Federal Register / Vol. 70, No. 182 / Wednesday, September 21, 2005 / Rules and Regulations 55227 

Department’s Commodity Credit 

Corporation, the Commodity Credit 

Corporation, or any entity determined 

by the Commodity Credit Corporation 

shall deduct and remit to the Board, 

from the proceeds of the loan paid to the 

producer, one (1%) percent of the loan 

value of the peanuts as determined by 

the warehouse receipt accompanying 

such peanuts, no more than 60 days 

after the last day of the month in which 

the peanuts were placed under a 

marketing assistance loan. 

(e) If a producer places peanuts under 

a marketing assistance loan and 

subsequently redeems and sells such 

peanuts at a price greater than the loan 

amount, the producer shall pay the 

difference between the sales price and 

the loan value of the peanuts multiplied 

by one (1%) percent to the Board within 

sixty (60) days after the final day of the 

loan availability period. 

(f) All assessments collected under 

this section are to be used for expenses 

and expenditures pursuant to this Order 

and for the establishment of an 

operating reserve as prescribed in the 

Order. 

(g) The Board shall impose a late 

payment charge on any person who fails 

to remit to the Board the total amount 

for which the person is liable on or 

before the payment due date established 

under this section. The late payment 

charge will be in the form of interest on 

the outstanding portion of any amount 

for which the person is liable. The rate 

of interest shall be prescribed in 

regulations issued by the Secretary. 

(h) Persons failing to remit total 

assessments due in a timely manner 

may also be subject to actions under 

federal debt collection procedures. 

(i) The Board may authorize other 

organizations to collect assessments on 

its behalf with the approval of the 

Secretary. 

(j) The assessment rate may not be 

increased unless the new rate is 

approved by a referendum among 

eligible producers. 

Dated: September 15, 2005. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 05–18759 Filed 9–20–05; 8:45 am] 

BILLING CODE 3410–02–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 712 

Audit Requirement for Credit Union 

Service Organizations 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: NCUA is amending its rule 

concerning credit union service 

organizations (CUSOs) to provide that a 

wholly owned CUSO need not obtain its 

own annual financial statement audit 

from a certified public accountant if it 

is included in the annual consolidated 

audit of the federal credit union (FCU) 

that is its parent. The amendment will 

reduce regulatory burden and conform 

the regulation with agency practice, 

which since 1997 has been to view 

credit unions with wholly owned 

CUSOs in compliance with the rule if 

the parent FCU has obtained an annual 

financial statement audit on a 

consolidated basis. 

DATES: This rule is effective on October 

21, 2005. 

FOR FURTHER INFORMATION CONTACT: Ross 

P. Kendall, Staff Attorney, Office of 

General Counsel, at telephone (703) 

518–6540. 

SUPPLEMENTARY INFORMATION: 

Background 

On March 17, 2005, the NCUA Board 

requested comment on a proposed 

change to part 712 of its regulations to 

provide that that a CUSO that is wholly 

owned need not secure its own public 

accounting firm financial statement 

audit if it is included on a consolidated 

basis in the audit of the FCU itself. 70 

FR 14579 (March 23, 2005). The 

proposal recognized that, where a CUSO 

is controlled by an FCU by virtue of its 

ownership of one hundred percent of its 

voting shares, generally accepted 

accounting principles (GAAP) call for 

the preparation of financial statements 

of both the FCU and the CUSO on a 

consolidated basis. 

As noted in the preamble to the 

proposed rule, consolidated financial 

statements present the results of 

operations, financial position, and cash 

flows of a parent and its subsidiaries as 

if the group were a single enterprise. 

Under GAAP, consolidated financial 

statements generally include enterprises 

in which the parent has a controlling 

financial interest, usually, a majority 

voting interest. There is a presumption 

that consolidated statements are more 

meaningful than separate statements 

and are usually necessary for a fair 

presentation when one of the 

enterprises in a group directly or 

indirectly has a controlling financial 

interest in another. 

Summary of Comments 

NCUA received twelve comments on 

the proposal, eleven of which were fully 

supportive of the amendment. These 

commenters noted several bases for 

their support, including efficiency, 

flexibility and cost savings, as well as 

the generally more thorough and 

accurate financial picture that emerges 

when the operations of corporate 

parents and subsidiaries are included in 

a consolidated financial statement. The 

one commenter that did not offer 

express support did not indicate 

opposition to the proposal, but rather 

raised two questions about the operation 

of the rule in specified circumstances. 

In the preamble to the proposed rule, 

the Board specifically recognized that 

GAAP would allow for consolidated 

financial reporting in cases that involve 

a CUSO that is majority owned. The 

Board noted, however, that it was not 

recommending extension of the rule to 

those cases, and indicated its belief that 

the proposal would ensure that 

prospective minority investors in 

CUSOs would have maximum 

disclosure of potential risks to their 

investment. Nine commenters 

recommended that NCUA extend the 

exemption for a separate audit to 

majority owned CUSOs, instead of 

limiting it to cases of one hundred 

percent ownership. Two of these 

commenters conditioned their support 

for this expanded treatment on 

including in the rule a safeguard to 

allow a minority owner to request the 

CUSO to obtain a separate opinion 

audit. 

The Board remains convinced that the 

original proposal, with its limited 

application only to cases involving one 

hundred percent ownership of the 

CUSO, is the best course. Absent a 

provision in the rule, a minority 

investor could encounter some 

difficulty in asserting its right to a 

separate opinion audit. The Board notes, 

in this respect, that its concern for the 

safety and soundness of credit unions, 

rather than assuring that its rules 

conform in all respects to what may be 

formally permissible under GAAP, is of 

paramount importance. Accordingly, 

NCUA is adopting the proposed 

amendments as a final rule without 

change. 

The Board notes that the rule change 

extends to cases involving CUSO 

subsidiaries that are also wholly owned. 

While cases of second tier CUSOs are 

relatively rare, the principles of the rule 

55228 Federal Register / Vol. 70, No. 182 / Wednesday, September 21, 2005 / Rules and Regulations 

would apply. Thus, where the second 

tier CUSO is itself wholly owned by a 

wholly owned first tier CUSO, use of a 

consolidated opinion audit capturing 

both levels would be permissible. 

Regulatory Procedures 

Regulatory Flexibility Act 

The final rule relieves a CUSO that is 

wholly owned from having to secure a 

separate opinion audit of its books, if it 

is included in the annual consolidated 

opinion audit of the credit union that is 

its parent. The Board has determined 

and certifies that the rule will not have 

a significant economic impact on a 

substantial number of small credit 

unions. Accordingly, the NCUA Board 

has determined that a Regulatory 

Flexibility Analysis is not required. 

Paperwork Reduction Act 

NCUA has determined that the 

proposed regulation does not increase 

paperwork requirements under the 

Paperwork Reduction Act of 1995 and 

regulations of the Office of Management 

and Budget. 

Executive Order 13132 

Executive Order 13132 encourages 

independent regulatory agencies to 

consider the impact of their actions on 

state and local interests. In adherence to 

fundamental federalism principles, 

NCUA, an independent regulatory 

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

voluntarily complies with the executive 

order. The final rule will apply only to 

federally-chartered credit unions. It will 

not have substantial direct effects 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 proposal does not 

constitute a policy that has federalism 

implications for purposes of the 

executive order. 

The Treasury and General Government 

Appropriations Act, 1999—Assessment 

of Federal Regulations and Policies on 

Families 

The NCUA has determined that the 

final rule will not affect family wellbeing within the meaning of section 654 

of the Treasury and General 

Government Appropriations Act, 1999, 

Public Law 105–277, 112 Stat. 2681 

(1998). 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 (Pub. 

L. 104–121) provides generally for 

congressional review of agency rules. A 

reporting requirement is triggered in 

instances where NCUA issues a final 

rule as defined by Section 551 of the 

Administrative Procedure Act. 5 U.S.C. 

551. The Office of Management and 

Budget has determined that this rule is 

not a major rule for purposes of the 

Small Business Regulatory Enforcement 

Fairness Act of 1996. 

List of Subjects in 12 CFR Part 712 

Administrative practices and 

procedure, Credit, Credit unions, 

Investments, Reporting and record 

keeping requirements. 

By the National Credit Union 

Administration Board on September 15, 

2005. 

Mary F. Rupp, 

Secretary of the Board. 

■ For the reasons stated in the preamble, 

NCUA amends 12 CFR part 712 as 

follows: 

PART 712—CREDIT UNION SERVICE 

ORGANIZATIONS (CUSOs) 

■ 1. The authority citation for part 712 

continues to read as follows: 

Authority: 12 U.S.C. 1756, 1757(5)(D), and 

(7)(I), 1766, 1782, 1784, 1785 and 1786. 

■ 2. Amend § 712.3 by revising 

paragraph (d)(2) to read as follows: 

§ 712.3 What are the characteristics of and 

what requirements apply to CUSOs? 

* * * * * 

(d) * * * 

(2) Prepare quarterly financial 

statements and obtain an annual 

financial statement audit of its financial 

statements by a licensed certified public 

accountant in accordance with generally 

accepted auditing standards. A wholly 

owned CUSO is not required to obtain 

a separate annual financial statement 

audit if it is included in the annual 

consolidated financial statement audit 

of the credit union that is its parent; and 

* * * * * 

[FR Doc. 05–18749 Filed 9–20–05; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2005–21189; Directorate 

Identifier 2005–NM–055–AD; Amendment 

39–14279; AD 2005–19–14] 

RIN 2120–AA64 

Airworthiness Directives; Airbus Model 

A318–100, A319–100, A320–200, A321–

100, and A321–200 Series Airplanes; 

and Model A320–111 Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Airbus Model A318–100, A319–100, 

A320–200, A321–100, and A321–200 

series airplanes; and Model A320–111 

airplanes. This AD requires 

modification of the electrical bonding of 

all structures and systems installed 

inside the center fuel tank. This AD 

results from fuel system reviews 

conducted by the manufacturer. We are 

issuing this AD to prevent electrical 

arcing in the center fuel tank due to 

inadequate bonding, which could result 

in an explosion of the center fuel tank 

and consequent loss of the airplane. 

DATES: This AD becomes effective 

October 26, 2005. 

The Director of the Federal Register 

approved the incorporation by reference 

of certain publications listed in the AD 

as of October 26, 2005. 

ADDRESSES: You may examine the AD 

docket on the Internet at http:// 

dms.dot.gov or in person at the Docket 

Management Facility, U.S. Department 

of Transportation, 400 Seventh Street 

SW., Nassif Building, Room PL–401, 

Washington, DC. 

Contact Airbus, 1 Rond Point Maurice 

Bellonte, 31707 Blagnac Cedex, France, 

for service information identified in this 

AD. 

FOR FURTHER INFORMATION CONTACT: Tim 

Dulin, Aerospace Engineer, 

International Branch, ANM–116, FAA, 

Transport Airplane Directorate, 1601 

Lind Avenue, SW., Renton, Washington 

98055–4056; telephone (425) 227–2141; 

fax (425) 227–1149. 

SUPPLEMENTARY INFORMATION: 

Examining the Docket 

You may examine the AD docket on 

the Internet at http://dms.dot.gov or in 

person at the Docket Management 

Facility office between 9 a.m. and 5 

p.m., Monday through Friday, except