Federal Register / Vol. 83, No. 153 / Wednesday, August 8, 2018 / Proposed Rules 38997 

1As of December 31, 2017, within the nine states 

that allow privately insured credit unions, 

approximately 116 state-chartered credit unions are 

privately insured and are not subject to the NCUA’s 

regulation and oversight. 

2Based on December 31, 2017 Call Report Data. 

3 80 FR 66625 (Oct. 29, 2015). 

H. Unreviewed Safety Questions 

1. The USQ process is an important tool to 

evaluate whether changes affect the safety 

basis. A contractor must use the USQ process 

to ensure that the safety basis for a DOE 

nuclear facility is not undermined by 

changes in the facility, the work performed, 

the associated hazards, or other factors that 

support the adequacy of the safety basis. 

2. The USQ process permits a contractor to 

make physical and procedural changes to a 

nuclear facility and to conduct tests and 

experiments without prior approval, 

provided these changes do not cause a USQ. 

The USQ process provides a contractor with 

the flexibility needed to conduct day-to-day 

operations by requiring only those changes 

and tests with a potential to impact the safety 

basis (and therefore the safety of the nuclear 

facility) be approved by DOE. This allows 

DOE to focus its review on those changes 

significant to safety. The USQ process helps 

keep the safety basis current by ensuring 

appropriate review of and response to 

situations that might adversely affect the 

safety basis. 

3. DOE Guide 424.1–1B Chg 2, 

Implementation Guide for Use in Addressing 

Unreviewed Safety Question Requirements, 

or successor document provides DOE’s 

expectations for a USQ process. The 

contractor must obtain DOE approval of its 

procedure used to implement the USQ 

process. The contractor is allowed to make 

editorial and format changes to its USQ 

procedure while maintaining DOE approval. 

I. Functions and Responsibilities 

1. The DOE Management Official for a DOE 

nuclear facility (that is, the Assistant 

Secretary, the Assistant Administrator, or the 

Office Director who is primarily responsible 

for the management of the facility) has 

primary responsibility within DOE for 

ensuring that the safety basis for the facility 

is adequate and complies with the safety 

basis requirements of Part 830. The DOE 

Management Official is responsible for 

ensuring the timely and proper (1) review of 

all safety basis documents submitted to DOE 

and (2) preparation of a safety evaluation 

report concerning the safety basis for a 

facility. 

2. DOE will maintain a public list on the 

internet that provides the status of the safety 

basis for each Hazard Category 1, 2, or 3 DOE 

nuclear facility and, to the extent practicable, 

provides information on how to obtain a 

copy of the safety basis and related 

documents for a facility. 

[FR Doc. 2018–16863 Filed 8–7–18; 8:45 am] 

BILLING CODE 6450–01–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 702 

RIN 3133–AE90 

Risk-Based Capital—Supplemental 

Rule 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule. 

SUMMARY: The NCUA Board (Board) is 

seeking comment on a proposed rule 

that would amend the NCUA’s 

previously revised regulations regarding 

prompt corrective action (PCA). The 

proposal would delay the effective date 

of the NCUA’s October 29, 2015 final 

rule regarding risk-based capital (2015 

Final Rule) for one year, moving the 

effective date from January 1, 2019 to 

January 1, 2020. During the extended 

delay period, the NCUA’s current PCA 

requirements would remain in effect. 

The proposal would also amend the 

definition of a ‘‘complex’’ credit union 

adopted in the 2015 Final Rule for riskbased capital purposes by increasing the 

threshold level for coverage from $100 

million to $500 million. These proposed 

changes would provide covered credit 

unions and the NCUA with additional 

time to prepare for the rule’s 

implementation, and would exempt an 

additional 1,026 credit unions from the 

rule without subjecting the National 

Credit Union Share Insurance Fund 

(NCUSIF) to undue risk. 

DATES: Comments must be received by 

September 7, 2018. 

ADDRESSES: You may submit written 

comments, identified by RIN 3133– 

AE90, 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 website: http://

www.ncua.gov/Legal/Regs/Pages/ 

PropRegs.aspx. Follow the instructions 

for submitting comments. 

• Email: Address to regcomments@

ncua.gov. Include ‘‘[Your name]— 

Comments on Proposed Rule: RiskBased Capital—Supplemental Proposal’’ 

in the email subject line. 

• Fax: (703) 518–6319. Use the 

subject line described above for email. 

• Mail: Address to Gerard Poliquin, 

Secretary of the Board, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314– 

3428. 

• Hand Delivery/Courier: Same as 

mail address. 

You can view all public comments on 

the NCUA’s website at http://

www.ncua.gov/Legal/Regs/Pages/ 

PropRegs.aspx 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. You may inspect paper 

copies of comments in the 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 email to OGCMail@

ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Policy and Analysis: Julie Cayse, 

Director, Division of Risk Management, 

Office of Examination and Insurance, at 

(703) 518–6360; Kathryn Metzker, Loss/ 

Risk Analyst, Division of Risk 

Management, Office of Examination and 

Insurance, at (703) 548–2456; Julie 

Decker, Loss/Risk Analyst, Division of 

Risk Management, Office of 

Examination and Insurance, at (703) 

518–3684; Aaron Langley, Risk 

Management Officer, Division of 

Analytics and Surveillance, Office of 

Examination and Insurance, at (703) 

518–6387; Legal: John Brolin, Staff 

Attorney, Office of General Counsel, at 

(703) 518–6540; or by mail at National 

Credit Union Administration, 1775 

Duke Street, Alexandria, VA 22314. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The NCUA’s primary mission is to 

ensure the safety and soundness of 

federally insured credit unions. The 

agency performs this function by 

examining and supervising all federal 

credit unions, participating in the 

examination and supervision of 

federally insured, state-chartered credit 

unions in coordination with state 

regulators, and insuring members’ 

accounts at federally insured credit 

unions.1 In its role as administrator of 

the NCUSIF, the NCUA insures and 

regulates approximately 5,573 federally 

insured credit unions, holding total 

assets exceeding $1.4 trillion and 

representing approximately 111 million 

members.2

At its October 2015 meeting, the 

Board issued the 2015 Final Rule to 

amend Part 702 of the NCUA’s PCA 

regulations to require that credit unions 

taking certain risks hold capital 

commensurate with those risks.3 The 

risk-based capital provisions of the 2015 

Final Rule apply only to federally 

insured, natural-person credit unions 

with quarter-end total assets exceeding 

$100 million. The overarching intent of 

the 2015 Final Rule is to reduce the 

likelihood that a relatively small 

number of high-risk outlier credit 

unions would exhaust their capital and 

cause large losses to the NCUSIF. Under 


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4See 12 U.S.C. 1782(c)(2)(A) (The FCUA requires 

that each federally insured credit unions to pay a 

federal share insurance premium equal to a 

percentage of the credit union’s insured shares to 

ensure that the NCUSIF has sufficient reserves to 

pay potential share insurance claims by credit 

union members, and to provide assistance in 

connection with the liquidation or threatened 

liquidation of federally insured credit unions in 

troubled condition.). 

5Public Law 105–219, 112 Stat. 913 (1998). 

6 12 U.S.C. 1790d. 

7The risk-based net worth requirement for credit 

unions meeting the definition of ‘‘complex’’ was 

first applied on the basis of data in the Call Report 

reflecting activity in the first quarter of 2001. 65 FR 

44950 (July 20, 2000). The NCUA’s risk-based net 

worth requirement has been largely unchanged 

since its implementation, with the following 

limited exceptions: revisions were made to the rule 

in 2003 to amend the risk-based net worth 

requirement for MBLs, 68 FR 56537 (Oct. 1, 2003); 

revisions were made to the rule in 2008 to 

incorporate a change in the statutory definition of 

‘‘net worth,’’ 73 FR 72688 (Dec. 1, 2008); revisions 

were made to the rule in 2011 to expand the 

definition of ‘‘low-risk assets’’ to include debt 

instruments on which the payment of principal and 

interest is unconditionally guaranteed by NCUA, 76 

FR 16234 (Mar. 23, 2011); and revisions were made 

in 2013 to exclude credit unions with total assets 

of $50 million or less from the definition of 

‘‘complex’’ credit union, 78 FR 4033 (Jan. 18, 2013). 

8 12 U.S.C. 1790d(b)(1)(A); see also 12 U.S.C. 

1831o (Section 38 of the FDI Act setting forth the 

PCA requirements for banks). 

9 12 U.S.C. 1790d(b)(1)(B). 

10 12 CFR part 702; see also 65 FR 8584 (Feb. 18, 

2000) and 65 FR 44950 (July 20, 2000). 

11 80 FR 66625 (Oct. 29, 2015). 

12 12 U.S.C. 1790d(a)(1). 

13 12 U.S.C. 1790d(c). 

14 12 U.S.C. 1790d(o)(2). 

15 12 U.S.C. 1790d(o)(3). 

16 12 U.S.C. 1790d(c)–(g); 12 CFR 702.204(a)–(b). 

17For purposes of this rulemaking, the term ‘‘riskbased net worth requirement’’ is used in reference 

to the statutory requirement for the Board to design 

a capital standard that accounts for variations in the 

risk profile of complex credit unions. The term 

‘‘risk-based capital ratio’’ is used to refer to the 

specific standards established in the 2015 Final 

Rule to function as criteria for the statutory riskbased net worth requirement. The term ‘‘risk-based 

capital ratio’’ is also used by the Other Banking 

Agencies and the international banking community 

when referring to the types of risk-based 

requirements that are addressed in the 2015 Final 

Rule. This change in terminology throughout the 

proposal would have no substantive effect on the 

requirements of the FCUA, and is intended only to 

reduce confusion for the reader. 

18 12 U.S.C. 1790d(d)(1). 

19 12 U.S.C. 1790d(d). 

20 Id. 

21The Board has always intended to periodically 

review the threshold of a complex credit union, as 

noted in the preamble to the 2015 proposed Risk 

Based Capital Rule. 80 FR 4339, 4378 (January 27, 

2015). 

the Federal Credit Union Act (FCUA), 

federally insured credit unions are 

collectively responsible for replenishing 

losses to the NCUSIF.4

The 2015 Final Rule restructures the 

NCUA’s PCA regulations and makes 

various revisions, including amending 

the agency’s current risk-based net 

worth requirement by replacing the risk 

based net worth ratio with a new riskbased capital ratio for federally insured, 

natural-person credit unions (credit 

unions). The risk-based capital 

requirements set forth in the 2015 Final 

Rule are more consistent with the 

NCUA’s risk-based capital ratio measure 

for corporate credit unions and, as the 

law requires, are more comparable to 

the regulatory risk-based capital 

measures used by the Federal Deposit 

Insurance Corporation (FDIC), Board of 

Governors of the Federal Reserve 

System, and Office of the Comptroller of 

Currency (Other Banking Agencies). The 

2015 Final Rule also eliminates several 

provisions in the NCUA’s current PCA 

regulations, including provisions related 

to the regular reserve account, riskmitigation credits, and alternative risk 

weights. 

The 2015 Final Rule is currently set 

to become effective on January 1, 2019. 

The NCUA delayed the effective date 

until January 1, 2019 to provide credit 

unions and the NCUA sufficient time to 

make the necessary adjustments, such as 

systems, processes, and procedures; to 

reduce the burden on affected credit 

unions. 

II. Legal Authority 

In 1998, Congress enacted the Credit 

Union Membership Access Act 

(CUMAA).5 Section 301 of CUMAA 

added section 216 to the FCUA,6 which 

required the Board to adopt by 

regulation a system of PCA to restore the 

net worth of credit unions that become 

inadequately capitalized.7 Section 

216(b)(1)(A) requires the Board to adopt 

by regulation a system of PCA for 

federally insured credit unions 

‘‘consistent with’’ section 216 of the 

FCUA and ‘‘comparable to’’ section 38 

of the Federal Deposit Insurance Act 

(FDI Act).8 Section 216(b)(1)(B) requires 

that the Board, in designing the PCA 

system, also take into account the 

‘‘cooperative character of credit unions’’ 

(i.e., credit unions are not-for-profit 

cooperatives that do not issue capital 

stock, must rely on retained earnings to 

build net worth, and have boards of 

directors that consist primarily of 

volunteers).9 The Board initially 

implemented the required system of 

PCA in 2000,10 primarily in Part 702 of 

the NCUA’s Regulations, and most 

recently made substantial updates to the 

regulation in October 2015.11

The purpose of section 216 of the 

FCUA is to ‘‘resolve the problems of 

[federally] insured credit unions at the 

least possible long-term loss to the 

[NCUSIF].’’ 12 To carry out that purpose, 

Congress set forth a basic structure for 

PCA in section 216 that consists of three 

principal components: (1) A framework 

combining mandatory actions 

prescribed by statute with discretionary 

actions developed by the NCUA; (2) an 

alternative system of PCA to be 

developed by the NCUA for credit 

unions defined as ‘‘new;’’ and (3) a riskbased net worth requirement to apply to 

credit unions the NCUA defines as 

‘‘complex.’’ 

Among other things, section 216(c) of 

the FCUA requires the NCUA to use a 

credit union’s net worth ratio to 

determine its classification among five 

‘‘net worth categories’’ set forth in the 

FCUA.13 Section 216(o) generally 

defines a credit union’s ‘‘net worth’’ as 

its retained earnings balance,14 and a 

credit union’s ‘‘net worth ratio,’’ as the 

ratio of its net worth to its total assets.15

As a credit union’s net worth ratio 

declines, so does its classification 

among the five net worth categories, 

thus subjecting it to an expanding range 

of mandatory and discretionary 

supervisory actions.16

Section 216(d)(1) of the FCUA 

requires that the NCUA’s system of PCA 

include, in addition to the statutorily 

defined net worth ratio requirement 

applicable to federally insured naturalperson credit unions, ‘‘a risk-based net 

worth 17 requirement for insured credit 

unions that are complex, as defined by 

the Board. . . .’’ 18 The FCUA directs 

the NCUA to base its definition of 

‘‘complex’’ credit unions ‘‘on the 

portfolios of assets and liabilities of 

credit unions.’’ 19 It also requires the 

NCUA to design a risk-based net worth 

requirement to apply to such ‘‘complex’’ 

credit unions.20

III. Proposed Rule 

Under § 702.103 of the NCUA’s 2015 

Final Rule, a credit union is defined as 

‘‘complex’’ and the NCUA’s risk-based 

capital ratio measure is applicable only 

if the credit union’s quarter-end total 

assets exceed $100 million, as reflected 

in its most recent Call Report. 

Consistent with the spirit and intent of 

Executive Order 13777, the NCUA 

further analyzed the impact of the 

NCUA’s risk-based capital requirements 

and the portfolios of assets and 

liabilities of credit unions to identify 

potential ways to reduce regulatory 

burden on credit unions.21

Based on the NCUA’s analysis, which 

is discussed in more detail below, the 

Board believes that $500 million in total 

assets would be a more appropriate 

threshold level for defining a complex 

credit union, and therefore subjecting it 

to the risk-based capital requirement. 

Increasing the threshold level to $500 

million in assets would reduce 


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22Based on December 31, 2017 Call Report data. 

For comparison, if the threshold were to remain at 

$100 million about 72 percent of all credit unions 

would be exempt. 

23For comparison, if the threshold were to remain 

at $100 million about 98 percent of the complex 

assets and liabilities and 93 percent of the total 

assets in the credit union system would be subject 

to the risk based capital requirement. 

24 80 FR 66625, 66663 (Oct. 29, 2015). 

25 80 FR 66625, 66663 (Oct. 29, 2015). The 2015 

Final Rule states ‘‘For the purpose of defining a 

complex credit union, assets include tangible and 

intangible items that are economic resources 

(products and services) that are expected to produce 

economic benefit (income), and liabilities are 

obligations (expenses) the credit union has to 

outside parties. The Board recognizes there are 

products and services—which under GAAP are 

reflected as the credit unions’ portfolio of assets and 

liabilities—in which credit unions are engaged that 

are inherently complex based on the nature of their 

risk and the expertise and operational demands 

necessary to manage and administer such activities 

effectively. Thus, credit unions offering such 

products and services have complex portfolios of 

assets and liabilities for purposes of NCUA’s riskbased net worth requirement.’’ 

26See 82 FR 39702, 39706 (Aug. 22, 2017). 

27See 12 CFR 723.2; and 81 FR 13529, 13538 

(March 14, 2016). 

regulatory burden on credit unions by 

more closely tailoring the applicability 

of the NCUA’s risk-based capital 

requirement to cover only those credit 

unions that, if they failed, individually 

could present an undue risk of loss to 

the NCUSIF. This amendment would 

exempt an additional 1,026 credit 

unions—a total of 90 percent 22 of all 

credit unions—from the 2015 Final 

Rule’s risk-based capital requirements. 

However, approximately 85 percent of 

the complex assets and liabilities and 76 

percent of the total assets in the credit 

union system would still be subject to 

the risk-based capital requirement.23

Accordingly, consistent with 

requirements of section 216(d)(1) of the 

FCUA, proposed § 702.103 would 

provide that, for purposes of § 702.102, 

a credit union is defined as ‘‘complex,’’ 

and a risk-based capital ratio 

requirement is applicable, only if the 

credit union’s quarter-end total assets 

exceed $500 million, as reflected in its 

most recent Call Report. 

Under the 2015 Final Rule, the NCUA 

determined that credit unions exceeding 

the $100 million asset-size threshold 

had portfolios of assets and liabilities 

that were complex based on the 

products and services in which such 

credit unions engaged. As explained 

further below, the $100 million assetsize threshold was developed as a proxy 

measure based on a detailed analysis 

performed by the NCUA. The threshold 

set forth a clear demarcation line, above 

which the NCUA determined all credit 

unions engaged in complex activities, 

and where almost all such credit unions 

(99 percent) were involved in multiple 

complex activities.24 The NCUA 

continues to believe that using a single 

asset-size threshold is appropriate, as it 

is clear, logical, and easy to administer. 

Moreover, using a single asset-size 

threshold provides regulatory relief for 

smaller institutions, and eliminates the 

potential unintended consequences of 

having a checklist of activities that 

would determine complexity on an 

institution-by-institution basis. 

The $100 million asset threshold 

adopted in the 2015 Final Rule for 

determining whether a credit union is 

complex was based on a complexity 

index (original complexity index or 

OCI). The OCI counted the number of 

complex products and services provided 

by credit unions based on the following 

indicators: 

• Member Business Loans 

• Participation Loans 

• Interest-Only Loans 

• Indirect Loans 

• Real Estate Loans 

• Non-Federally Guaranteed Student 

Loans 

• Investments with Maturities of 

Greater than Five Years (where the 

investments are greater than one 

percent of total assets) 

• Non-Agency Mortgage-Backed 

Securities 

• Non-Mortgage Related Securities With 

Embedded Options 

• Collateralized Mortgage Obligations/ 

Real Estate Mortgage Investment 

Conduits 

• Commercial Mortgage-Related 

Securities 

• Borrowings (Draws Against Lines of 

Credit, Borrowing Repurchase 

Transactions, Other Notes, Promissory 

Notes, and Interest Payable) 

• Repurchase Transactions 

• Derivatives 

• Internet Banking 

As discussed in more detail in the 

2015 Final Rule, these products and 

services were determined by the NCUA 

to be good indicators of complexity.25

To define ‘‘complex’’ credit unions for 

the 2015 Final Rule, the NCUA used the 

original complexity index to analyze 

June 30, 2014 and March 31, 2015 Call 

Report data. Based on the OCI, for credit 

unions with more than $100 million in 

assets, 100 percent engaged in offering 

at least one complex activity; 99 percent 

engaged in two or more complex 

activities; and 87 percent engaged in 

four or more complex activities. 

Accordingly, the Board determined it 

was appropriate to set the asset size 

threshold for ‘‘complex’’ credit unions 

at $100 million in total assets, 

subjecting credit unions with more than 

$100 million in assets to the NCUA’s 

risk-based capital requirements. 

As discussed in more detail below, 

the OCI did not take into account the 

volume of the complex activity engaged 

in by such credit unions. 

Following a careful review of the 2015 

Final Rule by the NCUA’s regulatory 

reform task force,26 the Board is now 

proposing to revise the original 

complexity index (revised complexity 

index or RCI), and to apply a new 

complexity ratio (complexity ratio or 

CR) for analyzing the portfolios of assets 

and liabilities of credit unions to 

determine which are ‘‘complex.’’ The 

RCI would amend 6 of the indicators in 

the original complexity index so the 

index will more accurately reflect 

‘‘complexity’’ in credit unions and take 

into account certain regulatory changes 

that were made after the 2015 Final Rule 

was approved. The revised complexity 

index would be the same as the original 

complexity index, with the following 

six changes: 

• Replace the indicator for ‘‘member 

business loans’’ with an indicator for 

‘‘commercial loans’’ to reflect changes to 

the NCUA’s member business lending 

rule,27 and current Call Report data 

collection requirements. 

• Replace the indicator for 

‘‘participation loans’’ (which included 

participation loans sold and 

participation loans held) with an 

indicator for ‘‘participation loans sold’’ 

to restrict the indicator to the most 

complex component of participation 

loans. 

• Replace the indicator for ‘‘interestonly loans’’ to exclude first-lien 

mortgages. The remaining interest only 

loans include complex payment 

options. For example, only requiring 

monthly payments of interest during 

draw periods. 

• Remove the indicator for ‘‘internet 

banking’’ because it has become a 

typical mechanism for members to 

transact business with most credit 

unions, with 78 percent of credit unions 

engaging in some type of internet 

banking. Also, it is not an asset or 

liability—therefore there is no suitable 

way to translate the volume into a 

financial measure for purposes of 

defining complex. 

• Remove the indicator for 

‘‘investments with maturities greater 

than five years (where the investments 

are greater than one percent of total 

assets)’’ because the indicator is 

adequately captured in the other index 

components. 

• Replace the indicator for ‘‘real 

estate loans (where the loans are greater 

than five percent of assets and/or sold 

mortgages)’’ with an indicator for ‘‘sold 


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39000 Federal Register / Vol. 83, No. 153 / Wednesday, August 8, 2018 / Proposed Rules 

28See 80 FR 66625, 66661 (Oct. 29, 2015) (As 

pointed out by at least one commenter, credit 

unions should not be considered complex unless 

complex activities are undertaken in significant 

volumes. The commenter provided the following 

example: A credit union that lends a member 

$60,000 to purchase new equipment for his bakery 

is engaged in member business lending, but that 

credit union should not be designated as complex 

by virtue of that single loan—assuming it is not a 

significant share of the credit union’s assets.). 

29Credit unions with assets between $250 million 

and $500 million hold a higher share of their 

portfolio in complex assets (32 percent) than the 

entire group of credit unions below $500 million in 

assets (23 percent), but it remains below the share 

of complex assets in credit unions above $500 

million in assets (40 percent). 

mortgages’’ to account for the most 

complex component of real estate loans. 

The NCUA believes the revised 

complexity index would provide a more 

accurate methodology, based on the 

assets and liabilities of credit unions, for 

identifying when credit unions engage 

in complex activities and defining credit 

unions as ‘‘complex.’’ Table 1 shows 

that, among credit unions with $500 

million or more in total assets, 100 

percent engage in at least one complex 

activity, and 96 percent engage in three 

or more complex activities. 

TABLE 1—REVISED COMPLEXITY INDEX BY ASSET CATEGORY, 2017Q4 CALL REPORT DATA

Asset category 

Number of 

credit 

unions 

Average 

index 

value 

Median 

index 

value 

Index >=1 

(%) 

Index >=2 

(%) 

Index >=3 

(%) 

Index >=5 

(%) 

Index >=6 

(%) 

<$100M ............................ 4,016 0.8 0.0 41 21 10 2 1 

$100M–$250M ................. 692 3.7 4.0 98 89 73 32 16 

$250M–$500M ................. 334 4.9 5.0 99 96 88 57 40 

$500M–$750M ................. 149 5.7 6.0 100 98 96 73 53 

$750M–$1B ...................... 95 6.1 7.0 100 100 97 79 64 

$1B+ ................................. 287 7.0 7.0 100 98 96 88 77 

In addition to the revised complexity 

index, the NCUA is also proposing to 

use a ratio of complex assets and 

liabilities to total assets (complexity 

ratio or CR) to evaluate the extent to 

which credit unions are involved in 

complex activities. The CR, when used 

in conjunction with the revised 

complexity index, takes into account the 

volume of the complex activity engaged 

in by complex credit unions and 

provides a more accurate measure of 

credit union complexity.28 The 

numerator of the CR would be the dollar 

value sum of the complex assets and the 

liabilities held by a credit union, where 

complex assets and liabilities are 

determined using the same complexity 

indicators as used in the RCI. The 

denominator of the CR would be the 

total assets of the credit union. 

As shown in Table 2 below, credit 

unions with greater than $500 million in 

total assets hold complex assets and 

liabilities as a larger share of their total 

assets than smaller credit unions. The 

complexity ratio increases from 23 

percent among credit unions with less 

than $500 million in assets to 40 percent 

among credit unions with more than 

$500 million in assets. Of the $497 

billion in complex assets and liabilities 

in the credit union system, $423 billion 

(85 percent)—the majority of complex 

assets and liabilities in the credit union 

system—are held among credit unions 

with more than $500 million in assets.29

TABLE 2—COMPLEXITY RATIO BY ASSET CATEGORIES, 2017Q4 CALL REPORT DATA

Asset category Number of 

credit unions 

Complex 

assets and 

liabilities 

Total assests Complex ratio 

(%) 

Share of 

complex A & L 

in the credit 

union system 

(%) 

Cumulative 

share of 

complex A & L 

in the credit 

union system 

(%) 

<$500M .................................................... 5,042 74,600 330,545 23 15 15 

>$500M .................................................... 531 422,553 1,048,289 40 85 100 

Table 3 below shows the share of 

credit unions in each asset category 

above various complex ratio thresholds. 

Larger credit unions are much more 

likely to have a significant share of their 

balance sheet in complex assets and 

liabilities. Nearly all credit unions (95 

percent) with more than $500 million in 

assets have complex assets and 

liabilities greater than 10 percent of 

their total assets, and 66 percent have 

complex assets and liabilities greater 

than 30 percent of their total assets. 

TABLE 3—COMPLEXITY RATIO ABOVE VARIOUS THRESHOLDS BY ASSET CATEGORIES, 2017Q4 

Asset category Complex ratio 

>10% 

Complex ratio 

>20% 

Complex ratio 

>30% 

<$500M ........................................................................................................................................ 29 18 11 

>$500M ........................................................................................................................................ 95 84 66 


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30Credit unions with assets between $250 million 

and $500 million are more likely to have a CR 

greater than 10 percent (88 percent) than the entire 

group of credit unions below $500 million in assets 

(29 percent), but it remains below the share of 

complex assets in credit unions above $500 million 

in assets (95 percent). Further, the difference 

widens significantly for CRs above 10 percent. Less 

than half (47 percent) of credit unions with assets 

between $250 million and $500 million have a CR 

greater than 30 percent, whereas over two-thirds of 

credit unions with more than $500 million in assets 

have a CR greater than 30 percent. 31Based on December 31, 2017 Call Report data. 32Based on December 31, 2017 Call Report data, 

93 percent of credit union assets would be covered 

based on the $100 million threshold established by 

the 2015 Final Rule. 33Based on December 31, 2017 Call Report data. 34Based on December 31, 2017 Call Report data. 

It is important to note that almost all of these credit 

unions already hold enough capital to meet either 

the risk-based capital requirements or the networth-based capital requirements. 

35Based on December 31, 2017 Call Report Data. 

36See, e.g., § 702.102(b) (Authorizes the NCUA 

Board to reclassify a well-capitalized credit union 

as adequately capitalized and may require an 

adequately capitalized or undercapitalized credit 

union to comply with certain mandatory or 

discretionary supervisory actions as if it were 

classified in the next lower capital category.). 

In general, two-thirds of credit unions 

with more than $500 million in total 

assets have complex assets and 

liabilities ratios above 30 percent. Only 

11 percent of credit unions with less 

than $500 million have complexity 

ratios above 30 percent.30

Using both the revised complexity 

index and the complexity ratio to 

determine the appropriate threshold for 

defining complex credit unions would 

exclude approximately 90 percent of 

credit unions from the risk-based capital 

requirement, while still covering 

approximately 76 percent of the assets 

held by federally insured credit 

unions.31 Moreover, the revised 

definition of a complex credit union 

would not represent undue risk to the 

NCUSIF, nor significantly decrease the 

level of complex assets and liabilities 

covered by the risk-based capital 

requirement. Even though the percent of 

total assets covered by the rule would 

fall from 93 percent 32 to 76 percent 

when compared to the $100 million 

threshold adopted in the 2015 Final 

Rule,33 85 percent of complex assets and 

liabilities would still be covered. 

In addition, if the historical trends in 

changes to the composition of the credit 

union community continue, the share of 

total assets covered by the rule will rise 

in the future, potentially reaching 90 

percent of total assets within the next 10 

years. Also, the higher asset threshold 

still captures those credit unions that, if 

they failed, individually could present 

an undue risk of loss to the NCUSIF. In 

addition, if the historical trends in 

changes to the composition of the credit 

union community continue and 

historical probability of failure and loss 

given failure rates (excluding fraud 

related failures) for credit unions with 

total assets between $100 and $500 

million and those with total assets over 

$500 million remain the same, total 

losses to the NCUSIF over the next 10 

years would likely be significantly 

larger for credit unions with more than 

$500 million in assets than for those 

with assets between $100 million and 

$500 million. 

TABLE 4—CREDIT UNIONS BOUND BY RISK-BASED CAPITAL, 2017Q4 CALL REPORT DATA

Asset category 

Number of 

complex credit 

unions bound by 

risk-based capital 

Capital required 

over the net 

worth ratio 

(million) 

Total assets 

(billion) 

Assets $100M–$500M ............................................................................................... 284 $165 $69 

Assets >$500M .......................................................................................................... 221 635 370 

Total .................................................................................................................... 505 800 439 

Under the 2015 Final Rule, an 

estimated 505 credit unions would face 

higher required capital levels as a result 

of risk-based capital requirements. 

These 505 credit unions have total 

assets of $439 billion and the 2015 Final 

Rule would raise their required capital 

levels by approximately $800 million 

above what is required by the net worth 

ratio.34 Under this proposal, the 284 

credit unions with assets between $100 

and $500 million would no longer have 

higher required capital levels as a result 

of risk-based capital requirements. 

However, as reflected in Table 4, this 

proposal would maintain most of the 

credit union assets subject to higher 

capital requirements, and incremental 

capital required by risk-based capital, 

under the 2015 Final Rule. 

Exempting credit unions with assets 

between $100 million and $500 million 

represents approximately 16 percent of 

the total assets of credit unions with 

required capital levels above what is 

required by the net worth ratio, and 

about 21 percent of the incremental 

capital the system is required to hold 

under the 2015 Final Rule. However, 

this proposal still encompasses 

approximately 84 percent of the total 

assets of credit unions with required 

capital levels above what is required by 

the net worth ratio, and almost 80 

percent of the incremental capital the 

system is required to hold under the 

2015 Final Rule. 

Under the 2015 Final Rule, a net of 20 

credit unions with total assets of $11.5 

billion would have a lower PCA 

classification with a capital shortfall of 

$84 million.35 Under this proposal, 6 

credit unions (net) with total assets of 

$8.8 billion would have a lower PCA 

classification and a capital deficiency of 

$71 million. Therefore, this proposal 

encompasses approximately 80 percent 

of the downgraded credit union assets 

and approximately 85 percent of the 

capital shortfall for these institutions. 

The Board also notes the NCUSIF is 

much stronger today than it was in 2015 

when the agency passed the 2015 Final 

Rule. The equity ratio of the NCUSIF 

was 1.29 percent in 2015. In 2018, the 

NCUSIF equity ratio will be 1.39 

percent even after an equity distribution 

of $736 million is paid to credit unions. 

The total funds held in the NCUSIF will 

be approximately $16 billion after the 

equity distribution this year, about $3.5 

billion more than the $12.4 billion held 

in the fund in 2015. 

The NCUA will continue to address 

any deficiencies in the capital levels of 

credit unions with $500 million or less 

in assets through the examination 

process.36 Sound capital levels are vital 

to the long-term health of all credit 

unions. Credit unions need to hold 

capital commensurate with their risk. 

Balancing proper capital accumulation 

with product offering and pricing 

strategies helps ensure credit unions are 

able to provide affordable member 

services over time. Credit unions are 

already expected to incorporate into 

their business models and strategic 

plans provisions for maintaining 

prudent levels of capital. 


amozie on DSK3GDR082PROD with PROPOSALS
39002 Federal Register / Vol. 83, No. 153 / Wednesday, August 8, 2018 / Proposed Rules 

37NCUA Interpretative Ruling and Policy 

Statement 15–1, available at https://www.ncua.gov/ 

regulation-supervision/Pages/rules/interpretiverulings-policy-statements.aspx. 

38 80 FR 66625, 66663–66664 (October 29, 2015). 

39Compare 80 FR 66663–66664, with 80 FR 

57512, 57514-57516 (Sept. 24, 2015). 

40 5 U.S.C. 601 et seq. 

41This proposal would limit risk-based capital 

requirements to only credit unions with assets of 

more than $500 million compared to the Other 

Banking Agencies’ risk-based capital standards that 

apply to banks of all sizes. As of December 31, 

2017, there were 1,450 and 4,294 FDIC-insured 

banks with assets of $100 million and $500 million 

or less, respectively. 

42Credit unions with assets between $100 million 

and $500 million make up 17 percent of assets in 

the credit union system, and only hold 13 percent 

of complex assets and liabilities. 

43For comparison, if the threshold were to remain 

at $100 million about 98 percent of the complex 

assets and liabilities and 93 percent of the total 

assets in the credit union system would still be 

subject to the risk-based capital requirement. 

44By way of comparison, the bank aggregate total 

risk-weighted assets to total assets ratio is 72.4 

percent as of December 31, 2017. Further, complex 

credit unions maintain a median risk-based capital 

ratio of 15.8 percent compared to a bank median 

risk-based capital ratio of 15.9 percent. Bank 

comparisons exclude banks with less than $50 

million in total assets and more than $60 billion in 

total assets to arrive at a more comparable asset 

profile to credit unions. 

45Of the 531 impacted credit unions, only 7, or 

1.3 percent, would have less than the 10 percent 

risk-based capital requirement to be well 

capitalized. Of these, one has a net worth ratio less 

than 7 percent and is therefore not a new 

downgrade in capital classification, but already 

categorized as less than well capitalized. If the asset 

threshold for the definition of complex credit union 

remained at $100 million, a net of 20 credit unions 

with total assets of $11.5 billion would have a lower 

capital classification, with a capital shortfall of 

approximately $84 million. 

Also, the Board wants to clarify for 

commenters that the standard under the 

Regulatory Flexibility Act for how the 

NCUA defines a ‘‘small credit union’’ 37

is different from the standard under the 

FCUA for how the agency defines 

‘‘complex credit union’’ for purposes of 

the risk-based net worth requirement.38

While both definitions currently use an 

asset threshold of greater than $100 

million in total assets, the thresholds 

were arrived at using different 

methodologies. The methodologies 

necessarily vary to address the different 

applicable statutory provisions.39 This 

proposal addresses and amends only the 

NCUA’s definition of ‘‘complex’’ credit 

unions as that term is defined under the 

2015 Final Rule. It does not address or 

propose to amend the NCUA’s current 

definition of ‘‘small credit unions’’ for 

purposes of the Regulatory Flexibility 

Act.40

V. Effective Date of the 2015 Final Rule 

The Board initially established the 

effective date of the 2015 Final Rule as 

January 1, 2019 to provide credit unions 

and the NCUA with an extended period 

to make necessary adjustments to 

systems, processes, and procedures, and 

to reduce the burden on affected credit 

unions in meeting the new 

requirements. Based on feedback from 

the credit union community and agency 

staff, and that the agency is proposing 

to change the definition of complex 

credit union, the Board believes it is 

necessary and beneficial to delay the 

effective date of the 2015 Final Rule as 

amended by this proposal by one year. 

Extending the effective date would 

provide covered credit unions 

additional time to adjust systems, 

processes, and procedures; and would 

help smooth the transition for complex 

credit unions affected by the 

requirements of the 2015 Final Rule. 

Until the 2015 Final Rule’s effective 

date, the NCUA’s current PCA 

regulation will remain in effect. The 

NCUA will continue to enforce the 

capital standards currently in place and 

address any supervisory concerns 

through existing regulatory and 

supervisory mechanisms. The Board 

believes that, given the facts above, 

extending the implementation period of 

the 2015 Final Rule for an additional 

year would be reasonable and would not 

pose undue risk to the NCUSIF. 

Accordingly, the Board proposes to 

change the effective date for the 2015 

Final Rule, and any changes to that rule 

finalized as part of this rulemaking, 

from January 1, 2019 to January 1, 2020. 

VI. Impact of the Proposed Regulation 

The proposed rule will lower the 

overall impact of the 2015 Final Rule by 

reducing the number of credit unions 

subject to the risk-based capital 

requirements of the rule. By increasing 

the threshold for defining a complex 

credit union from more than $100 

million to more than $500 million in 

assets, an additional 1,026 credit unions 

would be exempt from the 2015 Final 

Rule’s risk-based capital requirements. 

This represents significant burden relief 

for these relatively small credit unions, 

as half of them have assets of $190 

million or less. The proposed new 

definition of complex credit union 

would exempt a total of 90 percent 

(5,042) of all credit unions as of 

December 31, 2017.41 For comparison, if 

the threshold were to remain at $100 

million only about 72 percent of all 

credit unions would be exempt. 

While under this proposal 9 out of 10 

credit unions would be exempt, these 

institutions only hold 24 percent of total 

assets in the credit union system and 15 

percent of complex assets and 

liabilities.42 Thus, approximately 85 

percent of the complex assets and 

liabilities and 76 percent of the total 

assets in the credit union system would 

still be subject to the risk based capital 

requirement.43

The credit unions that would be 

defined as complex under this proposal 

have estimated aggregate and average 

risk-based capital ratios of 16.8 and 17.2 

percent, respectively. The aggregate 

risk-weighted assets to total assets ratio 

is 63 percent for complex credit unions 

under this proposal.44 Table 5 shows the 

distribution of estimated risk-based 

capital ratios for all complex credit 

unions based on this proposed rule. 

TABLE 5—DISTRIBUTION OF ESTIMATED RISK BASED CAPITAL RATIOS FOR COMPLEX CREDIT UNIONS

RBC Ratio <10% 10–13% 13–16% 16–20% 20–30% 30–50% >50% 

Number of CUs ............ 7 110 153 144 101 14 2 

As shown in Table 5 above, most 

complex credit unions will have a riskbased capital ratio well in excess of the 

10 percent level required to be well 

capitalized. Under this proposal, six 

complex credit unions with total assets 

of $8.8 billion would have a lower 

capital classification, with a capital 

shortfall of approximately $71 

million.45 Overall, 98.7 percent of all 

complex credit unions are well 

capitalized under this proposed rule. 

Credit unions often hold some margin 

above regulatory capital requirements. 

Table 6 below provides a comparison of 

the margins complex credit unions 

currently hold in excess of both the net 

worth ratio requirement and the riskbased capital requirement. 


amozie on DSK3GDR082PROD with PROPOSALS
Federal Register / Vol. 83, No. 153 / Wednesday, August 8, 2018 / Proposed Rules 39003 

46The required dollar amount for risk based 

capital is calculated as [(risk-weighted assets times 

10 percent) ¥ allowance for loan losses ¥ equity 

acquired in merger + total adjusted retained 

earnings acquired through business combinations + 

NCUA share insurance capitalization deposit + 

goodwill + identifiable intangible assets] ¥ (total 

assets × 7 percent). Complex credit unions in Table 

7 are categorized by whichever calculation results 

in a higher dollar volume. 

47The average net worth ratio is 10.3 percent for 

the 212 complex credit unions bound by risk-based 

capital while the average net worth ratio for the 310 

complex credit unions bound by the net worth ratio 

is 11.4 percent. 

48See 80 FR 57512 (Sept. 24, 2015). 

49 44 U.S.C. 3507(d). 

TABLE 6—DISTRIBUTION OF NET WORTH RATIO AND RISK-BASED CAPITAL RATIO FOR COMPLEX CREDIT UNIONS UNDER

THIS PROPOSAL

Number of CUs 

Less than 

well 

capitalized 

Well 

capitalized to 

well + 2% 

Well 

capitalized 

+2% to + 3.5% 

Well 

capitalized 

+3.5% to + 5% 

Greater than 

well capitalized 

+ 5% 

Net Worth Ratio ............................................... <7% 7%–9% 9%–10.5% 10.5%–12% >12% 

RBC Ratio ........................................................ <10% 10%–12% 12%–13.5% 13.5%–15% >15% 

Net Worth Ratio ............................................... 2 90 166 141 132 

RBC Ratio ........................................................ 7 54 82 88 300 

Both measures indicate the large 

majority of complex credit unions hold 

margins well above the levels required 

to be well-capitalized. 

The NCUA also analyzed complex 

credit unions to determine whether the 

net worth or risk-based capital 

requirement would require a credit 

union to hold more dollars of capital. 

Table 7 below summarizes the 

distribution of credit unions by the ratio 

of risk-weighted assets to total assets for 

credit unions bound by each capital 

requirement. 

TABLE 7—DISTRIBUTION OF RISK-WEIGHTED ASSETS TO TOTAL ASSETS RATIOS FOR COMPLEX CREDIT UNIONS BY

GOVERNING CAPITAL REQUIREMENT

Total 

number 

Average 

(%) 

Risk weighted assets/total assets 

<50% 50–60% 60–70% 70–80% 80–90% >90% 

Number Bound by Net Worth Ratio .................. 310 58.9 49 101 147 10 2 1 

Number Bound by Risk Based Capital ............. 221 71.9 0 3 81 128 6 3 

Forty-two percent of complex credit 

unions (221 complex credit unions with 

$370.3 billion in total assets) are 

estimated to have a higher minimum 

capital requirement in terms of dollars 

under the risk-based capital ratio than 

the net worth ratio.46 These 221 

complex credit unions have a notably 

higher risk profile than the other 310 

complex credit unions. The ratio of 

average risk weighted assets to total 

assets for the 221 complex credit unions 

is 72 percent, compared with 59 percent 

for the remaining 310 complex credit 

unions. Therefore, relative to what 

qualifies as capital for risk-based capital 

purposes, these institutions must hold 

more net worth in dollars to achieve a 

well-capitalized designation over what 

the net worth ratio requires. 

In addition, despite holding a greater 

share of risk-weighted assets, the riskbased capital-bound group of 221 

complex credit unions also has, on 

average, a net worth ratio that is 100 

basis point below the net worth ratio of 

the other 310 complex credit unions.47

Table 7 highlights the distribution of 

credit unions by risk weighted assets to 

total assets depending on whether the 

risk-based capital requirement 

necessitates more capital than the net 

worth ratio. The risk-based capitalbound group of 221 complex credit 

unions would have to retain more net 

worth in dollars than what is currently 

required due to the net worth ratio to 

satisfy the well-capitalized threshold. 

However, over 97 percent (215) of these 

institutions already hold more than 

enough capital to meet the risk-based 

capital requirement. 

VI. Request for Comment 

The Board is requesting comment on 

all aspects of the changes proposed in 

this proposed rule. In particular, the 

agency requests comments on: 

1. Whether the definition of a 

complex credit union, as defined under 

§ 701.103 of the 2015 Final Rule, should 

be amended to increase the threshold 

level for coverage from more than $100 

million in total assets to more than $500 

million in total assets? 

2. Whether the implementation date 

for the 2015 Final Rule should be 

amended to extend the effective date of 

the rule until January 1, 2020? 

VII. Regulatory Procedures 

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 credit unions with assets less 

than $100 million) 48 and publishes its 

certification and a short, explanatory 

statement in the Federal Register 

together with the rule. 

The proposed amendments to the 

2015 Final Rule and part 702 would 

only affect complex credit unions, 

which are those with greater than $100 

million in assets under the 2015 Final 

Rule and would be amended to cover 

only those with greater than $500 

million in assets under this proposal. As 

a result, credit unions with $100 million 

or less in total assets would not be 

affected by this proposal. Accordingly, 

the NCUA certifies that this proposal 

will not have a significant economic 

impact on a substantial number of small 

credit unions. 

Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) applies to rulemakings in which 

an agency by rule creates a new 

paperwork burden on regulated entities 

or modifies an existing burden.49 For 

purposes of the PRA, a paperwork 

burden may take the form of a reporting, 

disclosure, or recordkeeping 

requirement, each referred to as an 


amozie on DSK3GDR082PROD with PROPOSALS
39004 Federal Register / Vol. 83, No. 153 / Wednesday, August 8, 2018 / Proposed Rules 

50Proposed revisions to OMB control number 

3133–0191 have been submitted to OMB for 

approval in accordance with 5 CFR 1320.11. 

information collection. The NCUA may 

not conduct or sponsor, and the 

respondent is not required to respond 

to, an information collection unless it 

displays a currently valid Office of 

Management and Budget (OMB) control 

number. 

The proposed changes to part 702 

would increase the asset size of credit 

unions identified as complex from 

greater than $100 million to greater than 

$500 million. This change would reduce 

the number of credit unions who must 

comply with recordkeeping 

requirements prescribed by § 702.101(b). 

Therefore, the burden cleared under 

OMB number 3133–0191 will be revised 

to reflect the reduction in the number of 

respondents.50

Title of Information Collection: 

Prompt Corrective Action—Risk-Based 

Capital. 

OMB Control Number: 3133–0191. 

Affected Public: Private Sector: Notfor-profit institutions—Complex Credit 

Unions. 

Estimated Number of Respondents: 

531. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Hours per Response: 40. 

Estimated Total Annual Burden 

Hours: 21,240. 

By exempting credit unions with 

assets between $100 million and $500 

million, the NCUA estimates that the 

burden under this proposed rule would 

be 41,040 fewer hours. 

The Board invites comment on (a) 

whether the collections of information 

are necessary for the proper 

performance of the agency’s function, 

including practical utility; (b) the 

accuracy of estimates of the burden of 

the information collections, including 

the validity of the methodology and 

assumptions used; (c) ways to enhance 

the quality, utility, and clarity of the 

information being collected, and (d) 

ways to minimize the burden of the 

information collection on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology. 

All comments are a matter of public 

record. Comments regarding the 

information collection requirements of 

this rule should be sent to (1) Dawn 

Wolfgang, NCUA PRA Clearance 

Officer, National Credit Union 

Administration, 1775 Duke Street, Suite 

5080, Alexandria, Virginia 22314, or Fax 

No. 703–519–8572, or Email at 

PRAcomments@ncua.gov and the (2) 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Attention: Desk Officer for 

NCUA, New Executive Office Building, 

Room 10235, Washington, DC 20503, or 

email at 

OIRA_Submission,@OMB.EOP.gov. 

Submission of comments. 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. 

Executive Order 13132 

Executive Order 13132 encourages 

independent regulatory agencies to 

consider the impact of their actions on 

state and local interests. The NCUA, an 

independent regulatory agency as 

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

complies with the principles of the 

executive order to adhere to 

fundamental federalism principles. This 

proposed rule reduces the number of 

federally insured natural-person credit 

unions, including federally insured, 

state-chartered natural-person credit 

unions that would be subject to the 2015 

Final Rule. It may have, to some degree, 

a direct effect on the states, on the 

relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. It does not, 

however, rise to the level of material 

impact for purposed of Executive Order 

13132. 

Assessment of Federal Regulations and 

Policies on Families 

The NCUA has determined that this 

proposed rule will 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). 

List of Subjects in 12 CFR Part 702 

Credit unions, Reporting and 

recordkeeping requirements. 

By the National Credit Union 

Administration Board on August 2, 2018. 

Gerard Poliquin, 

Secretary of the Board. 

For the reasons discussed above, the 

Board proposes to further amend 12 

CFR part 702, as amended in a final rule 

at 80 FR 66625 (Oct. 29, 2015), effective 

January 1, 2019, as follows: 

PART 702—CAPITAL ADEQUACY 

■ 1. The authority citation for part 702 

continues to read as follows: 

Authority: 12 U.S.C. 1766(a), 1790d. 

§ 702.103 [Amended] 

■ 2. Amend § 702.103 by removing the 

words ‘‘one hundred million dollars 

($100,000,000)’’ and add in their place 

‘‘five hundred million dollars 

($500,000,000).’’ 

[FR Doc. 2018–16888 Filed 8–7–18; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2018–0722; Product 

Identifier 2017–SW–104–AD 

RIN 2120–AA64 

Airworthiness Directives; Bell 

Helicopter Textron Canada Limited 

Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to supersede 

airworthiness directive (AD) 2015–22– 

02 for Bell Helicopter Textron Canada 

Limited (Bell) Model 429 helicopters. 

AD 2015–22–02 requires inspecting the 

tail rotor (TR) pitch link assemblies. 

This proposed AD would retain the 

inspections of AD 2015–22–02 and 

would require replacing certain pitch 

link bearings. Since we issued AD 

2015–22–02, Bell has introduced a new 

design bearing. The actions of this 

proposed AD are intended to prevent an 

unsafe condition on these products. 

DATES: We must receive comments on 

this proposed AD by October 9, 2018. 

ADDRESSES: You may send comments by 

any of the following methods: 


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