Voluntary Liquidation, 11714-11717 [2014-04231]
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11714
Proposed Rules
Federal Register
Vol. 79, No. 41
Monday, March 3, 2014
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF ENERGY
10 CFR Part 431
[Docket No. EERE–2014–BT–STD–0005]
RIN 1904–AD15
Energy Conservation Program: Energy
Conservation Standards for
Residential Conventional Cooking
Products
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Extension of public comment
period.
AGENCY:
This document announces an
extension of the time period for
submitting comments on the request for
information document regarding
whether to amend the current energy
conservation standards for residential
conventional cooking products. The
comment period is extended to April 14,
2014.
DATES: The comment period for the
request for information document
regarding energy conservation standards
for residential conventional cooking
products published on February 12,
2014 (79 FR 8337) is extended to April
14, 2014.
ADDRESSES: Any comments submitted
must identify the request for
information for standards for residential
conventional cooking products and
provide docket number EERE–2014–
BT–STD–0005 and/or Regulation
Identification Number (RIN) 1904–AD15
by any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: ConventionalCooking
Products2014STD0005@ee.doe.gov
Include the docket number EERE–2014–
BT–STD–0005 and/or RIN 1904–AD15
in the subject line of the message.
• Mail: Ms. Brenda Edwards, U.S.
Department of Energy, Building
Technologies Office, Mailstop EE–5B,
1000 Independence Avenue SW.,
Washington, DC 20585–0121. If
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SUMMARY:
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possible, please submit all items on a
compact disc (CD), in which case it is
not necessary to include printed copies.
[Please note that comments and CDs
sent by mail are often delayed and may
be damaged by mail screening
processes.]
• Hand Delivery/Courier: Ms. Brenda
Edwards, U.S. Department of Energy,
Building Technologies Program, 950
L’Enfant Plaza, SW., Suite 600,
Washington, DC 20024. Telephone (202)
586–2945. If possible, please submit all
items on CD, in which case it is not
necessary to include printed copies.
Docket: The docket is available for
review at www.regulations.gov,
including Federal Register notices,
framework documents, public meeting
attendee lists and transcripts,
comments, and other supporting
documents/materials. All documents in
the docket are listed in the
www.regulations.gov index. However,
not all documents listed in the index
may be publicly available, such as
information that is exempt from public
disclosure.
FOR FURTHER INFORMATION CONTACT:
Mr. John Cymbalsky U.S. Department of
Energy, Office of Energy Efficiency
and Renewable Energy, Building
Technologies Office, EE–5B, 1000
Independence Avenue SW.,
Washington, DC 20585–0121.
Telephone: (202) 287–1692. Email:
kitchen_ranges_and_ovens@
ee.doe.gov.
Ms. Celia Sher, U.S. Department of
Energy, Office of the General Counsel,
GC–71, 1000 Independence Avenue
SW., Washington, DC 20585–0121.
Telephone: (202) 287–6122. Email:
Celia.Sher@hq.doe.gov.
SUPPLEMENTARY INFORMATION: On
February 12, 2014, the U.S. Department
of Energy (DOE) published a request for
information (RFI) and notice of
document availability document in the
Federal Register (79 FR 8337) initiating
the rulemaking and data collection
process to consider new and amended
energy conservation standards for
products included in the definition of
conventional cooking products. The RFI
requested public comment from
interested parties regarding specific as
well as general questions and provided
for the submission of comments by
March 14, 2014. Thereafter, the
Association of Home Appliance
Manufacturers (AHAM) requested that
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DOE extend the comment period by 30
days. AHAM stated that the additional
time is necessary in order to allow for
review of and substantive comment on
the significant questions to which DOE
is seeking response.
Based on AHAM’s request, DOE
believes that extending the comment
period to allow additional time for
interested parties to submit comments is
appropriate. Therefore, DOE is
extending the comment period until
April 14, 2014 to provide interested
parties additional time to prepare and
submit comments. Accordingly, DOE
will consider any comments received by
April 14, 2014 to be timely submitted.
Issued in Washington, DC, on February 26,
2014.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy
Efficiency, Energy Efficiency and Renewable
Energy.
[FR Doc. 2014–04646 Filed 2–28–14; 8:45 am]
BILLING CODE 6450–01–P
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 710
RIN 3133–AE30
Voluntary Liquidation
National Credit Union
Administration (NCUA).
ACTION: Notice of proposed rulemaking.
AGENCY:
SUMMARY: The NCUA Board (Board)
proposes to amend its voluntary
liquidation regulation to reduce
administrative burdens on voluntarily
liquidating federal credit unions (FCUs)
and recognize technological advances
by: Permitting liquidating FCUs to
publish required creditor notices in
either electronic media or newspapers
of general circulation; increasing the
asset-size threshold for requiring
multiple creditor notices; requiring that
preliminary partial distributions to
members not exceed the insured limit
for any member share account;
specifying when liquidating FCUs must
determine member share balances for
the purposes of distributions; and
permitting liquidating FCUs to
distribute member share payouts either
by wire or other electronic means or by
mail or personal delivery.
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Federal Register / Vol. 79, No. 41 / Monday, March 3, 2014 / Proposed Rules
Comments must be received on
or before May 2, 2014.
ADDRESSES: You may submit comments
by any of the following methods (Please
send comments by one method only):
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web site: https://
www.ncua.gov/Legal/Regs/Pages/
PropRegs.aspx. Follow the instructions
for submitting comments.
• Email: Address to regcomments@
ncua.gov. Include ‘‘[Your name]—
Comments on Proposed Rule 710’’ in
the email subject line.
• Fax: (703) 518–6319. Use the
subject line described above for email.
• Mail: Address to Gerard Poliquin,
Secretary of the Board, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–
3428.
• Hand Delivery/Courier: Same as
mail address.
Public Inspection: You may view all
public comments on NCUA’s Web site
at https://www.ncua.gov/Legal/Regs/
Pages/PropRegs.aspx as submitted,
except for those we cannot post for
technical reasons. NCUA will not edit or
remove any identifying or contact
information from the public comments
submitted. You may inspect paper
copies of comments in NCUA’s law
library at 1775 Duke Street, Alexandria,
Virginia 22314, by appointment
weekdays between 9 a.m. and 3 p.m. To
make an appointment, call (703) 518–
6546 or send an email to OGCMail@
ncua.gov.
DATES:
Ian
Marenna, Trial Attorney, Office of
General Counsel, National Credit Union
Administration, 1775 Duke Street,
Alexandria, Virginia 22314–3428 or
telephone: (703) 518–6540.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
I. Background
II. The Proposed Rule
III. Regulatory Procedures
I. Background
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A. What changes does this proposed
rule make?
NCUA has not made substantive
changes to the rule governing voluntary
liquidations by FCUs since 1993. This
proposed amendment to Part 710 would
modernize the rule by increasing dollar
thresholds for certain procedural
requirements. It also would afford
greater flexibility to voluntarily
liquidating FCUs to use electronic
means to publish creditor notices and
issue member share payments. In
addition, the proposed amendment
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would limit any preliminary
distributions to members to the insured
amount of each share account. The
proposed amendment would also clarify
an existing required calculation.
Specifically, the proposed rule would:
(1) Amend Section 710.5 to permit
voluntarily liquidating FCUs to publish
required creditor notices in electronic
media reasonably calculated to reach
the general public in the area or areas
where the FCUs do business; (2) amend
Section 710.5 to increase the asset size
threshold for requiring multiple creditor
notices, exempting FCUs with less than
$1 million in assets from the publication
requirement and exempting FCUs with
less than $50 million in assets from the
multiple publication requirement; (3)
amend Section 710.6 to specify that
partial distributions to members, which
are subject to the Regional Director’s
approval, must not exceed the insured
limit of each member’s share account;
(4) further amend Section 710.6 to
specify that, in calculating pro rata
distributions to members, voluntarily
liquidating FCUs must determine
member share balances as of the date
the members voted to approve the
liquidation or the date on which all
share drafts cleared, whichever is later;
and (5) permit voluntarily liquidating
FCUs to distribute member share
payouts either by wire or other
electronic means approved by a member
or by mail or personal delivery.
against the problems that could arise if
NCUA must convert a voluntary
liquidation to an involuntary
liquidation based on insolvency. If a
voluntarily liquidating FCU discovers
during the process that it is insolvent,
then NCUA may place the credit union
into involuntary liquidation. This
finding could stem from conditions
such as unanticipated creditor claims or
difficulty in converting remaining assets
to enough cash to pay all shares and
liabilities. In this scenario, the
procedures and priorities under Part 709
would apply, and general creditors
would have preference over uninsured
shareholders to the extent that they are
uninsured. By limiting these interim
distributions to each member’s insured
balance, the proposed rule would keep
Part 709’s priorities intact in case the
credit union must enter involuntary
liquidation. If the credit union remains
solvent throughout the liquidation, then
every member would receive the full
balance at the end of the process, along
with any available liquidating dividend.
Generally, the proposed rule is
designed to reduce the burden on small
credit unions by raising certain
thresholds for procedural requirements.
It also reduces the burden on FCUs
generally by affording more flexibility in
implementing voluntary liquidations
and clarifying an existing requirement.
B. Why is the Board proposing this rule?
The Board is proposing this
amendment to update the rule and
provide relief from unnecessary
regulatory burden. The proposed
increase in asset-size thresholds
recognizes both inflation and the
current definition of small credit
unions. The proposed rule also reflects
the increased use of electronic and
Internet communications, as well as
electronic payment methods, by
permitting voluntarily liquidating FCUs
to use these methods to notify potential
creditors and pay out member share
accounts.
This proposed rule furthers the goals
of ensuring an orderly liquidation
process and the prompt payment of
member shares by making voluntary
liquidation less cumbersome and
avoiding losses to the National Credit
Union Share Insurance Fund that might
ultimately be incurred if the subject
FCU is involuntarily liquidated. The
proposed rule also aims to reduce risk
to the Fund by specifying that
preliminary partial distributions to
members must not exceed the insured
limit of each member’s share account.
This limitation is proposed to guard
A. Section 710.5(a)(1)
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II. The Proposed Rule
Under the proposed rule, FCUs would
be allowed to publish the required
creditor notice(s) in electronic media.
With this update, voluntarily
liquidating FCUs will have greater
flexibility in notifying potential
creditors, thereby increasing the
efficiency of the process and decreasing
the costs associated with publishing
notices in newspapers.
Also, the proposed rule increases the
asset-size threshold for requiring
multiple creditor notices from FCUs
with assets equal to or greater than $5
million to FCUs with assets equal to or
greater than $50 million. The $50
million threshold is proposed to align
with NCUA’s definition of small credit
unions. Thus, the amendment seeks to
reduce the burden on small credit
unions with respect to the publication
requirements.
B. Section 710.5(a)(2)
The amendment to this provision
would increase the asset-size threshold
applicable to publication requirements.
Under this amendment, FCUs with
assets equal to or greater than $1 million
but less than $50 million would be
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Federal Register / Vol. 79, No. 41 / Monday, March 3, 2014 / Proposed Rules
required to publish just one notice,
though FCUs could choose to publish
more notices. This amendment retains
the tiered structure of the publication
requirement while increasing the dollar
amounts to reflect inflation, growth in
credit union assets, and NCUA’s
definition of small credit unions.
C. Section 710.5(a)(3)
This amendment also reflects an
increase in thresholds applicable to the
publication requirement. Specifically,
this amendment exempts FCUs with
assets under $1 million from the
publication requirement. This increase
from the current $500,000 threshold
implemented in 1993 reflects inflation,
growth in credit union assets over the
past 20 years, and the Board’s
experience that smaller credit unions
generally have a far less complex
business model with a limited number
of creditors.
D. Section 710.6(a)
This amendment limits approved
partial distributions to the extent of
share insurance for each member’s share
account. Under this limitation, a
voluntarily liquidating FCU could only
pay member share accounts up to the
applicable share insurance limit during
an interim distribution. This limitation,
which would only apply to approved
partial distributions and would only
apply to large share accounts, would not
diminish an affected member’s ability to
receive the remainder of the account
once the liquidation is completed. If the
FCU remains solvent, each member
would receive the full account balance
in the final distribution, along with any
liquidating dividend.
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E. Section 710.6(b)
This amendment clarifies the existing
requirement to compute pro rata
distributions to members by specifying
that a voluntarily liquidating FCU
would determine the member share
balances as of the day that the members
voted to approve liquidation, or the day
on which all share drafts cleared,
whichever is later. This addition is
intended to avoid uncertainty in the
computation, as share balances may
change during the liquidation process.
F. Section 710.6(c)
Under this amendment, a voluntarily
liquidating FCU would be permitted to
distribute member share account
payments by wire or other means that a
member agrees to accept. This change,
taking advantage of advanced
technology, would increase the
efficiency of the process by reducing the
number of checks that an FCU must
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draw and deliver while decreasing the
amount of time that the members wait
to receive their funds.
III. Regulatory Procedures
A. Regulatory Flexibility Act
The Regulatory Flexibility Act
requires NCUA to prepare an analysis to
describe any significant economic
impact a regulation may have on a
substantial number of small entities.1
For purposes of this analysis, NCUA
considers small credit unions to be
those having under $50 million in
assets.2 This proposed rule has no
significant economic impact on FCUs as
going concerns because it solely
addresses procedures for voluntary
liquidation. Also, the proposed rule
increases certain dollar thresholds and
affords greater flexibility to all FCUs
engaging in voluntary liquidation.
Accordingly, NCUA certifies the rule
will not have a significant economic
impact on a substantial number of small
credit unions.
B. 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 modifies an existing burden.3 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. This proposed
rule does not impose or expand upon
any existing reporting or recordkeeping
requirements. This proposed rule will
not create new paperwork burdens or
modify any existing paperwork burdens.
C. 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 rule 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 rule does not
constitute a policy that has federalism
U.S.C. 603(a).
Ruling and Policy Statement 03–2,
68 FR 31949 (May 29, 2003), as amended by
Interpretive Ruling and Policy Statement 13–1, 78
FR 4032 (Jan. 18, 2013).
3 44 U.S.C. 3507(d).
implications for purposes of the
executive order.
D. 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, 1999.4
List of Subjects in 12 CFR Part 710
Voluntary Liquidation.
By the National Credit Union
Administration Board on February 20, 2014.
Gerard Poliquin,
Secretary of the Board.
For the reasons discussed above,
NCUA proposes to amend 12 CFR Part
710 as follows:
PART 710—VOLUNTARY LIQUIDATION
1. The authority citation for part 710
continues to read as follows:
■
Authority: 12 U.S.C. 1766(a), 1786, and
1787.
2. In § 710.5, revise paragraphs (a)(1)
and (a)(2) and in paragraph (a)(3)
remove ‘‘$500,000’’ and add in its place
‘‘$1 million’’.
The revisions read as follows:
■
§ 710.5
Notice of liquidation to creditors.
(a) * * *
(1) Federal credit unions with assets
equal to or greater than $50 million as
of the month end prior to the
liquidation date shall publish the notice
once a week in each of three successive
weeks, in a newspaper of general
circulation in each county in which the
Federal credit union maintains an office
or branch for the transaction of business
on the liquidation date, or through any
alternative publication through an
electronic medium that is reasonably
calculated to reach the general public in
the relevant area or areas. The first
notice shall be published within seven
days of the liquidation date.
(2) Federal credit unions with assets
equal to or greater than $1 million but
less than $50 million as of the month
end prior to the liquidation date shall
publish the notice described in
§ 710.5(a)(1) of this section at least once.
The notice shall be published within
seven days of the liquidation date.
*
*
*
*
*
■ 3. In § 710.6, revise paragraphs (a), (b),
and (c) to read as follows:
15
§ 710.6
2 Interpretive
(a) With the approval of the regional
director, a partial pro rata distribution of
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Distribution of assets.
4 Public
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Law 105–277, 112 Stat. 2681 (1998).
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the Federal credit union’s assets may be
made to its members from cash funds
available on authorization by the board
of directors or liquidating agent.
Payment of a partial distribution may
exclude member accounts of less than
$25.00 and must not exceed the insured
amount of any account, as determined
under part 745 of this chapter.
(b) After all assets of the Federal
credit union have been converted to
cash or found to be worthless and all
loans and debts owing to it have been
collected or found to be uncollectible
and all obligations of the Federal credit
union have been paid, with the
exception of shares due its members, the
books shall be closed and the pro rata
distribution to the members shall be
computed. The computation shall be
based on the total amount in each share
account as of the liquidation date or the
date on which all share drafts have
cleared, whichever is later.
(c) Payments must be made to
members promptly after the pro rata
distribution has been computed. The
Federal credit union may mail a check
to a member at his or her last known
address, deliver the check personally to
the member, or make the payment by
wire or any other electronic means
approved by a member.
*
*
*
*
*
[FR Doc. 2014–04231 Filed 2–28–14; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2014–0121; Directorate
Identifier 2013–NM–151–AD]
RIN 2120–AA64
Airworthiness Directives; Airbus
Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
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AGENCY:
SUMMARY: We propose to supersede
airworthiness directive (AD) 2008–14–
17, for certain Airbus Model A330–200
and A340–300 series airplanes. AD
2008–14–17 currently requires a high
frequency eddy current (HFEC)
inspection, corrective actions if
necessary, and modifications. Since we
issued AD 2008–14–17, it has been
determined from a fatigue and damage
tolerance evaluation that the
compliance time needs to be revised.
This proposed AD would require the
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same actions as those required by AD
2008–14–17, but with a reduced
compliance time. We are proposing this
AD to detect and correct damage of the
upper shell structure at the skin and
frame interface, which could result in
reduced structural integrity of the
airframe.
DATES: We must receive comments on
this proposed AD by April 17, 2014.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: (202) 493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
For service information identified in
this proposed AD, contact Airbus SAS,
Airworthiness Office—EAL, 1 Rond
Point Maurice Bellonte, 31707 Blagnac
Cedex, France; telephone +33 5 61 93 36
96; fax +33 5 61 93 45 80; email
airworthiness.A330–A340@airbus.com;
Internet https://www.airbus.com. You
may view this referenced service
information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue
SW., Renton, WA. For information on
the availability of this material at the
FAA, call 425–227–1221.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2014–
0121; 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 proposed AD, the MCAI,
the regulatory evaluation, any
comments received, and other
information. The street address for the
Docket Operations office (telephone
(800) 647–5527) is in the ADDRESSES
section. Comments will be available in
the AD docket shortly after receipt.
FOR FURTHER INFORMATION CONTACT:
Vladimir Ulyanov, Aerospace Engineer,
International Branch, ANM–116,
Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA
98057–3356; telephone (425) 227–1138;
fax (425) 227–1149.
SUPPLEMENTARY INFORMATION:
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11717
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposed AD. Send your comments
to an address listed under the
ADDRESSES section. Include ‘‘Docket No.
FAA–2014–0121; Directorate Identifier
2013–NM–151–AD’’ at the beginning of
your comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this proposed AD. We will
consider all comments received by the
closing date and may amend this
proposed AD based on those comments.
We will post all comments we
receive, without change, to https://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this proposed AD.
Discussion
On June 27, 2008, we issued AD
2008–14–17, Amendment 39–15612 (73
FR 40958, July 17, 2008). AD 2008–14–
17 requires actions intended to address
an unsafe condition on certain Airbus
Model A330–200 and A340–300 series
airplanes.
Since we issued AD 2008–14–17,
Amendment 39–15612 (73 FR 40958,
July 17, 2008), it has been determined
from a fatigue and damage tolerance
evaluation that the compliance time of
the HFEC inspection for cracking, and
modification of the upper shell structure
of the fuselage needs to be revised.
The European Aviation Safety Agency
(EASA), which is the Technical Agent
for the Member States of the European
Community, has issued EASA
Airworthiness Directive 2013–0158,
dated July 22, 2013 (referred to after this
as the Mandatory Continuing
Airworthiness Information, or ‘‘the
MCAI’’), to correct an unsafe condition
for the specified products. The MCAI
states:
During fatigue tests (EF3) on an A340–600
aeroplane, multiple damage was found in the
upper side shell structure at skin and frame
(FR) 84 and 85 interface, from stringer 6 to
15 Left-Hand (LH) and Right Hand (RH). This
damage occurred between 58 341 and 72 891
simulated flight cycles (FC).
Due to the higher Design Service Goal and
different design (e.g. skin thickness) for
A330–200 and A340–300 aeroplanes, the
damage assessment concluded that these
aeroplanes can potentially be impacted.
This condition, if not detected and
corrected, could result in reduced structural
integrity of the airframe.
Prompted by these findings, EASA issued
[an] AD * * * to require a one-time
inspection and a modification to improve the
upper shell structure.
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Agencies
[Federal Register Volume 79, Number 41 (Monday, March 3, 2014)]
[Proposed Rules]
[Pages 11714-11717]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-04231]
=======================================================================
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 710
RIN 3133-AE30
Voluntary Liquidation
AGENCY: National Credit Union Administration (NCUA).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The NCUA Board (Board) proposes to amend its voluntary
liquidation regulation to reduce administrative burdens on voluntarily
liquidating federal credit unions (FCUs) and recognize technological
advances by: Permitting liquidating FCUs to publish required creditor
notices in either electronic media or newspapers of general
circulation; increasing the asset-size threshold for requiring multiple
creditor notices; requiring that preliminary partial distributions to
members not exceed the insured limit for any member share account;
specifying when liquidating FCUs must determine member share balances
for the purposes of distributions; and permitting liquidating FCUs to
distribute member share payouts either by wire or other electronic
means or by mail or personal delivery.
[[Page 11715]]
DATES: Comments must be received on or before May 2, 2014.
ADDRESSES: You may submit comments by any of the following methods
(Please send comments by one method only):
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
NCUA Web site: https://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx. Follow the instructions for submitting comments.
Email: Address to regcomments@ncua.gov. Include ``[Your
name]--Comments on Proposed Rule 710'' in the email subject line.
Fax: (703) 518-6319. Use the subject line described above
for email.
Mail: Address to Gerard Poliquin, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria,
Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
Public Inspection: You may view all public comments on NCUA's Web
site at https://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as
submitted, except for those we cannot post for technical reasons. NCUA
will not edit or remove any identifying or contact information from the
public comments submitted. You may inspect paper copies of comments in
NCUA's law library at 1775 Duke Street, Alexandria, Virginia 22314, by
appointment weekdays between 9 a.m. and 3 p.m. To make an appointment,
call (703) 518-6546 or send an email to OGCMail@ncua.gov.
FOR FURTHER INFORMATION CONTACT: Ian Marenna, Trial Attorney, Office of
General Counsel, National Credit Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6540.
SUPPLEMENTARY INFORMATION:
I. Background
II. The Proposed Rule
III. Regulatory Procedures
I. Background
A. What changes does this proposed rule make?
NCUA has not made substantive changes to the rule governing
voluntary liquidations by FCUs since 1993. This proposed amendment to
Part 710 would modernize the rule by increasing dollar thresholds for
certain procedural requirements. It also would afford greater
flexibility to voluntarily liquidating FCUs to use electronic means to
publish creditor notices and issue member share payments. In addition,
the proposed amendment would limit any preliminary distributions to
members to the insured amount of each share account. The proposed
amendment would also clarify an existing required calculation.
Specifically, the proposed rule would: (1) Amend Section 710.5 to
permit voluntarily liquidating FCUs to publish required creditor
notices in electronic media reasonably calculated to reach the general
public in the area or areas where the FCUs do business; (2) amend
Section 710.5 to increase the asset size threshold for requiring
multiple creditor notices, exempting FCUs with less than $1 million in
assets from the publication requirement and exempting FCUs with less
than $50 million in assets from the multiple publication requirement;
(3) amend Section 710.6 to specify that partial distributions to
members, which are subject to the Regional Director's approval, must
not exceed the insured limit of each member's share account; (4)
further amend Section 710.6 to specify that, in calculating pro rata
distributions to members, voluntarily liquidating FCUs must determine
member share balances as of the date the members voted to approve the
liquidation or the date on which all share drafts cleared, whichever is
later; and (5) permit voluntarily liquidating FCUs to distribute member
share payouts either by wire or other electronic means approved by a
member or by mail or personal delivery.
B. Why is the Board proposing this rule?
The Board is proposing this amendment to update the rule and
provide relief from unnecessary regulatory burden. The proposed
increase in asset-size thresholds recognizes both inflation and the
current definition of small credit unions. The proposed rule also
reflects the increased use of electronic and Internet communications,
as well as electronic payment methods, by permitting voluntarily
liquidating FCUs to use these methods to notify potential creditors and
pay out member share accounts.
This proposed rule furthers the goals of ensuring an orderly
liquidation process and the prompt payment of member shares by making
voluntary liquidation less cumbersome and avoiding losses to the
National Credit Union Share Insurance Fund that might ultimately be
incurred if the subject FCU is involuntarily liquidated. The proposed
rule also aims to reduce risk to the Fund by specifying that
preliminary partial distributions to members must not exceed the
insured limit of each member's share account. This limitation is
proposed to guard against the problems that could arise if NCUA must
convert a voluntary liquidation to an involuntary liquidation based on
insolvency. If a voluntarily liquidating FCU discovers during the
process that it is insolvent, then NCUA may place the credit union into
involuntary liquidation. This finding could stem from conditions such
as unanticipated creditor claims or difficulty in converting remaining
assets to enough cash to pay all shares and liabilities. In this
scenario, the procedures and priorities under Part 709 would apply, and
general creditors would have preference over uninsured shareholders to
the extent that they are uninsured. By limiting these interim
distributions to each member's insured balance, the proposed rule would
keep Part 709's priorities intact in case the credit union must enter
involuntary liquidation. If the credit union remains solvent throughout
the liquidation, then every member would receive the full balance at
the end of the process, along with any available liquidating dividend.
Generally, the proposed rule is designed to reduce the burden on
small credit unions by raising certain thresholds for procedural
requirements. It also reduces the burden on FCUs generally by affording
more flexibility in implementing voluntary liquidations and clarifying
an existing requirement.
II. The Proposed Rule
A. Section 710.5(a)(1)
Under the proposed rule, FCUs would be allowed to publish the
required creditor notice(s) in electronic media. With this update,
voluntarily liquidating FCUs will have greater flexibility in notifying
potential creditors, thereby increasing the efficiency of the process
and decreasing the costs associated with publishing notices in
newspapers.
Also, the proposed rule increases the asset-size threshold for
requiring multiple creditor notices from FCUs with assets equal to or
greater than $5 million to FCUs with assets equal to or greater than
$50 million. The $50 million threshold is proposed to align with NCUA's
definition of small credit unions. Thus, the amendment seeks to reduce
the burden on small credit unions with respect to the publication
requirements.
B. Section 710.5(a)(2)
The amendment to this provision would increase the asset-size
threshold applicable to publication requirements. Under this amendment,
FCUs with assets equal to or greater than $1 million but less than $50
million would be
[[Page 11716]]
required to publish just one notice, though FCUs could choose to
publish more notices. This amendment retains the tiered structure of
the publication requirement while increasing the dollar amounts to
reflect inflation, growth in credit union assets, and NCUA's definition
of small credit unions.
C. Section 710.5(a)(3)
This amendment also reflects an increase in thresholds applicable
to the publication requirement. Specifically, this amendment exempts
FCUs with assets under $1 million from the publication requirement.
This increase from the current $500,000 threshold implemented in 1993
reflects inflation, growth in credit union assets over the past 20
years, and the Board's experience that smaller credit unions generally
have a far less complex business model with a limited number of
creditors.
D. Section 710.6(a)
This amendment limits approved partial distributions to the extent
of share insurance for each member's share account. Under this
limitation, a voluntarily liquidating FCU could only pay member share
accounts up to the applicable share insurance limit during an interim
distribution. This limitation, which would only apply to approved
partial distributions and would only apply to large share accounts,
would not diminish an affected member's ability to receive the
remainder of the account once the liquidation is completed. If the FCU
remains solvent, each member would receive the full account balance in
the final distribution, along with any liquidating dividend.
E. Section 710.6(b)
This amendment clarifies the existing requirement to compute pro
rata distributions to members by specifying that a voluntarily
liquidating FCU would determine the member share balances as of the day
that the members voted to approve liquidation, or the day on which all
share drafts cleared, whichever is later. This addition is intended to
avoid uncertainty in the computation, as share balances may change
during the liquidation process.
F. Section 710.6(c)
Under this amendment, a voluntarily liquidating FCU would be
permitted to distribute member share account payments by wire or other
means that a member agrees to accept. This change, taking advantage of
advanced technology, would increase the efficiency of the process by
reducing the number of checks that an FCU must draw and deliver while
decreasing the amount of time that the members wait to receive their
funds.
III. Regulatory Procedures
A. Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact a regulation may have on a
substantial number of small entities.\1\ For purposes of this analysis,
NCUA considers small credit unions to be those having under $50 million
in assets.\2\ This proposed rule has no significant economic impact on
FCUs as going concerns because it solely addresses procedures for
voluntary liquidation. Also, the proposed rule increases certain dollar
thresholds and affords greater flexibility to all FCUs engaging in
voluntary liquidation. Accordingly, NCUA certifies the rule will not
have a significant economic impact on a substantial number of small
credit unions.
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\1\ 5 U.S.C. 603(a).
\2\ Interpretive Ruling and Policy Statement 03-2, 68 FR 31949
(May 29, 2003), as amended by Interpretive Ruling and Policy
Statement 13-1, 78 FR 4032 (Jan. 18, 2013).
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B. 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 modifies an existing burden.\3\ 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.
This proposed rule does not impose or expand upon any existing
reporting or recordkeeping requirements. This proposed rule will not
create new paperwork burdens or modify any existing paperwork burdens.
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\3\ 44 U.S.C. 3507(d).
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C. 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 rule 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
rule does not constitute a policy that has federalism implications for
purposes of the executive order.
D. 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.\4\
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\4\ Public Law 105-277, 112 Stat. 2681 (1998).
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List of Subjects in 12 CFR Part 710
Voluntary Liquidation.
By the National Credit Union Administration Board on February
20, 2014.
Gerard Poliquin,
Secretary of the Board.
For the reasons discussed above, NCUA proposes to amend 12 CFR Part
710 as follows:
PART 710--VOLUNTARY LIQUIDATION
0
1. The authority citation for part 710 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1786, and 1787.
0
2. In Sec. 710.5, revise paragraphs (a)(1) and (a)(2) and in paragraph
(a)(3) remove ``$500,000'' and add in its place ``$1 million''.
The revisions read as follows:
Sec. 710.5 Notice of liquidation to creditors.
(a) * * *
(1) Federal credit unions with assets equal to or greater than $50
million as of the month end prior to the liquidation date shall publish
the notice once a week in each of three successive weeks, in a
newspaper of general circulation in each county in which the Federal
credit union maintains an office or branch for the transaction of
business on the liquidation date, or through any alternative
publication through an electronic medium that is reasonably calculated
to reach the general public in the relevant area or areas. The first
notice shall be published within seven days of the liquidation date.
(2) Federal credit unions with assets equal to or greater than $1
million but less than $50 million as of the month end prior to the
liquidation date shall publish the notice described in Sec.
710.5(a)(1) of this section at least once. The notice shall be
published within seven days of the liquidation date.
* * * * *
0
3. In Sec. 710.6, revise paragraphs (a), (b), and (c) to read as
follows:
Sec. 710.6 Distribution of assets.
(a) With the approval of the regional director, a partial pro rata
distribution of
[[Page 11717]]
the Federal credit union's assets may be made to its members from cash
funds available on authorization by the board of directors or
liquidating agent. Payment of a partial distribution may exclude member
accounts of less than $25.00 and must not exceed the insured amount of
any account, as determined under part 745 of this chapter.
(b) After all assets of the Federal credit union have been
converted to cash or found to be worthless and all loans and debts
owing to it have been collected or found to be uncollectible and all
obligations of the Federal credit union have been paid, with the
exception of shares due its members, the books shall be closed and the
pro rata distribution to the members shall be computed. The computation
shall be based on the total amount in each share account as of the
liquidation date or the date on which all share drafts have cleared,
whichever is later.
(c) Payments must be made to members promptly after the pro rata
distribution has been computed. The Federal credit union may mail a
check to a member at his or her last known address, deliver the check
personally to the member, or make the payment by wire or any other
electronic means approved by a member.
* * * * *
[FR Doc. 2014-04231 Filed 2-28-14; 8:45 am]
BILLING CODE 7535-01-P