Delay of Effective Date of the Risk-Based Capital Rules, 30048-30050 [2019-13589]

Download as PDF jbell on DSK3GLQ082PROD with PROPOSALS 30048 Federal Register / Vol. 84, No. 123 / Wednesday, June 26, 2019 / Proposed Rules Washington, DC 20585–0121. Telephone: (202) 287–6111. Email: Jennifer.Tiedeman@hq.doe.gov. SUPPLEMENTARY INFORMATION: On May 1, 2019, DOE published a NOPR in the Federal Register that proposed amendments to its regulations to streamline its test procedure interim waiver decision-making process. (84 FR 18414) The proposed amendments would require the Department to notify, in writing, an applicant for an interim waiver of the disposition of the request within 30 business days (i.e., approximately 45 days) of receipt of the application. Should DOE fail to satisfy this requirement, the request for interim waiver would be deemed granted based on the criteria in DOE regulations. Specifically, DOE regulations require that DOE grant an interim waiver if it determines that it is desirable for public policy reasons to grant immediate relief pending a determination of the petition for waiver. An interim waiver would remain in effect until a waiver decision is published or until DOE publishes a new or amended test procedure that addresses the issues presented in the application, whichever is earlier. If the alternate test procedure ultimately required by DOE differs from what is specified in the interim waiver, manufacturers would have a 180-day grace period to begin using the alternate test procedure specified in the decision and order on the petition. This proposal is intended to address delays in DOE’s current process for considering requests for interim waivers and waivers from the DOE test method. These delays impose costs on manufacturers, as they cannot certify and distribute their products while they wait for DOE to respond to their petitions. The NOPR provides for the submission of comments by July 1, 2019. DOE has received several requests to hold a public meeting and to extend the comment period on the proposal. While these requests have been made by both large corporations and interest groups the purpose of which are, for the most part, to participate in DOE rulemakings, DOE has been made aware by the U.S. Small Business Administration (SBA) of the interest of small businesses and their representatives in this rulemaking. As a result, SBA is holding its own ‘‘dial-in’’ roundtable on this proposal focused on the particular interests of small businesses. Because small businesses typically do not have the resources available to those entities that have requested a public meeting on this rule to travel to Washington, DC to attend such a meeting, DOE has determined in VerDate Sep<11>2014 16:20 Jun 25, 2019 Jkt 247001 consultation with SBA that it is appropriate to offer an online webinar available to the public. Further, holding a webinar will allow all interested stakeholders to conserve resources while allowing full public participation. Given the importance to DOE of receiving public input, DOE is also extending the comment period by 14 days until July 15, 2019, so that the webinar can be held before comments are due. The webinar will be held on Thursday, July 11, from 9:00 a.m. to 11:00 a.m. DOE will consider comments received by midnight on July 15, 2019. Signed in Washington, DC, on June 20, 2019. Alexander N. Fitzsimmons, Acting Deputy Assistant Secretary for Energy Efficiency Energy Efficiency and Renewable Energy, U.S. Department of Energy. [FR Doc. 2019–13593 Filed 6–25–19; 8:45 am] BILLING CODE 6450–01–P NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 702 RIN 3133–AF01 Delay of Effective Date of the RiskBased Capital Rules National Credit Union Administration (NCUA). ACTION: Proposed rule, delay effective date of risk-based capital, part 702. AGENCY: The NCUA Board (Board) is seeking comment on a proposed rule that would delay the effective date of the NCUA’s October 29, 2015 final rule regarding risk-based capital (2015 Final Rule), and the NCUA’s November 6, 2018 supplemental final rule regarding risk-based capital (2018 Supplemental Rule), moving the effective date of both rules to January 1, 2022. This proposed delay would allow the NCUA Board additional time to holistically and comprehensively evaluate capital standards for federally insured credit unions. The proposed delay would also provide covered credit unions and the NCUA with additional time to prepare for the rule’s implementation. During the extended delay period, the NCUA’s current Prompt Corrective Action (PCA) requirements would remain in effect. DATES: Comments must be received by July 26, 2019. ADDRESSES: You may submit written comments, identified by RIN 3133– AF01, by any of the following methods (Please send comments by one method only): SUMMARY: PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. • NCUA Website: 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: RiskBased Capital—Delay of Effective Date’’ 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. You can view all public comments on the NCUA’s website at https:// www.ncua.gov/regulation-supervision/ rules-regulations/proposed-pendingand-recently-final-regulations as submitted, except for those we cannot post for technical reasons. The NCUA will not edit or remove any identifying or contact information from the public comments submitted. You may inspect paper copies of comments in the NCUA’s law library at 1775 Duke Street, Alexandria, Virginia 22314, by appointment weekdays between 9:00 a.m. and 3:00 p.m. To make an appointment, call (703) 518–6546, or send an email to OGCMail@ncua.gov. FOR FURTHER INFORMATION CONTACT: Policy and Analysis: Julie Cayse, Director, Division of Risk Management, Office of Examination and Insurance, at (703) 548–2142; Kathryn Metzker, Risk Officer, Division of Risk Management, Office of Examination and Insurance, at (571) 438–0073; Julie Decker, Risk Officer, Division of Risk Management, Office of Examination and Insurance, at (703) 518–3684; Legal: John Brolin, Senior Staff Attorney, Office of General Counsel, at (703) 518–6540; or by mail at National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314. SUPPLEMENTARY INFORMATION: At its October 2015 meeting, the Board issued the 2015 Final Rule to amend Part 702 of the NCUA’s PCA regulations to require that credit unions taking certain risks hold capital commensurate with those risks.1 The 2015 Final Rule restructures the NCUA’s PCA regulations and makes various revisions, including amending the agency’s current risk-based net worth requirement by replacing the risk-based 1 80 E:\FR\FM\26JNP1.SGM FR 66625 (Oct. 29, 2015). 26JNP1 Federal Register / Vol. 84, No. 123 / Wednesday, June 26, 2019 / Proposed Rules jbell on DSK3GLQ082PROD with PROPOSALS net worth ratio with a new risk-based capital ratio for federally insured, natural-person credit unions (credit unions). The 2015 Final Rule also eliminates several provisions in the NCUA’s current PCA regulations, including provisions related to the regular reserve account, risk-mitigation credits, and alternative risk weights. To provide credit unions and the NCUA sufficient time to make necessary adjustments, and to reduce the burden on affected credit unions, the NCUA initially delayed the effective date of the 2015 Final Rule until January 1, 2019. At its October 2018 meeting, the Board issued the 2018 Supplemental Rule to further delay the effective date of the 2015 Final Rule for an additional year, moving the effective date from January 1, 2019 to January 1, 2020. The 2018 Supplemental Rule also amended the definition of ‘‘complex’’ credit union adopted in the 2015 Final Rule for risk-based capital purposes by increasing the threshold level for coverage from $100 million to $500 million. These changes provided covered credit unions and the NCUA with additional time to prepare for the rule’s implementation, and exempted an additional 1,026 credit unions from the risk-based capital requirements of the 2015 Final Rule without subjecting the National Credit Union Share Insurance Fund (NCUSIF) to undue risk.2 The Board is now proposing to further delay the effective dates of both the 2015 Final Rule and the 2018 Supplemental Final Rule, moving the effective dates of both rules to January 1, 2022. This proposed delay would allow the Board additional time to holistically and comprehensively evaluate the NCUA’s capital standards for federally insured credit unions. For example, in this additional time, the Board would examine whether asset securitization, and subordinated debt should be addressed, and whether a community bank leverage ratio analog should be integrated into the NCUA’s capital standards. These issues, and additional matters that prompt the need for a further delay, are discussed further below. Asset Securitization Federal credit unions have the authority to issue and sell securities as a power incidental to their operation,3 and, in the case of Government National 2 83 FR 55467 (Nov. 6, 2018). § 1757(17) (An FCU ‘‘shall have the power . . . to exercise such incidental powers as shall be necessary or requisite to enable it to carry on effectively the business for which it is incorporated.’’); 12 CFR 721.2 & 721.4; and NCUA Legal Opinion Letter 17–0670 (June 21, 2017). 3 See VerDate Sep<11>2014 16:20 Jun 25, 2019 Jkt 247001 Mortgage Association (Ginnie Mae) securities, as a power expressly authorized under the Federal Credit Union Act (FCUA).4 The extent to which federally insured, state-chartered credit unions may issue and sell securities depends on state law and regulation. Accordingly, the NCUA’s capital standards should properly account for any asset securitization conducted by federally insured credit unions. Subordinated Debt As indicated in the 2015 Final Rule, the NCUA planned to examine additional forms of qualifying capital in a separate proposed rule. In February 2017, the NCUA issued an advanced notice of proposed rulemaking for alternative capital,5 and the NCUA’s Regulatory Review Task Force agenda, published in August 2017, addresses the NCUA’s intent with regard to the 2015 Final Rule.6 This proposed delay would provide the Board additional time to examine proposing and finalizing a rule to allow certain forms of subordinated debt to qualify as capital for risk-based capital purposes. The delay would also permit credit unions subject to the riskbased capital requirement time to consider the use of any authorized forms of subordinated debt before the risk-based capital rules go into effect. Community Bank Leverage Ratio Analog The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 7 required the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the other banking agencies), to propose a simplified, alternative measure of capital adequacy for federally insured banks.8 In February 2019, the other banking agencies issued a proposed rule that would provide qualifying community banks the option to comply with a simplified measure of capital adequacy.9 Under the proposal, qualifying community banking organizations that comply with and elect to use the community bank leverage ratio (CBLR) framework and that maintain a CBLR greater than 9 percent would be considered to have 4 § 1757(7)(E) (Providing in relevant part: ‘‘a federal credit union may issue and sell securities which are guaranteed pursuant to section 1721(g) of [title 12 of the United States Code].’’). 5 82 FR 9691 (Feb. 8, 2017). 6 82 FR 161 (Aug. 22, 2017). 7 Public Law 115–174 (May 24, 2018). 8 Id. at § 201. 9 84 FR 3062 (Feb. 8, 2019). PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 30049 met the capital requirements for the ‘‘well-capitalized’’ capital category under the other banking agencies’ PCA frameworks and would no longer be subject to the generally applicable capital rule. The NCUA Board believes the delay in the effective date of riskbased capital is appropriate to examine the other banking agencies’ recent CBLR proposal and consider whether adopting an equivalent provision for credit unions is appropriate and consistent with the FCUA. Additional Time To Prepare for Implementation The proposed delay would also provide covered credit unions and the NCUA with additional time to prepare for the rule’s implementation. The NCUA has several initiatives in process to improve and modernize how the agency conducts examinations and supervision. The goals of these initiatives are to replace outdated, endof-life examination systems, streamline processes, adopt enhanced examination techniques, and leverage new technology and data to maintain high quality supervision of federally-insured credit unions with less onsite presence. These initiatives include the Enterprise Solution Modernization, Call Report Modernization, and Virtual Examination programs. The proposed delay would enable the NCUA to direct additional time and resources toward modernizing examination systems, versus dedicating resources to end-of-life systems being retired. This additional time would further benefit credit unions as they work to implement the Financial Accounting Standards Board’s final current expected credit loss (CECL) standard. The current Board believes the proposed delay would allow credit unions additional time to allocate resources to the implementation of CECL. Under this proposal, the NCUA’s current PCA regulation would remain in effect until the 2015 Final Rule and the 2018 Supplemental Rule’s effective date. The NCUA would continue to enforce the capital standards currently in place and address any supervisory concerns through existing regulatory and supervisory mechanisms. The Board believes, given the facts above, that extending the implementation period of the 2015 Final Rule and 2018 Supplemental Rule until January 1, 2022, would be reasonable and would not pose undue risk to the NCUSIF. E:\FR\FM\26JNP1.SGM 26JNP1 30050 Federal Register / Vol. 84, No. 123 / Wednesday, June 26, 2019 / Proposed Rules VII. Regulatory Procedures jbell on DSK3GLQ082PROD with PROPOSALS Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) generally requires that, in connection with a notice of proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of a proposed rule on small entities. A regulatory flexibility analysis is not required, however, if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities (defined for purposes of the RFA to include credit unions with assets less than $100 million) 10 and publishes its certification and a short, explanatory statement in the Federal Register together with the rule. The proposed delay of the 2015 Final Rule and 2018 Supplemental Rule would affect only complex credit unions, which are those with greater than $500 million in assets under the 2018 Supplemental Rule. As a result, credit unions with $100 million or less in total assets would not be affected by this proposal. Accordingly, the NCUA certifies that this proposal 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 creates new or amends existing information collection requirements.11 For purposes of the PRA, an information collection requirement may take the form of a reporting, recordkeeping, or a thirdparty disclosure requirement. The information collection requirements prescribed by § 702.101(b) were set-out in the August 8, 2018 (83 FR 38997), proposed rule and assigned OMB control number 3133–0191. This proposed rule does not contain any new information collection requirements that require approval by OMB under the PRA. The proposed rule would only extend the effective date. The Board invites comment on (a) whether the collections of information are necessary for the proper performance of the agency’s function, including practical utility; (b) the accuracy of estimates of the burden of the information collections, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information being collected; and (d) 10 See 11 44 80 FR 57512 (Sept. 24, 2015). U.S.C. 3507(d). VerDate Sep<11>2014 16:20 Jun 25, 2019 Jkt 247001 ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology. All comments are a matter of public record. Comments regarding the information collection requirements of this rule should be sent to (1) Dawn Wolfgang, NCUA PRA Clearance Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314, or Fax No. 703–519–8572, or Email at PRAcomments@ncua.gov and the (2) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for NCUA, New Executive Office Building, Room 10235, Washington, DC 20503, or email at OIRA_Submission@ OMB.EOP.gov. Submission of comments. The NCUA considers comments by the public on this proposed collection of information in: • Evaluating whether the proposed collection of information is necessary for the proper performance of the functions of the NCUA, including whether the information will have a practical use; • Evaluating the accuracy of the NCUA’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Enhancing the quality, usefulness, and clarity of the information to be collected; and • Minimizing the burden of collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the principles of the executive order to adhere to fundamental federalism principles. This proposed rule reduces the number of federally insured natural-person credit unions, including federally insured, state-chartered natural-person credit unions that would be subject to the 2015 Final Rule. It may have, to some degree, a direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 responsibilities among the various levels of government. It does not, however, rise to the level of material impact for purposed of Executive Order 13132. Assessment of Federal Regulations and Policies on Families The NCUA has determined that this proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105–277, 112 Stat. 2681 (1998). By the National Credit Union Administration Board on June 20, 2019. Gerard Poliquin, Secretary of the Board. [FR Doc. 2019–13589 Filed 6–25–19; 8:45 am] BILLING CODE 7535–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 27 [Docket No. FAA–2019–0106; Notice No. 27– 046–SC] Special Conditions: Robinson Helicopter Company, Model Robinson R66, Visual Flight Rules Autopilot and Stability Augmentation System (AP/ SAS System) Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed special conditions. AGENCY: This action proposes special conditions for the Robinson Helicopter Company (Robinson) Model R66 helicopter. This helicopter will have a novel or unusual design feature associated with installation of the autopilot and stability augmentation system (AP/SAS system). The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. DATES: Send your comments on or before August 12, 2019. ADDRESSES: Send comments identified by docket number [FAA–2019–XXXX] using any of the following methods: b Federal eRegulations Portal: Go to https://www.regulations.gov and follow the online instructions for sending your comments electronically. SUMMARY: E:\FR\FM\26JNP1.SGM 26JNP1

Agencies

National Credit Union Administration

[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Proposed Rules]
[Pages 30048-30050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13589]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 702

RIN 3133-AF01


Delay of Effective Date of the Risk-Based Capital Rules

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule, delay effective date of risk-based capital, part 
702.

-----------------------------------------------------------------------

SUMMARY: The NCUA Board (Board) is seeking comment on a proposed rule 
that would delay the effective date of the NCUA's October 29, 2015 
final rule regarding risk-based capital (2015 Final Rule), and the 
NCUA's November 6, 2018 supplemental final rule regarding risk-based 
capital (2018 Supplemental Rule), moving the effective date of both 
rules to January 1, 2022. This proposed delay would allow the NCUA 
Board additional time to holistically and comprehensively evaluate 
capital standards for federally insured credit unions. The proposed 
delay would also provide covered credit unions and the NCUA with 
additional time to prepare for the rule's implementation. During the 
extended delay period, the NCUA's current Prompt Corrective Action 
(PCA) requirements would remain in effect.

DATES: Comments must be received by July 26, 2019.

ADDRESSES: You may submit written comments, identified by RIN 3133-
AF01, 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 Website: https://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx. Follow the instructions for submitting comments.
     Email: Address to [email protected]. Include ``[Your 
name]--Comments on Proposed Rule: Risk-Based Capital--Delay of 
Effective Date'' 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.
    You can view all public comments on the NCUA's website at https://www.ncua.gov/regulation-supervision/rules-regulations/proposed-pending-and-recently-final-regulations as submitted, except for those we cannot 
post for technical reasons. The NCUA will not edit or remove any 
identifying or contact information from the public comments submitted. 
You may inspect paper copies of comments in the NCUA's law library at 
1775 Duke Street, Alexandria, Virginia 22314, by appointment weekdays 
between 9:00 a.m. and 3:00 p.m. To make an appointment, call (703) 518-
6546, or send an email to [email protected].

FOR FURTHER INFORMATION CONTACT: Policy and Analysis: Julie Cayse, 
Director, Division of Risk Management, Office of Examination and 
Insurance, at (703) 548-2142; Kathryn Metzker, Risk Officer, Division 
of Risk Management, Office of Examination and Insurance, at (571) 438-
0073; Julie Decker, Risk Officer, Division of Risk Management, Office 
of Examination and Insurance, at (703) 518-3684; Legal: John Brolin, 
Senior Staff Attorney, Office of General Counsel, at (703) 518-6540; or 
by mail at National Credit Union Administration, 1775 Duke Street, 
Alexandria, VA 22314.

SUPPLEMENTARY INFORMATION: At its October 2015 meeting, the Board 
issued the 2015 Final Rule to amend Part 702 of the NCUA's PCA 
regulations to require that credit unions taking certain risks hold 
capital commensurate with those risks.\1\ The 2015 Final Rule 
restructures the NCUA's PCA regulations and makes various revisions, 
including amending the agency's current risk-based net worth 
requirement by replacing the risk-based

[[Page 30049]]

net worth ratio with a new risk-based capital ratio for federally 
insured, natural-person credit unions (credit unions). The 2015 Final 
Rule also eliminates several provisions in the NCUA's current PCA 
regulations, including provisions related to the regular reserve 
account, risk-mitigation credits, and alternative risk weights. To 
provide credit unions and the NCUA sufficient time to make necessary 
adjustments, and to reduce the burden on affected credit unions, the 
NCUA initially delayed the effective date of the 2015 Final Rule until 
January 1, 2019.
---------------------------------------------------------------------------

    \1\ 80 FR 66625 (Oct. 29, 2015).
---------------------------------------------------------------------------

    At its October 2018 meeting, the Board issued the 2018 Supplemental 
Rule to further delay the effective date of the 2015 Final Rule for an 
additional year, moving the effective date from January 1, 2019 to 
January 1, 2020. The 2018 Supplemental Rule also amended the definition 
of ``complex'' credit union adopted in the 2015 Final Rule for risk-
based capital purposes by increasing the threshold level for coverage 
from $100 million to $500 million. These changes provided covered 
credit unions and the NCUA with additional time to prepare for the 
rule's implementation, and exempted an additional 1,026 credit unions 
from the risk-based capital requirements of the 2015 Final Rule without 
subjecting the National Credit Union Share Insurance Fund (NCUSIF) to 
undue risk.\2\
---------------------------------------------------------------------------

    \2\ 83 FR 55467 (Nov. 6, 2018).
---------------------------------------------------------------------------

    The Board is now proposing to further delay the effective dates of 
both the 2015 Final Rule and the 2018 Supplemental Final Rule, moving 
the effective dates of both rules to January 1, 2022. This proposed 
delay would allow the Board additional time to holistically and 
comprehensively evaluate the NCUA's capital standards for federally 
insured credit unions. For example, in this additional time, the Board 
would examine whether asset securitization, and subordinated debt 
should be addressed, and whether a community bank leverage ratio analog 
should be integrated into the NCUA's capital standards. These issues, 
and additional matters that prompt the need for a further delay, are 
discussed further below.

Asset Securitization

    Federal credit unions have the authority to issue and sell 
securities as a power incidental to their operation,\3\ and, in the 
case of Government National Mortgage Association (Ginnie Mae) 
securities, as a power expressly authorized under the Federal Credit 
Union Act (FCUA).\4\ The extent to which federally insured, state-
chartered credit unions may issue and sell securities depends on state 
law and regulation. Accordingly, the NCUA's capital standards should 
properly account for any asset securitization conducted by federally 
insured credit unions.
---------------------------------------------------------------------------

    \3\ See Sec.  1757(17) (An FCU ``shall have the power . . . to 
exercise such incidental powers as shall be necessary or requisite 
to enable it to carry on effectively the business for which it is 
incorporated.''); 12 CFR 721.2 & 721.4; and NCUA Legal Opinion 
Letter 17-0670 (June 21, 2017).
    \4\ Sec.  1757(7)(E) (Providing in relevant part: ``a federal 
credit union may issue and sell securities which are guaranteed 
pursuant to section 1721(g) of [title 12 of the United States 
Code].'').
---------------------------------------------------------------------------

Subordinated Debt

    As indicated in the 2015 Final Rule, the NCUA planned to examine 
additional forms of qualifying capital in a separate proposed rule. In 
February 2017, the NCUA issued an advanced notice of proposed 
rulemaking for alternative capital,\5\ and the NCUA's Regulatory Review 
Task Force agenda, published in August 2017, addresses the NCUA's 
intent with regard to the 2015 Final Rule.\6\ This proposed delay would 
provide the Board additional time to examine proposing and finalizing a 
rule to allow certain forms of subordinated debt to qualify as capital 
for risk-based capital purposes. The delay would also permit credit 
unions subject to the risk-based capital requirement time to consider 
the use of any authorized forms of subordinated debt before the risk-
based capital rules go into effect.
---------------------------------------------------------------------------

    \5\ 82 FR 9691 (Feb. 8, 2017).
    \6\ 82 FR 161 (Aug. 22, 2017).
---------------------------------------------------------------------------

Community Bank Leverage Ratio Analog

    The Economic Growth, Regulatory Relief, and Consumer Protection Act 
of 2018 \7\ required the Office of the Comptroller of the Currency 
(OCC), the Board of Governors of the Federal Reserve System, and the 
Federal Deposit Insurance Corporation (collectively, the other banking 
agencies), to propose a simplified, alternative measure of capital 
adequacy for federally insured banks.\8\ In February 2019, the other 
banking agencies issued a proposed rule that would provide qualifying 
community banks the option to comply with a simplified measure of 
capital adequacy.\9\ Under the proposal, qualifying community banking 
organizations that comply with and elect to use the community bank 
leverage ratio (CBLR) framework and that maintain a CBLR greater than 9 
percent would be considered to have met the capital requirements for 
the ``well-capitalized'' capital category under the other banking 
agencies' PCA frameworks and would no longer be subject to the 
generally applicable capital rule. The NCUA Board believes the delay in 
the effective date of risk-based capital is appropriate to examine the 
other banking agencies' recent CBLR proposal and consider whether 
adopting an equivalent provision for credit unions is appropriate and 
consistent with the FCUA.
---------------------------------------------------------------------------

    \7\ Public Law 115-174 (May 24, 2018).
    \8\ Id. at Sec.  201.
    \9\ 84 FR 3062 (Feb. 8, 2019).
---------------------------------------------------------------------------

Additional Time To Prepare for Implementation

    The proposed delay would also provide covered credit unions and the 
NCUA with additional time to prepare for the rule's implementation. The 
NCUA has several initiatives in process to improve and modernize how 
the agency conducts examinations and supervision. The goals of these 
initiatives are to replace outdated, end-of-life examination systems, 
streamline processes, adopt enhanced examination techniques, and 
leverage new technology and data to maintain high quality supervision 
of federally-insured credit unions with less onsite presence. These 
initiatives include the Enterprise Solution Modernization, Call Report 
Modernization, and Virtual Examination programs. The proposed delay 
would enable the NCUA to direct additional time and resources toward 
modernizing examination systems, versus dedicating resources to end-of-
life systems being retired.
    This additional time would further benefit credit unions as they 
work to implement the Financial Accounting Standards Board's final 
current expected credit loss (CECL) standard. The current Board 
believes the proposed delay would allow credit unions additional time 
to allocate resources to the implementation of CECL.
    Under this proposal, the NCUA's current PCA regulation would remain 
in effect until the 2015 Final Rule and the 2018 Supplemental Rule's 
effective date. The NCUA would continue to enforce the capital 
standards currently in place and address any supervisory concerns 
through existing regulatory and supervisory mechanisms. The Board 
believes, given the facts above, that extending the implementation 
period of the 2015 Final Rule and 2018 Supplemental Rule until January 
1, 2022, would be reasonable and would not pose undue risk to the 
NCUSIF.

[[Page 30050]]

VII. Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in 
connection with a notice of proposed rulemaking, an agency prepare and 
make available for public comment an initial regulatory flexibility 
analysis that describes the impact of a proposed rule on small 
entities. A regulatory flexibility analysis is not required, however, 
if the agency certifies that the rule will not have a significant 
economic impact on a substantial number of small entities (defined for 
purposes of the RFA to include credit unions with assets less than $100 
million) \10\ and publishes its certification and a short, explanatory 
statement in the Federal Register together with the rule.
---------------------------------------------------------------------------

    \10\ See 80 FR 57512 (Sept. 24, 2015).
---------------------------------------------------------------------------

    The proposed delay of the 2015 Final Rule and 2018 Supplemental 
Rule would affect only complex credit unions, which are those with 
greater than $500 million in assets under the 2018 Supplemental Rule. 
As a result, credit unions with $100 million or less in total assets 
would not be affected by this proposal. Accordingly, the NCUA certifies 
that this proposal 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 creates new or amends existing information collection 
requirements.\11\ For purposes of the PRA, an information collection 
requirement may take the form of a reporting, recordkeeping, or a 
third-party disclosure requirement.
---------------------------------------------------------------------------

    \11\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    The information collection requirements prescribed by Sec.  
702.101(b) were set-out in the August 8, 2018 (83 FR 38997), proposed 
rule and assigned OMB control number 3133-0191. This proposed rule does 
not contain any new information collection requirements that require 
approval by OMB under the PRA. The proposed rule would only extend the 
effective date.
    The Board invites comment on (a) whether the collections of 
information are necessary for the proper performance of the agency's 
function, including practical utility; (b) the accuracy of estimates of 
the burden of the information collections, including the validity of 
the methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information being collected; and (d) ways 
to minimize the burden of the information collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.
    All comments are a matter of public record. Comments regarding the 
information collection requirements of this rule should be sent to (1) 
Dawn Wolfgang, NCUA PRA Clearance Officer, National Credit Union 
Administration, 1775 Duke Street, Alexandria, Virginia 22314, or Fax 
No. 703-519-8572, or Email at [email protected] and the (2) Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
Attention: Desk Officer for NCUA, New Executive Office Building, Room 
10235, Washington, DC 20503, or email at [email protected].
    Submission of comments. The NCUA considers comments by the public 
on this proposed collection of information in:
     Evaluating whether the proposed collection of information 
is necessary for the proper performance of the functions of the NCUA, 
including whether the information will have a practical use;
     Evaluating the accuracy of the NCUA's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. The 
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the principles of the executive order to 
adhere to fundamental federalism principles. This proposed rule reduces 
the number of federally insured natural-person credit unions, including 
federally insured, state-chartered natural-person credit unions that 
would be subject to the 2015 Final Rule. It may have, to some degree, a 
direct effect on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. It does not, 
however, rise to the level of material impact for purposed of Executive 
Order 13132.

Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Public Law 105-277, 112 
Stat. 2681 (1998).

    By the National Credit Union Administration Board on June 20, 
2019.
Gerard Poliquin,
Secretary of the Board.
[FR Doc. 2019-13589 Filed 6-25-19; 8:45 am]
BILLING CODE 7535-01-P

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