income information for 

members, the median earnings for 

individuals must be used to determine 

if the members are low-income. 

The final rule in November 2008 also 

provided credit unions an alternative to 

relying on NCUA’s geo-coding software, 

namely, the option of providing actual 

income information about their 

members as a basis for qualifying as a 

LICU. The Board is now proposing to 

amend the low-income rule further to 

permit credit unions that wish to submit 

their own data for purposes of 

qualifying for the designation to use a 

statistically valid, random sample of 

member incomes drawn from loan files 

or a member survey as the basis for the 

analysis. 

Proposed Rule 

Only one credit union has applied for 

a low-income designation using actual 

membership income data after failing to 

qualify on the basis of NCUA’s geocoding software. The Board recognizes 

several factors may be involved but, 

primarily, the Board believes credit 

unions may find it difficult to meet the 

requirement of collecting actual income 

data establishing the low-income status 

of at least 50% plus one of their 

members. Conducting a survey of 

members in which a credit union asks 

members to disclose their income poses 

the problem of achieving a sufficient 

response rate with the underlying issue 

of the general reluctance members may 

have about disclosing their income in a 

survey. Obtaining income information 

from loan applications, among other 

issues, may be a problem for credit 

unions because many simply have not 

made loans to over 50% of their 

members. For these reasons, the Board 

is proposing to permit those credit 

unions that do not qualify based on 

NCUA’s geo-coding software to use a 

statistically valid, random sample of 

member incomes from loan files or a 

member survey as the basis for the 

analysis.3

Currently, § 701.34(a)(3), with the 

August 5, 2010 amendment, states as 

follows: 

Federal credit unions that do not receive 

notification that they qualify for a lowincome credit union designation but believe 

they qualify may submit information to the 

regional director to demonstrate they qualify 

for a low-income credit union designation. 

For example, federal credit unions may 

provide actual member income from loan 

applications or surveys to demonstrate a 

majority of their membership is low-income 

members. Actual member income data must 

be compared to a like category of statistical 

data, for example, actual individual member 

income may only be compared to total 

median earnings for individuals for the 

metropolitan area where they live or national 

metropolitan area, whichever is greater. 

12 CFR 701.34(a)(3). The proposed rule 

would add language to this paragraph 

permitting credit unions to rely on a 

data sample as long as it meets certain 

criteria, including a narrative describing 

sampling technique and evidence 

supporting its validity. The proposed 

rule would require the random sample 

be representative of the membership, 

sufficient in both number and scope on 

which to base conclusions, and have a 

minimal confidence level of 95% and a 

confidence interval of 5%.4 The Board 

recognizes the 95% confidence level 

and 5% confidence interval is a widely 

accepted and used threshold for 

statistical significance in research and 

policy analysis. 

NCUA will evaluate the sample 

income data and the supporting 

narrative to verify it is a statistically 

valid, random sample. NCUA will 

expect the narrative and supporting 

materials to address the following: 

• Representativeness of Members. If a 

credit union is relying on income data 

drawn from its loan files, a credit 

union’s submission needs evidence that 

members with loans are representative 

of the broader membership. If members 

with loans are not representative of the 

broader membership, the sampling 

methodology may not be appropriate. If 

a credit union is relying on income data 

from a survey, a credit union must 

provide evidence regarding the 

representativeness of its responses and 

adequacy of response rate. 

• Income Definition and Timing: If 

relying on income data from a survey, 

the survey needs to be clear regarding 

its definition of income to ensure 

accurate responses from members and 

permit the credit union to use 

appropriate sources for comparison. If 

relying on income data from loan files, 

NCUA will expect the analysis to: 

Æ Clearly differentiate household 

versus individual income and income 

versus earnings in the loan files and use 

appropriate sources for comparison.5

Æ Address the age of the income data 

found in loan files by excluding loan 

files over five years old. 

Æ Address issues related to income 

verification, for example, addressing 

general credit union practices related to 

income verification and percentage of 

loans in the selected sample with 

unverified income. For surveys, address 

credit union verification, if any, of selfreported income information from 

members. 

• Based on membership size and 

conservative statistical sampling 

practices and requirements, establish 

minimum sample size of members with 

income data from loan files or valid 

survey responses. 

• Describe the method used for 

sampling loan files or conducting a 

survey, including any external 

validation or oversight. 

• For income data from loan files, 

submit the well-documented data set 

used in the analysis and, for surveys, a 

copy of the survey, data summary, and 

narrative, as necessary to describe the 

conduct of the survey. 

NCUA staff will review a credit 

union’s submission, may contact a 

credit union to resolve any questions 

about its submission or to request 

additional information, and will inform 

a credit union as to whether it qualifies 

as expeditiously as possible. The 

proposed rule does not establish a time 

frame for a NCUA staff’s review and 

determination because the Board 

believes a submission under the 

proposed amendment is likely to 


srobinson on DSKHWCL6B1PROD with PROPOSALS
80366 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 

present issues unique to the submitting 

credit union. The Board believes both 

credit unions and NCUA will benefit 

from having the flexibility to evaluate a 

credit union’s submission and 

potentially resolve questions without 

regulatory time constraints. The Board 

anticipates that credit unions 

considering a submission will find it 

helpful to contact NCUA staff to discuss 

their approach to providing sample 

income data before undertaking a 

review of loan files or conducting a 

survey. 

Regulatory Procedures 

Regulatory Flexibility Act 

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 entities. 

5 U.S.C. 603(a). For purposes of this 

analysis, NCUA considers credit unions 

having under $10 million in assets small 

entities. Interpretive Ruling and Policy 

Statement 03–2, 68 FR 31949 (May 29, 

2003). As of December 31, 2007, out of 

approximately 8,410 federally insured 

credit unions, 3,599 had less than $10 

million in assets. 

This proposed rule directly affects all 

low-income credit unions, of which 

currently there are approximately 1,100. 

NCUA estimates approximately 700 

low-income credit unions are small 

entities but that only one or two in a 

year will avail themselves of the option 

of providing actual data or sample data 

to meet the low-income criteria and 

receive the designation. Therefore, 

NCUA has determined this proposed 

rule will not have an impact on a 

substantial number of small entities. 

Paperwork Reduction Act 

The low-income rule contains a 

‘‘collection of information’’ within the 

meaning of section 3502(3) of the 

Paperwork Reduction Act of 1995, 44 

U.S.C. 3502(3), to the extent it permits 

federal credit unions that do not qualify 

under NCUA’s geo-coding software the 

option of applying on the basis of actual 

membership income data and, as set out 

in this proposed amendment to the rule, 

the additional option of submitting a 

random and statistically valid sample of 

membership income data to meet the 

rule’s requirement that a majority of its 

members are low-income as defined in 

the rule. 

The proposed rule would permit 

FCUs, which do not qualify for a lowincome designation using the geocoding software the NCUA has 

developed for that purpose, to submit an 

analysis of a statistically valid sample of 

their member income data as evidence 

they qualify. NCUA does not believe 

many FCUs are likely to apply for the 

designation on the basis of their member 

income data, perhaps two applications 

per year. 

If relying on income data drawn from 

loan files, NCUA estimates an FCU that 

maintains its loan files electronically 

can use statistical computer programs 

that are freely available and its own 

staff. In that case, staff time is estimated 

at about 40 hours. If an FCU uses the 

services of a contractor or other outside 

party, such as a computer programmer, 

it is estimated those services would cost 

approximately $100 per hour, for a cost 

of approximately $4,000. If an FCU 

conducts a survey, various free 

computer programs are available on the 

Internet. The costs of conducting a 

survey may vary significantly 

depending on the size of the 

membership. If an FCU uses the services 

of a contractor or other outside party to 

assist it in developing and conducting a 

survey, the costs are estimated at 

approximately $4,000 to $5,000. 

In summary, NCUA estimates the total 

information collection burden 

represented by this proposal involving: 

2 respondents, 80 annual burden hours, 

and an annual cost burden of 

approximately $10,000. 

Anyone wishing to submit comments 

on this information collection 

requirement should direct them to the 

Office of Information and Regulatory 

Affairs, OMB, Attn: NCUA Desk Officer, 

New Executive Office Building, 

Washington, DC 20503, with a copy to 

Mary Rupp, Secretary of the Board, 

National Credit Union Administration, 

1775 Duke Street, Alexandria, Virginia 

22314–3428. 

The NCUA considers comments by 

the public on this proposed collection of 

information in: 

• Evaluating whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the NCUA, including 

whether the information will have a 

practical use; 

• Evaluating the accuracy of the 

NCUA’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

• Enhancing the quality, usefulness, 

and clarity of the information to be 

collected; and 

• Minimizing the burden of 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; e.g., permitting 

electronic submission of responses. 

The Paperwork Reduction Act 

requires OMB to make a decision 

concerning the collection of information 

contained in the proposed regulation 

between 30 and 60 days after 

publication of this document in the 

Federal Register. Therefore, a comment 

to OMB is best assured of having its full 

effect if OMB receives it within 30 days 

of publication. This does not affect the 

deadline for the public to comment to 

the NCUA on the proposed regulation. 

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, 

NCUA, an independent regulatory 

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

voluntarily complies with the executive 

order. The proposed 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 this proposed 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 

NCUA has determined that this 

proposed rule would not affect family 

well-being within the meaning of 

section 654 of the Treasury and General 

Government Appropriations Act, 1999, 

Public Law 105–277, 112 Stat. 2681 

(1998). 

Agency Regulatory Goal 

NCUA’s goal is to promulgate clear 

and understandable regulations that 

impose minimal regulatory burden. We 

request your comments on whether the 

proposed amendment is understandable 

and minimally intrusive if implemented 

as proposed. 

List of Subjects in 12 CFR Part 701 

Credit unions, Low income, 

Nonmember deposits, Secondary 

capital, Shares. 

By the National Credit Union 

Administration Board, on December 16, 

2010. 

Mary F. Rupp, 

Secretary of the Board. 

For the reasons stated above, NCUA 

proposes to amend 12 CFR part 701 as 

follows: 


srobinson on DSKHWCL6B1PROD with PROPOSALS
Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Proposed Rules 80367 

1Public Law 111–203 (July 21, 2010). 

2The SMSIA is defined as $250,000. 12 CFR 

745.1(e). 

3Federal credit unions cannot offer interestbearing accounts; they can only pay dividends 

pursuant to the Federal Credit Union Act. Some 

State chartered, Federally insured credit unions 

may offer interest-bearing accounts pursuant to 

their State credit union acts. 

4The NCUA Board does not believe the general 

provisions of Article III, Section 5(a) of the Federal 

Credit Union Bylaws, or other similar provisions, 

affect the definition of noninterest-bearing 

transaction account or the share insurance coverage 

of this kind of account. Article III, Section 5(a) of 

the bylaws states that with respect to member 

withdrawals from share accounts, the Federal credit 

union’s board of directors has the right, at any time, 

to require members to give up to 60 days written 

notice of intention to withdraw the whole or any 

part of the amounts paid in by members. The NCUA 

Board considers this a broad, administrative 

Continued 

PART 701—ORGANIZATION AND 

OPERATIONS OF FEDERAL CREDIT 

UNIONS 

1. The authority for part 701 

continues to read as follows: 

Authority: 12 U.S.C. 1752(5), 1757, 1765, 

1766, 1781, 1782, 1787, 1789; Title V, Pub. 

L. 109–351, 120 Stat. 1966. 

2. Amend § 701.34 by adding the 

following at the end of paragraph (a)(3): 

§ 701.34 Designation of low-income 

status; Acceptance of secondary capital 

accounts by low-income designated credit 

unions. 

(a) * * * 

(3) * * * A Federal credit union may 

rely on a sample of membership income 

data drawn from loan files or a member 

survey provided the federal credit union 

can demonstrate the sample is a 

statistically valid, random sample by 

submitting with its data a narrative 

describing its sampling technique and 

evidence supporting the validity of the 

analysis, including the actual data set 

used in the analysis. The random 

sample must be representative of the 

membership, must be sufficient in both 

number and scope on which to base 

conclusions, and must have a minimum 

confidence level of 95% and a 

confidence interval of 5%. 

* * * * * 

[FR Doc. 2010–32131 Filed 12–21–10; 8:45 am] 

BILLING CODE 7535–01–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 745 

RIN 3133–AD79 

Share Insurance and Appendix 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule with request for 

comments. 

SUMMARY: Section 343 of the DoddFrank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) 1

provides that, on a temporary basis, the 

NCUA Board shall fully insure the net 

amount that any member or depositor at 

an insured credit union maintains in a 

noninterest-bearing transaction account. 

Although this insurance coverage is selfimplementing, and therefore already in 

place, this proposed rule: clarifies the 

definition of the term ‘‘noninterestbearing transaction account;’’ provides 

that this new insurance coverage is 

separate from, and in addition to, other 

coverage provided in NCUA’s share 

insurance rules; and imposes certain 

notice and disclosure requirements. 

DATES: Comments must be received on 

or before February 22, 2011. 

ADDRESSES: You may submit comments 

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. 

• NCUA Web Site: http:// 

www.ncua.gov/ 

RegulationsOpinionsLaws/ 

proposed_regs/proposed_regs.html. 

Follow the instructions for submitting 

comments. 

• E-mail: Address to 

regcomments@ncua.gov. Include ‘‘[Your 

name] Comments on Proposed Rule 745, 

Share Insurance and Appendix’’ in the 

e-mail subject line. 

• Fax: (703) 518–6319. Use the 

subject line described above for e-mail. 

• Mail: Address to Mary Rupp, 

Secretary of the Board, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314– 

3428. 

• Hand Delivery/Courier: Same as 

mail address. 

Public Inspection: All public 

comments are available on the agency’s 

Web site at http://www.ncua.gov/ 

RegulationsOpinionsLaws/comments as 

submitted, except as may not be 

possible for technical reasons. Public 

comments will not be edited to remove 

any identifying or contact information. 

Paper copies of comments may be 

inspected in NCUA’s law library at 1775 

Duke Street, Alexandria, Virginia 22314, 

by appointment weekdays between 

9 a.m. and 3 p.m. To make an 

appointment, call (703) 518–6546 or 

send an e-mail to OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Frank Kressman, Senior Staff Attorney, 

Office of General Counsel, at the above 

address or telephone (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

I. The Dodd-Frank Act 

Section 343 of the Dodd-Frank Act 

amends the Federal Credit Union Act 

(FCU Act) to include full share 

insurance coverage, beyond the 

Standard Maximum Share Insurance 

Amount (SMSIA),2 for the net amount 

held in a noninterest-bearing transaction 

account by any member or depositor at 

an insured credit union. Throughout 

this proposal, the term ‘‘noninterestbearing’’ should be read as including 

‘‘nondividend-bearing’’ to translate the 

provisions of the Dodd-Frank Act into 

credit union terminology.3 Insured 

credit unions are not required to take 

any action to receive this additional 

insurance coverage. The additional 

coverage provided by Section 343 of the 

Dodd-Frank Act is temporary through 

December 31, 2012. 

II. The Proposed Rule 

Amendments to Share Insurance Rules 

Section 343 of the Dodd-Frank Act 

amends the share insurance provisions 

of the FCU Act (12 U.S.C. 1787(k)(1)) to 

provide separate insurance coverage for 

noninterest-bearing transaction 

accounts. Accordingly, as discussed in 

detail below, NCUA proposes to revise 

its share insurance regulations in 12 

CFR Part 745 to include this new 

temporary share insurance account 

category. 

Definition of Noninterest-Bearing 

Transaction Account 

The proposed rule incorporates the 

definition of noninterest-bearing 

transaction account in section 343 of the 

Dodd-Frank Act. Section 343 defines a 

noninterest-bearing transaction account 

as ‘‘an account or deposit maintained at 

an insured credit union with respect to 

which interest is neither accrued nor 

paid; on which the account holder or 

depositor is permitted to make 

withdrawals by negotiable or 

transferable instrument, payment orders 

of withdrawal, telephone or other 

electronic media transfers, or other 

similar items for the purpose of making 

payments or transfers to third parties or 

others; and on which the insured credit 

union does not reserve the right to 

require advance notice of an intended 

withdrawal.’’ This definition of 

noninterest-bearing transaction account 

encompasses only traditional, 

noninterest-bearing demand deposit 

(checking or share draft) accounts that 

allow for an unlimited number of 

deposits and withdrawals at any time,4


srobinson on DSKHWCL6B1PROD with PROPOSALS