18236 Federal Register / Vol. 61, No. 81 / Thursday, April 25, 1996 / Rules and Regulations

3 Joint Statement of the OCC, Federal Deposit

Insurance Corporation, Federal Reserve Board, and

Office of Thrift Supervision titled ‘‘Revised

Interagency Guidance on Returning Nonaccrual

Loans to Accrual Status’’ issued June 10, 1993.

include such specific rules in their

regulations. They urge the FCA to

rescind the interim rule. Rescission

would restore the sunset provision and

retroactively eliminate §§ 621.6, 621.7,

621.8, 621.9 and 621.10 (subpart C).

The FCC bases its concern on the

length of time necessary to amend FCA

regulations. The FCC warns that the

presence of specific requirements in the

regulations could cause the System’s

financial reporting process to conflict

with GAAP because the FCA would not

be able to change its regulations quickly

enough to remain current with GAAP

guidelines for the accounting and

financial reporting of high-risk assets.

The FCC also points out that if the

Agency were to lack a quorum of its

Board, as has occurred in the past, it

would be impossible to amend the

regulations to be consistent with

changes as may be required by GAAP.

The FCA observes in response that the

application of GAAP to specific areas of

accounting and financial reporting is

not always well defined. This has been

especially true of high-risk asset

accounting. GAAP has not consistently

provided specific authoritative guidance

in the area of problem loan accounting

and reporting until recently. While

other financial institution regulators

have addressed this issue by instituting

specific guidance in their call report

instructions, the FCA is addressing

them in the accounting regulations.

There is little substantive difference

between these two approaches. Both the

Office of the Comptroller of the

Currency’s (OCC) Call Report

instructions and the FCA’s regulations

are published in the Federal Register,

and both give the public an opportunity

to provide comments prior to

implementation of the revised policy

direction.

The FCA continues to believe that, in

areas such as high-risk accounting, the

promulgation of regulations covering

subjects not fully addressed by GAAP

can be an effective method of promoting

consistent accounting and reporting by

System institutions. Since its adoption,

the final regulation has improved the

internal consistency of System financial

disclosures regarding high-risk assets

and made System accounting and

reporting for such assets more

comparable to the practices of the rest

of the financial services industry. If

GAAP provides future guidance and

direction that conflicts with FCA

regulations, the FCA agrees that it is

important to respond to the changes.

The FCA believes that it can address

any inconsistencies that may develop

between its regulations and GAAP in a

timely fashion.

In support of its contention that the

detailed nature of FCA regulations

might make it difficult for the FCA to

keep up with evolving trends in

regulatory accounting guidance, the FCC

notes two apparent inconsistencies

between FCA regulations and the

approach taken by other federal bank

and thrift regulators. While not

commenting substantively on the

provisions, the FCC suggests that more

flexible accounting and financial

reporting guidelines would facilitate

keeping System financial reporting

consistent with other financial

institutions. As noted, the FCA agrees

with the broad goal of accounting and

reporting consistency between the

System and other financial institutions.

However, in certain circumstances, the

unique needs of the System may require

FCA guidance that may differ from the

approach of other regulators without

affecting broad comparability of System

financial reporting. This is the case with

respect to the two examples of

accounting and reporting guidance

noted by the FCC.

First, the FCC notes that § 621.9(a)

requires all contractual principal and

interest due on the loan to be paid and

the loan to be current before returning

a nonaccrual loan to accrual status. The

FCC compares this to guidance by other

financial institution regulators that

would permit institutions to return past

due loans to accrual status if they are

‘‘reasonably assured of repayment

within a reasonable time period.’’ 3

The FCA believes that any nonaccrual

loan must demonstrate performance in

order to be reinstated to accrual status.

An essential demonstration of

performance is that the loan be brought

current. Under the final regulation, this

must occur before an institution can

resume interest accrual on that asset.

However, the regulation also states that

‘‘[o]nce the ultimate collectibility of the

recorded investment is no longer in

doubt, payments received in cash on

such loan may qualify for recognition as

interest income,’’ (i.e., cash basis

accounting) if certain characteristics are

met at the time the payment is received.

Therefore, application of FCA’s

regulation results in an accounting

treatment of income recognition on such

assets similar to that allowed by the

other financial institution regulators.

In a second example, the FCC states

that the OCC allows for cash basis

interest income recognition on

nonaccrual loans with partial chargeoffs before complete recovery of the

charge-off. The FCC notes that this

differs from the requirement in § 621.8

that interest income cannot be

recognized on a nonaccrual loan with an

unrecovered partial charge-off. The FCA

believes that applying loan payments to

recover partial charge-offs prior to

recording interest income is a prudent

and appropriate approach to eliminating

doubt as to the loan’s ultimate

collectibility and is not inconsistent

with GAAP. In addition, this

requirement is mitigated by an

exception in cases where the prior

charge-off was taken as part of a formal

restructuring of the loan. The FCA

believes this approach is justified for

this type of asset in light of the unique

structure of the System and its

concentration of credit in limited

agricultural markets. Moreover, any

differences in income recognition

between the FCA and the OCC

requirements are likely to be temporary

if the loan continues to perform.

For the reasons stated in the interim

rule release, supplemented by the above

analysis and discussion, the FCA Board

adopts the interim rule amending 12

CFR part 621, which was published at

59 FR 60886 on November 29, 1994, as

final without change. The effective date

of this rule remains December 15, 1994.

The FCA will continue to follow closely

any further developments under GAAP

in the area of problem loan accounting

and reporting and will adjust its

requirements as necessary.

Dated: April 19, 1996.

Floyd F. Fithian,

Secretary, Farm Credit Administration Board.

[FR Doc. 96–10238 Filed 4–24–96; 8:45 am]

BILLING CODE 6705–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 95–SW–01–AD; Amendment

39–9577; AD 96–09–03]

Airworthiness Directives; Societe

Nationale Industrielle Aerospatiale and

Eurocopter France Model SA–365N,

N1, and N2 Helicopters

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to Societe Nationale

Industrielle Aerospatiale and

Eurocopter France Model SA–365N, N1,
Federal Register / Vol. 61, No. 81 / Thursday, April 25, 1996 / Rules and Regulations 18237

and N2 helicopters, that requires an

inspection of the door jettison systems

to determine if the handle shafts are

locked to the jettison systems. If the

inspection indicates the handle shafts

are locked to the jettison systems, this

AD requires installation of a snapwire

on the jettison systems and a visual

inspection of the door jettison handles

to determine whether two spring pins

are installed, and installation of a

second spring pin, if necessary. If the

initial inspection indicates that the

handle shafts are not locked to the

jettison systems, this AD requires

replacement of the sheared spring pin

with two spring pins. This amendment

is prompted by a factory inspection

performed by the manufacturer that

revealed that the forward passenger

door jettison handles may have been

fitted with one spring pin instead of two

spring pins at the door jettison handle

attachment points. The actions specified

by this AD are intended to prevent a

loss of the doors in flight and

subsequent damage to the horizontal

stabilizer, main fin, or lateral fins.

EFFECTIVE DATE: May 30, 1996.

ADDRESSES: The service information

referenced in this AD may be obtained

from American Eurocopter Corporation,

2701 Forum Drive, Grand Prairie, Texas

75053–4005. This information may be

examined at the FAA, Office of the

Assistant Chief Counsel, 2601 Meacham

Blvd., Room 663, Fort Worth, Texas.

FOR FURTHER INFORMATION CONTACT: Mr.

Richard Monschke, Aerospace Engineer,

Rotorcraft Standards Staff, FAA,

Rotorcraft Directorate, 2601 Meacham

Blvd., Fort Worth, Texas 76137,

telephone (817) 222–5116, fax (817)

222–5961.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to Societe Nationale

Industrielle Aerospatiale and

Eurocopter France Model SA–365N, N1,

and N2 helicopters was published in the

Federal Register on November 2, 1995

(60 FR 55681). That action proposed to

require, within 30 days after the

effective date of the AD, an inspection

of the door jettison systems to determine

if the handle shafts were locked to the

jettison systems. If the inspection

indicated the handle shafts were locked

to the jettison systems, that action

proposed to require installation of a

snapwire on the jettison systems and

within 500 hours time-in-service, a

visual inspection of the door jettison

handles to determine whether two

spring pins were installed, and

installation of a second spring pin, if

necessary. If the initial inspection

indicated that the handle shafts were

not locked to the jettison systems, the

action proposed to require, before

further flight, replacement of the

sheared spring pin with two spring pins.

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. No

comments were received on the

proposal or the FAA’s determination of

the cost to the public. The FAA has

determined that air safety and the

public interest require the adoption of

the rule as proposed, except for various

non-substantive editorial changes and

deleting the incorporation by reference

of the service bulletin. The FAA has

determined that these changes will

neither increase the economic burden

on any operator nor increase the scope

of the AD.

The FAA estimates that 27 helicopters

of U.S. registry will be affected by this

AD, that it will take approximately 8

work hours per helicopter to accomplish

the actions, and that the average labor

rate is $60 per work hour. Required

parts will cost approximately $230 per

helicopter. Based on these figures, the

total cost impact of the AD on U.S.

operators is estimated to be $19,170.

The regulations adopted herein 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. Therefore, in

accordance with Executive Order 12612,

it is determined that this final rule does

not have sufficient federalism

implications to warrant the preparation

of a Federalism Assessment.

For the reasons discussed above, I

certify that this action (1) is not a

‘‘significant regulatory action’’ under

Executive Order 12866; (2) is not a

‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034, February 26, 1979); and (3)

will not have a significant economic

impact, positive or negative, on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act. A final evaluation has

been prepared for this action and it is

contained in the Rules Docket. A copy

of it may be obtained from the Rules

Docket at the location provided under

the caption ADDRESSES.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation

safety, Safety.

Adoption of the Amendment

Accordingly, pursuant to the

authority delegated to me by the

Administrator, the Federal Aviation

Administration amends part 39 of the

Federal Aviation Regulations (14 CFR

part 39) as follows:

PART 39—AIRWORTHINESS

DIRECTIVES

1. The authority citation for part 39

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding a new airworthiness directive to

read as follows:

AD 96–09–03 Societe Nationale Industrielle

Aerospatiale and Eurocopter France

(Eurocopter France): Amendment 39–

9577. Docket No. 95–SW–01–AD.

Applicability: Model SA–365N, N1, and

N2 helicopters, serial numbers (S/N) 6008,

6033, 6083, 6084, 6085, 6093, 6120 and

higher that have not been modified in

accordance with Avis De Modification (AMS)

365A07–56B15, certificated in any category.

Note 1: This AD applies to each helicopter

identified in the preceding applicability

provision, regardless of whether it has been

modified, altered, or repaired in the area

subject to the requirements of this AD. For

helicopters that have been modified, altered,

or repaired so that the performance of the

requirements of this AD is affected, the

owner/operator must use the authority

provided in paragraph (b) to request approval

from the FAA. This approval may address

either no action, if the current configuration

eliminates the unsafe condition, or different

actions necessary to address the unsafe

condition described in this AD. Such a

request should include an assessment of the

effect of the changed configuration on the

unsafe condition addressed by this AD. In no

case does the presence of any modification,

alteration, or repair remove any helicopter

from the applicability of this AD.

Compliance: Required as indicated, unless

accomplished previously.

To prevent a loss of the doors in flight and

subsequent damage to the horizontal

stabilizer, main fin, or lateral fins,

accomplish the following:

(a) Within 30 days after the effective date

of this AD, for both the left and right forward

passenger door jettison systems, cut the

snapwire on the door jettison handle, and,

without turning the handle completely,

determine whether the handle is locked to

the jettison mechanism.

(1) If the door jettison handle shaft is

locked to the jettison system,

(i) Install the snapwire, part number (P/N)

L23321, or annealed copper safety wire,

black enameled, 0.3mm diameter, on each

door jettison handle.

(ii) Within 500 hours time-in-service (TIS)

after the effective date of this AD, accomplish

the following in accordance with the

applicable maintenance manual:

(A) Remove the doors and remove the

trimming panels from the passenger door

posts. Visually inspect each door to

determine whether two spring pins are

installed to fasten each jettison handle.
18238 Federal Register / Vol. 61, No. 81 / Thursday, April 25, 1996 / Rules and Regulations

(B) If only one spring pin is installed,

install a second spring pin.

(C) Reinstall the trimming panel.

(D) Reinstall the door.

(E) Install the snapwire as specified in

paragraph (a)(1)(i) of this AD.

(2) If a door jettison handle shaft is not

locked to the jettison system, before further

flight, accomplish the following.

(i) Remove the door and the trimming

panel.

(ii) Remove the sheared spring pin.

(iii) Replace the sheared spring pin with

two spring pins.

(iv) Reinstall the door trimming panels.

(v) Reinstall the door.

(vi) Install the snapwire as described in

paragraph (a)(1)(i) of this AD.

Note 2: Eurocopter Service Bulletin SA

365, No. 01.38, dated January 31, 1994,

pertains to this AD.

(b) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used when approved by the Manager,

Rotorcraft Standards Staff, FAA, Rotorcraft

Directorate. Operators shall submit their

requests through an FAA Principal

Maintenance Inspector, who may concur or

comment and then send it to the Manager,

Rotorcraft Standards Staff.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Rotorcraft Standards Staff.

(c) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the helicopter

to a location where the requirements of this

AD can be accomplished.

(d) This amendment becomes effective on

May 30, 1996.

Issued in Fort Worth, Texas, on April 18,

1996.

Eric Bries,

Acting Manager, Rotorcraft Directorate,

Aircraft Certification Service.

[FR Doc. 96–10075 Filed 4–24–96; 8:45 am]

BILLING CODE 4910–13–U

14 CFR Part 39

[Docket No. 96–NM–75–AD; Amendment

39–9581; AD 96–09–07]

Airworthiness Directives; Boeing

Model 757 Series Airplanes Equipped

With Moog Spoiler Actuators

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment supersedes

an existing airworthiness directive (AD)

that is applicable to Boeing Model 757

series airplanes equipped with certain

Abex spoiler actuator electro-hydraulic

servo valves (EHSV) installed in certain

spoiler actuators. The existing AD

currently requires a one-time inspection

of the spoiler actuator to determine if a

suspect EHSV is incorrectly installed,

and replacement of the EHSV, if

necessary. That amendment was

prompted by reports that a bias spring

in the EHSV of certain spoiler actuators

was found to be incorrectly installed.

The actions specified by that AD are

intended to prevent a significant control

upset of the airplane as a result of

problems associated with an incorrectly

installed EHSV in the spoiler actuator

assembly. This amendment adds

additional suspect EHSV’s that require

inspection; it also corrects the actuator

manufacturer’s name and corrects the

serial number of one EHSV.

DATES: Effective May 10, 1996.

Comments for inclusion in the Rules

Docket must be received on or before

June 24, 1996.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–103,

Attention: Rules Docket No. 96–NM–

75–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

Information concerning this AD

action may be examined at the FAA,

Transport Airplane Directorate, 1601

Lind Avenue, SW., Renton, Washington.

FOR FURTHER INFORMATION CONTACT: Don

Eiford, Aerospace Engineer, Systems

and Equipment Branch, ANM–130S,

FAA, Seattle Aircraft Certification

Office, 1601 Lind Avenue, SW., Renton,

Washington; telephone (206) 227–2788;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: On March

5, 1996, the FAA issued AD 96–06–01,

amendment 39–9537 (61 FR 9607,

March 11, 1996), which is applicable to

Boeing Model 757 series airplanes

equipped with certain electro hydraulic

servo valves (EHSV) installed in certain

spoiler actuators. That AD requires a

one-time inspection of the EHSV on the

spoiler actuator to determine if a

suspect valve is incorrectly installed; if

so, the EHSV must be replaced. That

action was prompted by reports that a

bias spring in the EHSV of certain

spoiler actuators was found to be

incorrectly installed.

If the jet pipe in the first stage of the

EHSV is plugged, or if the differential

pressure between the extend and retract

ports pressurized by the jet pipe is

inadequate, an incorrectly installed bias

spring on the second stage spool would

cause the spoiler to be driven into the

‘‘deploy’’ position. Such inadvertent

spoiler deployment would result in the

airplane experiencing a rolling moment.

If the airplane is already banked or is at

a low altitude, or if the crew does not

respond rapidly enough to control the

uncommanded roll, a significant control

upset of the airplane could result. The

actions required by AD 96–06–01 are

intended to prevent the occurrence of

such a control upset.

New Data Since Issuance of AD 96–06–

01

Since the issuance of that AD, the

manufacturer has provided the FAA

with data indicating that additional

suspect EHSV’s may be installed on the

affected airplanes. These suspect

EHSV’s have serial numbers of 595, 563,

and 909. If any these EHSV’s are

installed on an airplane, there is the

potential for the occurrence of the same

unsafe condition that was addressed by

AD 96–06–01.

Explanation of New AD

Since an unsafe condition has been

identified that is likely to exist or

develop on other airplanes of this same

type design, this AD supersedes AD 96–

06–01 to require a one-time inspection

of the spoiler actuator to determine if a

suspect EHSV is incorrectly installed,

and replacement of the EHSV, if

necessary. This AD requires the

inspection for and removal of three

additional suspect EHSV’s.

Additionally, action is taken

throughout this AD to specify the

correct names of the manufacturers of

the spoiler actuator and the EHSV. The

subject spoiler actuators are

manufactured by Moog; the subject

EHSV’s are manufactured by Abex.

Table 1 of this AD has been corrected

to indicate that the order numbers are

‘‘Abex’’ order numbers, rather than

‘‘Boeing’’ order numbers.

Due to a typographical error, EHSV

serial number ‘‘559’’ was incorrectly

listed in Table 1 of AD 96–06–01 as

serial number ‘‘569.’’ This AD corrects

that error.

Cost Impact

According to the records of the EHSV

manufacturer, all of the affected EHSV’s

were shipped to be installed on Model

757 series airplanes that currently are

operated by non-U.S. operators under

foreign registry. None of the Model 757

series airplanes affected by this action

are on the U.S. Register; therefore, they

are not directly affected by this AD

action. However, the FAA considers that

this rule is necessary to ensure that the

unsafe condition is addressed in the

event that:

1. any of the subject airplanes are

imported and placed on the U.S.

Register in the future; or