50288 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 

1 82 FR 26378 (June 7, 2017). 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Parts 701, 703, 705, 708a, 709, 

741, 745, 746, 747, and 750 

RIN 3133–AE68 

Appeals Procedures 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: The NCUA Board (Board) is 

adopting this final rule to establish 

procedures to govern appeals to the 

Board. The rule establishes a uniform 

procedure that will apply to agency 

regulations that currently have their 

own embedded appeals provisions. 

Accordingly, this final rule will replace 

those current provisions. The 

procedures will apply in cases in which 

a decision rendered by a regional 

director or other program office director 

is subject to appeal to the Board. The 

procedures will result in greater 

efficiency, consistency, and a better 

understanding of the way in which 

matters under covered regulations may 

be appealed to the Board. 

DATES: This final rule is effective on 

January 1, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Michael J. McKenna, General Counsel, 

Ross P. Kendall, Special Counsel to the 

General Counsel, or Benjamin M. 

Litchfield, Staff Attorney, at the above 

address, or telephone: (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

Background 

As outlined in its May 2017 proposed 

rule,1 the Board intends for new 12 CFR 

part 746, subpart B, to govern most 

authorized appeals to the Board. The 

proposed rule identified which rules 

would be affected by these new 

procedures. In addition, the Board 

specifically requested comment on any 

other agency rules that should be 

covered under the proposal. The 

proposed rule also specifically 

identified certain categories of actions 

or determinations that would not be 

covered under the proposal because 

appeals relating to them are already 

covered under different agency 

procedures. The Board invited comment 

on these proposed exclusions as well. 

As reflected in the proposed rule and 

as finalized herein, the Board is 

committed to providing credit unions, 

and other persons or entities that are 

affected by agency decisions, with an 

opportunity to obtain meaningful 

review of those decisions. The Board 

believes this final rule strikes an 

appropriate balance that will afford a 

petitioner fair consideration of the 

issues while avoiding procedures that 

are overly burdensome, time 

consuming, and expensive. 

Comment Summary 

The Board received a total of seven 

comments to the proposed rule. All 

commenters noted broad, general 

support for the proposal. Beneficial 

results from the proposal identified by 

commenters included clearer and 

improved processes, the introduction of 

consistency into a process that is 

currently varied, a more uniform set of 

procedures to govern those rules in 

which an appeal is permitted, and the 

promotion of a more streamlined and 

efficient appeals process. One 

commenter applauded NCUA for what 

the commenter characterized as a visible 

and forceful commitment to the practice 

of transparency. 

As discussed more fully below, the 

Board received one comment suggesting 

that the appeals process be extended to 

include decisions involving capital 

planning and stress testing. There were 

no other suggestions of additional rules 

that should be covered. Similarly, the 

Board did not receive any comments on 

its proposal to exclude certain 

categories of actions or determinations 

from coverage under the new 

procedures. Accordingly, all of the 

proposed changes to existing regulations 

are adopted as proposed and without 

change. In addition, the Board confirms 

the exclusion of the following categories 

of actions from the scope of new part 

746, subpart B: 

• Formal enforcement actions; 

• Creditor claims in liquidation, to 

the extent that the claimant has 

requested and the Board has agreed to 

consider the appeal formally on the 

record; 

• Material supervisory 

determinations within the jurisdiction 

of the Supervisory Review Committee 

(SRC); 

• Challenges to actions imposed 

under the prompt corrective action 

regime; and 

• Appeals of matters that are 

delegated by rule to an officer or 

position below the Board for final, 

binding agency action. 

Section by Section Analysis; Discussion 

of Specific Comments 

Section 746.201—Authority, Purpose, 

and Scope. No comments were received 

concerning this first section of proposed 

subpart B to part 746, which outlines 

the Board’s authority for issuing the rule 

as well as its scope and purpose. 

Accordingly, this section of the 

proposed rule is adopted in full without 

change from the proposal. 

Section 746.202—Definitions. One 

commenter recommended that the rule 

be modified to include a specific 

definition of the term ‘‘reconsideration’’ 

in the definitions section. As proposed, 

this term is defined on a functional 

basis in § 746.203, which describes the 

concept of reconsideration in detail. 

While the Board understands that the 

commenter believes including a 

definition of the term in the definitions 

section would be useful, the Board 

believes that the description of this 

term, as set out in detail in § 746.203(a), 

provides a more useful, functional 

definition of the concept and should not 

be changed. Accordingly, this section of 

the proposed rule is adopted in full 

without change from the proposal. 

Section 746.203—Request for 

Reconsideration. As proposed, this 

section would set forth procedures for 

requesting reconsideration from a 

program office prior to filing an appeal 

with the Board. The rule specifies that 

the program office must make its 

determination on a request for 

reconsideration within 30 days, and that 

failure by the program office to do so 

within that time frame shall be deemed 

an affirmation of the initial agency 

determination. One commenter 

suggested that the rule as proposed was 

insufficient and should go further as to 

this point. According to the commenter, 

the rule should require the program 

office to notify the petitioner of its 

failure to timely act on the 

reconsideration request, provide a 

substantive response, and again notify 

the petitioner of the right to file an 

appeal with the Board. 

The Board believes that the proposal 

adequately covers this scenario. The 

Board anticipates that instances of 

failure by the program office to respond 

to a reconsideration request within the 

prescribed time frame will be rare. 

Furthermore, the Board notes that the 

provisions in § 746.203(g) are designed 

to protect the petitioner from 

circumstances in which delay at the 

program office level would thwart the 

petitioner’s ability to secure a higher 

level of review. As drafted, the 

provision effectively imposes an 

operational deadline for the program 

office to act. Accordingly, this section of 

the proposed rule is adopted in full 

without change from the proposal. 

Section 746.204—Appeal to the 

Board. As proposed, this section 

describes the procedures for filing an 

appeal with the Board, including timing 

constraints and a listing of the 


sradovich on DSK3GMQ082PROD with RULES4
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 50289 

2See 12 CFR part 702, subpart E. 

information that must be included as 

part of the appeal. These requirements 

are similar to the current requirements 

for creditor claims and share insurance 

claims, including the requirement that 

any appeal must be filed with the 

Secretary of the Board within 60 

calendar days of the date of the initial 

agency determination or, if applicable, 

any determination following a request 

for reconsideration. As proposed, the 

60-day deadline would not apply to a 

decision rejecting a request by a 

troubled or newly chartered credit 

union to make a change at the senior 

official level. In such cases, a 15-day 

deadline would govern the appeal 

process. 

One commenter recommended that, 

for the sake of consistency, this appeals 

period should also be established at 60 

days. Alternatively, according to the 

commenter, the rule should explicitly 

require the program office to notify 

credit unions affected by this provision 

of the notably shorter time frame for 

taking an appeal. Otherwise, according 

to the commenter, the movement toward 

standardization reflected in the rule 

could lead a credit union to assume that 

all appeals have the same 60-day 

deadline. 

The Board is not persuaded by this 

comment. Preserving the shorter time 

frame in this area recognizes the 

exigencies associated with management 

changes and helps assure that decisions 

affecting personnel are made quickly 

and subject to review within reasonable 

time frames. In this respect, the Board 

notes that the relatively shorter 

timeframe governing the change of 

officials is currently reflected in the 

existing rules that governs this area 

(§ 701.14 and part 747, subpart J) and is 

therefore familiar to credit unions 

generally. Furthermore, the Board notes 

that program offices include explicit 

references to this deadline in 

correspondence dealing with this issue 

currently, further minimizing the 

likelihood of confusion in this area. 

Accordingly, this section of the 

proposed rule is adopted in full without 

change from the proposal. 

Section 746.205—Preliminary 

Considerations Regarding the Appeal. 

As proposed, this section of the rule 

describes preliminary internal processes 

for reviewing appeals, and includes a 

description of the role of the Special 

Counsel to the General Counsel (Special 

Counsel) at this stage of the 

proceedings. Two commenters sought 

clarification as to this aspect. The 

proposed rule provides that the Special 

Counsel will conduct a preliminary 

review of the materials filed with the 

appeal (§ 746.205) and also perform a 

substantive, de novo review of the 

program office file and the materials 

submitted by the petitioner to make a 

recommendation to the Board regarding 

the disposition of the appeal (§ 746.206). 

Both commenters requested that the 

final rule provide clarification as to the 

distinction between these two functions 

and provide greater clarity as to the 

nature and purpose of the preliminary 

review. The Board acknowledges the 

validity of the point made by these 

commenters. In the final version of 

§ 746.205(a), language is now included 

that specifies in greater detail the nature 

of the preliminary review conducted by 

the Special Counsel, which is focused 

on whether the appeal is in good order 

procedurally. For example, the Special 

Counsel will assess the timeliness of the 

appeal and whether the issues identified 

in the appeal have become moot. 

Section 746.206 Administration of 

the Appeal. Aside from the comment, 

discussed above, seeking clarification as 

to the nature of the role of the Special 

Counsel, the Board did not receive any 

comments regarding § 746.206. 

Accordingly, this section of the 

proposed rule is adopted in full without 

change from the proposal. 

Section 746.207—Procedures for Oral 

Hearing. This section sets out a detailed 

process by which a petitioner may 

request to appear before the Board to 

argue its appeal in person. As proposed, 

the rule requires that a petitioner make 

its request for an oral hearing through a 

separate writing that must be submitted 

at the time of the initial appeal 

(§ 746.207(a)). Two commenters 

opposed this requirement, and 

advocated that the Board should change 

the rule so that a petitioner might make 

its request for an oral hearing at any 

time before the Board has issued its 

decision on the appeal. One commenter 

opposed limiting the number of persons 

to two who may appear as 

representatives for the petitioner at the 

oral hearing. The commenter asserted 

that two would be insufficient, and 

advocated that the number be changed 

to five. 

The Board declines to make the 

changes requested by these commenters. 

In its proposed form, the rule recognizes 

that an oral hearing can be a logistical 

challenge requiring significant planning 

and effort, particularly in view of the 

goal of having the Board render its 

decision within 90 days of the filing of 

an appeal. This requirement also helps 

to prevent a petitioner from requesting 

a hearing as a device to delay or prolong 

appeal proceedings. Similarly, with 

regard to the request to allow more 

personnel to participate in the hearing, 

the Board believes the limitations as 

proposed will help to keep the oral 

hearing procedures manageable. The 

Board notes, however, that the rule 

grants the NCUA Chairman discretion to 

allow a greater number of 

representatives to participate in the oral 

hearing. Accordingly, this section of the 

proposed rule is adopted in full without 

change from the proposal. 

Other Comments 

Role of the Ombudsman. Although 

the proposed rule made no mention of 

the NCUA Ombudsman and neither 

provided nor contemplated a role for the 

Ombudsman in the appeals process, two 

commenters recommended that 

consideration be given for such a role. 

One commenter opined that the full 

potential of the Ombudsman office is 

not being met, and that some role for the 

Ombudsman should be developed. In a 

similar vein, another commenter 

advocated a more robust role for the 

Ombudsman in the appeals process, but 

noted that greater independence of the 

Ombudsman, both in terms of 

appearance and in fact, would be 

necessary in order to further a fair and 

balanced appeals process. After due 

consideration, the Board concludes that, 

while the Ombudsman plays a valuable 

role in other contexts, a role for the 

Ombudsman is not necessary or useful 

in the appeals context. Accordingly, the 

Board has determined not to adopt this 

recommendation. 

Advisory Council. One commenter 

recommended the Board consider 

establishing an advisory council, 

comprised of credit unions, which 

could fulfill a role in the appeals 

process. After due consideration, the 

Board has determined that 

administration of the appeals process as 

contemplated by the rule does not lend 

itself to the involvement of an advisory 

council and so has elected not to adopt 

this recommendation. 

Operational Improvements. Although 

not directly related to the present 

proposal, one commenter suggested that 

NCUA focus on current operations in 

areas such as FOM-related applications 

to achieve improved efficiency and 

transparency in that area. In the view of 

the commenter, this would help to 

reduce the need for an eventual appeal 

of an adverse decision. The Board has 

taken this recommendation under 

advisement. 

Expansion of Scope of Proposal. One 

commenter recommended that the 

Board expand the scope of the proposed 

rule so that it would extend to both 

capital planning and stress testing,2


sradovich on DSK3GMQ082PROD with RULES4
50290 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 

3Public Law 104–121. 

4 5 U.S.C. 551. 

such that program office decisions in 

each of these areas would be specifically 

subject to appeal to the Board. After due 

consideration of this recommendation, 

the Board has determined that an 

adverse determination at the program 

office level concerning a credit union’s 

capital plan would qualify as a material 

supervisory determination, within the 

meaning of NCUA’s Supervisory Review 

Committee rule (part 746, subpart A) 

(the rule is published elsewhere in this 

issue of the Federal Register). Similarly, 

a program office determination 

concerning the outcome of a required 

stress test carries with it potentially 

adverse consequences, in the event the 

credit union is determined to have 

failed the stress test. As such, either 

determination should be subject to 

appeal to the SRC. Corresponding 

adjustments to that rule to accommodate 

this approach are being made in 

coordination with the adoption of this 

rule. 

Publication of Decisions. One 

commenter encouraged NCUA to 

publish its appeal decisions (as well as 

its SRC appeal decisions), so that the 

industry can better understand the 

Board’s policy goals and statutory and 

regulatory interpretations. Another 

commenter suggested that NCUA should 

establish an annual reporting 

requirement that would inform 

stakeholders of the utility of pursuing 

an appeal by including an evaluation of 

results of appeals that have been taken 

during the reporting period. The Board 

does, in fact, routinely publish on the 

NCUA Web site its decisions concerning 

matters that have been appealed. The 

Board has taken under advisement the 

suggestion to include results of appeals 

in its regular annual report. 

Codification in part 741. One 

commenter, whose focus is principally 

on the regulation of federally insured, 

State-chartered credit unions, 

recommended that the appeals rule be 

codified as a new subpart to part 741, 

instead of in new part 746. The 

commenter notes that because part 741 

is ostensibly designed to contain all 

regulations to which such credit unions 

are subject, including the appeals rule 

in that part would be more convenient 

and useful to them. After due 

consideration of this suggestion, the 

Board concludes that this is best 

handled through a separate part (i.e., 

new part 746) devoted exclusively to 

appeals. 

Notice to State Supervisory 

Authorities. One commenter suggested 

that, with respect to federally insured, 

State-chartered credit unions, the rule 

should include a requirement that the 

State regulator be provided with a copy 

of any correspondence between NCUA 

and the credit union relating to an 

appeal. In view of the close relationship 

that NCUA enjoys with State regulatory 

authorities, the Board believes inclusion 

of a provision mandating cooperation 

and information sharing is unnecessary. 

V. Regulatory Procedures 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

requires NCUA to prepare an analysis to 

describe any significant economic 

impact a rule may have on a substantial 

number of small entities (primarily 

those under $100 million in assets). 

This rule only provides enhanced 

voluntary opportunities for credit 

unions to appeal agency determinations. 

Accordingly, it 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 

The Paperwork Reduction Act of 1995 

(PRA) (44 U.S.C. 3501 et seq.) requires 

that the Office of Management and 

Budget (OMB) approve all collections of 

information by a Federal agency from 

the public before they can be 

implemented. Respondents are not 

required to respond to any collection of 

information unless it displays a current, 

valid OMB control number. 

In accordance with the PRA, the 

information collection requirements 

included in this final rule has been 

submitted to OMB for approval under 

control number 3133–0198. 

The Treasury and General Government 

Appropriations Act, 1999—Assessment 

of Federal Regulations and Policies on 

Families 

NCUA has determined that this rule 

will not affect family well-being within 

the meaning of sec. 654 of the Treasury 

and General Government 

Appropriations Act, 1999, Public Law 

105–277, 112 Stat. 2681 (1998). 

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 rulemaking will not have a 

substantial direct effect 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 proposal does not 

constitute a policy that has federalism 

implications for purposes of the 

executive order. 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 3

(SBREFA) 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.4 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. 

List of Subjects 

12 CFR Part 701 

Credit, Credit unions, Reporting and 

recordkeeping requirements. 

12 CFR Part 703 

Credit unions, Investments. 

12 CFR Part 705 

Credit unions, Grants, Loans, 

Revolving fund. 

12 CFR Part 708a 

Credit unions, Reporting and 

recordkeeping requirements. 

12 CFR Part 709 

Claims, Credit unions. 

12 CFR Part 741 

Credit unions, Reporting and 

recordkeeping requirements, Share 

insurance. 

12 CFR Part 745 

Administrative practice and 

procedure, Claims, Credit unions, Share 

insurance. 

12 CFR Part 746 

Administrative practice and 

procedure, Claims, Credit unions, 

Investigations. 

12 CFR Part 747 

Administrative practice and 

procedure, Claims, Credit unions, 

Investigations. 

12 CFR Part 750 

Credit unions, Golden parachute 

payments, Indemnity payments. 


sradovich on DSK3GMQ082PROD with RULES4
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 50291 

By the National Credit Union 

Administration Board, this 19th day of 

October 2017. 

Gerard Poliquin, 

Secretary of the Board. 

For the reasons discussed above, the 

NCUA Board amends 12 CFR parts 701, 

703, 705, 708a, 709, 741, 745, 746, 747, 

and 750 as follows: 

PART 701—ORGANIZATION AND 

OPERATION OF FEDERAL CREDIT 

UNIONS 

■ 1. The authority citation for part 701 

is revised to read as follows: 

Authority: 12 U.S.C. 1752(5), 1755, 1756, 

1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 

1782, 1784, 1786, 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. 

■ 2. Revise § 701.14(e) to read as 

follows: 

§ 701.14 Change in official or senior 

executive officer in credit unions that are 

newly chartered or are in troubled 

condition. 

* * * * * 

(e) Notice of disapproval. NCUA may 

disapprove the individual serving as a 

director, committee member or senior 

executive officer if it finds that the 

competence, experience, character, or 

integrity of the individual with respect 

to whom a notice under this section is 

submitted indicates that it would not be 

in the best interests of the members of 

the credit union or of the public to 

permit the individual to be employed 

by, or associated with, the credit union. 

The Notice of Disapproval will advise 

the parties of their rights to request 

reconsideration from the Regional 

Director and/or file an appeal with the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 

746 of this chapter. 

■ 3. Revise § 701.21(h)(3) to read as 

follows: 

§ 701.21 Loans to members and lines of 

credit to members. 

* * * * * 

(h) * * * 

(3) A regional director will provide a 

written determination on a waiver 

request within 45 calendar days after 

receipt of the request; however, the 45- 

day period will not begin until the 

requesting credit union has submitted 

all necessary information to the regional 

director. If the regional director does not 

provide a written determination within 

the 45-day period the request is deemed 

denied. A credit union may request the 

regional director to reconsider a denied 

waiver request and/or file an appeal 

with the NCUA Board in accordance 

with the procedures set forth in subpart 

B to part 746 of this chapter. 

* * * * * 

■ 4. Revise § 701.22(c) to read as 

follows: 

§ 701.22 Loan participations. 

* * * * * 

(c) To seek a waiver from any of the 

limitations in paragraph (b) of this 

section, a federally insured credit union 

must submit a written request to its 

regional director with a full and detailed 

explanation of why it is requesting the 

waiver. Within 45 calendar days of 

receipt of a completed waiver request, 

including all necessary supporting 

documentation and, if appropriate, any 

written concurrence, the regional 

director will provide the federally 

insured credit union a written response. 

The regional director’s decision will be 

based on safety and soundness and 

other considerations; however, the 

regional director will not grant a waiver 

to a federally insured, State-chartered 

credit union without the prior written 

concurrence of the appropriate State 

supervisory authority. A federally 

insured credit union may request the 

regional director to reconsider a denied 

waiver request and/or file an appeal 

with the NCUA Board in accordance 

with the procedures set forth in subpart 

B to part 746 of this chapter. 

* * * * * 

■ 5. Revise § 701.23(h)(3) to read as 

follows: 

§ 701.23 Purchase, sale, and pledge of 

eligible obligations. 

* * * * * 

(h) * * * 

(3) Appeal to NCUA Board. A Federal 

credit union may request the regional 

director to reconsider a denied request 

for expanded authority and/or file an 

appeal with the NCUA Board in 

accordance with the procedures set 

forth in subpart B to part 746 of this 

chapter. 

■ 6. Revise § 701.32(b)(5) to read as 

follows: 

§ 701.32 Payment on shares by public 

units and nonmembers. 

* * * * * 

(b) * * * 

(5) The regional director will provide 

a written determination on an 

exemption request within 30 calendar 

days after receipt of the request. The 30- 

day period will not begin to run until 

all necessary information has been 

submitted to the Regional Director. A 

credit union may request the Regional 

Director to reconsider a denied 

exemption request and/or file an appeal 

with the NCUA Board in accordance 

with the procedures set forth in subpart 

B to part 746 of this chapter. 

* * * * * 

■ 7. Revise § 701.34(a)(4) to read as 

follows: 

§ 701.34 Designation of low income status; 

Acceptance of secondary capital accounts 

by low-income designated credit unions. 

(a) * * * 

(4) If NCUA determines a low-income 

designated Federal credit union no 

longer meets the criteria for the 

designation, NCUA will notify the 

Federal credit union in writing, and the 

Federal credit union must, within five 

years, meet the criteria for the 

designation or come into compliance 

with the regulatory requirements 

applicable to Federal credit unions that 

do not have a low-income designation. 

The designation will remain in effect 

during the five-year period. If a Federal 

credit union does not requalify and has 

secondary capital or nonmember 

deposit accounts with a maturity 

beyond the five-year period, NCUA may 

extend the time for a Federal credit 

union to come into compliance with 

regulatory requirements to allow the 

Federal credit union to satisfy the terms 

of any account agreements. A Federal 

credit union may request NCUA to 

reconsider a determination that it no 

longer meets the criteria for the 

designation and/or file an appeal with 

the NCUA Board in accordance with the 

procedures set forth in subpart B to part 

746 of this chapter. 

* * * * * 

■ 8. Appendix B to part 701 is amended 

as follows: 

■ a. Section VII.D of Chapter 1 is 

revised. 

■ b. Section II.C.5 of Chapter 2 is 

revised. 

■ c. Section III.C.5 of Chapter 2 is 

revised. 

■ d. Section IV.C.5 of Chapter 2 is 

revised. 

■ e. Section V.C.5 of Chapter 2 is 

revised. 

■ f. Section IV.B of Chapter 3 is revised. 

■ g. Section II.C.6 of Chapter 4 is 

revised. 

■ h. Section II.D—Application for a 

Federal Charter of Chapter 4 is 

redesignated as Section II.D.2— 

Application for a Federal Charter and 

revised. 

■ i. Section III.D.6 of Chapter 4 is 

revised. 

The revisions read as follows: 


sradovich on DSK3GMQ082PROD with RULES4
50292 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 

Appendix B to Part 701—Chartering 

and Field of Membership Manual 

Chapter 1—Federal Credit Union Chartering 

* * * * * 

VII.D—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

If the Office of Consumer Financial 

Protection and Access Director denies a 

charter application, in whole or in part, that 

decision may be appealed to the NCUA 

Board in accordance with the procedures set 

forth in subpart B to part 746 of this chapter. 

Before appealing, the prospective group 

may, within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 

the initial denial. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. 

* * * * * 

Chapter 2—Field of Membership 

Requirements for Federal Credit Unions 

* * * * * 

II.C.5—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

If the Office of Consumer Financial 

Protection and Access Director denies a field 

of membership expansion request, merger, or 

spin-off, that decision may be appealed to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 

the initial denial. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. 

* * * * * 

III.C.5—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

If the Office of Consumer Financial 

Protection and Access Director denies a field 

of membership expansion request, merger, or 

spin-off, that decision may be appealed to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 

the initial denial or explain extenuating 

circumstances that precluded the inclusion 

of existing material evidence or information 

that should have been filed with the request 

for reconsideration. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. A petitioner may seek a second 

reconsideration based on new material 

evidence or information or extenuating 

circumstances that precluded the inclusion 

of such information in the previous request. 

* * * * * 

IV.C.5—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

If the Office of Consumer Financial 

Protection and Access Director denies a field 

of membership expansion request, merger, or 

spin-off, that decision may be appealed to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 

the initial denial or explain extenuating 

circumstances that precluded the inclusion 

of existing material evidence or information 

that should have been filed with the request 

for reconsideration. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. A petitioner may seek a second 

reconsideration based on new material 

evidence or information or extenuating 

circumstances that precluded the inclusion 

of such information in the previous request. 

* * * * * 

V.C.5—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

If the Office of Consumer Financial 

Protection and Access Director denies a field 

of membership expansion request, merger, or 

spin-off, that decision may be appealed to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 

the initial denial or explain extenuating 

circumstances that precluded the inclusion 

of existing material evidence or information 

that should have been filed with the request 

for reconsideration. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. A petitioner may seek a second 

reconsideration based on new material 

evidence or information or extenuating 

circumstances that precluded the inclusion 

of such information in the previous request. 

* * * * * 

Chapter 3—Low-Income Credit Unions and 

Credit Unions Serving Underserved Areas 

* * * * * 

IV.B—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

* * * * * 

If the Office of Consumer Financial 

Protection and Access Director denies an 

‘‘underserved area’’ request, the Federal 

credit union may appeal that decision to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 

the initial denial or explain extenuating 

circumstances that precluded the inclusion 

of existing material evidence or information 

that should have been filed with the request 

for reconsideration. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. A petitioner may seek a second 

reconsideration based on new material 

evidence or information or extenuating 

circumstances that precluded the inclusion 

of such information in the previous request. 

* * * * * 

Chapter 4—Charter Conversions 

* * * * * 

II.C.6—Appeal of the Office of Consumer 

Financial Protection and Access Director 

Decision 

If a conversion to a Federal charter is 

denied by the Office of Consumer Financial 

Protection and Access Director, the applicant 

credit union may appeal that decision to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. A request for 

reconsideration should contain new and 

material evidence addressing the reasons for 


sradovich on DSK3GMQ082PROD with RULES4
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 50293 

the initial denial or explain extenuating 

circumstances that precluded the inclusion 

of existing material evidence or information 

that should have been filed with the request 

for reconsideration. The Office of Consumer 

Financial Protection and Access Director will 

have 30 days from the date of the receipt of 

the request for reconsideration to make a 

final decision. If the request is again denied, 

the applicant may proceed with the appeal 

process within 60 days of the date of the last 

denial. A petitioner may seek a second 

reconsideration based on new material 

evidence or information or extenuating 

circumstances that precluded the inclusion 

of such information in the previous request. 

* * * * * 

II.D.2—Application for a Federal Charter 

When the Office of Consumer Financial 

Protection and Access Director has received 

evidence that the board of directors has 

satisfactorily completed the actions described 

above, the Federal charter and new 

Certificate of Insurance will be issued. 

The credit union may then complete the 

conversion as discussed in the following 

section. A credit union may request the 

Office of Consumer Financial Protection and 

Access Director to reconsider a denial of a 

conversion application and/or appeal a 

denial to the NCUA Board. For more 

information, refer to Section II.C.6 of this 

chapter. 

* * * * * 

III.D.6—Appeal of Office of Consumer 

Financial Protection and Access Director 

Decision 

If the Office of Consumer Financial 

Protection and Access Director denies a 

conversion to a State charter, the Federal 

credit union may appeal that decision to the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 746 

of this chapter. 

Before appealing, the credit union may, 

within 30 days of the denial, provide 

supplemental information to the Office of 

Consumer Financial Protection and Access 

Director for reconsideration. The Office of 

Consumer Financial Protection and Access 

Director will have 30 business days from the 

date of the receipt of the request for 

reconsideration to make a final decision. If 

the application is again denied, the credit 

union may proceed with the appeal process 

to the NCUA Board within 60 days of the 

date of the last denial by the Office of 

Consumer Financial Protection and Access 

Director. 

* * * * * 

PART 703—INVESTMENT AND 

DEPOSIT ACTIVITIES 

■ 9. The authority citation for part 703 

continues to read as follows: 

Authority: 12 U.S.C. 1757(7), 1757(8), 

1757(15). 

■ 10. Revise § 703.20(d) to read as 

follows: 

§ 703.20 Request for additional authority. 

* * * * * 

(d) Appeal to NCUA Board. A Federal 

credit union may request the regional 

director to reconsider any part of the 

determination made under paragraph (c) 

of this section and/or file an appeal with 

the NCUA Board in accordance with the 

procedures set forth in subpart B to part 

746 of this chapter. 

■ 11. Revise § 703.111(d) to read as 

follows: 

§ 703.111 NCUA approval. 

* * * * * 

(d) Right to appeal. A Federal credit 

union may request the field director to 

reconsider a determination made under 

paragraph (a) or (c) of this section and/ 

or file an appeal with the NCUA Board 

in accordance with the procedures set 

forth in subpart B to part 746 of this 

chapter. 

■ 12. Revise § 703.112(c) to read as 

follows: 

§ 703.112 Applying for additional products 

or characteristics. 

* * * * * 

(c) A Federal credit union may 

request the regional director to 

reconsider a denial of an application for 

additional products or characteristics 

and/or file an appeal with the NCUA 

Board in accordance with the 

procedures set forth in subpart B to part 

746 of this chapter. 

■ 13. Revise § 703.114(c) to read as 

follows: 

§ 703.114 Regulatory violation. 

* * * * * 

(c) A Federal credit union may 

request the regional director to 

reconsider a revocation of derivatives 

authority or an order to terminate 

existing derivatives positions and/or file 

an appeal with the NCUA Board in 

accordance with the procedures set 

forth in subpart B to part 746 of this 

chapter. 

* * * * * 

PART 705—COMMUNITY 

DEVELOPMENT REVOLVING LOAN 

FUND ACCESS FOR CREDIT UNIONS 

■ 14. The authority citation for part 705 

continues to read as follows: 

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

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

■ 15. Revise § 705.10(a) to read as 

follows: 

§ 705.10 Appeals. 

(a) Appeals of non-qualification. A 

Qualifying Credit Union whose 

application for a loan or technical 

assistance grant has been denied under 

§ 705.7(f) for failure to satisfy any of the 

conditions set forth in § 705.7(c), 

including any additional criteria set 

forth in the related notice of funding 

opportunity, may request the Director of 

the Office of Small Credit Union 

Initiatives to reconsider the denial and/ 

or appeal that decision to the NCUA 

Board in accordance with the 

procedures set forth in subpart B to part 

746 of this chapter, subject to the 

following limitations: 

(1) Scope. The scope of the Board’s 

review is limited to the threshold 

question of qualification and not the 

issue of whether, among qualified 

applicants, a particular loan or technical 

assistance grant is funded. 

(2) Appeals procedures inapplicable. 

The foregoing procedure applies during 

an open period in which funds are 

available and NCUA has called for 

applications. NCUA will reject any 

application submitted during a period 

in which NCUA has not called for 

applications, except for applications 

submitted under § 705.8. Such 

rejections are not subject to appeal or 

review by the NCUA Board. 

* * * * * 

PART 708a—BANK CONVERSIONS 

AND MERGERS 

■ 16. The authority citation for part 

708a continues to read as follows: 

Authority: 12 U.S.C. 1766, 1785(b), and 

1785(c). 

■ 17. Revise § 708a.108(d) to read as 

follows: 

§ 708a.108 NCUA oversight of methods 

and procedures of membership vote. 

* * * * * 

(d) A converting credit union may 

request the regional director to 

reconsider a determination regarding 

the methods and procedures of the 

membership vote and/or file an appeal 

with the NCUA Board in accordance 

with the procedures set forth in subpart 

B to part 746 of this chapter. 

■ 18. Revise § 708a.304(h) to read as 

follows: 

§ 708a.304 Notice to NCUA and request to 

proceed with member vote. 

* * * * * 

(h) Appeal of adverse decision. If the 

Regional Director disapproves a merger 

proposal, the credit union may request 

reconsideration and/or file an appeal 

with the NCUA Board in accordance 

with the procedures set forth in subpart 

B to part 746 of this chapter. 

■ 19. Revise § 708a.308(d) to read as 

follows: 

§ 708a.308 NCUA approval of the merger. 

* * * * * 


sradovich on DSK3GMQ082PROD with RULES4
50294 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 

(d) A merging credit union may 

request the Regional Director to 

reconsider the disapproval of a merger 

proposal and/or file an appeal with the 

NCUA Board in accordance with the 

procedures set forth in subpart B to part 

746 of this chapter. 

PART 709—INVOLUNTARY 

LIQUIDATION OF FEDERAL CREDIT 

UNIONS AND ADJUDICATION OF 

CREDITOR CLAIMS INVOLVING 

FEDERALLY INSURED CREDIT 

UNIONS IN LIQUIDATION 

■ 20. The authority citation for part 709 

continues to read as follows: 

Authority: 12 U.S.C. 1757, 1766, 1767, 

1786(h), 1787, 1788, 1789, 1789a. 

■ 21. Revise § 709.7 to read as follows: 

§ 709.7 Procedures for agency review or 

judicial determination of claims. 

(a) General. A claimant may either 

request agency review of an initial 

determination of the liquidating agent to 

disallow a claim or seek a de novo 

judicial determination of claims. In 

order to receive agency review of an 

initial determination, a claimant must 

request an administrative appeal before 

the NCUA Board. In order to seek a 

judicial determination, a claimant must 

file suit (or continue an action 

commenced before the appointment of 

the liquidating agent) in the district or 

territorial court of the United States for 

the district within which the credit 

union’s principal place of business is 

located or the United States District 

Court for the District of Columbia. 

(b) Procedures for agency review. A 

claimant requesting an administrative 

appeal may request a hearing on the 

record conducted pursuant to the 

procedures set forth in subpart A of part 

747 of this chapter. The determination 

of whether to agree to a request for a 

hearing on the record shall rest solely 

with the NCUA Board, which shall 

notify the claimant of its decision in 

writing. Alternatively, a claimant may 

request an appeal before the NCUA 

Board pursuant to the procedures set 

forth in subpart B to part 746 of this 

chapter. 

(c) Deadline to request agency review 

or file suit. A claimant must request 

agency review of an initial 

determination or file suit (or continue 

an action commenced before the 

appointment of the liquidating agent) 

within 60 days from the mailing of the 

initial determination or the expiration of 

the time period for the liquidating agent 

to determine claims under § 709.6(c), 

whichever is earlier. A request for a 

hearing on the record will suspend the 

60-day period for filing a lawsuit (or 

continuing an action commenced before 

the appointment of the liquidating 

agent) from the date of the claimant’s 

request to the date of the NCUA Board’s 

decision regarding that request. If a 

claimant fails to either request a hearing 

on the record or an appeal to the Board 

or file suit (or continue an action 

commenced before the appointment of 

the liquidating agent) within the 60-day 

period, any disallowance of claims shall 

be final and the claimant shall have no 

further rights or remedies with respect 

to such claims. 

(d) Reconsideration. Prior to 

requesting agency review or filing or 

continuing a lawsuit, a claimant may 

request reconsideration of the initial 

determination of the liquidating agent in 

accordance with the procedures set 

forth in subpart B to part 746 of this 

chapter. The deadline to request agency 

review or file suit (or continue an action 

commenced before the appointment of 

the liquidating agent) in paragraph (c) of 

this section will be suspended from the 

date of the claimant’s request to the date 

of the liquidating agent’s decision 

regarding that request. 

§ 709.8 [Removed] 

■ 22. Remove § 709.8. 

§§ 709.9 through 709.13 [Redesignated as 

§§ 709.8 through 709.12] 

■ 23. Redesignate §§ 709.9 through 

709.13 as §§ 709.8 through 709.12, 

respectively. 

PART 741—REQUIREMENTS FOR 

INSURANCE 

■ 24. The authority citation for part 741 

continues to read as follows: 

Authority: 12 U.S.C. 1757, 1766(a), 1781– 

1790, and 1790d; 31 U.S.C. 3717. 

■ 25. Revise § 741.11(d) to read as 

follows: 

§ 741.11 Foreign branching. 

* * * * * 

(d) Revocation of approval. A State 

regulator that revokes approval of the 

branch office must notify NCUA of the 

action once it issues the notice of 

revocation. The regional director may 

revoke approval of the branch office for 

failure to follow the business plan in a 

material respect or for substantive and 

documented safety and soundness 

reasons. If the regional director revokes 

the approval, the credit union will have 

six months from the date of the 

revocation letter to terminate the 

operations of the branch. The credit 

union can request reconsideration of the 

revocation and/or appeal this revocation 

to the NCUA Board in accordance with 

the procedures set forth in subpart B to 

part 746 of this chapter. 

* * * * * 

PART 745—SHARE INSURANCE AND 

APPENDIX 

■ 26. The authority citation for part 745 

continues to read as follows: 

Authority: 12 U.S.C. 1752(5), 1757, 1765, 

1766, 1781, 1782, 1787, 1789; title V, Pub. L. 

109–351, 120 Stat. 1966. 

■ 27. Revise § 745.201(c) to read as 

follows: 

§ 745.201 Processing of insurance claims. 

* * * * * 

(c) Reconsideration and appeals. An 

accountholder may request 

reconsideration from the Liquidating 

Agent of the initial determination and/ 

or file an appeal with the NCUA Board 

in accordance with the procedures set 

forth in subpart B to part 746 of this 

chapter. 

§ 745.202 [Removed] 

■ 28. Remove § 745.202. 

§ 745.203 [Redesignated as § 745.202] 

■ 29. Redesignate § 745.203 as 

§ 745.202. 

PART 746—APPEALS PROCEDURES 

■ 30. The authority citation for part 746 

continues to read as follows: 

Authority: 12 U.S.C. 1766, 1787, and 1789. 

■ 31. Add subpart B to read as follows: 

Subpart B—Appeals Procedures That Do 

Not by Law Require a Board Hearing 

Sec. 

746.201 Authority, purpose, and scope. 

746.202 Definitions. 

746.203 Request for reconsideration. 

746.204 Appeal to the Board. 

746.205 Preliminary considerations 

regarding the appeal. 

746.206 Administration of the appeal. 

746.207 Procedures for oral hearing. 

Subpart B—Appeals Procedures That 

Do Not by Law Require a Board 

Hearing 

§ 746.201 Authority, purpose, and scope. 

(a) Authority. This subpart is issued 

pursuant to sections 120, 207, and 209 

of the Federal Credit Union Act (12 

U.S.C. 1766, 1787, and 1789). 

(b) Purpose. This subpart provides 

generally uniform procedures by which 

petitioners may appeal initial agency 

determinations to the NCUA Board 

under this part. 

(c) Scope. This subpart covers the 

appeal of initial agency determinations 

by a program office which the petitioner 

has a right to appeal to the NCUA Board 


sradovich on DSK3GMQ082PROD with RULES4
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 50295 

under the following regulations: 

§§ 701.14(e), 701.21(h)(3), 701.22(c), 

701.23(h)(3), 701.32(b)(5), and 

701.34(a)(4), appendix B to part 701 of 

this chapter, Chapters 1–4, §§ 703.20(d), 

703.111(d), 703.112(c), 703.114(c), 

705.10(a), 708a.108(d), 708a.304(h), 

708a.308(d), 709.7, 741.11(d), and 

745.201(c), subpart J to part 747 of this 

chapter, and § 750.6(b). 

(d) Exclusions. This subpart does not 

apply to: 

(1) Actions by the agency to develop 

regulations, policy statements, or 

guidance documents; 

(2) Formal enforcement actions, the 

review of material supervisory 

determinations that come under the 

jurisdiction of NCUA’s Supervisory 

Review Committee, or the appeal of any 

agency determination made pursuant to 

part 792 of this chapter; 

(3) Challenges to determinations 

under the prompt corrective action 

regime in parts 702 and 704 of this 

chapter and subparts L and M to part 

747 of this chapter; and 

(4) Creditor claims arising from the 

liquidation of an insured credit union to 

the extent that the creditor has 

requested, and the NCUA Board has 

agreed, for the claim to be handled 

through a hearing on the record 

pursuant to 12 U.S.C. 1787(b)(7)(A) and 

subpart A of part 747 of this chapter. 

§ 746.202 Definitions. 

For purposes of this subpart: 

Appeal means a process by which a 

petitioner may obtain the review by the 

Board of an initial agency 

determination. 

Board means the NCUA Board. 

Initial agency determination means an 

agency action taken at a level below the 

Board with respect to an application, 

request, claim, or other matter in which 

a determination of rights or resolution of 

issues is rendered and the party affected 

by the determination has been provided 

with a right to appeal the determination 

to the NCUA Board. The initial agency 

determination shall notify the Petitioner 

of the right to request reconsideration or 

to file an appeal with the Board, and 

shall include a description of applicable 

filing deadlines and time frames for 

agency responses. Agency 

determinations involving the 

formulation of a regulation, guidance 

document, or policy statement are 

excluded from this definition. 

Oral hearing means an opportunity, 

granted at the sole discretion of the 

Board, by which a petitioner may make 

an oral presentation to the Board 

concerning issues pertinent to an 

appeal. 

Petitioner means the person or entity 

seeking Board review of an initial 

agency determination. 

Program office means the office 

within NCUA responsible for making an 

initial agency determination. 

Special Counsel to the General 

Counsel means an individual (referred 

to herein as the ‘‘Special Counsel’’) 

within NCUA’s Office of General 

Counsel charged with administering 

appeals in accordance with the 

procedures set forth in this part. 

§ 746.203 Request for reconsideration. 

(a) Reconsideration. Prior to 

submitting an appeal in accordance 

with § 746.204, the petitioner may in its 

sole discretion make a written request to 

the appropriate program office to 

reconsider the initial agency 

determination. 

(b) Deadline to file. A request for 

reconsideration must be sent to the 

appropriate program office within 30 

calendar days of the date of the initial 

agency determination. A petitioner who 

does not file a request for 

reconsideration in a timely manner is 

considered to have waived the right to 

request reconsideration. 

(c) Special rule regarding change in 

officials. Notwithstanding paragraph (a) 

of this section, a request for 

reconsideration of an initial agency 

determination disapproving an 

individual serving as a director, 

committee member or senior executive 

officer pursuant to § 701.14 of this 

chapter must be sent to the appropriate 

program office within 15 calendar days 

of the date of the initial agency 

determination. 

(d) Content of request. Any request for 

reconsideration must include: 

(1) A statement of the facts on which 

the request for reconsideration is based; 

(2) A statement of the basis for the 

initial agency determination to which 

the petitioner objects and the alleged 

error in such determination; and 

(3) Any other support or evidence 

relied upon by the petitioner which was 

not previously provided to the 

appropriate program office. 

(e) Determination of program office. 

The appropriate program office will 

review its initial agency determination 

and reconsider the position initially 

taken in the light of the arguments and 

additional materials provided in the 

request for reconsideration. Within 30 

calendar days of its receipt of a request 

for reconsideration, the appropriate 

program office shall issue its 

determination either affirming in whole 

or in part the initial agency 

determination or rejecting it. 

(f) Notice of determination. The 

appropriate program office shall provide 

its decision concerning the 

reconsideration request to the petitioner 

in writing, stating the reasons for the 

decision. The decision shall be treated 

as an initial agency determination for 

purposes of § 746.204(a). 

(1) In addition to a written statement 

of reasons for the decision, the 

appropriate program office shall provide 

the petitioner with written notice of the 

right to appeal the decision, in whole or 

in part, to the Board in accordance with 

the procedures set forth in § 746.204. 

(2) For creditor claims brought 

pursuant to sec. 207 of the Federal 

Credit Union Act (12 U.S.C. 1787), the 

appropriate program office shall provide 

the petitioner with written notice of the 

right, in the alternative to filing an 

appeal with the Board, to file suit or 

continue an action commenced before 

the appointment of the liquidating agent 

in the district or territorial court of the 

United States for the district within 

which the credit union’s principal place 

of business was located or the United 

States District Court for the District of 

Columbia. For such claims, the 60-day 

period for filing a lawsuit in United 

States district court provided in 12 

U.S.C. 1787(b)(6) shall be tolled from 

the date of the petitioner’s request for 

reconsideration to the date of a 

determination pursuant to paragraph (e) 

of this section. 

(3) Upon a showing of extenuating 

circumstances, as determined by the 

program office in its reasonable 

judgment, a petitioner may be allowed 

to submit a second reconsideration 

request before filing an appeal with the 

Board. In such cases, the deadline for 

filing an appeal with the Board shall 

begin to run from the earlier of the date 

of the decision of the program office 

regarding the second reconsideration 

request or thirty calendar days from the 

date the second reconsideration request 

was accepted by the program office. 

(g) Failure to make a determination. 

Failure by the appropriate program 

office to issue a decision within the 

timeframe specified in paragraph (e) of 

this section shall be an affirmation of 

the original initial agency determination 

and shall be treated as an initial agency 

determination for purposes of 

§ 746.204(a). 

(h) Burden of proof. The burden of 

proof to lead the appropriate program 

office to modify or reverse an initial 

agency determination shall rest solely 

upon the petitioner. 

§ 746.204 Appeal to the Board. 

(a) Filing. Within 60 calendar days of 

the date of an initial agency 


sradovich on DSK3GMQ082PROD with RULES4
50296 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 

determination, or, as applicable, a 

determination by the program office on 

any request for reconsideration, a 

petitioner may file an appeal seeking 

review of the determination by the 

Board. The request must be in writing 

and filed with the Secretary of the 

Board, National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, VA 22314–3428. 

(b) Special rule regarding change in 

officials. Notwithstanding paragraph (a) 

of this section, an appeal of an initial 

agency determination disapproving an 

individual serving as a director, 

committee member or senior executive 

officer pursuant to § 701.14 of this 

chapter must be filed with the Secretary 

of the Board within 15 calendar days of 

the date of the initial agency 

determination. 

(c) Failure to file a timely appeal. 

Absent extenuating circumstances, as 

determined by the Board in its sole 

discretion, a petitioner who fails to file 

an appeal within the specified 60-day 

period shall be deemed to have waived 

all claims pertaining to the matters in 

issue. 

(d) Content of request. Any appeal 

filed with the Board must include: 

(1) A statement summarizing the 

underlying facts that form the basis of 

the appeal, together with copies of all 

pertinent documents, records, and 

materials on which the petitioner relies 

in support of the appeal. 

(2) A statement outlining why the 

petitioner objects to the conclusions in 

the initial agency determination, 

including any errors alleged to have 

been made by the program office in 

reaching its determination. 

(3) Any other materials or evidence 

relied upon by the petitioner that were 

not previously provided to the 

appropriate program office. 

(e) Burden of proof. The burden of 

proof to lead the Board to modify or 

reverse an initial agency determination 

shall rest solely upon the petitioner. 

(f) Amending or supplementing the 

appeal. Within 45 calendar days from 

the date the Secretary of the Board 

receives an appeal, the petitioner may 

amend or supplement the appeal in 

writing. 

(g) Request for oral hearing. In 

accordance with § 746.207, the 

petitioner may request an opportunity to 

appear before the Board, in person, or 

via teleconference or videoconference, 

to make an oral presentation in support 

of the appeal. 

§ 746.205 Preliminary considerations 

regarding the appeal. 

(a) Initial review. The Special Counsel 

shall review all appeals filed with the 

Secretary of the Board for conformance 

with the rules set forth in this subpart, 

including deadlines for submission of 

an appeal. The Special Counsel shall 

also make an evaluation concerning 

whether an appeal is moot or is 

otherwise not in good order, and shall 

make a recommendation for the 

disposition of all such appeals to the 

Board. The Special Counsel shall have 

the authority to dismiss an appeal upon 

the request of the petitioner. 

(b) Supplemental materials. Within 

30 calendar days from the date the 

Secretary of the Board receives an 

appeal, the Special Counsel may request 

in writing that the petitioner submit 

additional evidence in support of the 

appeal. If additional evidence is 

requested, the petitioner shall have 30 

calendar days from the date of issuance 

of such request to provide the requested 

information. Failure by the petitioner to 

provide such information may result in 

denial of the petitioner’s appeal. The 

Special Counsel shall have the authority 

to request additional information from 

any other relevant source in order to 

provide the Board with a full and 

complete administrative record. All 

requests by the Special Counsel 

pursuant to this section must be 

reasonable and designed to facilitate the 

processing of the appeal, not to delay it. 

§ 746.206 Administration of the appeal. 

(a) De novo review by Special 

Counsel. After receipt of a timely 

appeal, the Special Counsel shall 

contact the relevant NCUA program 

office and request a complete set of all 

pertinent materials, including internal 

memoranda, correspondence, and 

records having a bearing on the initial 

agency determination being appealed. 

The Special Counsel will conduct an 

independent review of these materials, 

along with all materials submitted by 

the petitioner in support of the appeal. 

The Special Counsel will make a 

recommendation to the Board as to the 

appropriate disposition of the appeal 

after having evaluated the applicable 

legal arguments and considered the facts 

and circumstances that pertain to the 

appeal. As directed by the Board, the 

Special Counsel may provide his or her 

recommendation in writing to the Board 

and may make an oral presentation 

before the Board. 

(b) Determination on appeal. Within 

90 calendar days from the date of 

receipt of an appeal by the Secretary of 

the Board, or within any extension of 

time as established by the Chairman, the 

Board shall issue a decision allowing, in 

whole or in part, or disallowing the 

petitioner’s appeal. The decision by the 

Board shall be in writing, stating the 

reasons for the decision, and shall 

constitute a final agency action for 

purposes of chapter 7 of title 5 of the 

United States Code. Failure by the 

Board to issue a decision on an appeal 

within the 90-day period or within any 

extension of time as established by the 

Chairman shall be deemed to be a denial 

of the appeal. 

(c) Extension of time. In the discretion 

of the Chairman, the time frame for the 

Board’s decision may be extended as the 

Chairman may consider necessary or 

appropriate for a full and fair 

consideration of the issues. For 

purposes of this paragraph (c), the 

Special Counsel is authorized to act on 

behalf of the Chairman and may, in that 

capacity, grant an extension of time. 

§ 746.207 Procedures for oral hearing. 

(a) Request for oral hearing. The 

petitioner may request to appear before 

the Board to make an oral presentation 

in support of the appeal. The request 

must be submitted with the initial 

appeal documents and should be in the 

form of a separate written document 

titled ‘‘Request for Oral Hearing.’’ The 

request must show good cause for an 

oral presentation and state reasons why 

the appeal cannot be presented 

adequately in writing. 

(b) Action on the request. The Board 

shall determine whether to grant the 

request for oral hearing and shall direct 

the Special Counsel to serve notice of 

the Board’s determination in writing to 

the petitioner. A request for oral hearing 

shall be granted with the approval of 

any Board member. The determination 

by a Board member approving an oral 

hearing must be taken within 20 days of 

the Board Secretary’s receipt of the 

appeal. 

(c) Effect of denial. In the event no 

Board member approves of holding an 

oral hearing, the request for an oral 

hearing is deemed to be denied, and the 

appeal shall be reviewed and 

determined by the Board on the basis of 

the written record. 

(d) Procedures for oral hearing. The 

following procedures shall govern the 

conduct of any oral hearing: 

(1) Scheduling of oral hearing; 

location. The Special Counsel shall 

notify the petitioner and the program 

office of the date and time for the oral 

hearing, making sure to provide 

reasonable lead time and schedule 

accommodations. The oral hearing will 

be held at NCUA headquarters in 

Alexandria, Virginia; provided, 

however, that on his or her own 

initiative or at the request of the 

petitioner, the Chairman may in his or 

her sole discretion allow for a hearing 


sradovich on DSK3GMQ082PROD with RULES4
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Rules and Regulations 50297 

to be conducted via teleconference or 

video conference facilities. 

(2) Appearances; representation. The 

petitioner and the NCUA program office 

shall submit a notice of appearance 

identifying the individual(s) who will 

be representing them at the oral 

presentation. The petitioner shall 

designate not more than two officers, 

employees, or other representatives 

(including counsel), unless otherwise 

authorized by the Chairman. The NCUA 

program office shall designate not more 

than two individuals (one of whom may 

be a litigation and enforcement attorney 

from NCUA’s Office of General 

Counsel), unless otherwise authorized 

by the Chairman. 

(3) Conduct of oral hearing. The oral 

hearing shall consist entirely of oral 

presentations. The introduction of 

written evidence or witness testimony at 

the hearing shall not be permitted. The 

petitioner shall present first, followed 

by the NCUA program office. Each side 

shall be allotted a specified and equal 

amount of time for its presentation, of 

which a portion may be reserved for 

purposes of rebuttal. This time limit 

shall be set by the Board and will be 

based on the complexity of the appeal. 

Members of the Board may ask 

questions of any individual appearing 

before the Board. 

(4) Transcript. The oral hearing shall 

be on the record and transcribed by a 

stenographer, who will prepare a 

transcript of the proceedings. The 

stenographer will make the transcript 

available to the petitioner upon 

payment of the cost thereof. 

(e) Confidentiality. An oral hearing as 

provided for herein constitutes a 

meeting of the Board within the 

meaning of the Government in the 

Sunshine Act (5 U.S.C. 552b). The 

NCUA Chairman shall preside over the 

conduct of the oral hearing. The meeting 

will be closed to the public to the extent 

that one or more of the exemptions from 

public meetings apply as certified by 

NCUA’s Office of General Counsel. The 

Board shall maintain the confidentiality 

of any information or materials 

submitted or otherwise obtained in the 

course of the procedures outlined 

herein, subject to applicable law and 

regulations. 

(f) Conclusion of the oral hearing. The 

Board shall take the oral presentations 

under advisement. The Board shall 

render its decision on the appeal in 

accordance with § 746.206. 

PART 747—ADMINISTRATIVE 

ACTIONS, ADJUDICATIVE HEARINGS, 

RULES OF PRACTICE AND 

PROCEDURE, AND INVESTIGATIONS 

■ 32. The authority citation for part 747 

continues to read as follows: 

Authority: 12 U.S.C. 1766, 1782, 1784, 

1785, 1786, 1787, 1790a, 1790d; 15 U.S.C. 

1639e; 42 U.S.C. 4012a; Pub. L. 101–410; 

Pub. L. 104–134; Pub. L. 109–351; Pub. L. 

114–74. 

Subpart J—[Removed and Reserved] 

■ 33. Remove and reserve subpart J. 

PART 750—GOLDEN PARACHUTE 

AND INDEMNIFICATION PAYMENTS 

■ 34. The authority citation for part 750 

continues to read as follows: 

Authority: 12 U.S.C. 1786(t). 

■ 35. Revise § 750.6(b) to read as 

follows: 

§ 750.6 Filing instructions; appeal. 

* * * * * 

(b) A FICU whose request for approval 

by NCUA, in accordance with paragraph 

(a) of this section, has been denied may 

seek reconsideration of the request and/ 

or file an appeal with the NCUA Board 

in accordance with the procedures set 

forth in subpart B to part 746 of this 

chapter. 

[FR Doc. 2017–23211 Filed 10–27–17; 8:45 am] 

BILLING CODE 7535–01–P 


sradovich on DSK3GMQ082PROD with RULES4