41978 Federal Register / Vol. 63, No. 151 /Thursday, August 6, 1998 / Proposed Rules

(ii) Real estate loans purchased in

accordance with paragraph (b)(1)(iv) of

this section;

(iii) Eligible obligations purchased in

accordance with paragraph (b)(1)(i) of

this section that are refinanced by the

purchaser so that it is a loan it is

empowered to grant; and

(iv) An indirect lending or indirect

leasing arrangement that is classified as

a loan and not the purchase of an

eligible obligation because the federal

credit union makes the final

underwriting decision and the sales or

lease contract is assigned to the federal

credit union very soon after it is signed

by the member and the dealer or leasing

company.

* * * * *

[FR Doc. 98–20952 Filed 8–5–98; 8:45 am]

BILLING CODE 7535–01–P

NATIONAL CREDIT UNION

ADMINISTRATION

12 CFR Part 701

Organization and Operations of

Federal Credit Unions

AGENCY: National Credit Union

Administration (NCUA).

ACTION: Notice of proposed rulemaking.

SUMMARY: The NCUA is proposing to

incorporate into its regulations the

agency’s longstanding interpretation

that federal credit unions can permit a

nonmember to assume a member’s longterm residential real estate loan in

conjunction with the nonmember’s

purchase of the member’s principal

residence.

DATES: Comments must be received on

or before October 5, 1998.

ADDRESSES: Direct comments to Becky

Baker, Secretary of the Board. Mail or

hand-deliver comments to: National

Credit Union Administration, 1775

Duke Street, Alexandria, Virginia

22314–3428. Fax comments to (703)

518–6319. Please send comments by one

method only.

FOR FURTHER INFORMATION CONTACT:

Michael J. McKenna, Staff Attorney,

Division of Operations, Office of

General Counsel, at the above address or

telephone: (703) 518–6540.

SUPPLEMENTARY INFORMATION: Since

1977, federal credit unions have had the

authority to offer long-term real estate

loans to finance a member’s principal

residence. 12 U.S.C. 1757(A)(i). NCUA’s

implementing regulation for this

authority is set forth at 12 CFR

701.21(g).

In 1985, the NCUA Board issued

Interpretive Ruling and Policy

Statement 85–3 (IRPS 85–3). 50 FR

51840 (December 20, 1985). IRPS 85–3

stated that, incidental to a federal credit

union’s authority to make long-term real

estate loans to members, a federal credit

union may permit assumptions, by

either members or nonmembers, under

the terms and conditions specified in

the loan agreement and consistent with

the Federal Credit Union Act and

NCUA’s Regulations. The Board also

stated that, in the case of a nonmember

assumption, there must be no new

money lent to the borrower and no

extension of the original maturity date

specified in the loan agreement with the

member.

NCUA has a policy of periodically

reviewing its regulations to ‘‘update,

clarify and simplify existing regulations

and eliminate redundant and

unnecessary provisions.’’ IRPS 87–2,

Developing and Reviewing Government

Regulations. As part of its regulatory

review program, NCUA reviewed its

IRPS to determine their current

effectiveness. As a result of that review,

the NCUA Board stated that it planned

to incorporate IRPS 85–3 into NCUA’s

Regulations. 62 FR 11773 (March 13,

1997) and 62 FR 50245 (September 25,

1997). The Board’s goal is to increase

regulatory effectiveness by making it

easier for credit unions to locate

applicable rules regarding real estate

lending. Accordingly, the Board is

proposing to add a new paragraph to

Section 701.21(g) that will incorporate

IRPS 85–3 so that this provision on

nonmember assumption of loans will be

in the same place with the other

regulatory provisions regarding real

estate lending. Although the language is

slightly different, the policy set forth in

the proposed amendment is, for all

practical purposes, identical to the

policy set forth in IRPS 85–3.

This proposal does not authorize a

refinancing by a nonmember. Further,

this proposal, just as IRPS 85–3, does

not permit a federal credit union to

grant an assumption of a loan to a

nonmember if the underlying intent of

the original loan to the member was to

grant an assumption by a nonmember

immediately or soon after making the

original loan. NCUA would view such a

transaction as a sham and will not

permit federal credit unions to

circumvent the restriction on lending to

nonmembers. NCUA will review

assumptions by nonmembers during the

examination process. Federal credit

unions engaging in such sham

transactions will be subject to NCUA’s

administrative enforcement process.

This proposal does not require a

federal credit union to permit

nonmember assumption of real estate

loans. A federal credit union’s loan

agreements can provide that a loan is

immediately due and payable if the

member’s residence securing the loan is

sold.

Regulatory Procedures

Regulatory Flexibility Act

The Regulatory Flexibility Act

requires NCUA to prepare an analysis to

describe any significant economic

impact any proposed regulation may

have on a substantial number of small

entities (primarily those under $1

million in assets). The NCUA Board has

determined and certifies that the

proposed amendment, if adopted, will

not have a significant economic impact

on a substantial number of small credit

unions.

Accordingly, the Board has

determined that a Regulatory Flexibility

Analysis is not required.

Paperwork Reduction Act

NCUA has determined that the

proposed amendments do not increase

paperwork requirements under the

Paperwork Reduction Act of 1995 and

regulations of the Office of Management

and Budget.

Executive Order 12612

Executive Order 12612 requires

NCUA to consider the effect of its

actions on state interests. The proposal

only applies to federal credit unions.

NCUA has determined that the

proposed amendment does not

constitute a significant regulatory action

for the purposes of the Executive Order.

List of Subjects in 12 CFR Part 701

Credit, Credit unions, Insurance,

Mortgages, Reporting and recordkeeping

requirements, Surety bonds.

By the National Credit Union

Administration Board on July 30, 1998.

Becky Baker,

Secretary of the Board.

For the reasons set forth in the

preamble, it is proposed that 12 CFR

Part 701 be amended as follows:

PART 701—ORGANIZATION AND

OPERATION OF FEDERAL CREDIT

UNIONS

1. The authority citation for part 701

continues to read as follows:

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

1757, 1759, 1761a, 1761b, 1766, 1767, 1782,

1784, 1787, and 1789. Section 701.6 is also

authorized by 31 U.S.C. 3717. Section 701.31

is also authorized by 15 U.S.C. 1601 et seq.,

42 U.S.C. 1861 and 42 U.S.C. 3601–3610.

Section 701.35 is also authorized by 42 U.S.C

4311–4312.
Federal Register / Vol. 63, No. 151 /Thursday, August 6, 1998 / Proposed Rules 41979

2. Section 701.21 is amended by

adding a new paragraph (g)(7) to read as

follows:

§ 701.21(g) Loans to members and lines of

credit to members.

* * * * *

(g) * * *

(7) Assumption of real estate loans by

nonmembers. A federal credit union

may permit a nonmember to assume a

member’s mortgage loan in conjunction

with the nonmember’s purchase of the

member’s principal residence, provided

that the nonmember assumes only the

remaining unpaid balance of the loan,

the terms of the loan remain unchanged,

and there is no extension of the original

maturity date specified in the loan

agreement with the member. An

assumption is impermissible if the

original loan was made with the intent

of having a nonmember assume the

loan.

* * * * *

[FR Doc. 98–20951 Filed 8–5–98; 8:45 am]

BILLING CODE 7535–01–U

DEPARTMENT OF COMMERCE

Bureau of the Census

15 CFR Part 30

[Docket No. 980716108–8108–01]

RIN 0607–AA20

Amendment to Foreign Trade Statistics

Regulations To Clarify Exporters’ and

Forwarding Agents’ Responsibilities

and To Clarify Provisions for

Executing a Power of Attorney

AGENCY: Bureau of the Census,

Commerce.

ACTION: Notice of proposed rulemaking

and request for comments.

SUMMARY: The Bureau of the Census

(Census Bureau) proposes amending the

Foreign Trade Statistics Regulations

(FTSR), 15 CFR Part 30, to clarify

exporters’ and forwarding agents’

responsibilities for providing and

reporting information on the Shipper’s

Export Declaration (SED), and to clarify

the provisions for executing a power of

attorney when exporters authorize

forwarding agents to perform services

regarding the export of merchandise out

of the United States. This proposed rule

will further clarify the provisions for

executing a power of attorney when the

principal party is transmitting SED

information electronically. The Census

Bureau also proposes requiring that the

SED be prepared in English.

The proposed revisions are consistent

with the Bureau of Export

Administration’s Export Administration

Regulations (EAR) regarding export

control responsibilities of exporters and

forwarding agents. The Department of

Treasury concurs with the provisions

contained in this proposed rule.

DATES: Written comments must be

submitted on or before October 5, 1998.

ADDRESSES: Direct all written comments

on this proposed rulemaking to the

Director, Bureau of the Census, Room

2049, Federal Building 3, Washington,

D.C. 20233.

FOR FURTHER INFORMATION CONTACT: C.

Harvey Monk, Jr., Chief, Foreign Trade

Division, Bureau of the Census, Room

2104, Federal Building 3, Washington,

D.C. 20233–6700, by telephone on (301)

457–2255 or by fax on (301) 457–2645.

SUPPLEMENTARY INFORMATION:

Background

In response to requests from various

members of the trade community, the

Census Bureau proposes amending 15

CFR Part 30 to clarify the

responsibilities of exporters and

forwarding agents for preparing and

submitting SEDs and to clarify the

provisions for obtaining and executing a

power of attorney.

For purposes of this proposed rule,

the exporter is defined as any person in

the United States; any firm; government

agency, department, or commission; and

any other association or organization,

whether or not organized for profit,

organized under the laws of the United

States, or any jurisdiction within the

United States, who is also the principal

party in interest in the export

transaction. Generally, the exporter is

the U.S. manufacturer, seller, order

party, or licensee on an export license.

A forwarding agent may act as exporter,

but only when it is the ‘‘applicant’’ and

‘‘licensee’’ on an export license. A

foreign principal, not located in the

United States at the time of export, must

not be designated as exporter on the

SED. If a U.S. manufacturer sells

merchandise for export to a foreign

company (including Ex Works), the U.S.

manufacturer must be listed as exporter

on the SED. If a U.S. manufacturer sells

merchandise to a U.S. seller

(wholesaler/distributor), and the U.S.

seller sells the merchandise for export to

a foreign company (including Ex

Works), the U.S. seller must be listed as

exporter on the SED. If a U.S.

manufacturer or seller sells merchandise

to a U.S. order party and the U.S. order

party arranges for the sale and export of

the merchandise to a foreign company

(including Ex Works), the U.S. order

party must be listed as exporter on the

SED.

The U.S. manufacturer, seller, or

order party, that is, the principal party

in interest in the export transaction,

may authorize its own forwarding agent

to facilitate the export transaction or

may authorize the forwarding agent

designated by the foreign company. In

either case, the U.S. manufacturer,

seller, or order party must authorize the

forwarding agent to act on its behalf in

completing and filing the SED in a

power of attorney or a written

authorization to execute the SED, or

sign the authorization printed on the

SED. When a U.S. manufacturer, seller,

or order party authorizes a forwarding

agent to facilitate the export transaction,

the manufacturer, seller, or order party,

that is, whoever sold the merchandise to

the foreign company, must be listed as

the exporter on the SED, unless the

forwarding agent is the applicant and

licensee on an export license.

The forwarding agent is any person in

the United States; any firm; government

agency, department or commission; and

any other association or organization,

whether or not organized for profit,

organized under the laws of the United

States, or any jurisdiction within the

United States, who is authorized by the

U.S. principal party in interest in the

export transaction to perform the

services required to facilitate the export

of the merchandise out of the United

States. The principal party must

authorize a forwarding agent to act on

its behalf in completing and filing the

SED in a power of attorney or a written

authorization to execute the SED, or

sign the authorization printed on the

SED. The principal party also must

provide the forwarding agent with the

information necessary to correctly

prepare the SED in accordance with the

requirements specified in FTSR § 30.7.

The FTSR places ultimate

responsibility for the export transaction

on the exporter. However, the FTSR also

considers all parties to the export

transaction, including U.S. and foreign

principals and forwarding agents

responsible for providing information

necessary to complete the SED, and for

the accuracy of the information reported

on the SED. If a forwarding agent’s

principal does not possess the necessary

information, the forwarding agent may

request that other parties to the export

transaction provide that information.

The parties to the transaction must

provide the forwarding agent with the

necessary information to correctly

prepare the SED. Necessary and proper

documentation must be maintained by

all parties involved in the export

transaction to support information

reported on the SED.