Chartering and Field of Membership Manual for Federal Credit Unions, 13460-13463 [2013-04647]
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13460
Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Rules and Regulations
(2) Separate records of production are
provided for at least the most recent
consecutive two crop years. The records
will be used to verify that trees from
each unit meet the minimum
production requirement contained in
section 8(d) and to establish the
approved average revenue per acre for
the optional units selected; and
(3) Optional units are selected and
identified on the acreage report by the
acreage reporting date of the first year of
the two-year coverage module. Units
will be determined when the acreage is
reported, but may be adjusted or
combined to reflect the actual unit
structure when adjusting a loss. No
further unit division may be made after
the acreage reporting date for any
reason.
3. * * *
(d) * * *
(1) You fail to provide acceptable
records necessary to determine a loss for
optional units. This will result in
optional units being adjusted or
combined to reflect the actual unit
structure at the time of discovery. Your
amount of insurance per acre will be
recalculated for the current crop year
and the subsequent crop year of the twoyear coverage module (provided another
year remains in the two-year coverage
module).
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(4) Your gross sales amount is
assigned in accordance with section 3(f).
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(f) * * *
(1) If you do not report your gross
sales in accordance with this paragraph,
we will assign a gross sales amount for
any year you fail to report and you will
not be eligible for optional units for both
years of the two-year coverage module.
The gross sales amount assigned by us
will be not greater than the T-revenue
for the current coverage module.
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4. * * *
(d) * * * If available from us, you
may elect to receive these documents
and changes electronically.’’ following
the sentence, ‘‘If changes are made that
will be effective for a subsequent twoyear coverage module, such copies will
be provided not later than 30 days prior
to the cancellation date.
8. * * *
(d) That are grown on trees that have
produced at least 600 pounds of pecans
in-shell per acre (or an amount provided
in the Special Provisions) in at least one
of the previous four crop years, unless
we inspect and allow insurance by
written agreement. This amount of
production must be achieved
subsequent to any top work that occurs
within a unit;
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(e) That are grown on varieties or a
grouping of varieties within a unit that
are not designated as uninsurable in the
Special Provisions;
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13. * * *
(b) We will determine your loss on a
unit basis. In the event you are unable
to provide separate acceptable records
for any:
(1) Optional unit, we will combine all
optional units for which such records
were not provided and this will be the
unit structure the current crop year and
the subsequent crop year of the two-year
coverage module (provided another year
remains in the two-year coverage
module); or
(2) Basic unit, we will allocate
commingled production or revenue to
each basic unit in proportion to our
liability on the harvested acreage for
each unit.
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(d) * * *
(2) * * *
(i) The dollar amount obtained by
multiplying the number of pounds of
pecans sold by the price received for
each day the pecans were sold. (If the
price received is not verifiable by sales
receipts or if the pecan production was
direct marketed, the market price will
be used. Unless otherwise provided in
the Special Provisions, and excluding
pecans sold under contract, the price
received will be not less than 95 percent
of the lowest AMS price for the nearest
location for similar quality, quantity,
and variety of in-shell pecans published
during the week you sell your pecans.
If AMS prices are not published for the
week the pecans were sold, the price
received will be not less than 95 percent
of the lowest price per pound for inshell pecans of the same variety or
varieties insured offered by buyers in
the area you normally market the pecans
or the area nearest to you if prices are
not available in your immediate area on
the day you sell your pecans.);
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divided by the number of years ($2,675
÷ 4 = $669).
The amount of insurance per acre
equals the approved average revenue
multiplied by the coverage level percent
($669 × .65 = $435).
Assume pecan trees in the unit
experienced damage to blooms due to a
late freeze causing low production. You
produced, harvested, and sold 300
pounds per acre of pecans from 70 acres
and received an actual price of $0.75 per
pound. On the other 30 acres, the
pecans suffered damage due to drought.
You elected not to harvest the other 30
acres of pecans. The 30 acres were
appraised at 100 pounds per acre and on
the day of the appraisal the average
AMS price was $0.65. The total dollar
value of production to count is (300
pounds of pecans × 70 net acres × $0.75)
+ (100 pounds × 30 net acres × $0.65)
= $15,750 + $1,950 = $17,700.
The indemnity would be:
The amount of insurance per acre
multiplied by the net acres minus the
dollar value of the total production to
count equals the dollar amount of
indemnity ($435 × 100 = $43,500.00 ¥
$17,700.00 = $25,800).
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Signed in Washington, DC, on February 19,
2013.
Brandon Willis,
Acting Manager, Federal Crop Insurance
Corporation.
[FR Doc. 2013–04468 Filed 2–27–13; 8:45 am]
BILLING CODE 3410–08–P
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 701
RIN 3133–AE02
Chartering and Field of Membership
Manual for Federal Credit Unions
National Credit Union
Administration (NCUA).
ACTION: Final rule.
AGENCY:
The NCUA Board (Board) is
amending the definition of ‘‘rural
PECAN REVENUE EXAMPLE
district’’ in NCUA’s Chartering and
Field of Membership Manual. The
Average
Average
amendment permits a geographic area to
gross
Year
Acres
pounds
sales per qualify as a rural district if, among other
per acre
acre
criteria, it has a total population that
does not exceed the greater of 250,000
4 ............
100
750
$1,050
people or three percent of the
3 ............
100
625
$625
2 ............
100
1250
$750 population of the state in which the
1 ............
100
200
$250 majority of the district is located. The
current definition limits the rural
Total Average Gross Sales Per Acre = $2,675 district’s population to 200,000 people
without regard to the population of the
The approved average revenue equals state containing the majority of the rural
the total average gross sales per acre
district.
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SUMMARY:
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Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Rules and Regulations
DATES:
This rule is effective April 1,
2013.
FOR FURTHER INFORMATION CONTACT:
Frank Kressman, Associate General
Counsel, or Elizabeth Wirick, Staff
Attorney, Office of General Counsel, at
(703) 518–6545, or Robert Leonard,
Director, Division of Consumer Access,
Office of Consumer Protection, at (703)
518–1140.
SUPPLEMENTARY INFORMATION:
I. Background
II. Public Comments
III. Regulatory Procedures
I. Background
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A. Statutory Framework and the
Proposed Rule
The Federal Credit Union Act (Act),
as amended by the Credit Union
Membership Access Act of 1998
(CUMAA), establishes requirements for
membership in federal credit unions
(FCUs). The Act provides that a
community credit union is one
organized around a ‘‘well-defined local
community, neighborhood, or rural
district.’’1 In CUMAA, Congress
specifically delegated to the Board the
authority to define by regulation the
meaning of ‘‘well-defined local
community’’ (WDLC) and ‘‘rural
district’’ for FCU charters.2
Since CUMAA’s enactment, the
agency has gained significant
experience in determining the criteria
that establish an area as a WDLC or rural
district by analyzing and processing
numerous applications for community
charter conversions and expansions.
With the benefit of this experience, the
Board has determined that the current
population limit of 200,000 people
associated with establishing a rural
district is too restrictive to fulfill the
potential of that charter type and is
limiting some FCUs’ ability to serve
members in rural areas. Accordingly,
the Board issued a proposed rule in
September 2012 to increase the
population limit associated with rural
districts.3 Specifically, the proposed
rule permitted a geographic area to
qualify as a rural district if, among other
criteria, it has a total population that
does not exceed the greater of 200,000
people or three percent of the
population of the state in which the
majority of the district is located.
B. Final Rule
Among other criteria, the final rule
permits an area to qualify as a rural
district if its population does not exceed
1 12
U.S.C. 1759(b)(3).
2 12 U.S.C. 1759(g).
3 77 FR 59137 (Sept. 26, 2012).
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the greater of 250,000 people or three
percent of the population of the state in
which the majority of the district is
located. As revised by the final rule,
NCUA’s Chartering and Field of
Membership Manual 4 continues to
include two alternative sets of criteria to
establish a rural district. One set
requires that the district have welldefined, contiguous boundaries and
more than 50% of its population must
reside in areas the U.S. Census Bureau
designates as rural. The other set of
criteria requires that the district have
well-defined, contiguous boundaries
and a population density of no more
than 100 people per square mile. Under
either set of criteria, the population of
a rural district may not exceed the
greater of 250,000 or three percent of the
population of the state in which the
majority of the district is located.
As with all community charters, FCUs
serving rural districts must develop
business and marketing plans that
demonstrate how they will serve their
entire community.
The practical effect of the revised
definition is that it allows rural districts
of up to 250,000 persons in all states,
and, in the 11 most populous states,
rural districts may exceed the 250,000
person limit.5 Despite the focus on the
population aspect of the definition of
rural district, the other criteria in the
definition not related to population
remain in place and help ensure the
definition as a whole does not exceed
appropriate boundaries.
For FCUs seeking a rural district that
includes portions of two or more states,
the three percent state population
component will be based on the
population of the state containing the
majority of the proposed rural district.
The majority of a multi-state rural
district will be based on population
rather than geographic area. For
example, if an FCU applies to serve a
district with two geographically large
counties and 100,000 residents in state
A, plus one geographically small county
and 200,000 residents in state B, the
combined population of 300,000 could
4 NCUA has implemented the Act’s field of
membership requirements in its Chartering and
Field of Membership Manual, incorporated as
Appendix B to part 701 of NCUA’s regulations. 12
CFR part 701, Appendix B. NCUA also publishes
the manual as an Interpretative Ruling and Policy
Statement (IRPS). The current version of the manual
is set forth as IRPS 08–2, as amended by IRPS 10–
1.
5 With respect to the three percent of state
population component, the amended definition will
only affect FCUs seeking a rural district located in
states with a population above approximately 8.83
million. This is because three percent of the
population of states with fewer than 8.83 million
people would already be less than the 250,000
person limit.
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13461
not exceed three percent of the
population of state B.
C. How is the final rule different from
the proposed rule?
The proposal would have allowed
rural districts of up to 200,000 people or
three percent of a state’s population,
whichever is greater. As discussed in
more detail below, the final rule allows
rural districts of up to 250,000 people or
three percent of a state’s population,
whichever is greater.
II. Public Comments
NCUA received 16 comments on the
proposal: three from trade associations,
nine from state credit union leagues,
and four from FCUs. Fourteen
commenters supported the proposed
rule but urged NCUA to make other
changes to the definition of rural district
so more FCUs could benefit. One
commenter supported the proposal
without additional suggestions. Only a
banking trade association opposed the
proposal.
The commenters who encouraged
NCUA to make additional changes
mostly expressed concern that the
proposal would benefit only credit
unions in the most populous states.
Many commenters suggested that
increasing the population limit for a
rural district would enhance the
availability of rural district-based
community charters. Two commenters
suggested using a population limit of
500,000 persons, and another two
commenters suggested the population
should be limited to the greater of
500,000 or four percent of a state’s
population. Six commenters stated the
definition of rural district should be
contiguous areas in a state with a total
district population of less than 500,000.
As discussed in the preamble to the
proposed rule, NCUA is seeking a
balance that permits rural districts to
include a sufficient number of potential
credit union members to make this a
realistic chartering option in more areas,
without permitting rural districts to
become overly large.
The Board believes that many of the
commenters have suggested population
limits that would result in overly large
rural districts. The Board’s longstanding
view is that a community charter should
not encompass an entire state.6 For
example, the 500,000 member limit
suggested by many of the commenters
constitutes the majority of the
population in seven states 7 and the
6 75
FR 36257 (June 25, 2010).
states are Montana, Delaware, South
Dakota, Alaska, North Dakota, Vermont, and
Wyoming.
7 These
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Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Rules and Regulations
District of Columbia. Accordingly, this
suggested limit violates in principle the
Board’s position of restricting
community charters to appropriate
sizes. The 500,000 person limit also
exceeds the balance the Board seeks
between permitting rural districts to be
large enough to be economically viable
but not unreasonably or unnecessarily
large taking into account the purpose of
the rural district. Although the Board
believes a 500,000 person population
limit is too large, the Board agrees with
commenters that an increase from the
current 200,000 person limit is
warranted. Accordingly, the Board has
determined to increase the population
limit for rural districts to the greater of
250,000 or three percent of the
population of the state containing the
rural district. Increasing the population
limit to 250,000 will potentially benefit
FCUs in all geographic locations, not
only the 11 most populous states, but is
not so drastic an increase to dilute the
integrity of the purpose of rural
districts. In other words, the Board
believes this incremental increase to
250,000 reaches the balance discussed
above.
The Board took into account similar
considerations and applied a similar
analysis in establishing the ‘‘three
percent of state population’’ component
in the definition. As noted in the
preamble to the proposed rule, the
Board is concerned that many rural
districts are centered around a small
hub city or town. When the population
of the hub is included in the rural
district’s total population, it often can
cause the total population to exceed the
250,000 person limit.8 This is
problematic because the inclusion of
such hub cities or towns is often
necessary for some rural districts to be
economically viable. The addition of the
three percent of state population
component to the definition, as
introduced in the proposed rule,
potentially increases the size of a rural
district.
In the discussion of the proposed rule,
the Board also noted that FCUs in rural
areas often have greater expenses to
locate, join and serve members than
FCUs whose membership is less
geographically dispersed.9 As a result, a
higher potential population is required
to ensure the economic viability of
many rural district charters. The
proposal would have offered the higher
potential population limit only to FCUs
in the most populous states. The final
rule increases the population limit for
all FCUs.
Commenters also offered a variety of
suggested changes to other components
of the definition of rural district. The
current definition of rural district also
requires that either: (1) more than 50%
of the district’s population resides in
areas designated as rural by the U.S.
Census Bureau; or (2) the proposed
district has a population density of no
more than 100 people per square mile.
Five commenters queried whether the
definition of rural district requires any
component based on census tract data,
and one commenter suggested the 100
person per square mile limit is too low.
Several commenters also proposed
alternatives for these criteria. The Board
has carefully considered these
suggestions but is not making any
changes to the other, existing
components of the definition.
Six commenters requested that
existing rural district-based FCU
charters be grandfathered, but also
allowed to apply for an expanded area
under any new definition adopted. The
Board reiterates that FCUs with current
rural district charters are grandfathered,
and they are able to apply to amend
their charters based on the adopted
definition.
Executive Order 13132
III. Regulatory Procedures
The Small Business Regulatory
Enforcement Fairness Act of 1996 13
(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.14 NCUA
expects that the Office of Management
and Budget will determine that the final
rule is not a ‘‘major rule’’ for purposes
of SBREFA.
Regulatory Flexibility Act
The Regulatory Flexibility Act
requires NCUA to prepare an analysis of
any significant economic impact a
regulation may have on a substantial
number of small entities (primarily
those under $50 million in assets).10
This rule does not impose any
requirements on small credit unions.
NCUA has determined that this final
rule will not have a significant
economic impact on a substantial
number of small credit unions.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA) applies to rulemakings in which
an agency by rule creates a new
paperwork burden on regulated entities
or increases an existing burden.11 For
purposes of the PRA, a paperwork
burden may take the form of either a
reporting or a recordkeeping
requirement, both referred to as
information collections. NCUA has
determined that this rule does not
impose a new information collection
requirement or increase an existing
burden.
Executive Order 13132 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. NCUA, an
independent regulatory agency as
defined in 44 U.S.C. 3502(5), voluntarily
complies with the executive order to
adhere to fundamental federalism
principles. This rule only applies to
FCUs and will not have substantial
direct effects 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.
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 section 654 of the
Treasury and General Government
Appropriations Act, 1999.12
Small Business Regulatory Enforcement
Fairness Act
List of Subjects in 12 CFR Part 701
Credit, Credit unions, Reporting and
recordkeeping requirements.
By the National Credit Union
Administration Board on February 21, 2013.
Mary Rupp,
Secretary of the Board.
For the reasons set forth above, the
National Credit Union Administration
amends 12 CFR part 701 as follows:
PART 701—ORGANIZATION AND
OPERATION OF FEDERAL CREDIT
UNIONS
1. The authority citation for part 701
continues to read as follows:
■
12 Public
8 77
FR 59137, 59138 (Sept. 26, 2012).
9 Id.
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10 5
U.S.C. 603(a).
11 44 U.S.C. 3507(d); 5 CFR part 1320.
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Law 105–277, 112 Stat. 2681 (1998).
Law 104–121, 110 Stat. 857 (1996).
14 5 U.S.C. 551.
13 Public
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Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Rules and Regulations
Authority: 12 U.S.C. 1752(5), 1755, 1756,
1757, 1758, 1759, 1761a, 1761b, 1766, 1767,
1782, 1784, 1786, 1787, 1789. 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 12 U.S.C. 4311–
4312.
2. Revise the fifth paragraph of
Section V.A.2 of Chapter 2 of Appendix
B to part 701 to read as follows:
■
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*
Chapter 2
*
*
V.A.2—Definition of Well-Defined Local
Community and Rural District
*
*
*
*
*
The rural district requirement is met if:
• Rural District—
• The district has well-defined, contiguous
geographic boundaries;
• More than 50% of the district’s
population resides in census blocks or other
geographic areas that are designated as rural
by the United State Census Bureau; and
• The total population of the district does
not exceed the greater of 250,000 people or
three percent of the population of the state
in which the majority of the district is
located; or
• The district has well-defined, contiguous
geographic boundaries;
• The district does not have a population
density in excess of 100 people per square
mile; and
• The total population of the district does
not exceed the greater of 250,000 people or
three percent of the population of the state
in which the majority of the district is
located.
*
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*
[FR Doc. 2013–04647 Filed 2–27–13; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2012–0421; Directorate
Identifier 2012–NM–042–AD; Amendment
39–17284; AD 2012–25–03]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; correction.
srobinson on DSK4SPTVN1PROD with RULES
AGENCY:
The FAA is correcting an
airworthiness directive (AD) that
published in the Federal Register. That
AD applies to certain The Boeing
Company Model 757 airplanes. That AD
incorrectly identified certain actions
SUMMARY:
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This final rule is effective
February 28, 2013. The effective date for
AD 2012–25–03 (77 FR 73897,
December 12, 2012) remains January 16,
2013.
DATES:
You may examine the AD
docket on the Internet at https://
www.regulations.gov; or in person at the
Docket Management Facility between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD
docket contains this AD, the regulatory
evaluation, any comments received, and
other information. The address for the
Docket Office (phone: 800–647–5527) is
Document Management Facility, U.S.
Department of Transportation, Docket
Operations, M–30, West Building
Ground Floor, Room W12–140, 1200
New Jersey Avenue SE., Washington,
DC 20590.
ADDRESSES:
Appendix B to Part 701—Chartering
and Field of Membership Manual
*
that are terminated in another AD. This
document corrects that error. In all other
respects, the original document remains
the same.
13463
Correction of Regulatory Text
§ 39.13
[Corrected]
In the Federal Register of December
12, 2012, AD 2012–25–03, Amendment
39–17284 (77 FR 73897, December 12,
2012), on page 73902, in the second
column, paragraph (l) of AD 2012–25–
03 is corrected to read as follows:
*
*
*
*
*
■
(l) Related AD Termination
Accomplishing the actions required by this
AD terminates the requirements of
paragraphs (f), (g), and (h) of AD 2010–15–
01, Amendment 39–16367 (75 FR 39804, July
13, 2010), for that airplane only.
*
*
*
*
*
Issued in Renton, Washington, on February
15, 2013.
Kalene C. Yanamura,
Acting Manager, Transport Airplane
Directorate, Aircraft Certification Service.
[FR Doc. 2013–04337 Filed 2–27–13; 8:45 am]
BILLING CODE 4910–13–P
FOR FURTHER INFORMATION CONTACT:
Elias Natsiopoulos, Aerospace Engineer,
Systems and Equipment Branch, ANM–
130S, FAA, Seattle Aircraft Certification
Office (ACO), 1601 Lind Avenue SW.,
Renton, WA 98057–3356; phone: 425–
917–6478; fax: 425–917–6590; email:
Elias.Natsiopoulos@faa.gov.
DEPARTMENT OF COMMERCE
AD 2012–
25–03, Amendment 39–17284 (77 FR
73897, December 12, 2012), currently
requires repetitive inspections of
electrical heat terminals on the left and
right windshields for damage, and
corrective actions if necessary; and
allows replacing an affected windshield
with a windshield equipped with
different electrical connections, which
would terminate the repetitive
inspections for that windshield. For
certain The Boeing Company Model 757
airplanes, AD 2012–25–03 also specifies
that accomplishing the required actions
terminates certain requirements of AD
2010–15–01, Amendment 39–16367 (75
FR 39804, July 13, 2010), for that
airplane only.
As published, paragraph (l) of AD
2012–25–03, Amendment 39–17284 (77
FR 73897, December 12, 2012),
incorrectly identified certain actions
that are terminated in AD 2010–15–01,
Amendment 39–16367 (75 FR 39804,
July 13, 2010).
No other part of the preamble or
regulatory information has been
changed; therefore, only the changed
portion of the final rule is being
published in the Federal Register.
The effective date of this AD remains
January 16, 2013.
[Docket No. 120320203–2295–03]
SUPPLEMENTARY INFORMATION:
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Bureau of Industry and Security
15 CFR Parts 730, 732, 734, 736, 740,
742, 743, 744, 745, 748, 752, 754, 756,
758, 760, 762, 764, and 772
RIN 0694–AF63
Editorial Corrections to the Export
Administration Regulations
Bureau of Industry and
Security, Commerce.
ACTION: Final rule.
AGENCY:
This final rule corrects
reference and typographical errors in
the Export Administration Regulations
(EAR). The corrections are editorial in
nature and do not affect license
requirements.
SUMMARY:
DATES:
Effective on February 28, 2013.
FOR FURTHER INFORMATION CONTACT:
Robert Monjay, Office of Exporter
Services, Bureau of Industry and
Security, by telephone (202) 482–2440
or email: Robert.Monjay@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
On November 14, 1994, by Executive
Order 12938, the President declared a
national emergency with respect to the
unusual and extraordinary threat to the
national security, foreign policy, and
economy of the United States posed by
the proliferation of nuclear, biological,
and chemical weapons (weapons of
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]]>Agencies
[Federal Register Volume 78, Number 40 (Thursday, February 28, 2013)]
[Rules and Regulations]
[Pages 13460-13463]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04647]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
RIN 3133-AE02
Chartering and Field of Membership Manual for Federal Credit
Unions
AGENCY: National Credit Union Administration (NCUA).
ACTION: Final rule.
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SUMMARY: The NCUA Board (Board) is amending the definition of ``rural
district'' in NCUA's Chartering and Field of Membership Manual. The
amendment permits a geographic area to qualify as a rural district if,
among other criteria, it has a total population that does not exceed
the greater of 250,000 people or three percent of the population of the
state in which the majority of the district is located. The current
definition limits the rural district's population to 200,000 people
without regard to the population of the state containing the majority
of the rural district.
[[Page 13461]]
DATES: This rule is effective April 1, 2013.
FOR FURTHER INFORMATION CONTACT: Frank Kressman, Associate General
Counsel, or Elizabeth Wirick, Staff Attorney, Office of General
Counsel, at (703) 518-6545, or Robert Leonard, Director, Division of
Consumer Access, Office of Consumer Protection, at (703) 518-1140.
SUPPLEMENTARY INFORMATION:
I. Background
II. Public Comments
III. Regulatory Procedures
I. Background
A. Statutory Framework and the Proposed Rule
The Federal Credit Union Act (Act), as amended by the Credit Union
Membership Access Act of 1998 (CUMAA), establishes requirements for
membership in federal credit unions (FCUs). The Act provides that a
community credit union is one organized around a ``well-defined local
community, neighborhood, or rural district.''\1\ In CUMAA, Congress
specifically delegated to the Board the authority to define by
regulation the meaning of ``well-defined local community'' (WDLC) and
``rural district'' for FCU charters.\2\
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\1\ 12 U.S.C. 1759(b)(3).
\2\ 12 U.S.C. 1759(g).
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Since CUMAA's enactment, the agency has gained significant
experience in determining the criteria that establish an area as a WDLC
or rural district by analyzing and processing numerous applications for
community charter conversions and expansions. With the benefit of this
experience, the Board has determined that the current population limit
of 200,000 people associated with establishing a rural district is too
restrictive to fulfill the potential of that charter type and is
limiting some FCUs' ability to serve members in rural areas.
Accordingly, the Board issued a proposed rule in September 2012 to
increase the population limit associated with rural districts.\3\
Specifically, the proposed rule permitted a geographic area to qualify
as a rural district if, among other criteria, it has a total population
that does not exceed the greater of 200,000 people or three percent of
the population of the state in which the majority of the district is
located.
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\3\ 77 FR 59137 (Sept. 26, 2012).
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B. Final Rule
Among other criteria, the final rule permits an area to qualify as
a rural district if its population does not exceed the greater of
250,000 people or three percent of the population of the state in which
the majority of the district is located. As revised by the final rule,
NCUA's Chartering and Field of Membership Manual \4\ continues to
include two alternative sets of criteria to establish a rural district.
One set requires that the district have well-defined, contiguous
boundaries and more than 50% of its population must reside in areas the
U.S. Census Bureau designates as rural. The other set of criteria
requires that the district have well-defined, contiguous boundaries and
a population density of no more than 100 people per square mile. Under
either set of criteria, the population of a rural district may not
exceed the greater of 250,000 or three percent of the population of the
state in which the majority of the district is located.
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\4\ NCUA has implemented the Act's field of membership
requirements in its Chartering and Field of Membership Manual,
incorporated as Appendix B to part 701 of NCUA's regulations. 12 CFR
part 701, Appendix B. NCUA also publishes the manual as an
Interpretative Ruling and Policy Statement (IRPS). The current
version of the manual is set forth as IRPS 08-2, as amended by IRPS
10-1.
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As with all community charters, FCUs serving rural districts must
develop business and marketing plans that demonstrate how they will
serve their entire community.
The practical effect of the revised definition is that it allows
rural districts of up to 250,000 persons in all states, and, in the 11
most populous states, rural districts may exceed the 250,000 person
limit.\5\ Despite the focus on the population aspect of the definition
of rural district, the other criteria in the definition not related to
population remain in place and help ensure the definition as a whole
does not exceed appropriate boundaries.
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\5\ With respect to the three percent of state population
component, the amended definition will only affect FCUs seeking a
rural district located in states with a population above
approximately 8.83 million. This is because three percent of the
population of states with fewer than 8.83 million people would
already be less than the 250,000 person limit.
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For FCUs seeking a rural district that includes portions of two or
more states, the three percent state population component will be based
on the population of the state containing the majority of the proposed
rural district. The majority of a multi-state rural district will be
based on population rather than geographic area. For example, if an FCU
applies to serve a district with two geographically large counties and
100,000 residents in state A, plus one geographically small county and
200,000 residents in state B, the combined population of 300,000 could
not exceed three percent of the population of state B.
C. How is the final rule different from the proposed rule?
The proposal would have allowed rural districts of up to 200,000
people or three percent of a state's population, whichever is greater.
As discussed in more detail below, the final rule allows rural
districts of up to 250,000 people or three percent of a state's
population, whichever is greater.
II. Public Comments
NCUA received 16 comments on the proposal: three from trade
associations, nine from state credit union leagues, and four from FCUs.
Fourteen commenters supported the proposed rule but urged NCUA to make
other changes to the definition of rural district so more FCUs could
benefit. One commenter supported the proposal without additional
suggestions. Only a banking trade association opposed the proposal.
The commenters who encouraged NCUA to make additional changes
mostly expressed concern that the proposal would benefit only credit
unions in the most populous states. Many commenters suggested that
increasing the population limit for a rural district would enhance the
availability of rural district-based community charters. Two commenters
suggested using a population limit of 500,000 persons, and another two
commenters suggested the population should be limited to the greater of
500,000 or four percent of a state's population. Six commenters stated
the definition of rural district should be contiguous areas in a state
with a total district population of less than 500,000. As discussed in
the preamble to the proposed rule, NCUA is seeking a balance that
permits rural districts to include a sufficient number of potential
credit union members to make this a realistic chartering option in more
areas, without permitting rural districts to become overly large.
The Board believes that many of the commenters have suggested
population limits that would result in overly large rural districts.
The Board's longstanding view is that a community charter should not
encompass an entire state.\6\ For example, the 500,000 member limit
suggested by many of the commenters constitutes the majority of the
population in seven states \7\ and the
[[Page 13462]]
District of Columbia. Accordingly, this suggested limit violates in
principle the Board's position of restricting community charters to
appropriate sizes. The 500,000 person limit also exceeds the balance
the Board seeks between permitting rural districts to be large enough
to be economically viable but not unreasonably or unnecessarily large
taking into account the purpose of the rural district. Although the
Board believes a 500,000 person population limit is too large, the
Board agrees with commenters that an increase from the current 200,000
person limit is warranted. Accordingly, the Board has determined to
increase the population limit for rural districts to the greater of
250,000 or three percent of the population of the state containing the
rural district. Increasing the population limit to 250,000 will
potentially benefit FCUs in all geographic locations, not only the 11
most populous states, but is not so drastic an increase to dilute the
integrity of the purpose of rural districts. In other words, the Board
believes this incremental increase to 250,000 reaches the balance
discussed above.
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\6\ 75 FR 36257 (June 25, 2010).
\7\ These states are Montana, Delaware, South Dakota, Alaska,
North Dakota, Vermont, and Wyoming.
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The Board took into account similar considerations and applied a
similar analysis in establishing the ``three percent of state
population'' component in the definition. As noted in the preamble to
the proposed rule, the Board is concerned that many rural districts are
centered around a small hub city or town. When the population of the
hub is included in the rural district's total population, it often can
cause the total population to exceed the 250,000 person limit.\8\ This
is problematic because the inclusion of such hub cities or towns is
often necessary for some rural districts to be economically viable. The
addition of the three percent of state population component to the
definition, as introduced in the proposed rule, potentially increases
the size of a rural district.
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\8\ 77 FR 59137, 59138 (Sept. 26, 2012).
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In the discussion of the proposed rule, the Board also noted that
FCUs in rural areas often have greater expenses to locate, join and
serve members than FCUs whose membership is less geographically
dispersed.\9\ As a result, a higher potential population is required to
ensure the economic viability of many rural district charters. The
proposal would have offered the higher potential population limit only
to FCUs in the most populous states. The final rule increases the
population limit for all FCUs.
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\9\ Id.
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Commenters also offered a variety of suggested changes to other
components of the definition of rural district. The current definition
of rural district also requires that either: (1) more than 50% of the
district's population resides in areas designated as rural by the U.S.
Census Bureau; or (2) the proposed district has a population density of
no more than 100 people per square mile. Five commenters queried
whether the definition of rural district requires any component based
on census tract data, and one commenter suggested the 100 person per
square mile limit is too low. Several commenters also proposed
alternatives for these criteria. The Board has carefully considered
these suggestions but is not making any changes to the other, existing
components of the definition.
Six commenters requested that existing rural district-based FCU
charters be grandfathered, but also allowed to apply for an expanded
area under any new definition adopted. The Board reiterates that FCUs
with current rural district charters are grandfathered, and they are
able to apply to amend their charters based on the adopted definition.
III. Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
of any significant economic impact a regulation may have on a
substantial number of small entities (primarily those under $50 million
in assets).\10\ This rule does not impose any requirements on small
credit unions. NCUA has determined that this final rule will not have a
significant economic impact on a substantial number of small credit
unions.
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\10\ 5 U.S.C. 603(a).
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Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in
which an agency by rule creates a new paperwork burden on regulated
entities or increases an existing burden.\11\ For purposes of the PRA,
a paperwork burden may take the form of either a reporting or a
recordkeeping requirement, both referred to as information collections.
NCUA has determined that this rule does not impose a new information
collection requirement or increase an existing burden.
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\11\ 44 U.S.C. 3507(d); 5 CFR part 1320.
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Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests.
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the executive order to adhere to fundamental
federalism principles. This rule only applies to FCUs and will not have
substantial direct effects 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.
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 section 654 of the Treasury and General
Government Appropriations Act, 1999.\12\
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\12\ Public Law 105-277, 112 Stat. 2681 (1998).
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Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996 \13\
(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.\14\ NCUA expects that the Office of Management and Budget will
determine that the final rule is not a ``major rule'' for purposes of
SBREFA.
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\13\ Public Law 104-121, 110 Stat. 857 (1996).
\14\ 5 U.S.C. 551.
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List of Subjects in 12 CFR Part 701
Credit, Credit unions, Reporting and recordkeeping requirements.
By the National Credit Union Administration Board on February
21, 2013.
Mary Rupp,
Secretary of the Board.
For the reasons set forth above, the National Credit Union
Administration amends 12 CFR part 701 as follows:
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
0
1. The authority citation for part 701 continues to read as follows:
[[Page 13463]]
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759,
1761a, 1761b, 1766, 1767, 1782, 1784, 1786, 1787, 1789. 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 12 U.S.C. 4311-
4312.
0
2. Revise the fifth paragraph of Section V.A.2 of Chapter 2 of Appendix
B to part 701 to read as follows:
Appendix B to Part 701--Chartering and Field of Membership Manual
* * * * *
Chapter 2
* * * * *
V.A.2--Definition of Well-Defined Local Community and Rural District
* * * * *
The rural district requirement is met if:
Rural District--
The district has well-defined, contiguous geographic
boundaries;
More than 50% of the district's population resides in
census blocks or other geographic areas that are designated as rural
by the United State Census Bureau; and
The total population of the district does not exceed
the greater of 250,000 people or three percent of the population of
the state in which the majority of the district is located; or
The district has well-defined, contiguous geographic
boundaries;
The district does not have a population density in
excess of 100 people per square mile; and
The total population of the district does not exceed
the greater of 250,000 people or three percent of the population of
the state in which the majority of the district is located.
* * * * *
[FR Doc. 2013-04647 Filed 2-27-13; 8:45 am]
BILLING CODE 7535-01-P
