[Federal Register Volume 74, Number 120 (Wednesday, June 24, 2009)]
[Rules and Regulations]
[Pages 29934-29936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14756]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 701

RIN 3133-AD60


Operating Fees

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: NCUA is amending its rule on the assessment of the Federal 
credit union (FCU) operating fee by permitting FCUs to subtract 
investments made under the Credit Union System Investment Program (CU 
SIP) and the

[[Page 29935]]

Credit Union Homeowners Affordability Relief Program (CU HARP) from 
their total assets; total assets is the basis on which the operating 
fee is currently calculated. The Board believes this amendment will 
remove a disincentive for some FCUs from participating in the CU SIP or 
the CU HARP.

DATES: This rule is effective January 1, 2010.

FOR FURTHER INFORMATION CONTACT: Justin M. Anderson, Staff Attorney, 
Office of General Counsel, at (703) 518-6540.

SUPPLEMENTARY INFORMATION:

A. Background

    In February 2009, the NCUA Board issued a proposed rule to amend 
Sec.  701.6 of NCUA's regulations. 74 FR 9573 (Mar. 5, 2009). The 
proposed rule recommended allowing FCUs to deduct investments under the 
CU SIP and CU HARP from the calculation of total assets for purposes of 
assessing the operating fee.
    Currently, Sec.  701.6 sets out the basis on which NCUA assesses 
the operating fee. Briefly summarized, this section provides that FCUs 
must pay NCUA an annual operating fee based on the credit union's total 
assets. 12 CFR 701.6(a). NCUA calculates an FCU's operating fee by 
multiplying the dollar amount of the total assets by a percentage set 
by the Board after considering the expenses of NCUA and the ability of 
FCUs to pay the fee. The term ``total assets'' generally includes all 
assets created on an FCU's books related to investments made by an FCU 
that are currently outstanding as of the close of the previous fiscal 
year. Based on this calculation, an increase in the dollar amount of 
investments will increase total assets and, thereby, may increase an 
FCU's operating fee.
    The Board recognized an increase in an FCUs operating fee might be 
a disincentive for FCUs to participate in the CU SIP and CU HARP. The 
Board, therefore, issued a proposed rule permitting FCUs to calculate 
their total assets less any asset created by an investment in the CU 
SIP or CU HARP. Because the operating fee is based on an FCU's total 
assets as of the close of the previous fiscal year and funding for the 
CU SIP and CU HARP took place after January 1, 2009, the proposed 
amendments would not affect the computation of the operating fee until 
2010.

B. Discussion

    The NCUA Board received seven comment letters regarding the 
proposal: two from credit union trade associations; two from State 
credit union leagues; and three from FCUs. All of the comment letters 
generally supported the amendment in the proposed rule and six of the 
commenters offered no additional comments or suggestions. One commenter 
suggested NCUA also amend the definition of total assets for purposes 
of prompt corrective action, 12 CFR Part 702, to exclude guaranteed or 
no/low risk assets from net worth ratio calculations. This comment is 
outside the scope of this rulemaking; NCUA may consider this suggestion 
when it reviews the prompt corrective action rule as part of its 
rolling regulation review under Interpretive Ruling and Policy 
Statement (IRPS) 87-2, Developing and Reviewing Government Regulations.
    In the final rule, the Board is adopting a recommendation from 
agency staff to revise the regulatory language to describe the 
calculation more clearly. The proposed rule stated the term ``total 
assets'' does not include investments made under the CU SIP and CU 
HARP. The final rule has been revised to state the operating fee is 
determined based on total assets less the assets created on the books 
of a natural person FCU by investments under CU SIP and CU HARP. This 
revision does not change the substance of the proposed amendment or its 
intended effect, which is to ensure that FCUs will not pay an increased 
operating fee because of their participation in the CU SIP or CU HARP.

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 credit unions (those under $10 million in 
assets). This final rule revises the calculation of total assets for 
purposes of the assessment of the FCU operating fee and permits FCUs to 
subtract investments made under the CU SIP and the CU HARP from the 
calculation. The operating fee is calculated as a percentage of total 
assets and, as such, the calculation already is geared to impose a 
smaller fee on smaller credit unions. In addition, the operating fee 
schedule has historically imposed no operating fee on FCUs with assets 
up to $500,000 and a flat fee of $100 for FCUs of up to $750,000 in 
assets. The benefit of the amendment would apply equally to small 
credit unions, to the extent they participate in the CU SIP or the CU 
HARP, and would not have a significant effect on their operating fees. 
The final rule, therefore, will not have a significant economic impact 
on a substantial number of small credit unions and a regulatory 
flexibility analysis is not required.

Paperwork Reduction Act

    NCUA has determined that the amendment will not increase paperwork 
requirements and a paperwork reduction analysis is not required.

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. NCUA does not believe this final rule is a 
``major rule'' within the meaning of the relevant sections of SBREFA. 
NCUA has submitted the rule to the Office of Management and Budget for 
its determination in that regard.

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 does not have substantial 
direct effects on the States, on the connection 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 final 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 final rule would 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).

List of Subjects in 12 CFR Part 701

    Credit unions, Operating fee.

    By the National Credit Union Administration Board on June 18, 
2009.
Mary Rupp,
Secretary of the Board.

0
For the reasons stated in the preamble, the National Credit Union

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Administration is amending 12 CFR part 701 as set forth below:

PART 701--ORGANIZATION AND OPERATIONS OF FEDERAL CREDIT UNIONS

0
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, 1789. Section 701.6 is also 
authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 
15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3610. Section 701.35 
is also authorized by 42 U.S.C. 4311-4312.

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2. In Sec.  701.6, add a new sentence to the end of paragraph (a) to 
read as follows:


Sec.  701.6  Fees paid by Federal credit unions.

    (a) * * * The operating fee is determined based on total assets 
less the assets created on the books of a natural person Federal credit 
union by investments made in a corporate credit union under the Credit 
Union System Investment Program or the Credit Union Homeowners 
Affordability Relief Program.
* * * * *
[FR Doc. E9-14756 Filed 6-23-09; 8:45 am]
BILLING CODE 7535-01-P