Voluntary Liquidation, 11714-11717 [2014-04231]

Download as PDF 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: http:// 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 mstockstill on DSK4VPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 16:22 Feb 28, 2014 Jkt 232001 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 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 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. E:\FR\FM\03MRP1.SGM 03MRP1 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: http:// www.regulations.gov. Follow the instructions for submitting comments. • NCUA Web site: http:// 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 http://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 mstockstill on DSK4VPTVN1PROD with PROPOSALS 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 VerDate Mar<15>2010 16:22 Feb 28, 2014 Jkt 232001 11715 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) PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 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 E:\FR\FM\03MRP1.SGM 03MRP1 11716 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. mstockstill on DSK4VPTVN1PROD with PROPOSALS 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 VerDate Mar<15>2010 16:22 Feb 28, 2014 Jkt 232001 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 PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 Distribution of assets. 4 Public E:\FR\FM\03MRP1.SGM Law 105–277, 112 Stat. 2681 (1998). 03MRP1 Federal Register / Vol. 79, No. 41 / Monday, March 3, 2014 / Proposed Rules 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). mstockstill on DSK4VPTVN1PROD with PROPOSALS 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 VerDate Mar<15>2010 16:22 Feb 28, 2014 Jkt 232001 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 http://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 http://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 http:// 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: PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 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 http:// 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. E:\FR\FM\03MRP1.SGM 03MRP1

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]


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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: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web site: http://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 http://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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \3\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \4\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------

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