Source: https://www.federalregister.gov/documents/2004/07/01/04-14764/change-in-official-or-senior-executive-officer-in-credit-unions-that-are-newly-chartered-or-are-in
Timestamp: 2018-09-20 08:42:32
Document Index: 799251564

Matched Legal Cases: ['§\u2009701', '§\u2009701', '§\u2009701', '§\u2009701', '§\u2009701', 'art 701', '§\u2009701']

The NCUA must receive comments on or before August 30, 2004.
69 FR 39871
39871-39873 (3 pages)
04-14764
https://www.federalregister.gov/d/04-14764 https://www.federalregister.gov/d/04-14764
NCUA is proposing to revise its rule concerning the requirement that federally-insured credit unions that are newly chartered or troubled file notice with NCUA before adding or replacing a board or committee member or employing or changing the duties of a senior executive officer. The proposed amendments will clarify the relationship between the prior notice provision and the commencement of service provision, so as to eliminate any potential confusion. In addition, the amendments reorganize the requirements in the current rule to make it easier to understand.
E-mail: Address to regcomments@ncua.gov. Include “[Your name] Comments on Proposed Rule 701.14, Change in Official in Newly Chartered or Troubled Credit Unions” in the e-mail subject line.
Section 212 of the Federal Credit Union Act and § 701.14 of NCUA's regulations require newly chartered and troubled credit unions to seek NCUA approval before the appointment or employment of directors and senior management officials. 12 U.S.C. 1790a; 12 CFR 701.14. Section 701.14 sets out the substantive and procedural requirements for credit unions seeking approval of an individual. The rule was adopted in 1990 and has had one substantive revision since that time. 55 FR 43084 (October 26, 1990); 64 FR 28715 (May 27, 1999).
The NCUA Board has a policy of continually reviewing NCUA regulations to “update, clarify and simplify existing regulations and eliminate unnecessary and redundant and unnecessary provisions.” NCUA Interpretive Ruling and Policy Statement (IRPS) 87-2, Developing and Reviewing Government Regulations. As a result of NCUA's 2003 review, the Board determined that the Change in Official or Senior Executive Officer rule should be updated.
The only substantive proposed change to the rule is to § 701.14(e), the provision dealing with commencement of service. As currently written, this provision states a proposed director, committee member or senior executive officer may serve temporarily until the credit union and the individual are notified in writing of NCUA's approval or disapproval. This provision conflicts with the prior notice requirement in § 701.14(c).
Section 701.14(c) requires at least 30 days prior notice to NCUA before the addition of a board or committee member or the employment of a senior executive officer. There are some exceptions to the prior notice requirement but they are addressed in other sections of the rule. 12 CFR 701.14(d)(2) and (3). To resolve this inconsistency, the Board proposes adopting language in the commencement of service provision that is similar to regulations of the Federal Deposit Insurance Corporation and the other financial regulators. 12 CFR 303.103(b).
The revised provision is redesignated § 701.14(d). It provides for commencement of service at the expiration of the 30-day period or any additional time under paragraph (c)(3)(iii) of the section, unless NCUA disapproves the notice before the end of the period.
The proposed rule reorganizes the paragraph structure so that it is easier to read. All of the notice requirements are moved to current paragraph (d) Procedures for Notice of Proposed Change in Official or Senior Executive Officer. This paragraph is redesignated paragraph (c) and now includes in paragraph (c)(1) the prior notice requirements from current paragraph (c). Current paragraph (d)(2) Waiver of prior notice requirements is redesignated (c)(2)(i) and (iii). Current paragraph (d)(3) Election of directors or credit committee members is retitled Automatic waiver and redesignated (c)(2(ii).
Current paragraph (d)(1) Filing and acceptance is retitled Filing Procedures, redesignated (c)(3), and broken into three subparts: (i) Where to file; (ii) Contents; and (iii) Processing.
The final change is the redesignation of paragraph (f) as paragraph (e).
The Regulatory Flexibility Act (RFA) requires NCUA to prepare an analysis to describe any significant economic impact any proposed regulation may have on a substantial number of small entities. NCUA considers credit unions having less than ten million in assets to be small for purposes of RFA. Interpretive Ruling and Policy Statement (IRPS) 87-2 as amended by IRPS 03-2. The proposal clarifies the relationship between the waiver of prior notice provision and the temporary service provision, so as to eliminate any potential confusion. The NCUA has determined and certifies that this proposed rule, if adopted, will not have a significant economic impact on a substantial number of small credit Start Printed Page 39872unions. Accordingly, the NCUA has determined that a Regulatory Flexibility Analysis is not required.
NCUA has determined that the proposed rule would not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget (OMB). NCUA currently has OMB clearance for § 701.14's collection requirements (OMB No. 3133-0121).
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 proposed rule will apply to all federally insured credit unions. NCUA has determined that the proposed amendments 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 proposed rule does not constitute a policy that has federalism implications for purposes of the executive order.
NCUA's goal is clear, understandable regulations that impose a minimal regulatory burden. We request your comments on whether the proposed rule is understandable and minimally intrusive if implemented as proposed.
Accordingly, the National Credit Union Administration proposes to amend 12 CFR Part 701 as follows:
2. Amend § 701.14 by removing paragraphs (c) (d) and (e), adding new paragraphs (c) and (d), and redesignating paragraph (f) as paragraph (e) to read as follows:
(c) Procedures for Notice of Proposed Change in Official or Senior Executive Officer—(1) Prior Notice Requirement. An insured credit union must give NCUA written notice at least 30 days before the effective date of any addition or replacement of a member of the board of directors or committee member or the employment or change in responsibilities of any individual to a position of senior executive officer if:
(d) Commencement of Service. A proposed director, committee member, or senior executive officer may begin service after the end of the 30-day period or any other additional period as provided under paragraph (c)(3)(iii) of Start Printed Page 39873this section, unless the NCUA disapproves the notice before the end of the period.
[FR Doc. 04-14764 Filed 6-30-04; 8:45 am]