This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

11229

Vol. 66, No. 37

Friday, February 23, 2001

NATIONAL CREDIT UNION

ADMINISTRATION

12 CFR Part 709

Involuntary Liquidation of Federal

Credit Unions and Adjudication of

Creditor Claims Involving FederallyInsured Credit Unions in Liquidation

AGENCY: National Credit Union

Administration.

ACTION: Interim final rule with request

for comments.

SUMMARY: The National Credit Union

Administration (NCUA) is adopting a

rule clarifying that as conservator or

liquidating agent of a federally-insured

credit union, the NCUA Board (Board)

will honor a claim for prepayment fees

by a Federal Home Loan Bank under the

circumstances set forth in the rule.

DATES: Effective February 23, 2001.

NCUA welcomes comments on this

interim final rule. Comments must be

received on or before April 24, 2001.

ADDRESSES: Comments should be

directed to Becky Baker, Secretary of the

Board. Mail or hand-deliver comments

to: National Credit Union

Administration, 1775 Duke Street,

Alexandria, VA 22314–3428. You may

also fax comments to (703) 518–6319 or

e-mail comments to

regcomments@ncua.gov. Please send

comments by one method only.

FOR FURTHER INFORMATION CONTACT:

Chrisanthy J. Loizos, Staff Attorney,

Division of Operations, Office of

General Counsel, at the above address or

telephone: (703) 518–6540.

SUPPLEMENTARY INFORMATION: Federallyinsured credit unions (FICUs) are

eligible for membership at the Federal

Home Loan Bank in their district

provided they meet certain statutory

requirements. 12 U.S.C. 1422(12)(B),

1424. As members of a Federal Home

Loan Bank, FICUs may receive long

term, secured advances for the purpose

of providing funds for residential loans.

See 12 U.S.C. 1430(a). Under the

Affordable Housing Program, Federal

Home Loan Banks ‘‘subsidize the

interest rate on advances to members

engaged in lending for long term, lowand moderate-income, owner-occupied

and affordable rental housing at

subsidized interest rates.’’ 12 U.S.C.

1430(j). Federal Home Loan Banks also

make advances to members that

undertake community-oriented

mortgage lending. 12 U.S.C. 1430(i).

Under the Community Investment

Program, advances to members are

‘‘priced at the cost of consolidated

Federal Home Loan Bank obligations of

comparable maturities, taking into

account reasonable administrative

costs.’’ Id. Therefore, these advances

may be available to members at costs

lower than alternative sources of funds.

The Board, when acting as

conservator or liquidating agent of any

FICU, has the power to disaffirm or

repudiate contracts or leases (i) to which

the credit union is a party; (ii) the

performance of which the conservator or

liquidating agent, in the conservator’s or

liquidating agent’s discretion,

determines to be burdensome; and (iii)

the disaffirmance or repudiation of

which the conservator or liquidating

agent determines, in the conservator’s or

liquidating agent’s discretion, will

promote the orderly administration of

the credit union’s affairs. 12 U.S.C.

1787(c)(1). Repudiation of a contract

relieves the Board from performing any

unperformed obligations remaining

under the contract. Repudiation also

entitles the other party to the contract to

a claim for damages, which are limited

by statute to actual direct compensatory

damages determined as of the date of

the appointment of the liquidating agent

or conservator. See 12 U.S.C. 1787(c)(3).

The Federal Credit Union Act

establishes an exception to the Board’s

authority to repudiate contracts entered

into by an FICU before the Board is

appointed the FICU’s conservator or

liquidating agent. The Board may not

repudiate a contract regarding an

extension of credit from any Federal

Home Loan Bank to an FICU. 12 U.S.C.

1787(c)(13).

This rule, § 709.12, sets forth the

circumstances under which the Board,

as conservator or liquidating agent, will

honor a claim for prepayment fees by a

Federal Home Loan Bank (Bank) when

an FICU in conservatorship or

liquidation has an outstanding

extension of credit with the Bank. The

rule tracks one used by the Federal

Deposit Insurance Corporation (FDIC)

when federally-insured banks with

extensions of credit from a Federal

Home Loan Bank are conserved or

placed in receivership. See 12 CFR

360.2(e). Like the Board, the FDIC has

the statutory authority to repudiate

contracts when appointed conservator

or receiver for a federally-insured bank

under section 11(e) of the Federal

Deposit Insurance Act. 12 U.S.C.

1821(e). Likewise, the Federal Deposit

Insurance Act also carves out an

exception for extensions of credit from

any Federal Home Loan Bank. 12 U.S.C.

1821(e)(13)(A). By providing these

exceptions for Federal Home Loan

Banks in both the Federal Credit Union

Act and the Federal Deposit Insurance

Act, Congress recognized that they have

a unique role as special lenders to

depository institutions.

Prepayment fees are an integral part of

the operations of Federal Home Loan

Banks because they issue long term

obligations in order to make prudent

long term advances to members. The

prepayment of long term advances can

result in losses to a Bank, depending

upon reinvestment opportunities

available at the time of such

prepayment. 54 FR 19155, May 4, 1989.

The rule allows the payment of a

prepayment fee to the Bank if set forth

in a written contract, provided: (1) That

the fee does not exceed the present

value of any economic loss suffered by

the Bank; and, (2) the collateral is

sufficient to pay in full the principal

and interest due on secured advances

and the applicable prepayment fee.

Interim Final Rule

The NCUA Board is issuing this rule

as an interim final rule because there is

a strong public interest in assuring that

FICUs are in the same position as other

depository institutions that obtain

advances from Federal Home Loan

Banks as soon as possible. This interim

rule benefits FICUs with no additional

burden by giving them the opportunity

to receive advances from Federal Home

Loan Banks at a lower cost of funds than

may be available from alternative

sources. Accordingly, for good cause,

11230 Federal Register / Vol. 66, No. 37 / Friday, February 23, 2001 / Rules and Regulations

the Board finds that, pursuant to 5

U.S.C. 553(b)(3)(B), notice and public

procedures are impracticable,

unnecessary, and contrary to the public

interest; and, pursuant to 5 U.S.C.

553(d)(3), the rule shall be effective

immediately and without 30 days

advance notice of publication. Although

the rule is being issued as an interim

final rule and is effective immediately,

the NCUA Board encourages interested

parties to submit comments.

Regulatory Procedures

Regulatory Flexibility Act

The Regulatory Flexibility Act

requires NCUA to prepare an analysis to

describe any significant economic

impact any regulation may have on a

substantial number of small entities. For

purposes of this analysis, credit unions

under $1 million in assets will be

considered small entities.

The NCUA Board has determined and

certifies that this rule will not have a

significant economic impact on a

substantial number of small entities.

This rule allows FICUs that are

members of Federal Home Loan Banks

to receive advances at lower rates of

interest for the benefit of their members

without any additional regulatory

burden or expense to credit unions.

Accordingly, the NCUA has determined

that a Regulatory Flexibility Analysis is

not required.

Paperwork Reduction Act

NCUA has determined that this rule

does not increase paperwork

requirements under the Paperwork

Reduction Act of 1995 and regulations

of the Office of Management and

Budget.

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 Procedures Act. 5 U.S.C.

551. The Office of Management and

Budget has determined that this is not

a major rule.

Executive Order 13132

Executive Order 13132 encourages

independent regulatory agencies to

consider the impact of their regulatory

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 rule will

apply to some state-chartered credit

unions, but it will not have substantial

direct effect on the states, on the

relationship between the national

government and the states, or on the

distribution of power and

responsibilities among the various

levels of government. NCUA has

determined that this rule does not

constitute a policy that has federalism

implications for purposes of the

executive order.

Agency Regulatory Goal

NCUA’s goal is to promulgate clear

and understandable regulations that

impose minimal regulatory burden. We

request your comments on whether this

rule is understandable and minimally

intrusive.

List of Subjects in 12 CFR Part 709

Credit unions, Liquidations.

By the National Credit Union

Administration Board, on February 15, 2001.

Becky Baker,

Secretary of the Board.

For the reasons stated above, NCUA

amends 12 CFR part 709 as follows:

PART 709—INVOLUNTARY

LIQUIDATION OF FEDERAL CREDIT

UNIONS AND ADJUDICATION OF

CREDITOR CLAIMS INVOLVING

FEDERALLY-INSURED CREDIT

UNIONS IN LIQUIDATION

1. The authority citation for part 709

continues to read as follows:

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

1786, 1787, 1788, 1789, 1789a.

2. Amend § 709.0 by revising the first

sentence to read as follows:

§ 709.0 Scope.

The rules and procedures in this part

apply to charter revocations of federal

credit unions under 12 U.S.C.

1787(a)(1)(A), (B), the involuntary

liquidation and adjudication of creditor

claims in all cases involving federallyinsured credit unions, the treatment by

the Board as conservator or liquidating

agent of financial assets transferred in

connection with a securitization or

participation or of public funds held by

a federally-insured credit union, and the

allowance of prepayment fees to Federal

Home Loan Banks under specified

conditions. * * *

3. Add § 709.12 to part 709 to read as

follows:

§ 709.12 Prepayment Fees to Federal

Home Loan Bank.

The Board as conservator or

liquidating agent of a federally-insured

credit union in receipt of any extension

of credit from a Federal Home Loan

Bank will allow a claim for a

prepayment fee by the Bank if:

(a) The claim is made pursuant to a

written contract that provides for a

prepayment fee but the prepayment fee

allowed by the Board will not exceed

the present value of the loss attributable

to the difference between the contract

rate of the secured borrowing and the

reinvestment rate then available to the

Bank; and

(b) The indebtedness owed to the

Bank is secured by sufficient collateral

in which a perfected security interest in

favor of the Bank exists or as to which

the Bank’s security interest is entitled to

priority under section 306(d) of the

Competitive Equality Banking Act of

1987, 12 U.S.C. 1430(e) footnote (1), or

otherwise so that the aggregate of the

outstanding principal on the advances

secured by the collateral, the accrued

but unpaid interest on the outstanding

principal and the prepayment fee

applicable to the advances can be paid

in full from the amounts realized from

the collateral. For purposes of this

paragraph, the adequacy of the collateral

will be determined as of the date the

prepayment fees are due and payable

under the terms of the written contract.

[FR Doc. 01–4361 Filed 2–22–01; 8:45 am]

BILLING CODE 7535–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 00–ANM–33]

RIN 2120–AA66

Revision of Legal Descriptions of

Multiple Federal Airways in the Vicinity

of Douglas; WY

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action amends the legal

descriptions of three Federal airways

that use the Douglas, WY, Very High

Frequency Omnidirectional Range/

Distance Measuring Equipment (VOR/

DME) in their route structure. Currently,

the Douglas VOR/DME and the

Converse County, WY, Airport share the

same location identifier. The fact that

the VOR/DME and the airport are not

collocated has led to confusion among

users. To eliminate this confusion, the

Douglas VOR/DME will be renamed the

‘‘Hipsher VOR/DME,’’ and all the

airways with ‘‘Douglas VOR/DME’’

included in their legal descriptions will

be amended, concurrent with the