6558 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

(12) Repairing or maintenance of 

existing constructed fish passageways, 

such as fish ladders or spawning areas 

impacted by natural disasters or human 

alteration; 

(13) Repairing, maintaining, or 

installing fish screens to existing 

structures; 

(14) Repairing or maintaining 

principal spillways and appurtenances 

associated with existing serviceable 

dams, originally constructed to NRCS 

standards, in order to meet current 

safety standards. Work will be confined 

to the existing footprint of the dam, and 

no major change in reservoir or 

downstream operations will result; 

(15) Repairing or improving 

(deepening/widening/armoring) existing 

auxiliary/emergency spillways 

associated with dams, originally 

constructed to NRCS standards, in order 

to meet current safety standards. Work 

will be confined to the dam or abutment 

areas, and no major change in reservoir 

or downstream operation will result; 

(16) Repairing embankment slope 

failures on structures, originally built to 

NRCS standards, where the work is 

confined to the embankment or 

abutment areas; 

(17) Increasing the freeboard (which is 

the height from the auxiliary 

(emergency) spillway crest to the top of 

embankment) of an existing dam or 

dike, originally built to NRCS standards, 

by raising the top elevation in order to 

meet current safety and performance 

standards. The purpose of the safety 

standard and associated work is to 

ensure that during extreme rainfall 

events, flows are confined to the 

auxiliary/emergency spillway so that 

the existing structure is not overtopped 

which may result in a catastrophic 

failure. Elevating the top of the dam will 

not result in an increase to lake or 

stream levels. Work will be confined to 

the existing dam and abutment areas, 

and no major change in reservoir 

operations will result. Examples of work 

may include the addition of fill material 

such as earth or gravel or placement of 

parapet walls; 

(18) Modifying existing residential, 

commercial, and other public and 

private buildings to prevent flood 

damages, such as elevating structures or 

sealing basements to comply with 

current State safety standards and 

Federal performance standards; 

(19) Undertaking minor agricultural 

practices to maintain and restore 

ecological conditions in floodplains 

after a natural disaster or on lands 

impacted by human alteration. 

Examples of these practices include: 

mowing, haying, grazing, fencing, offstream watering facilities, and invasive 

species control which are undertaken 

when fish and wildlife are not breeding, 

nesting, rearing young, or during other 

sensitive timeframes; 

(20) Implementing soil control 

measures on existing agricultural lands, 

such as grade stabilization structures 

(pipe drops), sediment basins, terraces, 

grassed waterways, filter strips, riparian 

forest buffer, and critical area planting; 

and 

(21) Implementing water conservation 

activities on existing agricultural lands, 

such as minor irrigation land leveling, 

irrigation water conveyance (pipelines), 

irrigation water control structures, and 

various management practices. 

Signed this 4th day of February, 2010, in 

Washington, DC. 

Dave White, 

Chief, Natural Resources Conservation 

Service. 

[FR Doc. 2010–2815 Filed 2–9–10; 8:45 am] 

BILLING CODE 3410–16–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 706 

RIN 3133–AD47 

Unfair or Deceptive Acts or Practices 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule; withdrawal. 

SUMMARY: On January 29, 2009, jointly 

with the Federal Reserve System Board 

of Governors (FRB) and the Office of 

Thrift Supervision (OTS), the NCUA 

Board (Board) published a final rule and 

staff commentary amending its credit 

practices regulations (UDAP Rule). The 

UDAP Rule also included technical 

clarifications and was scheduled to 

become effective on July 1, 2010. The 

Board is now revising the UDAP Rule 

because its stipulations became 

unnecessary due to the enactment of the 

Credit Card Accountability, 

Responsibility, and Disclosure Act of 

2009 (Credit CARD Act) on May 22, 

2009, and amendments to Regulation Z 

implementing the Credit CARD Act that 

will become effective on February 22, 

2010. For procedural reasons, the 

substantive requirements of the UDAP 

Rule will be removed effective July 1, 

2010, but it is the Board’s intent that 

only the technical clarifications become 

effective and that the substantive 

requirements will not take effect. This 

final rule applies only to the NCUA 

Board’s regulations and does not affect 

the rules issued by the OTS and FRB. 

DATES: This rule is effective July 1, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Moisette I. Green, Staff Attorney, Office 

of General Counsel, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314– 

3428, or telephone: (703) 518–6540. 

SUPPLEMENTARY INFORMATION: On 

December 18, 2008, NCUA, along with 

the Federal Reserve Board (FRB) and the 

Office of Thrift Supervision, exercised 

its authority under the Federal Trade 

Commission Act (FTC Act) to issue a 

final rule prohibiting unfair acts or 

practices regarding consumer credit 

card accounts. The rule was published 

in the Federal Register on January 29, 

2009, and the effective date for the 

amendments was July 1, 2010. 74 FR 

5498 (January 29, 2009) (UDAP Rule). 

The Credit CARD Act, enacted on 

May 22, 2009, amended the Truth in 

Lending Act (TILA) and established new 

substantive and disclosure requirements 

to establish fair and transparent 

practices pertaining to open-end 

consumer credit plans, including credit 

card accounts. Public Law 111–24, 123 

Stat. 1734 (2009). After consultation 

with NCUA and other Federal financial 

regulators, the FRB amended 12 CFR 

Part 226 and the staff commentary 

(Regulation Z) to implement the Credit 

CARD Act. The Credit CARD Act and 

Regulation Z cover the practices 

regulated in the UDAP Rule, and in 

some instances, expand the UDAP 

Rule’s requirements or consumer 

protections. For example, the UDAP 

Rule prohibited the financing of security 

deposits and fees for the availability of 

a credit card account in excess of 50% 

of the initial credit limit and limited 

how fees that did not exceed the 50% 

limit could be financed. The Credit 

CARD Act prohibits financing any fees 

charged within the first year an openend credit plan in excess of 25% of the 

credit limit from the available credit. In 

as much as the UDAP Rule duplicates, 

overlaps, or conflicts with the Credit 

CARD Act and recent amendments to 

Regulation Z, the NCUA Board believes 

the recent amendments to Part 706 are 

unnecessary and is withdrawing the 

substantive requirements of the UDAP 

Rule. Accordingly, the Board is 

amending Part 706 to remove the 

substantive requirements and retain the 

clarifying technical amendments in the 

UDAP Rule, such as the addition of an 

authority, purpose, and scope section 

and, the removal of the provision for 

State exemptions. 

This revision is applicable only to 

NCUA’s portion of the UDAP Rule. For 

procedural reasons, the substantive 


cprice-sewell on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 6559 

requirements of the UDAP Rule will be 

removed effective July 1, 2010. It is the 

Board’s intent, however, that the 

substantive requirements on the UDAP 

Rule will not take effect. Additionally, 

the Board does not intend to finalize the 

proposed amendments to the UDAP 

Rule. 74 FR 20804 (May 5, 2009). 

List of Subjects in 12 CFR Part 706 

Credit, Credit unions, Deception, 

Intergovernmental relations, Trade 

practices, Unfairness. 

■ For the reasons set forth in the 

preamble, NCUA revises 12 CFR Part 

706 to read as follows: 

PART 706—UNFAIR OR DECEPTIVE 

ACTS OR PRACTICES 

Sec. 

706.0 Purpose and scope. 

706.1 Definitions. 

706.2 Unfair credit practices. 

706.3 Unfair or deceptive cosigner 

practices. 

706.4 Late charges. 

Authority: 15 U.S.C. 57a(f). 

§ 706.0 Purpose and scope. 

(a) Purpose. The purpose of this part 

is to prohibit unfair or deceptive acts or 

practices in violation of section 5(a)(1) 

of the Federal Trade Commission Act, 

15 U.S.C. 45(a)(1). The prohibitions in 

this part do not limit NCUA’s authority 

to enforce the Federal Trade 

Commission Act with respect to any 

other unfair or deceptive acts or 

practices. 

(b) Scope. This part applies to Federal 

credit unions. 

§ 706.1 Definitions. 

(a) Person. An individual, 

corporation, or other business 

organization. 

(b) Consumer. A natural person 

member who seeks or acquires goods, 

services, or money for personal, family, 

or household use. 

(c) Obligation. An agreement between 

a consumer and a Federal credit union. 

(d) Debt. Money that is due or alleged 

to be due from one to another. 

(e) Earnings. Compensation paid or 

payable to an individual or for his or her 

account for personal services rendered 

or to be rendered by him or her, whether 

denominated as wages, salary, 

commission, bonus, or otherwise, 

including periodic payments pursuant 

to a pension, retirement, or disability 

program. 

(f) Household goods. Clothing, 

furniture, appliances, one radio and one 

television, linens, china, crockery, 

kitchenware, and personal effects 

(including wedding rings) of the 

consumer and his or her dependents, 

provided that the following are not 

included within the scope of the term 

‘‘household goods’’: 

(1) Works of art; 

(2) Electronic entertainment 

equipment (except one television and 

one radio); 

(3) Items acquired as antiques; and 

(4) Jewelry (except wedding rings). 

(g) Antique. Any item over one 

hundred years of age, including such 

items that have been repaired or 

renovated without changing their 

original form or character. 

(h) Cosigner. A natural person who 

renders himself or herself liable for the 

obligation of another person without 

receiving goods, services, or money in 

return for the credit obligation, or, in the 

case of an open-end credit obligation, 

without receiving the contractual right 

to obtain extensions of credit under the 

obligation. The term includes any 

person whose signature is requested as 

a condition to granting credit to a 

consumer, or as a condition for 

forbearance on collection of a 

consumer’s obligation that is in default. 

The term does not include a spouse 

whose signature is required on a credit 

obligation to perfect a security interest 

pursuant to State law. A person is a 

cosigner within the meaning of this 

definition whether or not he or she is 

designated as such on a credit 

obligation. 

§ 706.2 Unfair credit practices. 

In connection with the extension of 

credit to consumers, it is an unfair act 

or practice for a Federal credit union, 

directly or indirectly, to take or receive 

from a consumer an obligation that: 

(a) Constitutes or contains a cognovit 

or confession of judgment (for purposes 

other than executory process in the 

State of Louisiana), warrant of attorney, 

or other waiver of the right to notice and 

the opportunity to be heard in the event 

of suit or process thereon. 

(b) Constitutes or contains an 

executory waiver or a limitation of 

exemption from attachment, execution, 

or other process on real or personal 

property held, owned by, or due to the 

consumer, unless the waiver applies 

solely to property subject to a security 

interest executed in connection with the 

obligation. 

(c) Constitutes or contains an 

assignment of wages or other earnings 

unless: 

(1) The assignment by its terms is 

revocable at the will of the debtor, or 

(2) The assignment is a payroll 

deduction plan or preauthorized 

payment plan, commencing at the time 

of the transaction, in which the 

consumer authorizes a series of wage 

deductions as a method of making each 

payment, or 

(3) The assignment applies only to 

wages or other earnings already earned 

at the time of the assignment. 

(d) Constitutes or contains a 

nonpossessory security interest in 

household goods other than a purchase 

money security interest. 

§ 706.3 Unfair or deceptive cosigner 

practices. 

(a) Prohibited practices. In connection 

with the extension of credit to 

consumers, it is: 

(1) A deceptive act or practice for a 

Federal credit union, directly or 

indirectly, to misrepresent the nature or 

extent of cosigner liability to any 

person. 

(2) An unfair act or practice for a 

Federal credit union, directly or 

indirectly, to obligate a cosigner unless 

the cosigner is informed prior to 

becoming obligated, which in the case 

of open-end credit means prior to the 

time that the agreement creating the 

cosigner’s liability for future charges is 

executed, of the nature of his or her 

liability as cosigner. 

(b) Disclosure requirement. (1) To 

comply with the cosigner information 

requirement of paragraph (a)(2) of this 

section, a clear and conspicuous 

disclosure statement shall be of this 

section given in writing to the cosigner 

prior to becoming obligated. The 

disclosure statement will contain only 

the following statement, or one which is 

substantially equivalent, and shall 

either be a separate document or 

included in the documents evidencing 

the consumer credit obligation. 

Notice to Cosigner 

You are being asked to guarantee this debt. 

Think carefully before you do. If the 

borrower doesn’t pay the debt, you will have 

to. Be sure you can afford to pay if you have 

to, and that you want to accept this 

responsibility. 

You may have to pay up to the full amount 

of the debt if the borrower does not pay. You 

may also have to pay late fees or collection 

costs, which increase this amount. 

The creditor can collect this debt from you 

without first trying to collect from the 

borrower. The creditor can use the same 

collection methods against you that can be 

used against the borrower, such as suing you, 

garnishing your wages, etc. If this debt is ever 

in default, that fact may become a part of 

your credit record. 

This notice is not the contract that makes 

you liable for the debt. 

(2) If the notice to cosigner is a 

separate document, nothing other than 

the following items may appear with the 

notice. The following paragraphs 

(b)(2)(i) through (v) may not be part of 


cprice-sewell on DSK2BSOYB1PROD with RULES
6560 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

1Special Information Sharing Procedures to Deter 

Money Laundering and Terrorist Activity, 67 FR 

60,579 (Sept. 26, 2002). 

2 31 CFR 103.100. 

the narrative portion of the notice to 

cosigner. 

(i) The name and address of the 

Federal credit union; 

(ii) An identification of the debt to be 

cosigned (e.g., a loan identification 

number); 

(iii) The amount of the loan; 

(iv) The date of the loan; 

(v) A signature line for a cosigner to 

acknowledge receipt of the notice; and 

(vi) To the extent permitted by State 

law, a cosigner notice required by State 

law may be included in the notice in 

paragraph (b)(1) of this section. 

(3) To the extent the notice to cosigner 

specified in paragraph (b)(1) of this 

section refers to an action against a 

cosigner that is not permitted by State 

law, the notice to cosigner may be 

modified. 

§ 706.4 Late charges. 

(a) In connection with collecting a 

debt arising out of an extension of credit 

to a consumer, it is an unfair act or 

practice for a Federal credit union, 

directly or indirectly, to levy or collect 

any delinquency charge on a payment, 

which payment is otherwise a full 

payment for the applicable period and 

is paid on its due date or within an 

applicable grace period, when the only 

delinquency is attributable to late fee(s) 

or delinquency charge(s) assessed on 

earlier installment(s). 

(b) For purposes of this section, 

‘‘collecting a debt’’ means any activity 

other than the use of judicial process 

that is intended to bring about or does 

bring about repayment of all or part of 

a consumer debt. 

By the National Credit Union 

Administration Board, on January 29, 2010. 

Mary F. Rupp, 

Secretary of the Board. 

[FR Doc. 2010–2311 Filed 2–9–10; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 103 

RIN 1506–AB04 

Financial Crimes Enforcement 

Network; Expansion of Special 

Information Sharing Procedures To 

Deter Money Laundering and Terrorist 

Activity 

AGENCY: Financial Crimes Enforcement 

Network (‘‘FinCEN’’), Treasury. 

ACTION: Final rule. 

SUMMARY: FinCEN is issuing this final 

rule to amend the relevant Bank Secrecy 

Act (‘‘BSA’’) information sharing rules to 

allow certain foreign law enforcement 

agencies, and State and local law 

enforcement agencies, to submit 

requests for information to financial 

institutions. The rule also clarifies that 

FinCEN itself, on its own behalf and on 

behalf of other appropriate components 

of the Department of the Treasury 

(‘‘Treasury’’), may submit such requests. 

Modification of the information sharing 

rules is a part of Treasury’s continuing 

effort to increase the efficiency and 

effectiveness of its anti-money 

laundering and counter-terrorist 

financing policies. 

DATES: Effective Date: February 10, 

2010. 

FOR FURTHER INFORMATION CONTACT: The 

FinCEN regulatory helpline at (800) 

949–2732 and select Option 2. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Statutory Provisions 

On October 26, 2001, the President 

signed into law the Uniting and 

Strengthening America by Providing 

Appropriate Tools Required to Intercept 

and Obstruct Terrorism Act of 2001 

(‘‘USA PATRIOT ACT’’), Public Law 

107–56 (‘‘the Act’’). Title III of the Act 

amends the anti-money laundering 

provisions of the BSA, codified at 12 

U.S.C. 1829b and 1951–1959 and 31 

U.S.C. 5311–5314 and 5316–5332, to 

promote the prevention, detection, and 

prosecution of international money 

laundering and the financing of 

terrorism. Regulations implementing the 

BSA appear at 31 CFR Part 103. The 

authority of the Secretary of the 

Treasury (‘‘the Secretary’’) to administer 

the BSA has been delegated to the 

Director of FinCEN. 

Of the Act’s many goals, the 

facilitation of information sharing 

among governmental entities and 

financial institutions for the purpose of 

combating terrorism and money 

laundering is of paramount importance. 

Section 314 of the Act furthers this goal 

by providing for the sharing of 

information between the government 

and financial institutions, and among 

financial institutions themselves. As 

with many other provisions of the Act, 

Congress has charged Treasury with 

promulgating regulations to implement 

these information-sharing provisions. 

Subsection 314(a) of the Act states in 

part that: 

[t]he Secretary shall * * * adopt regulations 

to encourage further cooperation among 

financial institutions, their regulatory 

authorities, and law enforcement authorities, 

with the specific purpose of encouraging 

regulatory authorities and law enforcement 

authorities to share with financial 

institutions information regarding 

individuals, entities, and organizations 

engaged in or reasonably suspected based on 

credible evidence of engaging in terrorist acts 

or money laundering activities. 

B. Overview of the Current Regulatory 

Provisions Regarding the 314(a) 

Program 

On September 26, 2002, FinCEN 

published a final rule implementing the 

authority contained in section 314(a) of 

the Act.1 That rule (‘‘the 314(a) rule’’) 

allows FinCEN to require financial 

institutions to search their records to 

determine whether they have 

maintained an account or conducted a 

transaction with a person that a Federal 

law enforcement agency has certified is 

suspected based on credible evidence of 

engaging in terrorist activity or money 

laundering.2 Before processing a request 

from a Federal law enforcement agency, 

FinCEN also requires the requesting 

agency to certify that, in the case of 

money laundering, the matter is 

significant, and that the requesting 

agency has been unable to locate the 

information sought through traditional 

methods of investigation and analysis 

before attempting to use this authority 

(‘‘the 314(a) program’’). 

Since its inception, the 314(a) 

program has yielded significant 

investigative benefits to Federal law 

enforcement users in terrorist financing 

and major money laundering cases. 

Feedback from the requesters and 

illustrations from sample case studies 

consistently demonstrate how useful the 

program is in enhancing the scope and 

expanding the universe of 

investigations. In view of the proven 

success of the 314(a) program, FinCEN 

is broadening access to the program as 

outlined in the following paragraphs. 

C. Objectives of Changes 

1. Allowing Certain Foreign Law 

Enforcement Agencies To Initiate 314(a) 

Queries 

In order to satisfy the United States’ 

treaty obligation with certain foreign 

governments, FinCEN is extending the 

use of the 314(a) program to include 

foreign law enforcement agencies. On 

June 25, 2003, the Agreement on Mutual 

Legal Assistance between the United 

States and the European Union (‘‘EU’’) 

(hereinafter, the ‘‘U.S.–EU MLAT’’) was 

signed. In 2006, the U.S.–EU MLAT, 

along with twenty-five bilateral 

instruments, were submitted to the U.S. 

Senate for its advice and consent for 


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