This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

57013 

Vol. 73, No. 191 

Wednesday, October 1, 2008 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Parts 701 and 742 

RIN 3133–AD53 

Regulatory Flexibility Regarding 

Ownership of Fixed Assets 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Proposed rule. 

SUMMARY: NCUA proposes to amend its 

Regulatory Flexibility (RegFlex) 

Program to provide additional flexibility 

to qualifying federal credit unions 

(FCUs) when acquiring unimproved 

land for future expansion. Currently, 

when an FCU acquires unimproved land 

for future expansion and does not fully 

occupy the completed premises within 

one year, it must partially occupy the 

completed premises within three years 

or obtain a waiver. The proposed 

amendment would increase the three 

years to six years for RegFlex FCUs 

without a waiver. NCUA also proposes 

to make conforming amendments to its 

fixed asset rule to be consistent with the 

RegFlex changes. 

DATES: Comments must be received on 

or before December 1, 2008. 

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/ 

RegulationsOpinionsLaws/ 

proposed_regs/proposed_regs.html. 

Follow the instructions for submitting 

comments. 

• E-mail: Address to 

regcomments@ncua.gov. Include ‘‘[Your 

name] Comments on Proposed Rule 742, 

Regulatory Flexibility Program’’ in the 

e-mail subject line. 

• Fax: (703) 518–6319. Use the 

subject line described above for e-mail. 

• Mail: Address to Mary Rupp, 

Secretary of the Board, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314– 

3428. 

• Hand Delivery/Courier: Same as 

mail address. 

Public Inspection: All public 

comments are available on the agency’s 

Web site at http://www.ncua.gov/ 

RegulationsOpinionsLaws/comments as 

submitted, except as may not be 

possible for technical reasons. Public 

comments will not be edited to remove 

any identifying or contact information. 

Paper copies of comments may be 

inspected 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 e-mail to OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Frank Kressman, Staff Attorney, Office 

of General Counsel, at the above address 

or telephone (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

A. Background 

1. Fixed Assets 

The Federal Credit Union Act 

authorizes an FCU to purchase, hold, 

and dispose of property necessary or 

incidental to its operations. 12 U.S.C. 

1757(4). Generally, the fixed asset rule 

provides limits on fixed asset 

investments, establishes occupancy and 

other requirements for acquired and 

abandoned premises, and prohibits 

certain transactions. 12 CFR 701.36. 

Fixed assets are defined in § 701.36(e) as 

premises, furniture, fixtures, and 

equipment and includes any office, 

branch office, suboffice, service center, 

parking lot, facility, real estate where a 

credit union transacts or will transact 

business, office furnishings, office 

machines, computer hardware and 

software, automated terminals, and 

heating and cooling equipment. 

Section 701.36 prohibits an FCU with 

$1 million or more in assets from 

investing in fixed assets the aggregate of 

which exceeds five percent of the FCU’s 

shares and retained earnings, although 

this prohibition is waivable. 12 CFR 

701.36(a)(1), (2). If an FCU acquires 

premises, as broadly defined in 

§ 701.36(e), for future expansion and 

does not fully occupy the space within 

one year, its board must have a 

resolution in place by the end of that 

year with plans for full occupation and 

make those plans available to NCUA 

upon request. 12 CFR 701.36(b)(1). 

Additionally, the FCU must partially 

occupy the premises within a 

reasonable period, not to exceed three 

years, without a waiver. 12 CFR 

701.36(b)(2). In this proposal, NCUA is 

only addressing the circumstance where 

an FCU is acquiring unimproved land 

but no other kind of premises. 

2. Regulatory Flexibility Program 

The RegFlex Program exempts from 

certain regulatory restrictions and grants 

additional powers to those FCUs that 

have demonstrated sustained superior 

performance as measured by CAMEL 

ratings and net worth classifications. 12 

CFR 742.1. An FCU may qualify for 

RegFlex treatment automatically or by 

application to the appropriate regional 

director. 12 CFR 742.2. Also, an FCU’s 

RegFlex authority can be lost or 

revoked. 12 CFR 742.3. 

B. Discussion 

Although a RegFlex eligible FCU is 

exempt from the five percent aggregate 

limit on fixed asset investments, it is not 

exempt from the requirement to 

partially occupy premises acquired for 

future expansion within three years or 

request a waiver of this requirement. 12 

CFR 701.36(a), 701.36(b)(2), 701.36(d), 

742.4(a)(3). Where an FCU is acquiring 

unimproved land, the partial occupancy 

requirement is more difficult to satisfy 

than if the FCU were purchasing 

premises with an existing branch 

building. The Board is aware that some 

FCUs take the position that the fixed 

asset rule’s three-year partial occupancy 

requirement, even with a waiver option, 

is burdensome and an unnecessary level 

of oversight for RegFlex FCUs that have 

demonstrated sustained superior 

performance. 

Although the NCUA Board believes 

additional regulatory relief can and 

should be granted, the time limit for an 

FCU to fulfill the partial occupancy 

requirement cannot be unlimited. That 

would be the equivalent of an FCU 

making an impermissible real estate 

investment and also could cause serious 

safety and soundness concerns. NCUA 

recognizes, however, that many real 

estate transactions are complex, time 

consuming, and can involve a host of 

wide ranging issues that must be 

worked through before an FCU is ready 

to occupy the premises. This is 

especially true in the unimproved land 

context considering the addition of 


ebenthall on PROD1PC60 with PROPOSALS
57014 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Proposed Rules 

construction related issues. 

Accordingly, NCUA proposes to extend 

the three-year time period to six years 

for RegFlex FCUs but only with respect 

to the acquisition of unimproved land. 

NCUA believes six years is a sufficiently 

long time period to provide RegFlex 

FCUs with the flexibility they need to 

manage their fixed asset portfolios, in 

any context, free of unnecessary 

regulation and consistent with safe and 

sound credit union operations. All other 

substantive aspects of the fixed asset 

rule remain unchanged, including an 

FCU’s ability to request a waiver of the 

partial occupancy requirement. 

C. Regulatory Procedures 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

requires NCUA to prepare an analysis to 

describe any significant economic 

impact a proposed rule may have on a 

substantial number of small entities 

(primarily those under ten million 

dollars in assets). This rule provides 

additional flexibility and reduces 

regulatory burden. Accordingly, this 

proposed rule will not have a significant 

economic impact on a substantial 

number of small credit unions, and 

therefore, no regulatory flexibility 

analysis is required. 

Paperwork Reduction Act 

NCUA has determined that this rule 

will 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. This proposed rule 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. 

The Treasury and General Government 

Appropriations Act, 1999—Assessment 

of Federal Regulations and Policies on 

Families 

NCUA has determined that this 

proposed rule 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). 

Agency Regulatory Goal 

NCUA’s goal is to promulgate clear 

and understandable regulations that 

impose minimal regulatory burden. We 

request your comments on whether the 

proposed rule is understandable and 

minimally intrusive if implemented as 

proposed. 

List of Subjects 

12 CFR Part 701 

Credit unions. 

12 CFR Part 742 

Credit unions, reporting and 

recordkeeping requirements. 

By the National Credit Union 

Administration Board on September 25, 

2008. 

Mary Rupp, 

Secretary of the Board. 

For the reasons discussed above, 

NCUA proposes to amend 12 CFR parts 

701 and 742 as follows: 

PART 701—ORGANIZATION AND 

OPERATIONS 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. 

2. Section 701.36(d) introductory text 

is amended by adding a new second 

sentence to read as follows: 

§ 701.36 FCU Ownership of fixed assets. 

* * * * * 

(d) * * * Those federal credit unions 

are also exempt from the three-year 

partial occupancy requirement 

described in paragraph (b) of this 

section when acquiring unimproved 

land for future expansion pursuant to 

the terms of section 742.4(a)(3) of this 

chapter. * * * 

* * * * * 

PART 742—REGULATORY 

FLEXIBILITY PROGRAM 

3. The authority citation for part 742 

continues to read as follows: 

Authority: 12 U.S.C. 1756, 1766. 

4. Section 742.4(a)(3) is amended by 

adding two sentences at the end to read 

as follows: 

§ 742.4 RegFlex Relief. 

(a) * * * 

(3) * * * Section 701.36(b)(2) of this 

chapter concerning the three-year 

partial occupancy requirement when 

acquiring unimproved land for future 

expansion; RegFlex credit unions are 

instead subject to a six-year partial 

occupancy requirement when acquiring 

unimproved land but remain subject to 

all other provisions of that section 

including the waiver provision; 

* * * * * 

[FR Doc. E8–23039 Filed 9–30–08; 8:45 am] 

BILLING CODE 7535–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 121, 125, 127, and 134 

The Women-Owned Small Business 

Federal Contract Assistance 

Procedures 

AGENCY: Small Business Administration. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: The U.S. Small Business 

Administration (SBA) is seeking 

comments on a data issue involving the 

Women-Owned Small Business (WOSB) 

Federal Contract Assistance Procedures 

authorized under Section 8(m) of the 

Small Business Act. Specifically, SBA is 

seeking comments on two data sets: the 

Central Contractor Registration (CCR) 

data set which was used in the RAND 

report and the proposed rule for the 

WOSB Federal Contract Assistance 

Procedures to determine the 

representation of WOSBs in Federal 

procurement in the various industries 

and a non-public Survey of Business 

Owners (SBO) data set from the 

Economic Census, which was not 

previously used in the RAND report or 

the proposed rule to determine the 

representation of WOSBs in Federal 

procurement in the various industries. 

This request for comments is intended 

to stimulate dialogue on available data 

sets and the comments will be evaluated 

to determine which data set will 

provide the soundest basis to identify 

industries in which WOSBs are 

underrepresented in Federal 

procurement. 

DATES: The SBA must receive comments 

on or before October 31, 2008. 

ADDRESSES: You may submit comments 

by any of the following methods: 


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