11954 Federal Register / Vol. 80, No. 43 / Thursday, March 5, 2015 / Proposed Rules 

■ 4. Amend § 3555.108 by revising 

paragraph (d) to read as follows: 

§ 3555.108 Full faith and credit. 

* * * * * 

(d) Indemnification. If the Agency 

determines that a Lender did not 

originate a loan in accordance with the 

requirements in this part, and the 

Agency pays a claim under the loan 

guarantee, the Agency may revoke the 

lender’s eligibility status in accordance 

with subpart B of this part and may also 

require the lender: 

(1) To indemnify the Agency for the 

loss, if the default leading to the 

payment of loss claim occurred within 

five (5) years of loan closing, and the 

default arose from failure to originate 

the loan in accordance with agency 

requirements; or: 

(2) To indemnify the Agency for the 

loss regardless of how long ago the loan 

closed or the default occurred, if the 

Agency determines that fraud or 

misrepresentation was involved with 

the origination of the loan. 

(3) In addition, the Agency may use 

any other legal remedies it has against 

the Lender. 

* * * * * 

■ 5. Add § 3555.109 to read as follows: 

§ 3555.109 Qualified mortgage. 

A qualified mortgage is a guaranteed 

loan meeting the requirements of this 

part and applicable Agency guidance, as 

well as the requirements in 12 CFR 

1026.43(e)(i) through (iii) and 12 CFR 

1026.43(e)(3). 

■ 6. Section 3555.304 is amended by: 

■ a. Revising paragraph (d)(1). 

■ b. Removing paragraph (d)(3). 

■ c. Re-designating paragraphs (d)(4) 

through (8) as (d)(3) through (7) 

respectively. 

■ d. Adding paragraph (e). 

The revisions read as follows: 

§ 3555.304 Special servicing options. 

* * * * * 

(d) * * * 

(1) The maximum amount of a 

mortgage recovery advance is the sum of 

arrearages not to exceed 12 months of 

PITI, annual fees, legal fees and 

foreclosure costs related to a cancelled 

foreclosure action. 

* * * * * 

(e) Principal reduction advance. A 

principal reduction advance cannot be 

issued independently of a mortgage 

recovery advance, and the amount of the 

principal reduction advance, when 

combined with the mortgage recovery 

advance, cannot exceed 30 percent of 

the unpaid principal balance as of the 

date of default. Principal reduction 

advances can be considered only for 

loans originated and closed on or after 

January 1, 2001 through January 1, 2010. 

(1) After a mortgage recovery advance 

has been calculated, the principal 

reduction amount for the modified 

mortgage is determined by calculating 

how much principal reduction advance 

is needed to achieve a mortgage 

payment-to-income ratio that is 31 

percent or a proximate value extremely 

close to, but not less than, 31 percent, 

while ensuring that the total debt-toincome ratio does not exceed 55 percent 

and that the combined mortgage 

recovery advance and principal 

reduction advance does not exceed 30 

percent of the unpaid principal balance. 

(2) The Lender must have the 

borrower execute an unsecured 

promissory note payable to RHS for the 

amount of the principal reduction 

advance. 

(3) The following terms apply to the 

repayment of principal reduction 

advances: 

(i) The principal reduction advance 

debt under the promissory note shall be 

interest-free. 

(ii) Borrowers are not required to 

make any monthly or periodic payments 

on the principal reduction advance 

note; however, borrowers may 

voluntarily submit partial payments 

without incurring any prepayment 

penalty. 

(iii) The due date for the principal 

reduction advance note shall be three 

years from the date of the note. Prior to 

the due date on the principal reduction 

note, payment in full under the note is 

due should the borrower transfer title to 

the property by voluntary or involuntary 

means within three years of the 

principal reduction advance. 

(iv) At the conclusion of three years, 

RHS will review the account and 

determine if it is in good standing. An 

account will be deemed in good 

standing if it has not been 60 days or 

more delinquent over the past three 

years. If the debt is forgiven, RHS must 

report this amount to the Internal 

Revenue Service in accordance with 

applicable law and regulations. 

(v) If the account is in good standing 

at the conclusion of the three year 

period, RHS will forgive the principal 

reduction advance note and the 

borrower will be released of all liability 

from the principal reduction advance 

promissory note. 

(vi) If the account is not in good 

standing, the principal reduction 

advance note will be payable and due in 

full. The Agency will collect this 

Federal debt from the borrower by any 

available means if the principal 

reduction advance is not repaid based 

on the terms outlined in the promissory 

note. 

(4) The lender may request 

reimbursement from the Agency for a 

principal reduction advance. A fully 

supported and documented claim for 

reimbursement must be submitted to the 

Agency within 60 days of the advance 

being completed. To be complete, the 

lender must provide the original 

promissory note to the Agency. 

(5) The loss claim filed by the lender 

will be adjusted by any amount of 

principal recovery advance reimbursed 

to the lender by the Agency. 

* * * * * 

Dated: January 20, 2015. 

Tony Hernandez, 

Administrator, Rural Housing Service. 

[FR Doc. 2015–03711 Filed 3–4–15; 8:45 am] 

BILLING CODE 3410–XV–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 791 

RIN 3133–AE45 

Promulgation of NCUA Rules and 

Regulations 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule and interpretive 

ruling and Policy Statement 15–1 with 

request for comments. 

SUMMARY: The NCUA Board (Board) 

proposes to amend Interpretive Ruling 

and Policy Statement (IRPS) 87–2, as 

amended by IRPS 03–2 and 13–1. The 

amended IRPS would increase the asset 

threshold used to define small entity 

under the Regulatory Flexibility Act 

(RFA) from $50 million to $100 million 

and, thereby, provide transparent 

consideration of regulatory relief for a 

greater number of credit unions in 

future rulemakings. The proposed rule 

and IRPS also make a technical change 

to NCUA’s regulations in connection 

with NCUA’s procedures for developing 

regulations. 

DATES: Comments must be received on 

or before May 4, 2015. 

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/Legal/Regs/Pages/PropRegs.aspx. 

Follow the instructions for submitting 

comments. 

• Email: Address to regcomments@

ncua.gov. Include ‘‘[Your name]— 

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Federal Register / Vol. 80, No. 43 / Thursday, March 5, 2015 / Proposed Rules 11955 

1Public Law 96–354. 

2 IRPS 13–1, 78 FR 4032 (Jan. 18, 2013). 

3Public Law 104–121. 

4 Id. 

5 5 U.S.C. 603, 604, 605(b). The term ‘‘small 

entity’’ as used in the RFA includes small 

businesses, small organizations, and small 

government jurisdictions. 5 U.S.C. 601(6). Credit 

unions fall within the definition of organization. 5 

U.S.C. 601(4). 

6 5 U.S.C. 603, 604. 

7 Id. 

8 5 U.S.C. 605(b). 

9 5 U.S.C. 603(b). The IRFA must also include a 

description of why the agency is considering action 

and ‘‘a succinct statement of the objectives of, and 

legal basis for, the proposed rule . . . .’’ Id. 

10 5 U.S.C. 603(c). 

11 Id. 

12 5 U.S.C. 604(a). 

13 5 U.S.C. 601. 

14 5 U.S.C. 601(4). 

15 Id. 

16 Id. 

17 IRPS 81–4, 46 FR 29248 (June 1, 1981). 

18 52 FR 35231 (Sept. 8, 1987). 

19 68 FR 31949 (May 29, 2003). 

20 78 FR 4032 (Jan. 18, 2013). 

Comments on Proposed Rule 791 and 

IRPS 15–1’’ 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. 

Public Inspection: You can view all 

public comments on NCUA’s Web site 

at http://www.ncua.gov/Legal/Regs/

Pages/PropRegs.aspx as submitted, 

except for those we cannot post for 

technical reasons. NCUA will not edit or 

remove any identifying or contact 

information from the public comments 

submitted. You may inspect paper 

copies of comments 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 email to OGCMail@

ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Kevin Tuininga, Lead Liquidations 

Counsel, Office of General Counsel, 

National Credit Union Administration, 

1775 Duke Street, Alexandria, Virginia 

22314–3428 or telephone: (703) 518– 

6543. 

SUPPLEMENTARY INFORMATION: 

I. Background 

II. The Proposed Rule and IRPS 

III. Regulatory Procedures 

I. Background 

A. What changes does this proposed 

rule make? 

The RFA,1 as amended, generally 

requires federal agencies to determine 

and consider the impact of proposed 

and final rules on small entities. Since 

adopting IRPS 13–1 in 2013, the Board 

has defined ‘‘small entity’’ in this 

context as a federally insured credit 

union (FICU) with less than $50 million 

in assets.2 This proposed rule and IRPS 

15–1 redefines ‘‘small entity’’ as a FICU 

with less than $100 million in assets. In 

addition, the proposed rule amends 

§ 791.8(a) of NCUA’s regulations to 

cross reference proposed IRPS 15–1. 

Section 791.8(a) governs NCUA’s 

procedures for developing regulations 

and incorporates IRPS 87–2 and each of 

its amendments. 

B. Why is the board proposing this rule 

and IRPS? 

The Board is proposing this 

rulemaking and IRPS to increase the 

number of FICUs that receive special 

consideration of regulatory relief under 

the RFA. Congress enacted the RFA in 

1980 and amended it with the Small 

Business Regulatory Enforcement 

Fairness Act of 1996.3 A principal 

purpose of the 1996 amendment was to 

provide an opportunity for judicial 

review of agency compliance with the 

RFA.4

The RFA, in part, requires federal 

agencies to determine whether a 

proposed or final rule would have a 

significant economic impact on a 

substantial number of small entities.5 If 

so, the RFA requires agencies to engage 

in a small entity impact analysis, known 

as an initial regulatory flexibility 

analysis (IRFA) for proposed rules and 

a final regulatory flexibility analysis 

(FRFA) for final rules.6 The IRFA and 

FRFA each must be published in the 

Federal Register.7 If an agency 

determines that a proposed or final rule 

will not have a ‘‘significant economic 

impact on a substantial number of small 

entities,’’ the agency may certify as 

much in the Federal Register and forego 

the IRFA and FRFA.8

For an IRFA, the procedural 

requirements include, among other 

things, ‘‘a description of and, where 

feasible, an estimate of the number of 

small entities to which the proposed 

rule will apply,’’ a description of 

reporting, recordkeeping, and other 

compliance burden, and an 

identification of any overlapping or 

conflicting federal rules.9 In addition, 

the IRFA must ‘‘contain a description of 

any significant alternatives to the 

proposed rule which accomplish the 

stated objectives . . . and which 

minimize any significant economic 

impact of the proposed rule on small 

entities.’’ 10 This discussion must 

include alternatives such as allowing 

‘‘differing compliance or reporting 

requirements or timetables,’’ ‘‘the 

clarification, consolidation, or 

simplification of compliance and 

reporting requirements,’’ ‘‘the use of 

performance rather than design 

standards,’’ and a full or partial 

exemption for small entities.11

The FRFA must meet requirements 

similar to that of the IRFA, but must 

also discuss and respond to public 

comments and describe ‘‘the steps the 

agency has taken to minimize the 

significant economic impact on small 

entities . . ., including a statement of 

factual, policy, and legal reasons for 

selecting the alternative adopted in the 

final rule and why each one of the other 

significant alternatives to the rule . . . 

was rejected.’’ 12 These processes 

encourage federal agencies to give 

special consideration to the ability of 

smaller entities to absorb compliance 

burdens imposed by new rules. 

The RFA establishes terms for various 

subgroups that fall within the meaning 

of ‘‘small entity,’’ including ‘‘small 

business,’’ ‘‘small organization,’’ and 

‘‘small governmental jurisdiction.’’ 13

FICUs, as not-for-profit enterprises, are 

‘‘small organizations,’’ within the 

broader meaning of ‘‘small entity.’’ The 

RFA permits a regulator, including 

NCUA, to establish one or more 

definitions of ‘‘small organization,’’ as 

appropriate to the activities of the 

agency.14 An agency’s definition must 

be subjected to public comment and 

published in the Federal Register.15 The 

RFA provides a default definition of 

‘‘small organization’’ as ‘‘a not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. . . .’’ 16

In 1981, the Board initially defined 

‘‘small entity’’ in the credit union 

context as any FICU with less than $1 

million in assets.17 IRPS 87–2 

superseded IRPS 81–4, but retained the 

definition of ‘‘small entity’’ as a FICU 

with less than $1 million in assets.18

The Board updated the definition in 

2003 to include FICUs with less than 

$10 million in assets with IRPS 03–2.19

The last update occurred in 2013, when 

the Board increased the defining 

threshold to include FICUs with less 

than $50 million in assets in IRPS 

13–1.20 In addition, in IRPS 13–1, the 

Board pledged to review the RFA 

threshold after two years and thereafter 

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11956 Federal Register / Vol. 80, No. 43 / Thursday, March 5, 2015 / Proposed Rules 

21 Id. IRPSs 87–2, 03–2, and 13–1 are 

incorporated by reference into NCUA’s rule 

governing the promulgation of regulations. 12 CFR 

791.8(a). 

22 68 FR 31949, 31950 (May 29, 2003); 78 FR 

4032, 4034 (Jan. 18, 2013). 

23 78 FR 4032 (Jan. 18, 2013). 

24 5 U.S.C. 601(4). 

25The data used to calculate each of the metrics 

is adjusted to prevent outliers from skewing the 

average results. 

on a three-year cycle, similar to its 

regulatory review process.21

As a result of conducting its review 

two years following the issuance IRPS 

13–1, the Board believes it should 

increase the asset threshold used to 

define ‘‘small entity’’ from $50 million 

to $100 million. In its last two 

adjustments to the RFA threshold, the 

Board primarily referenced inflation, 

asset growth, and the percentage of 

FICUs covered by certain 1998 

amendments to the Federal Credit 

Union Act to justify increasing the 

threshold.22 In light of the persistent 

economic trends in the industry that are 

discussed below, the Board has decided 

to bypass the extrapolation approach it 

has used in the past, which would 

justify only an incremental increase to 

the RFA threshold at this time. Instead, 

the Board believes it should weigh 

competitive disadvantages within the 

credit union industry, relative threats to 

the National Credit Union Share 

Insurance Fund (Insurance Fund), and 

the need for broader regulatory relief to 

adopt a larger increase. 

Increasing the RFA threshold to $100 

million will account for FICUs that 

generally face significant challenges 

from their relatively small asset base, 

membership, and economies of scale. 

The Board believes competitive 

disadvantages, rather than industry 

percentages, better delineate which 

FICUs should receive special 

consideration during future 

rulemakings. This new approach would 

result in a more inclusive threshold 

with respect to RFA coverage, reflecting 

the Board’s intent to reduce regulatory 

burdens for FICUs under $100 million 

in assets. 

II. The Proposed Rule and IRPS 

This proposed rule and IRPS 15–1 

would amend IRPS 87–2 (as amended 

by IRPS 03–2 and IRPS 13–1) by 

changing the definition of ‘‘small 

entity’’ to include FICUs with less than 

$100 million in assets. The increased 

threshold would cause NCUA to give 

special consideration to the economic 

impact of proposed and final regulations 

on an additional 745 small FICUs, 

bringing the total number of FICUs 

covered by the RFA to approximately 

4,869. The proposed rule and IRPS 15– 

1 retains the three-year review cycle that 

the Board adopted in 2013. IRPS 15–1 

would be incorporated by reference into 

§ 791.8(a) of NCUA’s regulations 

governing regulatory procedures, and it 

would replace the reference to IRPS 13– 

1. 

In IRPS 13–1, the Board combined 

adjustments to existing regulatory asset 

thresholds with an increase to the RFA 

threshold.23 Specifically, asset 

thresholds addressed in IRPS 13–1 

included the threshold governing the 

definition of ‘‘complex’’ in § 702.103(a) 

of NCUA’s regulations, which 

determines the application of risk-based 

net worth requirements, and the 

threshold providing an exemption to 

NCUA’s interest rate risk (IRR) rule in 

§ 741.3(b)(5). Rather than replicate this 

approach in this proposal, the Board 

will separately establish the asset 

threshold used to define which FICUs 

are ‘‘complex’’ in § 702.103(a) in the 

risk-based capital rule itself. Further, 

other regulatory asset thresholds, 

including those applying to IRR and 

liquidity requirements, will be 

separately considered in the Board’s 

general three-year regulatory review 

cycle. Individual review will facilitate 

consideration of unique risks and 

compliance burdens that are specific to 

those rules, rather than encouraging a 

one-size-fits-all approach. 

A. How did the Board identify $100 

million as an appropriate asset 

threshold for the RFA? 

The Board believes that the RFA 

threshold proposed in this rulemaking 

and IRPS will result in thorough 

consideration of regulatory relief for a 

larger number of FICUs in future 

rulemakings. Thus, to determine an 

appropriate asset threshold for the RFA 

and support a significant increase, the 

Board considered which FICUs are most 

disadvantaged in comparison to their 

peers, as well as risk to the Insurance 

Fund. The concept of competitive 

disadvantage aligns well with 

Congress’s default description of RFAcovered entities as those that are ‘‘not 

dominant’’ in their field.24 In an effort 

to determine which institutions fall 

within that concept in this proposed 

rule and IRPS, the Board examined the 

following industry metrics for the 

period between 2001 and 2013: 

• Deposit growth rates; 

• asset growth rates; membership 

growth rates; 

• loan origination growth rates; 

• inflation-adjusted average loan 

amounts; 

• ratio of operating costs to assets; 

• merger and liquidation trends; 

• average year-to-date loan amounts; 

• non-interest expenses per dollar 

loaned; 

• average assets per full-time 

employee; and 

• average non-interest expense per 

annual loan originations. 

As discussed below, rates of deposit 

growth, rates of membership growth, 

rates of loan origination growth, and the 

ratio of operating costs to assets 

exemplified the results of the Board’s 

examination.25

(i) Slower Deposit Growth Rates 

Smaller FICUs have consistently 

demonstrated an inability to grow their 

deposit base at a rate that keeps pace 

with larger FICUs. This slower growth 

rate makes it difficult for smaller FICUs 

to cover fixed costs, which are 

increasing over time. FICUs with 

growing deposits and loans are able to 

spread out fixed costs and incrementally 

reduce operating costs. 

In general, deposit growth rates drop 

off significantly for FICUs with less than 

$100 million in assets. FICUs with less 

than $100 million in assets as of the end 

of the year 2000 grew their deposits by 

an average of 4.0 percent annually over 

the next 13 years. In comparison, FICUs 

with greater than $100 million in assets 

as of the end of the year 2000 grew 

deposits at 7.3 percent annually, on 

average, over the same period. On an 

asset-weighted basis, the industry’s 

average deposit growth rate from 2001 

to 2013 was 7.0 percent per year. 

(ii) Slower Membership Growth Rates 

FICUs with less than $100 million in 

assets also had significantly slower 

membership growth rates than larger 

FICUs. On average, FICUs with less than 

$100 million in assets as of the end of 

the year 2000 had their membership 

shrink by 0.5 percent annually over the 

next 13 years. In contrast, FICUs with 

more than $100 million in assets as of 

the end of the year 2000 grew their 

membership by 2.3 percent annually 

over the same period. On an assetweighted basis, the industry’s 

membership growth rate was 1.7 percent 

per year from 2001 to 2013. 

(iii) Slower Growth in Loan Originations 

FICUs with less than $100 million in 

assets also had significantly slower 

growth in loan originations than larger 

FICUs. On average, FICUs with less than 

$100 million in assets as of the end of 

the year 2000 grew loan originations by 

2.3 percent annually over the next 13 

years. In contrast, FICUs with more than 

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Federal Register / Vol. 80, No. 43 / Thursday, March 5, 2015 / Proposed Rules 11957 

26 44 U.S.C. 3507(d). 

$100 million in assets as of the end of 

the year 2000 grew their loan 

originations by 8.5 percent annually 

over the same period. On an assetweighted basis, the industry’s loan 

origination growth was 6.9 percent per 

year from 2001 to 2013. 

(iv) Higher Operating Expenses 

FICUs with less than $100 million in 

assets also had higher annual operating 

expenses per unit of assets and per 

dollar of loan originations compared to 

other asset groups. On average, FICUs 

with less than $100 million in assets as 

of the end of the year 2000 had annual 

operating expenses equal to 4.0 percent 

of assets over the next 13 years. FICUs 

with more than $100 million in assets 

as of the end of the year 2000 had 

annual operating expenses of 3.5 

percent of assets over the same period. 

The impact of these differences in 

operating expenses can be dramatic. 

Between 2001 and 2013, FICUs with 

less than $100 million in assets as of the 

end of the year 2000, had operating 

expenses, on average, equal to 18 cents 

for every dollar in loan originations. 

This expense ratio was a third higher 

than at FICUs with more than $100 

million in assets as of the end of the 

year 2000, which averaged annual 

operating expenses equal to 13 cents for 

every dollar in loan originations over 

the same period. 

The 50-basis-point difference in 

operating expenses (as a share of assets) 

between FICUs above and below the 

$100 million asset threshold resulted in 

large and persistent differences in 

earnings between these FICUs. The 

earnings gap between FICUs above and 

below the $100 million threshold 

averaged 40 basis points from 2001 to 

2013. To put this in perspective, during 

that period, 25 percent of FICUs below 

the $100 million asset threshold had 

negative earnings. Only 3.3 percent of 

FICUs with more than $100 million in 

assets had negative earnings over the 

same period. FICUs with persistently 

weak or negative earnings are more 

likely to go out of business via failure 

or merger. 

The Board believes that if smaller 

FICUs are going to be successful and 

meet their mission in the long term, 

they should have every feasible 

opportunity to lower costs. Challenges 

related to lagging deposit growth, 

stagnant membership, and high 

operating costs have caused FICUs with 

less than $100 million in assets to merge 

and/or fail at higher rates. Despite 

representing 83 percent of all FICUs, 

FICUs with less than $100 million in 

assets experienced 96 percent of 

mergers and liquidations since 2004 

(through the second quarter of 2014). 

Although the number of mergers and 

failures for FICUs below $100 million is 

disproportionately high, losses suffered 

by FICUs with assets between $50 

million and $100 million have 

historically been relatively small. Seven 

FICUs between $50 million and $100 

million in inflation-adjusted assets 

failed between the first quarter of 2002 

and second quarter of 2014. Resulting 

losses totaled less than $52 million. In 

contrast, losses for FICUs between $100 

million and $200 million were more 

than triple that amount over the same 

period. Moreover, FICUs with between 

$50 million and $100 million in assets 

represent a small additional share of the 

system’s assets (4.8 percent). Thus, to 

the extent the increase to $100 million 

results in more FICU exemptions from 

rules governing safety and soundness, 

the Board does not believe it will 

present material risk to the Insurance 

Fund. 

By increasing the RFA threshold to 

$100 million in assets, the Board 

recognizes its role in ensuring 

additional scrutiny of the regulatory 

costs of FICUs under that threshold. The 

increase to $100 million in assets will 

require the Board to engage in the 

public analytical process the RFA 

requires for the benefit of significantly 

more FICUs whenever a regulation 

would impose significant economic 

burdens on a substantial number of 

FICUs under $100 million. Further, it 

will encourage the consideration of 

alternatives for more FICUs and subject 

that consideration to the benefit of 

public comments. 

B. How will the proposed rule and IRPS 

affect FICUs? 

The change to the RFA threshold will 

ensure that regulatory relief will be 

consistently and robustly considered for 

an additional 745 FICUs. Future rules 

are more likely to invoke an RFA 

analysis because of the significantly 

increased threshold. When an IRFA or 

FRFA is triggered, these additional 

FICUs will have the benefit of an 

opportunity to comment on a 

transparent and published analysis of 

impacts and alternatives. 

In all, approximately 4,869 FICUs 

with less than $100 million in assets 

would come within the RFA’s mandates 

as of the adoption of this proposed rule 

and IRPS. This represents 76.7 percent 

of FICUs. For all of these FICUs, future 

regulations will be thoroughly evaluated 

to determine whether an exemption or 

other separate consideration should 

apply. 

III. Regulatory Procedures 

A. Regulatory Flexibility Act 

The RFA requires NCUA to prepare 

an analysis to describe any significant 

economic impact a proposed rule may 

have on a substantial number of small 

entities (currently defined by NCUA as 

FICUs with under $50 million in assets). 

In this case, the proposed rule and IRPS 

expands the number of FICUs defined as 

small entities under the RFA. The 

proposed rule and IRPS therefore will 

not have a significant economic impact 

on a substantial number of FICUs under 

$50 million in assets that are already 

covered by the RFA. 

With respect to additional FICUs that 

would be covered by the RFA, a 

significant component of the proposed 

rule and IRPS will provide prospective 

relief in the form of special and more 

robust consideration of their ability to 

handle compliance burden. This 

prospective relief is not yet quantifiable. 

Further, the proposed rule and IRPS can 

only reduce, rather than increase, 

compliance burden for these FICUs and, 

therefore, will not raise costs in a 

manner that requires an IRFA or FRFA 

or a discussion of alternatives for 

minimizing the proposed rule’s 

compliance burden. Accordingly, NCUA 

has determined and certifies that the 

proposed rule and IRPS will not have a 

significant economic impact on a 

substantial number of small entities. No 

regulatory flexibility analysis is 

required. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) applies to rulemakings in which 

an agency creates a new paperwork 

burden on regulated entities or modifies 

an existing burden.26 For purposes of 

the PRA, a paperwork burden may take 

the form of either a reporting or a 

recordkeeping requirement, both 

referred to as information collections. 

The proposed changes to IRPS 87–2, as 

amended by IRPSs 03–2 and 13–1, will 

not create any new paperwork burden 

for FICUs. Thus, NCUA has determined 

that the terms of this proposed rule and 

IRPS do not increase the paperwork 

requirements under the PRA and 

regulations of the Office of Management 

and Budget. 

C. Executive Order 13132 

Executive Order 13132 encourages 

independent regulatory agencies to 

consider the impact of their actions on 

state and local interests. NCUA, an 

independent regulatory agency as 

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

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11958 Federal Register / Vol. 80, No. 43 / Thursday, March 5, 2015 / Proposed Rules 

complies with the executive order to 

adhere to fundamental federalism 

principles. This proposed rule and IRPS 

would not have a substantial 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. NCUA has 

determined that this proposed rule does 

not constitute a policy that has 

federalism implications for purposes of 

the executive order. 

D. Assessment of Federal Regulations 

and Policies on Families 

NCUA has determined that this 

proposed rule and IRPS 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 791 

Administrative practice and 

procedure, Credit unions, Sunshine Act. 

By the National Credit Union 

Administration Board on February 19, 2015. 

Gerard Poliquin, 

Secretary of the Board. 

■ For the reasons discussed above, the 

Board proposes to amend IRPS 87–2 (as 

amended by IRPS 03–2 and IRPS 13–1) 

by revising the second sentence of 

paragraph 2 of Section II and replacing 

the last two sentences of paragraph 2 of 

Section II to read as follows: 

Interpretive Ruling and Policy Statement 

87–2 

II. Procedures for the Development of 

Regulations 

* * * * * 

2. * * * NCUA will designate federally 

insured credit unions with less than $100 

million in assets as small entities. * * * 

Every three years, the NCUA Board will 

review and consider adjusting the asset 

threshold it uses to define small entities for 

purposes of analyzing whether a regulation 

will have a significant economic impact on 

a substantial number of small entities. 

* * * * * 

For the reasons discussed above, the 

Board proposes to amend 12 CFR part 

791 as follows: 

PART 791—RULES OF NCUA BOARD 

PROCEDURES; PROMULGATION OF 

NCUA RULES AND REGULATIONS; 

PUBLIC OBSERVATION OF NCUA 

BOARD MEETINGS 

■ 1. The authority citation for part 791 

continues to read as follows: 

Authority: 12 U.S.C. 1766, 1789 and 5 

U.S.C 552b. 

■ 2. Amend § 791.8(a) to read as 

follows: 

§ 791.8 Promulgation of NCUA rules and 

regulations. 

(a) NCUA’s procedures for developing 

regulations are governed by the 

Administrative Procedure Act (5 U.S.C. 

551 et seq.), the Regulatory Flexibility 

Act (5 U.S.C. 601 et seq.), and NCUA’s 

policies for the promulgation of rules 

and regulations as set forth in its 

Interpretive Ruling and Policy 

Statement 87–2, as amended by 

Interpretive Ruling and Policy 

Statements 03–2, 13–1, and 15–1. 

[FR Doc. 2015–03806 Filed 3–4–15; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 25 

[Docket No. FAA–2015–0455; Notice No. 25– 

15–04–SC] 

Special Conditions: Bombardier 

Aerospace, Models BD–500–1A10 and 

BD–500–1A11; Electronic Flight 

Control System: Lateral-Directional 

and Longitudinal Stability and LowEnergy Awareness 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed special 

conditions. 

SUMMARY: This action proposes special 

conditions for the Bombardier 

Aerospace Models BD–500–1A10 and 

BD–500–1A11 series airplanes. These 

airplanes will have a novel or unusual 

design feature when compared to the 

state of technology envisioned in the 

airworthiness standards for transport 

category airplanes. This design feature 

is a fly-by-wire electronic flight control 

system that provides an electronic 

interface between the pilot’s flight 

controls and the flight control surfaces 

for both normal and failure states. The 

system generates the actual surface 

commands that provide for stability 

augmentation and control about all 

three airplane axes. The applicable 

airworthiness regulations do not contain 

adequate or appropriate safety standards 

for this design feature. These proposed 

special conditions contain the 

additional safety standards that the 

Administrator considers necessary to 

establish a level of safety equivalent to 

that established by the existing 

airworthiness standards. 

DATES: Send your comments on or 

before April 20, 2015. 

ADDRESSES: Send comments identified 

by docket number FAA–2015–0455 

using any of the following methods: 

• Federal eRegulations Portal: Go to 

http://www.regulations.gov/ and follow 

the online instructions for sending your 

comments electronically. 

• Mail: Send comments to Docket 

Operations, M–30, U.S. Department of 

Transportation (DOT), 1200 New Jersey 

Avenue SE., Room W12–140, West 

Building Ground Floor, Washington, 

DC, 20590–0001. 

• Hand Delivery or Courier: Take 

comments to Docket Operations in 

Room W12–140 of the West Building 

Ground Floor at 1200 New Jersey 

Avenue SE., Washington, DC, between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. 

• Fax: Fax comments to Docket 

Operations at 202–493–2251. 

Privacy: The FAA will post all 

comments it receives, without change, 

to http://www.regulations.gov/, 

including any personal information the 

commenter provides. Using the search 

function of the docket Web site, anyone 

can find and read the electronic form of 

all comments received into any FAA 

docket, including the name of the 

individual sending the comment (or 

signing the comment for an association, 

business, labor union, etc.). DOT’s 

complete Privacy Act Statement can be 

found in the Federal Register published 

on April 11, 2000 (65 FR 19477–19478), 

as well as at 

http://DocketsInfo.dot.gov/. 

Docket: Background documents or 

comments received may be read at 

http://www.regulations.gov/ at any time. 

Follow the online instructions for 

accessing the docket or go to the Docket 

Operations in Room W12–140 of the 

West Building Ground Floor at 1200 

New Jersey Avenue SE., Washington, 

DC, between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: Joe 

Jacobsen, FAA, Airplane and Flight 

Crew Interface, ANM–111, Transport 

Airplane Directorate, Aircraft 

Certification Service, 1601 Lind Avenue 

SW., Renton, Washington, 98057–3356; 

telephone 425–227–2011; facsimile 

425–227–1320. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite interested people to take 

part in this rulemaking by sending 

written comments, data, or views. The 

most helpful comments reference a 

specific portion of the special 

conditions, explain the reason for any 

recommended change, and include 

supporting data. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS