Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 36199 

Subpart B—Uniform System of 

Accounts 

■ 31. Amend § 1767.41 by revising entry 

119 to read as follows: 

§ 1767.41 Accounting methods and 

procedures required of all RUS borrowers. 

* * * * * 

119 Special Equipment 

Special Equipment items are 

classified separately from work order 

items. The USoA provides accounting 

that differs from that used for other 

types of materials. The cost of new, 

special equipment items shall be 

capitalized at the time of purchase; it 

shall not be charged to Account 154 as 

is the case with other materials. The 

first installation cost, as well as all 

incidental costs necessary to prepare the 

equipment for use, shall be capitalized 

with the material upon purchase. All 

subsequent costs of removing, resetting, 

changing, renewing oil, and repairing 

constitute operations and maintenance 

expenses. The capitalized cost of special 

equipment items, including the first 

installation, shall be removed from the 

electric plant accounts only when the 

items are abandoned or retired from the 

system. Borrowers may request a waiver 

from the special equipment accounting 

requirements as described later in this 

section. 

Special Equipment Items include the 

following: 

1. Reclosers and Sectionalizers 

recorded in Account 365, Conductor 

and Devices 

2. Transformers, Capacitors and 

Voltage Regulators recorded in Account 

368, Line Transformers 

3. Meters, Meter Sockets, current and 

potential transformers, and other 

metering equipment recorded in 

Account 379, Meters 

4. Load Control Devices recorded in 

Account 371, Installations on 

Customers’ Premises (See Interpretation 

No. 118) 

Note: Equipment installed in a substation 

is not considered special equipment. 

Special equipment items which are 

classified as nonusable shall be 

segregated in the warehouse and retired 

from service. The Summary of Special 

Equipment Costs shall be retitled 

Summary of Special Equipment Costs 

Retired and used for this purpose. A 

journal entry reflecting this information 

shall be prepared and posted to the 

books. Since loan funds for special 

equipment, including first installation 

costs, are approved for advance by the 

Rural Development upon receipt of the 

borrower’s written estimate of funds 

required, and not on the basis of an 

Inventory of Work Orders, it is improper 

to take a credit for any salvage involved 

in the retirement of special equipment 

on the Inventory of Work Orders. 

Electric borrowers that wish to receive 

a waiver from the special equipment 

accounting requirements should submit 

a letter request to Rural Development. In 

order to expedite these requests the 

letter to Rural Development should state 

that the borrower will adhere to the 

following requirements to account for 

special equipment using the work order 

procedure rather than the special 

equipment accounting procedures 

prescribed by Rural Development: 

1. New purchases of special 

equipment items are to be charged to 

Account 154, Materials and Supplies, 

upon purchase. 

2. Labor, material and overhead costs 

associated with the initial installation 

and all subsequent installations of 

special equipment are recorded on 

construction work orders and charged to 

the appropriate plant accounts upon 

closeout of the construction work order. 

3. Labor and overhead costs 

associated with the removal of special 

equipment items, whether the items 

removed are placed in inventory or 

permanently retired and disposed of, are 

recorded on retirement work orders and 

charged or credited to the depreciation 

reserve account upon closeout of the 

retirement work order. 

4. The special equipment items 

retired and salvaged for reuse are 

returned to the materials and supplies 

account at the average material cost in 

the materials and supplies account and 

credited to the depreciation reserve 

upon closeout of the retirement work 

order. 

In addition to recognition of the 

requirements noted above, the borrower 

should indicate how it plans to account 

for the items of special equipment that 

have been charged to the plant accounts 

but not installed (in inventory). Two 

acceptable methods to account for this 

equipment are: (1) Leave the equipment 

in the plant accounts until the inventory 

is depleted and charge only new 

purchases to materials and supplies, or 

(2) credit the plant accounts for the 

installed cost of the equipment in 

inventory, charge the equipment cost to 

materials and supplies, and charge the 

installation cost to the appropriate 

operations expense account. Also, under 

the second method, the borrower must 

submit a ‘‘negative’’ special equipment 

summary to Rural Development to 

return to the balance in reserve for the 

current loan the installed cost of special 

equipment in inventory on the date of 

transition. 

* * * * * 

Christopher A. McLean, 

Acting Administrator, Rural Utilities Service. 

[FR Doc. 2021–14358 Filed 7–8–21; 8:45 am] 

BILLING CODE 3410–15–P 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Part Chapter XII 

[No. 2021–N–7] 

Policy Statement on Fair Lending 

AGENCY: Federal Housing Finance 

Agency. 

ACTION: Notification of approval and 

adoption of policy statement; request for 

comment. 

SUMMARY: The Federal Housing Finance 

Agency (FHFA or agency) is issuing a 

policy statement on Fair Lending 

(Policy Statement) to communicate the 

agency’s general position on monitoring 

and information gathering, supervisory 

examinations, and administrative 

enforcement related to the Equal Credit 

Opportunity Act, the Fair Housing Act, 

and the Federal Housing Enterprises 

Financial Safety and Soundness Act, 

and is soliciting comments on its 

application. 

DATES: The Policy Statement becomes 

effective on July 9, 2021. Comments 

must be received on or before 

September 7, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Annalyce Shufelt, Senior Attorney 

Advisor (Fair Lending), Office of Fair 

Lending Oversight, (202) 649–3416, 

Annalyce.Shufelt@fhfa.gov, Federal 

Housing Finance Agency, Constitution 

Center, 400 7th Street SW, Washington, 

DC 20219; or Ming-Yuen Meyer-Fong, 

Associate General Counsel, Office of 

General Counsel, (202) 649–3078 (not 

toll-free numbers), Ming-Yuen.MeyerFong@fhfa.gov. The 

Telecommunications Device for the Deaf 

is (800) 877–8339. 

ADDRESSES: FHFA welcomes comments 

about application of the principles set 

out in the policy statement to specific 

policies and practices. You may submit 

your comments to FHFA, identified by 

‘‘Policy Statement; Comment Request: 

(2021–N–7)’’, by any one of the 

following methods: 

• Agency website: www.fhfa.gov/ 

open-for-comment-or-input. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. If 


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36200 Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 

1As a historical note, in 1994, a number of 

Federal agencies published a Policy Statement on 

Discrimination in Lending (1994 Statement) which, 

in part, described how Federal agencies use their 

authorities to oversee fair lending compliance. See 

59 FR 18266 (April 15, 1994). FHFA did not exist 

at the time and was not a signatory. In 2008, 

Congress abolished the former Office of Federal 

Housing Enterprise Oversight and the Federal 

Housing Finance Board, which had been parties to 

the 1994 Statement. In their place, Congress 

established FHFA with authorities that, in contrast 

to its predecessor agencies, include overseeing 

Enterprise and Bank compliance with applicable 

law. 12 U.S.C. 4511(b) (FHFA ‘‘shall have general 

regulatory authority over each regulated entity . . . 

and shall exercise such general regulatory authority 

. . . to ensure that the purposes of this Act, the 

authorizing statutes, and any other applicable law 

are carried out’’). Given the importance of fair 

lending compliance, FHFA is publishing this FHFA 

Policy Statement on Fair Lending to implement its 

authorities and articulate agency activities in 

relevant areas including monitoring, examination, 

enforcement, and coordination to oversee regulated 

entity fair lending compliance. 

2The Federal Reserve Board of Governors also 

implements ECOA through a regulation covering 

auto dealers. 

3The Fair Housing Act uses the term ‘‘handicap’’ 

instead of ‘‘disability.’’ This document uses the 

term ‘‘disability,’’ which is more generally 

accepted. See Joint Statement of the Department of 

Housing and Urban Development and the 

Department of Justice on Accessibility (Design and 

Construction) Requirements for Covered 

Multifamily Dwellings under the Fair Housing Act, 

April 30, 2013, available at https://www.hud.gov/ 

sites/documents/JOINTSTATEMENT.PDF (citing 

Bragdon v. Abbott, 524 U.S. 624, 631 (1998), to say 

that both terms have the same legal meaning). 

4 12 U.S.C. 4545. 

you submit your comment to the 

Federal eRulemaking Portal, please also 

send it by email to FHFA at 

RegComments@fhfa.gov to ensure 

timely receipt by FHFA. Include the 

following information in the subject line 

of your submission: ‘‘Policy Statement; 

Comment Request: (2021–N–7).’’ 

• Hand Delivered/Courier: The hand 

delivery address is: Clinton Jones, 

General Counsel, Attention: ‘‘Policy 

Statement; Comment Request: (2021–N– 

7)’’, Federal Housing Finance Agency, 

Eighth Floor, 400 Seventh Street SW, 

Washington, DC 20219. Deliver the 

package at the Seventh Street entrance 

Guard Desk, First Floor, on business 

days between 9 a.m. and 5 p.m. 

• U.S. Mail, United Parcel Service, 

Federal Express, or Other Mail Service: 

The mailing address for comments is: 

Clinton Jones, General Counsel, 

Attention: ‘‘Policy Statement; Comment 

Request: (2021–N–7)’’, Federal Housing 

Finance Agency, Eighth Floor, 400 

Seventh Street SW, Washington, DC 

20219. Please note that all mail sent to 

FHFA via U.S. Mail is routed through a 

national irradiation facility, a process 

that may delay delivery by 

approximately two weeks. For any timesensitive correspondence, please plan 

accordingly. 

We will post all public comments we 

receive without change, including any 

personal information you provide, such 

as your name and address, email 

address, and telephone number, on the 

FHFA website at http://www.fhfa.gov. In 

addition, copies of all comments 

received will be available for 

examination by the public through the 

electronic comment docket also located 

on the FHFA website. 

SUPPLEMENTARY INFORMATION: 

I. Purpose 

FHFA is the primary regulator for 

Fannie Mae and Freddie Mac (the 

Enterprises) and the Federal Home Loan 

Banks (the Banks) (collectively, the 

regulated entities). FHFA is issuing this 

Policy Statement to communicate 

FHFA’s general position on monitoring 

and information gathering, supervisory 

examinations, and administrative 

enforcement related to the Equal Credit 

Opportunity Act (ECOA), 15 U.S.C. 

1691 et seq., the Fair Housing Act, 42 

U.S.C. 3601 et seq., and section 4545 of 

the Federal Housing Enterprises 

Financial Safety and Soundness Act 

(Safety and Soundness Act), 12 U.S.C. 

4501 et seq. (collectively, with 

implementing regulations and other 

sources, ‘‘fair lending laws’’). This 

Policy Statement is intended to be 

consistent with those statutes and their 

implementing regulations and to 

provide guidance to FHFA’s regulated 

entities seeking to comply with them. It 

describes sources of statutory authority 

for actions that may be taken by FHFA 

and it articulates FHFA’s policies for 

supervisory oversight and enforcement 

of fair lending matters. FHFA is also 

issuing this Policy Statement to provide 

a foundation for possible future 

interpretations and rulemakings by the 

agency for its regulated entities.1

II. Policy Statement 

Fair Lending Policy Statement 

FHFA is committed to ensuring that 

its regulated entities operate 

consistently with the public interest and 

with sufficient overall risk management 

by providing fair, equitable, and 

nondiscriminatory access to credit and 

housing. Fair lending is central to the 

principles under which the U.S. 

housing finance system operates and is 

a requirement of law. FHFA will never 

tolerate illegal discrimination by the 

regulated entities. FHFA will engage in 

comprehensive fair lending oversight of 

its regulated entities and adopts the 

following high-level policies to guide its 

fair lending monitoring, supervision, 

and enforcement. FHFA is committed to 

interagency engagement, coordination, 

and collaboration in fair lending. 

Legal Overview 

While many Federal statutes seek to 

promote fair lending, FHFA’s policy 

statement focuses on ECOA, the Fair 

Housing Act, and the fair lending 

provisions of the Safety and Soundness 

Act as they apply to the regulated 

entities’ activities. This policy statement 

does not create or confer any 

substantive or procedural rights which 

could be enforceable in any 

administrative or civil proceeding. 

The Consumer Financial Protection 

Bureau’s (CFPB) Regulation B, 12 CFR 

part 1002, along with Official 

Interpretations in Supplement I to 12 

CFR part 1002, implements ECOA.2 The 

U.S. Department of Housing and Urban 

Development’s (HUD) regulations at 24 

CFR part 100 implement the Fair 

Housing Act. Together, these statutes 

and regulations prohibit discrimination 

on the basis of race or color, religion, 

national origin, sex, marital status, age 

(provided the applicant has the capacity 

to contract), receipt of income derived 

from any public assistance program, 

exercise, in good faith, of any right 

under the Consumer Credit Protection 

Act, familial status (defined by 42 

U.S.C. 3602(k) of the Fair Housing Act 

as children under the age of 18 living 

with a parent or legal custodian, 

pregnant women, and people securing 

custody of children under 18), and 

disability.3

The Enterprises are also subject to 

section 4545 of the Safety and 

Soundness Act, which requires HUD, by 

regulation, to prohibit the Enterprises 

from discriminating in the purchase of 

mortgages on the bases of race, color, 

religion, sex, disability, familial status, 

age, or national origin, including any 

consideration of the age or location of 

the dwelling or the age of the 

neighborhood or census tract where the 

dwelling is located in a manner that has 

a discriminatory effect.4

FHFA also recognizes that there are a 

number of applicable and relevant 

sources of fair lending law and 

guidance, including judicial decisions, 

administrative interpretations and 

guidance, and administrative actions. 

Fair Lending Oversight Considerations 

FHFA has broad statutory authority to 

supervise the regulated entities, 

including authority to monitor and 

gather information, conduct supervisory 

examinations, and enforce compliance 

with law where appropriate. FHFA 

monitors regulated entities for fair 

lending risk, conducts supervisory 

examinations, and, when necessary, 


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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 36201 

5 12 U.S.C. 4514(a). 

6 12 U.S.C. 4511(b)(1) (‘‘Each regulated entity 

shall, to the extent provided in this chapter, be 

subject to the supervision and regulation of the 

Agency’’); 12 U.S.C. 4511(b)(2) (‘‘The Director shall 

have general regulatory authority over each 

regulated entity and the Office of Finance, and shall 

exercise such general regulatory authority, 

including such duties and authorities set forth 

under section 4513 of this title, to ensure that the 

purposes of this Act, the authorizing statutes, and 

any other applicable law are carried out.’’). 

7 12 U.S.C. 4517(b). 

8 12 U.S.C. 4517(e). The statute particularly 

references the authority of examiners employed by 

the Federal Reserve banks. 

9 12 U.S.C. 4513(a)(1)(B)(v). 

10The Housing and Economic Recovery Act of 

2008 (HERA), Public Law 110–289 (July 30, 2008), 

available at https://www.govinfo.gov/content/pkg/ 

PLAW-110publ289/pdf/PLAW-110publ289.pdf. 

11Public Law 110–289, sec. 1101 (amended the 

former OFHEO authorities to provide the new 

FHFA general supervisory and regulatory authority 

requiring regulated entity compliance with the 

Safety and Soundness Act, the regulated entities 

statutory charters, and ‘‘any other applicable law’’); 

sec. 1151 (amended cease and desist authorities to 

include violations of law generally); codified at 12 

U.S.C. 4511 and 4631. 

12 12 U.S.C. 4636. 

13See 24 CFR 81.47(a). 

14 24 CFR 81.47(a). Under the Safety and 

Soundness Act, FHFA is empowered to initiate 

enforcement actions for Enterprise violations of 12 

U.S.C. 4545 and HUD’s implementing regulations. 

The process for referring ‘‘violations or potential 

violations’’ to FHFA under 24 CFR 81.47(a) is 

distinct from the process under 24 CFR 81.47(b), in 

which HUD shall conduct an investigation of the 

Fair Housing Act complaint, make a determination 

as to whether or not reasonable cause exists to 

believe discrimination occurred, and, if it does, 

proceed to enforcement under the Fair Housing Act. 

15Federal Housing Finance Agency, Advisory 

Bulletin: FHFA Enforcement Policy, AB 2013–03 

(issued May 31, 2013), available at https://

www.fhfa.gov/SupervisionRegulation/ 

AdvisoryBulletins/AdvisoryBulletinDocuments/ 

20130531_AB_2013-03_FHFA-Enforcement-Policy_

508%20(2).pdf. 

16Federal Housing Finance Agency, Advisory 

Bulletin: FHFA Enforcement Policy, AB 2013–03 

(issued May 31, 2013), available at https://

www.fhfa.gov/SupervisionRegulation/ 

AdvisoryBulletins/AdvisoryBulletinDocuments/ 

20130531_AB_2013-03_FHFA-Enforcement-Policy_

508%20(2).pdf. The Enforcement Policy further 

describes a number of informal and formal actions 

that FHFA may take, many of which may be used 

for enforcing compliance with fair lending laws. 

takes enforcement action to ensure 

compliance with fair lending laws. 

Monitoring and Information Gathering 

FHFA regularly monitors the fair 

lending risk presented by Enterprise and 

Bank activities and may request data 

and information in its role as supervisor 

and regulator to ensure effective, 

ongoing oversight. FHFA reviews the 

regulated entities’ internal fair lending 

data monitoring, risk assessments, 

policies and procedures, internal 

control systems, and other information 

to appropriately scope monitoring and 

examinations commensurate with fair 

lending risk. Fair lending monitoring 

information may be collected pursuant 

to FHFA’s supervisory and regulatory 

authority, including 12 U.S.C. 4514(a) 

which authorizes FHFA to order 

regulated entities to submit both regular 

and special reports. FHFA may require 

regulated entities to submit ‘‘regular 

reports . . . on the condition (including 

financial condition), management, 

activities, or operations of the regulated 

entity, as the Director considers 

appropriate.’’ 5 Fair lending monitoring 

information includes, but is not limited 

to: Data and other information necessary 

to monitor and evaluate the policies, 

programs, and activities of the regulated 

entities; information about changes in 

policies, programs, and activities; 

information about the regulated entities’ 

fair lending testing and other 

compliance activities; and the regulated 

entities’ self-evaluations of fair lending 

risk and the compliance of their 

policies, programs, and activities with 

respect to fair lending laws. 

Supervisory Examinations 

FHFA has broad authority to 

supervise the Enterprises and the Banks 

for compliance with fair lending 

standards. The regulated entities are 

subject to FHFA’s overarching 

‘‘supervision and regulation.’’ 6 FHFA 

may conduct examinations of the 

regulated entities whenever FHFA 

determines that an examination is 

necessary or appropriate.7 FHFA 

examiners have examination authority 

equivalent to other Federal prudential 

regulators.8 FHFA also has a duty to 

ensure that the regulated entities are 

operating consistently with the public 

interest.9

FHFA conducts risk-based fair 

lending examinations of the regulated 

entities. FHFA’s fair lending oversight 

program is committed to effective, 

appropriately tailored supervisory 

measures to ensure that the regulated 

entities adhere to applicable fair lending 

compliance standards. The Enterprises 

and the Banks each engage in activities 

that present differing levels and kinds of 

fair lending risk. FHFA carefully weighs 

the totality of available information, 

including monitoring information, 

market intelligence, and relevant data, 

when considering how best to employ 

supervisory resources. 

Enforcement 

FHFA may use its administrative 

enforcement authority to address 

violations of ECOA and the Fair 

Housing Act by the regulated entities. 

That a regulated entity is in 

conservatorship does not preclude other 

enforcement actions; however, the 

conservator’s broad statutory powers 

may provide FHFA with more efficient 

means to address problems than 

traditional enforcement tools. FHFA as 

conservator may take immediate action, 

consistent with applicable law, to direct 

or restrict the activities at the regulated 

entity, including the activities of the 

board of directors and executive 

management. 

FHFA has broader enforcement 

authority than its predecessor agencies 

FHFB and OFHEO, including for fair 

lending violations. The Housing and 

Economic Recovery Act (HERA) 10

granted FHFA the authority to use cease 

and desist orders to enforce violations of 

all applicable laws, including ECOA 

and the Fair Housing Act.11 FHFA may 

also use civil money penalties as a tool 

to ensure fair lending compliance, 

where the statutory bases for such 

penalties are present.12

Prior to HERA, OFHEO’s fair lending 

enforcement authority over the 

Enterprises was limited to the Safety 

and Soundness Act fair housing 

provision and HUD’s implementing 

regulation.13 HUD’s implementing 

regulation anticipates HUD referring 

violations and potential violations of 

that provision by an Enterprise to FHFA 

for enforcement.14 FHFA will support 

enforcement of HUD’s regulation 

implementing the Safety and Soundness 

Act’s fair housing provision. FHFA will 

conduct a full review of HUD’s referral 

of a violation or potential violation and 

all evidence submitted as part of the 

referral and resolve the matter 

appropriately and in accordance with 

FHFA’s enforcement policy and in 

consultation with HUD. In addition, 

FHFA will continue to facilitate HUD’s 

periodic fair lending reviews of the 

Enterprises. FHFA may also 

independently pursue administrative 

enforcement actions for any violations 

of section 4545 of the Safety and 

Soundness Act. 

FHFA’s enforcement policy applies 

when taking any enforcement action 

against regulated entities for violations 

of law, including violations of fair 

lending law.15 Pursuant to FHFA’s 

enforcement policy, FHFA may engage 

in consent order negotiations with 

regulated entities to resolve violations of 

fair lending laws.16 FHFA is not 

required by statute to refer potential fair 

lending violations to the Attorney 

General when the agency has a reason 

to believe that a regulated entity has 

engaged in a pattern or practice of 

discouraging or denying applications for 


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36202 Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 

17 15 U.S.C. 1691e(g). 

18 12 U.S.C. 4513(f). 

credit.17 Nevertheless, FHFA will 

consult with and refer matters to the 

Attorney General and coordinate with 

the Department of Justice on 

enforcement of fair lending matters as 

appropriate. 

FHFA will consider whether the 

regulated entity has conducted any selfevaluations or undertaken any 

corrective actions when making 

supervisory and enforcement decisions. 

FHFA will view responsible business 

practices such as self-testing, 

implementation of management 

controls, and voluntary remedial action 

favorably when making fair lending 

supervisory and enforcement 

determinations. In particular, FHFA 

commits to taking into consideration an 

entity’s cooperation and candor during 

examinations and monitoring. Regulated 

entities are not required to self-report 

potential violations of fair lending laws. 

However, self-reporting of violations of 

fair lending laws will be viewed 

favorably by FHFA as it exercises its 

discretion. FHFA also considers the 

number and duration of violations 

identified, the nature of the evidence of 

discrimination (i.e., overt 

discrimination, disparate treatment, or 

disparate impact), the pervasiveness of 

the discrimination, the presence and 

effectiveness of any anti-discrimination 

policies, any history of discriminatory 

conduct, any corrective measures 

implemented or proposed by the 

regulated entity, and any other factors 

for determining the appropriateness of 

any potential action. 

Consideration of Differences Between 

the Banks and the Enterprises 

FHFA recognizes the important 

distinctions between the two types of 

regulated entities, the Enterprises and 

the Banks. In drafting this Policy 

Statement, FHFA has considered the 

differences between the Enterprises and 

the Banks with respect to the Banks’ 

cooperative ownership structure, 

mission of providing liquidity to 

members, affordable housing and 

community development mission, 

capital structure, and joint and several 

liability, as well as other applicable 

differences.18

Sandra L. Thompson, 

Acting Director, Federal Housing Finance 

Agency. 

[FR Doc. 2021–14438 Filed 7–8–21; 8:45 am] 

BILLING CODE 8070–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0542; Project 

Identifier MCAI–2021–00117–R; Amendment 

39–21641; AD 2021–14–14] 

RIN 2120–AA64 

Airworthiness Directives; Leonardo 

S.p.a. Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Leonardo S.p.a. Model AW119 MKII 

helicopters. This AD was prompted by 

reports of detected smoke and burning 

smell during flight, caused by chafing of 

electrical wiring. This AD requires an 

inspection of the instrument panel 

electrical wiring, corrective actions if 

necessary, a modification of the wiring 

installation, and, for certain helicopters, 

an additional modification of the wiring 

installation, as specified in a European 

Union Aviation Safety Agency (EASA) 

AD, which is incorporated by reference. 

The FAA is issuing this AD to address 

the unsafe condition on these products. 

DATES: This AD becomes effective July 

26, 2021. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of July 26, 2021. 

The FAA must receive comments on 

this AD by August 23, 2021. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE, Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For material incorporated by reference 

(IBR) in this AD, contact the EASA, 

Konrad-Adenauer-Ufer 3, 50668 

Cologne, Germany; phone: +49 221 8999 

000; email: ADs@easa.europa.eu; 

internet: www.easa.europa.eu. You may 

find this material on the EASA website 

at https://ad.easa.europa.eu. You may 

view this material at the FAA, Office of 

the Regional Counsel, Southwest 

Region, 10101 Hillwood Pkwy., Room 

6N–321, Fort Worth, TX 76177. For 

information on the availability of this 

material at the FAA, call 817–222–5110. 

It is also available in the AD docket on 

the internet at https://

www.regulations.gov by searching for 

and locating Docket No. FAA–2021– 

0542. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2021–0542; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

AD, any comments received, and other 

information. The street address for 

Docket Operations is listed above. 

FOR FURTHER INFORMATION CONTACT: Hal 

Jensen, Aerospace Engineer, Operational 

Safety Branch, Compliance & 

Airworthiness Division, FAA, 950 

L’Enfant Plaza N SW, Washington, DC 

20024; telephone (202) 267–9167; email 

hal.jensen@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The EASA, which is the Technical 

Agent for the Member States of the 

European Union, has issued EASA AD 

2021–0040, dated January 27, 2021 

(EASA AD 2021–0040) (also referred to 

as the Mandatory Continuing 

Airworthiness Information, or the 

MCAI), to correct an unsafe condition 

for certain Leonardo S.p.a. Model 

AW119 MKII helicopters. 

This AD was prompted by reports of 

detected smoke and burning smell 

during flight, caused by chafing of 

electrical wiring. The FAA is issuing 

this AD to address detected smoke, 

burning smell during flight, and chafing 

of electrical wiring, which could lead to 

further occurrences of smoke in the 

cabin, or loss of function of avionics 

equipment, and possibly result in 

reduced control of the helicopter. See 

the MCAI for additional background 

information. 

Related Service Information Under 1 

CFR Part 51 

EASA AD 2021–0040 specifies 

procedures for an inspection of the 

instrument panel electrical wiring for 

defects (including wire chafing; 

pinched, broken, or severely bent wires; 

deteriorated, cracked or missing wire 

shielding or insulation; and loose, 

corroded, or broken wire connectors), 

corrective actions (repair or replacement 

of the wiring and a pin to pin continuity 


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