Risk-Based Net Worth-COVID-19 Regulatory Relief, 10872-10875 [2021-01400]
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10872
Proposed Rules
Federal Register
Vol. 86, No. 34
Tuesday, February 23, 2021
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.
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 702
RIN 3133–AF21
Risk-Based Net Worth—COVID–19
Regulatory Relief
National Credit Union
Administration (NCUA).
ACTION: Proposed rule.
AGENCY:
The NCUA Board (Board) is
issuing this proposal to raise the asset
threshold for defining a credit union as
‘‘complex’’ for purposes of being subject
to any risk-based net worth requirement
in the NCUA’s regulations. The
proposed rule would amend the
NCUA’s regulations to provide that any
risk-based net worth requirement will
be applicable only to a federally insured
natural-person credit union (credit
union) with quarter-end assets that
exceed $500 million and a risk-based
net worth requirement that exceeds six
percent. The COVID–19 pandemic has
created a vital need for financial
institutions, including credit unions, to
provide access to responsible credit and
other member services to support
consumers. Implementing this
regulatory change in advance of January
1, 2022, the effective date of the 2015
final risk based capital (RBC) rule issued
by the NCUA, would provide necessary
capital relief to a significant number of
credit unions without substantially
decreasing the safety and soundness of
credit unions or the National Credit
Union Share Insurance Fund (NCUSIF).
DATES: Comments must be received on
or before March 25, 2021.
ADDRESSES: You may submit written
comments, identified by RIN 3133–
AF21, 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.
• Fax: (703) 518–6319. Include
‘‘[Your Name]—Comments on RiskSUMMARY:
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Based Net Worth—COVID–19
Regulatory Relief’’ in the transmittal.
• Mail: Address to Melane ConyersAusbrooks, Secretary of the Board,
National Credit Union Administration,
1775 Duke Street, Alexandria, Virginia
22314–3428.
Public Inspection: You may view all
public comments on the Federal
eRulemaking Portal at https://
www.regulations.gov 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. Due to social
distancing measures in effect, the usual
opportunity to inspect paper copies of
comments in the NCUA’s law library is
not currently available. After social
distancing measures are relaxed, visitors
may make an appointment to review
paper copies by calling (703) 518–6540
or emailing OGCMail@ncua.gov.
FOR FURTHER INFORMATION CONTACT:
Policy and Analysis: Kathryn Metzker,
Risk Management Division, Office of
Examination and Insurance, at (571)
438–0073; Legal: Thomas Zells, Staff
Attorney, Office of General Counsel, at
(703) 518–6540; Rachel Ackmann,
Senior Staff Attorney, Office of General
Counsel, at (703) 548–2601; or by mail
at: National Credit Union
Administration, 1775 Duke Street,
Alexandria, Virginia 22314.
SUPPLEMENTARY INFORMATION:
I. Introduction
II. Legal Authority
III. The Proposed Rule
IV. Impact of the Proposed Rule
V. Regulatory Procedures
I. Introduction
In 1998, Congress enacted the Credit
Union Membership Access Act
(CUMAA).1 Section 301 of CUMAA
added section 216 to the Federal Credit
Union Act (FCU Act),2 which required
the Board to adopt by regulation a
system of prompt corrective action
(PCA) to restore the net worth of credit
unions that become inadequately
capitalized. The purpose of section 216
of the FCU Act is to ‘‘resolve the
problems of [federally] insured credit
unions at the least possible long-term
loss to the [NCUSIF].’’ 3 To carry out
that purpose, Congress set forth a basic
1 Public
Law 105–219, 112 Stat. 913 (1998).
U.S.C. 1790d.
3 12 U.S.C. 1790d(a)(1).
2 12
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structure for PCA in section 216 that
consists of three principal components:
(1) A framework combining mandatory
actions prescribed by statute with
discretionary actions developed by the
NCUA; (2) an alternative system of PCA
to be developed by the NCUA for credit
unions defined as ‘‘new;’’ and (3) a riskbased net worth requirement to apply to
credit unions the NCUA defines as
‘‘complex.’’
The Board initially implemented the
required system of PCA in 2000,4
primarily in part 702 of the NCUA’s
regulations, and most recently made
substantial updates to the regulation in
October 2015 5 and October 2018.6 The
risk-based net worth requirement for
credit unions meeting the definition of
‘‘complex’’ was first applied on the
basis of data in the Call Report reflecting
activity in the first quarter of 2001.7 The
NCUA’s risk-based net worth
requirement has been largely unchanged
since its implementation, with limited
exceptions.8 Currently, the NCUA
defines a credit union as complex and
thus subject to the requirement only if
the credit union has quarter-end assets
that exceed $50 million and its riskbased net worth requirement exceeds
six percent.9
As described more fully below, while
the risk-based net worth requirement
remains in place, the NCUA has issued
multiple final rules to implement a
requirement that utilizes an RBC ratio to
replace the current requirement. The
4 12 CFR part 702; see also 65 FR 8584 (Feb. 18,
2000) and 65 FR 44950 (July 20, 2000).
5 80 FR 66626 (Oct. 29, 2015).
6 83 FR 55467 (Nov. 6, 2018).
7 65 FR 44950 (July 20, 2000).
8 The NCUA’s risk-based net worth requirement
has been largely unchanged since its
implementation, with limited exceptions: Revisions
were made to the rule in 2003 to amend the riskbased net worth requirement for member business
loans, 68 FR 56537 (Oct. 1, 2003); revisions were
made to the rule in 2008 to incorporate a change
in the statutory definition of ‘‘net worth,’’ 73 FR
72688 (Dec. 1, 2008); revisions were made to the
rule in 2011 to expand the definition of ‘‘low-risk
assets’’ to include debt instruments on which the
payment of principal and interest is
unconditionally guaranteed by the NCUA, 76 FR
16234 (Mar. 23, 2011); revisions were made in 2013
to exclude credit unions with total assets of $50
million or less from the definition of ‘‘complex’’
credit union, 78 FR 4033 (Jan. 18, 2013); and
amendments were made in April 2020 to define
loans made by credit unions under the Small
Business Administration’s Paycheck Protection
Program as ‘‘low-risk assets,’’ 85 FR 23212 (Apr. 27,
2020).
9 12 CFR 702.103.
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Proposed Rules
RBC requirement is based on the same
provisions in the FCU Act, but uses
different terminology and standards to
distinguish it from the current riskbased net worth requirement. However,
the effective date of the RBC
amendments has been delayed until
January 1, 2022, and the rule is
currently undergoing a holistic review
as part of that delay. Further, and of
particular relevance to this proposed
rule, the prospective RBC requirement
applies only if a credit union’s quarterend total assets exceed $500 million,
whereas the current risk-based net
worth requirement applies if a credit
union has quarter-end assets that exceed
$50 million and its risk-based net worth
requirement, as calculated under
current part 702, exceeds six percent.
As noted, at its October 2015 meeting,
the Board issued a final rule (2015 Final
Rule) to amend part 702 of the NCUA’s
current PCA regulations to require that
credit unions taking certain risks hold
capital commensurate with those
risks.10 The RBC provisions of the 2015
Final Rule applied only to credit unions
with quarter-end total assets exceeding
$100 million. The overarching intent of
the 2015 Final Rule was to reduce the
likelihood that a relatively small
number of high-risk outlier credit
unions would exhaust their capital and
cause large losses to the NCUSIF. Under
the FCU Act, federally insured credit
unions are collectively responsible for
replenishing losses to the NCUSIF.11
The 2015 Final Rule restructures the
NCUA’s current PCA regulations and
makes various revisions, including
amending the agency’s risk-based net
worth requirement by replacing it with
a new RBC ratio. The Board originally
set the effective date of the 2015 Final
Rule for January 1, 2019 to provide
credit unions and the NCUA with
sufficient time to make the necessary
adjustments—such as systems,
processes, and procedures—and to
reduce the burden on affected credit
unions.
At its October 2018 meeting, the
Board issued a final rule (2018
Supplemental Rule) to delay the
effective date of the 2015 Final Rule for
an additional year, moving the effective
date from January 1, 2019 to January 1,
10 80
FR 66626 (Oct. 29, 2015).
12 U.S.C. 1782(c)(2)(A) (The FCU Act
requires that each federally insured credit union
pay a Federal share insurance premium equal to a
percentage of the credit union’s insured shares to
ensure that the NCUSIF has sufficient reserves to
pay potential share insurance claims by credit
union members, and to provide assistance in
connection with the liquidation or threatened
liquidation of federally insured credit unions in
troubled condition.).
11 See
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2020.12 Importantly, the 2018
Supplemental Rule also amended the
definition of ‘‘complex’’ credit union,
adopted in the 2015 Final Rule for RBC
purposes, by increasing the threshold
level for coverage from $100 million to
$500 million. Therefore, only credit
unions with over $500 million in assets
will be subject to the 2015 Final Rule.13
These changes provided these 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
RBC requirements of the 2015 Final
Rule without subjecting the NCUSIF to
undue risk.
In December 2019, the Board issued a
final rule (2019 Supplemental Rule) to
further delay the effective date of the
2015 Final Rule an additional two years,
until January 1, 2022.14 The Board
issued the 2019 Supplemental Rule to
allow the Board more time to
holistically and comprehensively
evaluate capital standards for credit
unions 15 and provide covered credit
unions and the NCUA with additional
time to prepare for the 2015 Final Rule’s
implementation.
Under the 2019 Supplemental Rule,
the NCUA’s current PCA regulation
remains in effect until the 2015 Final
Rule’s amended effective date, January
1, 2022. The NCUA has enforced, and
will continue to enforce, the capital
standards currently in place and address
any supervisory concerns through
existing regulatory and supervisory
mechanisms. Until that amended
effective date, a credit union that would
be exempted from any future RBC
requirement because it does not have
over $500 million in total assets remains
subject to the current risk-based net
worth requirement if it has over $50
million in total assets and a risk-based
net worth requirement that exceeds six
percent. The Board now believes that
this is an unnecessary restriction and is
proposing to increase the threshold for
defining a complex credit union for
purposes of the current risk-based net
worth requirement to $500 million to
match the prospective RBC requirement
while retaining the requirement that a
credit union’s risk-based net worth
requirement also exceeds six percent.
12 83
FR 55467 (Nov. 6, 2018).
risk-based net worth requirement currently
in effect applies to a credit union only if it has
quarter-end assets that exceed $50 million and its
risk-based net worth requirement exceeds six
percent.
14 84 FR 68781 (Dec. 17, 2019).
15 The final rule provided several examples of
issues the Board would consider during the delay,
including asset securitization, subordinated debt,
and a community bank leverage ratio analog.
13 The
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10873
This capital relief would enable credit
unions to provide better service and
more loans to their members.
II. Legal Authority
As discussed above, in 1998, Congress
enacted CUMAA.16 Section 301 of
CUMAA added section 216 to the FCU
Act,17 which required the Board to
adopt by regulation a system of PCA to
restore the net worth of credit unions
that become inadequately capitalized.18
Section 216(b)(1)(A) requires the Board
to adopt by regulation a system of PCA
for credit unions ‘‘consistent with’’
section 216 of the FCU Act and
‘‘comparable to’’ section 38 of the
Federal Deposit Insurance Act (FDI
Act).19 Section 216(b)(1)(B) requires that
the Board, in designing the PCA system,
also take into account the ‘‘cooperative
character of credit unions’’ (i.e., credit
unions are not-for-profit cooperatives
that do not issue capital stock, must rely
on retained earnings to build net worth,
and have boards of directors that consist
primarily of volunteers).20 Among other
things, section 216(c) of the FCU Act
requires the NCUA to use a credit
union’s net worth ratio to determine its
classification among five ‘‘net worth
categories’’ set forth in the FCU Act.21
Section 216(o) generally defines a credit
union’s ‘‘net worth’’ as its retained
earnings balance,22 and a credit union’s
‘‘net worth ratio,’’ as the ratio of its net
worth to its total assets.23 As a credit
union’s net worth ratio declines, so does
its classification among the five net
worth categories, thus subjecting it to an
expanding range of mandatory and
discretionary supervisory actions under
PCA.24
Section 216(d)(1) of the FCU Act
requires that the NCUA’s system of PCA
include, in addition to the statutorily
defined net worth ratio requirement
applicable to credit unions, ‘‘a riskbased net worth 25 requirement for
16 Public
Law 105–219, 112 Stat. 913 (1998).
U.S.C. 1790d.
18 The risk-based net worth requirement for credit
unions meeting the definition of ‘‘complex’’ was
first applied on the basis of data in the Call Report
reflecting activity in the first quarter of 2001. 65 FR
44950 (July 20, 2000).
19 12 U.S.C. 1790d(b)(1)(A); see also 12 U.S.C.
1831o (Section 38 of the FDI Act setting forth the
PCA requirements for banks).
20 12 U.S.C. 1790d(b)(1)(B).
21 12 U.S.C. 1790d(c).
22 12 U.S.C. 1790d(o)(2).
23 12 U.S.C. 1790d(o)(3).
24 12 U.S.C. 1790d(c)–(g); 12 CFR 702.204(a)–(b).
25 For purposes of this rulemaking, the term ‘‘riskbased net worth requirement’’ is used in reference
to the statutory requirement for the Board to design
a capital standard that accounts for variations in the
risk profile of complex credit unions. The term RBC
is used to refer to the specific standards established
17 12
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Proposed Rules
insured credit unions that are complex,
as defined by the Board.’’ 26 The FCU
Act directs the NCUA to base its
definition of ‘‘complex’’ credit unions
‘‘on the portfolios of assets and
liabilities of credit unions.’’ 27 It also
requires the NCUA to design a riskbased net worth requirement to apply to
such ‘‘complex’’ credit unions.28
In addition to the specific regulatory
authority provided to the NCUA by the
above-referenced statutory provisions of
the FCU Act, the FCU Act also grants
the NCUA broad plenary rulemaking
authority.
III. The Proposed Rule
The COVID–19 pandemic has created
a vital need for financial institutions,
including credit unions, to provide
access to responsible credit and other
member services to support consumers.
The Board is working with Federal and
state regulatory agencies, in addition to
credit unions, to assist credit unions in
managing their operations and to
facilitate continued assistance to credit
union members and communities
impacted by the coronavirus. As part of
these ongoing efforts, the Board is
proposing to raise the asset threshold for
defining a credit union as ‘‘complex’’ for
purposes of the current risk-based net
worth requirement. Under the proposal,
any risk-based net worth requirement
would be applicable to only a credit
union with quarter-end assets that
exceed $500 million whose risk-based
net worth requirement also exceeds six
percent. This would remain in place
until the effective date of the abovereferenced RBC rule. The Board believes
that this increase would provide
necessary relief to a significant number
of credit unions and their members
without substantially increasing the risk
to credit unions or the NCUSIF,
consistent with the NCUA’s
responsibility to maintain the safety and
soundness of the credit union system.
The NCUA seeks to strike the
appropriate balance between providing
for the safety and soundness of the
credit union industry, while not
restricting credit union activities by
requiring a credit union to hold
excessive levels of capital. Requiring a
in the 2015 Final Rule to function as criteria for the
statutory risk-based net worth requirement. The
term ‘‘risk-based capital ratio’’ is also used by the
other Federal banking agencies and the
international banking community when referring to
the types of risk-based requirements that are
addressed in the 2015 Final Rule. This change in
terminology has no substantive effect on the
requirements of the FCU Act, and is intended only
to reduce confusion for the reader.
26 12 U.S.C. 1790d(d)(1).
27 12 U.S.C. 1790d(d).
28 Id.
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credit union to hold excess capital
above what is necessary to account for
risk limits its ability to increase lending
or provide necessary services to
members. Specifically, potential
consequences of the higher capital
requirements include: Reduced or
higher-cost lending, limited products,
higher compliance cost, and increased
merger activity.
In 2018, the NCUA determined that
increasing the applicability threshold
for RBC to $500 million did not pose
undue risk to the NCUSIF because
credit unions with assets greater than
$500 million account for the majority of
industry assets (both total assets and
complex assets, as explained below).
Based on September 30, 2020 data,
credit unions with assets between $50
million and $500 million account for
15.9 percent of industry assets and 33.8
percent of credit unions. The average
asset size of a credit union in this cohort
is $164 million. Conversely, credit
unions with assets greater than $500
million account for 81.6 percent of
industry assets and only 12.4 percent of
total credit unions. Therefore, raising
the risk-based net worth requirement
threshold to $500 million would still
cover the majority of assets in the credit
union system and not pose undue risk
to the NCUSIF for the same reasons that
the Board found in the 2018
Supplemental Rule. In the 2015 Final
Rule and 2018 Supplemental Rule, the
NCUA determined a credit union was
complex by evaluating whether its
portfolios of assets and liabilities were
complex based on the products and
services in which such credit unions
engaged. An asset size threshold was
developed as a proxy measure based on
a detailed analysis performed by the
NCUA.29 The threshold set forth a clear
demarcation line, above which the
NCUA determined all credit unions
engaged in complex activities, and
where almost all such credit unions
were involved in multiple complex
activities.
The asset threshold adopted in the
2015 Final Rule and revised in the 2018
Supplemental Rule for determining
whether a credit union is complex was
based on a complexity index.30 The
29 See the 2015 Final Rule and 2018
Supplemental Rule for reasons the NCUA believes
a single asset-size threshold is appropriate for
determining whether a credit union is complex for
purposes of prompt corrective action. See 80 FR
66626 (Oct. 29, 2015) and 83 FR 55467 (Nov. 6,
2018).
30 The 2015 Final Rule and 2018 Supplemental
Rule both used a complexity index, however the
original complexity index used in the 2015 Final
Rule was amended in the 2018 Supplemental Rule.
The 2018 Supplemental Rule used a revised
complexity index that amended six of the indicators
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2018 Supplemental Rule also used a
complexity ratio, a ratio of complex
assets and liabilities to total assets, to
evaluate the extent to which credit
unions are involved in complex
activities. The 2018 Supplemental Rule
noted that of the $497 billion in
complex assets and liabilities in the
credit union system, $423 billion (85
percent)—the majority of complex assets
and liabilities in the credit union
system—are held among credit unions
with more than $500 million in assets.31
In general, two-thirds of credit unions
with more than $500 million in total
assets had complex assets and liabilities
ratios above 30 percent. Only 11 percent
of credit unions with less than $500
million had complexity ratios above 30
percent.
Using both the revised complexity
index and the complexity ratio, the 2018
Supplemental Rule noted the $500
million threshold for defining complex
credit unions would not represent
undue risk to the NCUSIF as
approximately 76 percent of the assets
held by federally insured credit unions
would still be covered. As noted above,
credit unions with assets above $500
million represent 81.6 percent of
industry assets as of September 30,
2020.
The Board believes this change would
provide relief to many credit unions and
help to maintain confidence in the
system of cooperative credit, consistent
with the NCUA’s mission.
IV. Impact of the Proposed Rule
Increasing the complexity threshold
to $500 million would provide potential
relief to 1,737 credit unions. While all
complex credit unions meet their riskbased net worth requirement as of
September 30, 2020, because their net
worth ratio exceeds their risk-based net
worth requirement, immediate capital
relief can be provided to some of these
credit unions. As shown in Table 1,
there are 94 complex credit unions with
assets totaling $66 billion which are
required to hold capital above 7 percent
to be well capitalized based on their
risk-based net worth requirement. Of the
94 credit unions, 67 have assets less
than $500 million and would no longer
be required to hold more capital to
remain well capitalized. Additionally,
increasing the complexity threshold
now rather than when the 2015 Final
Rule goes into effect will not pose
in the original complexity index so the index more
accurately reflected ‘‘complexity’’ in credit unions
and took into account certain regulatory changes
that were made after the 2015 Final Rule was
approved.
31 This was based on available data at the time of
the 2018 Supplemental Rule.
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Proposed Rules
undue risk to the NCUSIF as the 67
credit unions provided relief represent
less than 1 percent of industry assets.
TABLE 1—COMPLEX CREDIT UNIONS WITH A RISK BASED NET WORTH REQUIREMENT GREATER THAN 7 PERCENT
Number of
credit unions
Asset category
Assets >$50M 32 ..........................................................................................................................
Assets >$500M 33 ........................................................................................................................
$50M< Assets <$500M ................................................................................................................
Therefore, this proposed rule would
provide immediate relief for the 67
credit unions that must currently
manage their capital levels to a riskbased net worth requirement above
seven percent.34 Additionally, it would
also provide relief to all credit unions
with assets between $50 million and
$500 million, which would be able to
expand their portfolios and simply
manage their capital levels to meet the
seven percent leverage requirement to
be well capitalized.
The NCUA invites comments on all
aspects of the proposal.35
V. Regulatory Procedures
A. Regulatory Flexibility Act (RFA)
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 federally insured credit unions
with assets less than $100 million) and
publishes its certification and a short,
explanatory statement in the Federal
Register together with the rule. The
proposed rule would only exempt
additional credit unions from any riskbased net worth requirement in part 702
of the NCUA’s regulations applicable to
complex credit unions. As a result, it
32 This
reflects the current threshold for complex
credit unions.
33 This reflects the proposed threshold for
complex credit unions.
34 This would reduce the amount of capital they
are required to hold to be well capitalized by $82
million in aggregate, based on September 30, 2020
data.
35 Because of the straightforward nature of the
proposed change and the extensive comment period
offered on the various RBC rulemakings, the Board
is not providing the usual 60-day comment period.
See NCUA Interpretive Ruling and Policy Statement
(IRPS) 87–2, as amended by IRPS 03–2 and IRPS
15–1. 80 FR 57512 (Sept. 24, 2015), available at
https://www.ncua.gov/files/publications/irps/
IRPS1987-2.pdf.
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will not cause any increased burden on
credit unions and will not have an
impact on small credit unions.
Accordingly, the NCUA certifies that the
proposed 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 (44
U.S.C. 3507(d)). For purposes of the
PRA, a paperwork burden may take the
form of a reporting, recordkeeping, or a
third-party disclosure requirement,
referred to as an information collection.
The NCUA may not conduct or sponsor,
and the respondent is not required to
respond to, an information collection
unless it displays a valid Office of
Management and Budget (OMB) control
number. This proposed rule contains no
provisions constituting a collection of
information under the Paperwork
Reduction Act of 1995 (44 U.S.C. et
seq.).
C. 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 Executive order to
adhere to fundamental federalism
principles.
This proposed rule would not have
substantial direct effects on the states,
on the relationship between the
National Government and the states, or
on the distribution of power and
responsibilities among the various
levels of government. The NCUA has
therefore determined that this proposed
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
The NCUA has determined that this
proposed rule will not affect family
well-being within the meaning of
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Total assets
(million)
94
27
67
Percent of
industry assets
$66.0
54.6
11.4
3.7
3.1
0.6
section 654 of the Treasury and General
Government Appropriations Act, 1999,
Public Law 105–277, 112 Stat. 2681
(1998).
List of Subjects in 12 CFR Part 702
Credit, Credit unions, Reporting and
recordkeeping requirements.
By the NCUA Board on January 14, 2021.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons discussed in the
preamble, the Board proposes to amend
part 702 of chapter VII of title 12 of the
Code of Federal Regulations as follows:
PART 702—CAPITAL ADEQUACY
1. The authority citation for part 702
continues to read as follows:
■
Authority: 12 U.S.C. 1766(a), 1790d.
§ 702.103
[Amended]
2. Amend § 702.103(a) by removing
the words ‘‘fifty million dollars
($50,000,000)’’ and add in their place
‘‘five hundred million dollars
($500,000,000).’’
■
[FR Doc. 2021–01400 Filed 2–22–21; 8:45 am]
BILLING CODE 7535–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2020–0994; Project
Identifier AD–2020–00687–T]
RIN 2120–AA64
Airworthiness Directives; Gulfstream
Aerospace Corporation Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
The FAA proposes to adopt a
new airworthiness directive (AD) for
certain Gulfstream Aerospace
Corporation (Gulfstream) Model GVII–
G600 airplanes. This proposed AD was
prompted by a report that a failure mode
SUMMARY:
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]]>Agencies
[Federal Register Volume 86, Number 34 (Tuesday, February 23, 2021)]
[Proposed Rules]
[Pages 10872-10875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01400]
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Proposed Rules
Federal Register
________________________________________________________________________
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.
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 /
Proposed Rules
[[Page 10872]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 702
RIN 3133-AF21
Risk-Based Net Worth--COVID-19 Regulatory Relief
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) is issuing this proposal to raise the
asset threshold for defining a credit union as ``complex'' for purposes
of being subject to any risk-based net worth requirement in the NCUA's
regulations. The proposed rule would amend the NCUA's regulations to
provide that any risk-based net worth requirement will be applicable
only to a federally insured natural-person credit union (credit union)
with quarter-end assets that exceed $500 million and a risk-based net
worth requirement that exceeds six percent. The COVID-19 pandemic has
created a vital need for financial institutions, including credit
unions, to provide access to responsible credit and other member
services to support consumers. Implementing this regulatory change in
advance of January 1, 2022, the effective date of the 2015 final risk
based capital (RBC) rule issued by the NCUA, would provide necessary
capital relief to a significant number of credit unions without
substantially decreasing the safety and soundness of credit unions or
the National Credit Union Share Insurance Fund (NCUSIF).
DATES: Comments must be received on or before March 25, 2021.
ADDRESSES: You may submit written comments, identified by RIN 3133-
AF21, 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.
Fax: (703) 518-6319. Include ``[Your Name]--Comments on
Risk-Based Net Worth--COVID-19 Regulatory Relief'' in the transmittal.
Mail: Address to Melane Conyers-Ausbrooks, Secretary of
the Board, National Credit Union Administration, 1775 Duke Street,
Alexandria, Virginia 22314-3428.
Public Inspection: You may view all public comments on the Federal
eRulemaking Portal at https://www.regulations.gov 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. Due to social distancing measures in effect, the
usual opportunity to inspect paper copies of comments in the NCUA's law
library is not currently available. After social distancing measures
are relaxed, visitors may make an appointment to review paper copies by
calling (703) 518-6540 or emailing [email protected].
FOR FURTHER INFORMATION CONTACT: Policy and Analysis: Kathryn Metzker,
Risk Management Division, Office of Examination and Insurance, at (571)
438-0073; Legal: Thomas Zells, Staff Attorney, Office of General
Counsel, at (703) 518-6540; Rachel Ackmann, Senior Staff Attorney,
Office of General Counsel, at (703) 548-2601; or by mail at: National
Credit Union Administration, 1775 Duke Street, Alexandria, Virginia
22314.
SUPPLEMENTARY INFORMATION:
I. Introduction
II. Legal Authority
III. The Proposed Rule
IV. Impact of the Proposed Rule
V. Regulatory Procedures
I. Introduction
In 1998, Congress enacted the Credit Union Membership Access Act
(CUMAA).\1\ Section 301 of CUMAA added section 216 to the Federal
Credit Union Act (FCU Act),\2\ which required the Board to adopt by
regulation a system of prompt corrective action (PCA) to restore the
net worth of credit unions that become inadequately capitalized. The
purpose of section 216 of the FCU Act is to ``resolve the problems of
[federally] insured credit unions at the least possible long-term loss
to the [NCUSIF].'' \3\ To carry out that purpose, Congress set forth a
basic structure for PCA in section 216 that consists of three principal
components: (1) A framework combining mandatory actions prescribed by
statute with discretionary actions developed by the NCUA; (2) an
alternative system of PCA to be developed by the NCUA for credit unions
defined as ``new;'' and (3) a risk-based net worth requirement to apply
to credit unions the NCUA defines as ``complex.''
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\1\ Public Law 105-219, 112 Stat. 913 (1998).
\2\ 12 U.S.C. 1790d.
\3\ 12 U.S.C. 1790d(a)(1).
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The Board initially implemented the required system of PCA in
2000,\4\ primarily in part 702 of the NCUA's regulations, and most
recently made substantial updates to the regulation in October 2015 \5\
and October 2018.\6\ The risk-based net worth requirement for credit
unions meeting the definition of ``complex'' was first applied on the
basis of data in the Call Report reflecting activity in the first
quarter of 2001.\7\ The NCUA's risk-based net worth requirement has
been largely unchanged since its implementation, with limited
exceptions.\8\ Currently, the NCUA defines a credit union as complex
and thus subject to the requirement only if the credit union has
quarter-end assets that exceed $50 million and its risk-based net worth
requirement exceeds six percent.\9\
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\4\ 12 CFR part 702; see also 65 FR 8584 (Feb. 18, 2000) and 65
FR 44950 (July 20, 2000).
\5\ 80 FR 66626 (Oct. 29, 2015).
\6\ 83 FR 55467 (Nov. 6, 2018).
\7\ 65 FR 44950 (July 20, 2000).
\8\ The NCUA's risk-based net worth requirement has been largely
unchanged since its implementation, with limited exceptions:
Revisions were made to the rule in 2003 to amend the risk-based net
worth requirement for member business loans, 68 FR 56537 (Oct. 1,
2003); revisions were made to the rule in 2008 to incorporate a
change in the statutory definition of ``net worth,'' 73 FR 72688
(Dec. 1, 2008); revisions were made to the rule in 2011 to expand
the definition of ``low-risk assets'' to include debt instruments on
which the payment of principal and interest is unconditionally
guaranteed by the NCUA, 76 FR 16234 (Mar. 23, 2011); revisions were
made in 2013 to exclude credit unions with total assets of $50
million or less from the definition of ``complex'' credit union, 78
FR 4033 (Jan. 18, 2013); and amendments were made in April 2020 to
define loans made by credit unions under the Small Business
Administration's Paycheck Protection Program as ``low-risk assets,''
85 FR 23212 (Apr. 27, 2020).
\9\ 12 CFR 702.103.
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As described more fully below, while the risk-based net worth
requirement remains in place, the NCUA has issued multiple final rules
to implement a requirement that utilizes an RBC ratio to replace the
current requirement. The
[[Page 10873]]
RBC requirement is based on the same provisions in the FCU Act, but
uses different terminology and standards to distinguish it from the
current risk-based net worth requirement. However, the effective date
of the RBC amendments has been delayed until January 1, 2022, and the
rule is currently undergoing a holistic review as part of that delay.
Further, and of particular relevance to this proposed rule, the
prospective RBC requirement applies only if a credit union's quarter-
end total assets exceed $500 million, whereas the current risk-based
net worth requirement applies if a credit union has quarter-end assets
that exceed $50 million and its risk-based net worth requirement, as
calculated under current part 702, exceeds six percent.
As noted, at its October 2015 meeting, the Board issued a final
rule (2015 Final Rule) to amend part 702 of the NCUA's current PCA
regulations to require that credit unions taking certain risks hold
capital commensurate with those risks.\10\ The RBC provisions of the
2015 Final Rule applied only to credit unions with quarter-end total
assets exceeding $100 million. The overarching intent of the 2015 Final
Rule was to reduce the likelihood that a relatively small number of
high-risk outlier credit unions would exhaust their capital and cause
large losses to the NCUSIF. Under the FCU Act, federally insured credit
unions are collectively responsible for replenishing losses to the
NCUSIF.\11\
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\10\ 80 FR 66626 (Oct. 29, 2015).
\11\ See 12 U.S.C. 1782(c)(2)(A) (The FCU Act requires that each
federally insured credit union pay a Federal share insurance premium
equal to a percentage of the credit union's insured shares to ensure
that the NCUSIF has sufficient reserves to pay potential share
insurance claims by credit union members, and to provide assistance
in connection with the liquidation or threatened liquidation of
federally insured credit unions in troubled condition.).
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The 2015 Final Rule restructures the NCUA's current PCA regulations
and makes various revisions, including amending the agency's risk-based
net worth requirement by replacing it with a new RBC ratio. The Board
originally set the effective date of the 2015 Final Rule for January 1,
2019 to provide credit unions and the NCUA with sufficient time to make
the necessary adjustments--such as systems, processes, and procedures--
and to reduce the burden on affected credit unions.
At its October 2018 meeting, the Board issued a final rule (2018
Supplemental Rule) to 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.\12\ Importantly, the 2018 Supplemental Rule also
amended the definition of ``complex'' credit union, adopted in the 2015
Final Rule for RBC purposes, by increasing the threshold level for
coverage from $100 million to $500 million. Therefore, only credit
unions with over $500 million in assets will be subject to the 2015
Final Rule.\13\ These changes provided these 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 RBC
requirements of the 2015 Final Rule without subjecting the NCUSIF to
undue risk.
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\12\ 83 FR 55467 (Nov. 6, 2018).
\13\ The risk-based net worth requirement currently in effect
applies to a credit union only if it has quarter-end assets that
exceed $50 million and its risk-based net worth requirement exceeds
six percent.
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In December 2019, the Board issued a final rule (2019 Supplemental
Rule) to further delay the effective date of the 2015 Final Rule an
additional two years, until January 1, 2022.\14\ The Board issued the
2019 Supplemental Rule to allow the Board more time to holistically and
comprehensively evaluate capital standards for credit unions \15\ and
provide covered credit unions and the NCUA with additional time to
prepare for the 2015 Final Rule's implementation.
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\14\ 84 FR 68781 (Dec. 17, 2019).
\15\ The final rule provided several examples of issues the
Board would consider during the delay, including asset
securitization, subordinated debt, and a community bank leverage
ratio analog.
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Under the 2019 Supplemental Rule, the NCUA's current PCA regulation
remains in effect until the 2015 Final Rule's amended effective date,
January 1, 2022. The NCUA has enforced, and will continue to enforce,
the capital standards currently in place and address any supervisory
concerns through existing regulatory and supervisory mechanisms. Until
that amended effective date, a credit union that would be exempted from
any future RBC requirement because it does not have over $500 million
in total assets remains subject to the current risk-based net worth
requirement if it has over $50 million in total assets and a risk-based
net worth requirement that exceeds six percent. The Board now believes
that this is an unnecessary restriction and is proposing to increase
the threshold for defining a complex credit union for purposes of the
current risk-based net worth requirement to $500 million to match the
prospective RBC requirement while retaining the requirement that a
credit union's risk-based net worth requirement also exceeds six
percent. This capital relief would enable credit unions to provide
better service and more loans to their members.
II. Legal Authority
As discussed above, in 1998, Congress enacted CUMAA.\16\ Section
301 of CUMAA added section 216 to the FCU Act,\17\ which required the
Board to adopt by regulation a system of PCA to restore the net worth
of credit unions that become inadequately capitalized.\18\ Section
216(b)(1)(A) requires the Board to adopt by regulation a system of PCA
for credit unions ``consistent with'' section 216 of the FCU Act and
``comparable to'' section 38 of the Federal Deposit Insurance Act (FDI
Act).\19\ Section 216(b)(1)(B) requires that the Board, in designing
the PCA system, also take into account the ``cooperative character of
credit unions'' (i.e., credit unions are not-for-profit cooperatives
that do not issue capital stock, must rely on retained earnings to
build net worth, and have boards of directors that consist primarily of
volunteers).\20\ Among other things, section 216(c) of the FCU Act
requires the NCUA to use a credit union's net worth ratio to determine
its classification among five ``net worth categories'' set forth in the
FCU Act.\21\ Section 216(o) generally defines a credit union's ``net
worth'' as its retained earnings balance,\22\ and a credit union's
``net worth ratio,'' as the ratio of its net worth to its total
assets.\23\ As a credit union's net worth ratio declines, so does its
classification among the five net worth categories, thus subjecting it
to an expanding range of mandatory and discretionary supervisory
actions under PCA.\24\
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\16\ Public Law 105-219, 112 Stat. 913 (1998).
\17\ 12 U.S.C. 1790d.
\18\ The risk-based net worth requirement for credit unions
meeting the definition of ``complex'' was first applied on the basis
of data in the Call Report reflecting activity in the first quarter
of 2001. 65 FR 44950 (July 20, 2000).
\19\ 12 U.S.C. 1790d(b)(1)(A); see also 12 U.S.C. 1831o (Section
38 of the FDI Act setting forth the PCA requirements for banks).
\20\ 12 U.S.C. 1790d(b)(1)(B).
\21\ 12 U.S.C. 1790d(c).
\22\ 12 U.S.C. 1790d(o)(2).
\23\ 12 U.S.C. 1790d(o)(3).
\24\ 12 U.S.C. 1790d(c)-(g); 12 CFR 702.204(a)-(b).
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Section 216(d)(1) of the FCU Act requires that the NCUA's system of
PCA include, in addition to the statutorily defined net worth ratio
requirement applicable to credit unions, ``a risk-based net worth \25\
requirement for
[[Page 10874]]
insured credit unions that are complex, as defined by the Board.'' \26\
The FCU Act directs the NCUA to base its definition of ``complex''
credit unions ``on the portfolios of assets and liabilities of credit
unions.'' \27\ It also requires the NCUA to design a risk-based net
worth requirement to apply to such ``complex'' credit unions.\28\
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\25\ For purposes of this rulemaking, the term ``risk-based net
worth requirement'' is used in reference to the statutory
requirement for the Board to design a capital standard that accounts
for variations in the risk profile of complex credit unions. The
term RBC is used to refer to the specific standards established in
the 2015 Final Rule to function as criteria for the statutory risk-
based net worth requirement. The term ``risk-based capital ratio''
is also used by the other Federal banking agencies and the
international banking community when referring to the types of risk-
based requirements that are addressed in the 2015 Final Rule. This
change in terminology has no substantive effect on the requirements
of the FCU Act, and is intended only to reduce confusion for the
reader.
\26\ 12 U.S.C. 1790d(d)(1).
\27\ 12 U.S.C. 1790d(d).
\28\ Id.
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In addition to the specific regulatory authority provided to the
NCUA by the above-referenced statutory provisions of the FCU Act, the
FCU Act also grants the NCUA broad plenary rulemaking authority.
III. The Proposed Rule
The COVID-19 pandemic has created a vital need for financial
institutions, including credit unions, to provide access to responsible
credit and other member services to support consumers. The Board is
working with Federal and state regulatory agencies, in addition to
credit unions, to assist credit unions in managing their operations and
to facilitate continued assistance to credit union members and
communities impacted by the coronavirus. As part of these ongoing
efforts, the Board is proposing to raise the asset threshold for
defining a credit union as ``complex'' for purposes of the current
risk-based net worth requirement. Under the proposal, any risk-based
net worth requirement would be applicable to only a credit union with
quarter-end assets that exceed $500 million whose risk-based net worth
requirement also exceeds six percent. This would remain in place until
the effective date of the above-referenced RBC rule. The Board believes
that this increase would provide necessary relief to a significant
number of credit unions and their members without substantially
increasing the risk to credit unions or the NCUSIF, consistent with the
NCUA's responsibility to maintain the safety and soundness of the
credit union system.
The NCUA seeks to strike the appropriate balance between providing
for the safety and soundness of the credit union industry, while not
restricting credit union activities by requiring a credit union to hold
excessive levels of capital. Requiring a credit union to hold excess
capital above what is necessary to account for risk limits its ability
to increase lending or provide necessary services to members.
Specifically, potential consequences of the higher capital requirements
include: Reduced or higher-cost lending, limited products, higher
compliance cost, and increased merger activity.
In 2018, the NCUA determined that increasing the applicability
threshold for RBC to $500 million did not pose undue risk to the NCUSIF
because credit unions with assets greater than $500 million account for
the majority of industry assets (both total assets and complex assets,
as explained below). Based on September 30, 2020 data, credit unions
with assets between $50 million and $500 million account for 15.9
percent of industry assets and 33.8 percent of credit unions. The
average asset size of a credit union in this cohort is $164 million.
Conversely, credit unions with assets greater than $500 million account
for 81.6 percent of industry assets and only 12.4 percent of total
credit unions. Therefore, raising the risk-based net worth requirement
threshold to $500 million would still cover the majority of assets in
the credit union system and not pose undue risk to the NCUSIF for the
same reasons that the Board found in the 2018 Supplemental Rule. In the
2015 Final Rule and 2018 Supplemental Rule, the NCUA determined a
credit union was complex by evaluating whether its portfolios of assets
and liabilities were complex based on the products and services in
which such credit unions engaged. An asset size threshold was developed
as a proxy measure based on a detailed analysis performed by the
NCUA.\29\ The threshold set forth a clear demarcation line, above which
the NCUA determined all credit unions engaged in complex activities,
and where almost all such credit unions were involved in multiple
complex activities.
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\29\ See the 2015 Final Rule and 2018 Supplemental Rule for
reasons the NCUA believes a single asset-size threshold is
appropriate for determining whether a credit union is complex for
purposes of prompt corrective action. See 80 FR 66626 (Oct. 29,
2015) and 83 FR 55467 (Nov. 6, 2018).
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The asset threshold adopted in the 2015 Final Rule and revised in
the 2018 Supplemental Rule for determining whether a credit union is
complex was based on a complexity index.\30\ The 2018 Supplemental Rule
also used a complexity ratio, a ratio of complex assets and liabilities
to total assets, to evaluate the extent to which credit unions are
involved in complex activities. The 2018 Supplemental Rule noted that
of the $497 billion in complex assets and liabilities in the credit
union system, $423 billion (85 percent)--the majority of complex assets
and liabilities in the credit union system--are held among credit
unions with more than $500 million in assets.\31\ In general, two-
thirds of credit unions with more than $500 million in total assets had
complex assets and liabilities ratios above 30 percent. Only 11 percent
of credit unions with less than $500 million had complexity ratios
above 30 percent.
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\30\ The 2015 Final Rule and 2018 Supplemental Rule both used a
complexity index, however the original complexity index used in the
2015 Final Rule was amended in the 2018 Supplemental Rule. The 2018
Supplemental Rule used a revised complexity index that amended six
of the indicators in the original complexity index so the index more
accurately reflected ``complexity'' in credit unions and took into
account certain regulatory changes that were made after the 2015
Final Rule was approved.
\31\ This was based on available data at the time of the 2018
Supplemental Rule.
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Using both the revised complexity index and the complexity ratio,
the 2018 Supplemental Rule noted the $500 million threshold for
defining complex credit unions would not represent undue risk to the
NCUSIF as approximately 76 percent of the assets held by federally
insured credit unions would still be covered. As noted above, credit
unions with assets above $500 million represent 81.6 percent of
industry assets as of September 30, 2020.
The Board believes this change would provide relief to many credit
unions and help to maintain confidence in the system of cooperative
credit, consistent with the NCUA's mission.
IV. Impact of the Proposed Rule
Increasing the complexity threshold to $500 million would provide
potential relief to 1,737 credit unions. While all complex credit
unions meet their risk-based net worth requirement as of September 30,
2020, because their net worth ratio exceeds their risk-based net worth
requirement, immediate capital relief can be provided to some of these
credit unions. As shown in Table 1, there are 94 complex credit unions
with assets totaling $66 billion which are required to hold capital
above 7 percent to be well capitalized based on their risk-based net
worth requirement. Of the 94 credit unions, 67 have assets less than
$500 million and would no longer be required to hold more capital to
remain well capitalized. Additionally, increasing the complexity
threshold now rather than when the 2015 Final Rule goes into effect
will not pose
[[Page 10875]]
undue risk to the NCUSIF as the 67 credit unions provided relief
represent less than 1 percent of industry assets.
Table 1--Complex Credit Unions With a Risk Based Net Worth Requirement Greater Than 7 Percent
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Percent of
Asset category Number of Total assets industry
credit unions (million) assets
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Assets >$50M \32\............................................... 94 $66.0 3.7
Assets >$500M \33\.............................................. 27 54.6 3.1
$50M< Assets <$500M............................................. 67 11.4 0.6
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Therefore, this proposed rule would provide immediate relief for
the 67 credit unions that must currently manage their capital levels to
a risk-based net worth requirement above seven percent.\34\
Additionally, it would also provide relief to all credit unions with
assets between $50 million and $500 million, which would be able to
expand their portfolios and simply manage their capital levels to meet
the seven percent leverage requirement to be well capitalized.
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\32\ This reflects the current threshold for complex credit
unions.
\33\ This reflects the proposed threshold for complex credit
unions.
\34\ This would reduce the amount of capital they are required
to hold to be well capitalized by $82 million in aggregate, based on
September 30, 2020 data.
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The NCUA invites comments on all aspects of the proposal.\35\
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\35\ Because of the straightforward nature of the proposed
change and the extensive comment period offered on the various RBC
rulemakings, the Board is not providing the usual 60-day comment
period. See NCUA Interpretive Ruling and Policy Statement (IRPS) 87-
2, as amended by IRPS 03-2 and IRPS 15-1. 80 FR 57512 (Sept. 24,
2015), available at https://www.ncua.gov/files/publications/irps/IRPS1987-2.pdf.
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V. Regulatory Procedures
A. Regulatory Flexibility Act (RFA)
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 federally insured credit unions with
assets less than $100 million) and publishes its certification and a
short, explanatory statement in the Federal Register together with the
rule. The proposed rule would only exempt additional credit unions from
any risk-based net worth requirement in part 702 of the NCUA's
regulations applicable to complex credit unions. As a result, it will
not cause any increased burden on credit unions and will not have an
impact on small credit unions. Accordingly, the NCUA certifies that the
proposed 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 (44 U.S.C. 3507(d)). For
purposes of the PRA, a paperwork burden may take the form of a
reporting, recordkeeping, or a third-party disclosure requirement,
referred to as an information collection. The NCUA may not conduct or
sponsor, and the respondent is not required to respond to, an
information collection unless it displays a valid Office of Management
and Budget (OMB) control number. This proposed rule contains no
provisions constituting a collection of information under the Paperwork
Reduction Act of 1995 (44 U.S.C. et seq.).
C. 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 Executive order to adhere to fundamental
federalism principles.
This proposed rule would not have substantial direct effects on the
states, on the relationship between the National Government and the
states, or on the distribution of power and responsibilities among the
various levels of government. The NCUA has therefore determined that
this proposed 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
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).
List of Subjects in 12 CFR Part 702
Credit, Credit unions, Reporting and recordkeeping requirements.
By the NCUA Board on January 14, 2021.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons discussed in the preamble, the Board proposes to
amend part 702 of chapter VII of title 12 of the Code of Federal
Regulations as follows:
PART 702--CAPITAL ADEQUACY
0
1. The authority citation for part 702 continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1790d.
Sec. 702.103 [Amended]
0
2. Amend Sec. 702.103(a) by removing the words ``fifty million dollars
($50,000,000)'' and add in their place ``five hundred million dollars
($500,000,000).''
[FR Doc. 2021-01400 Filed 2-22-21; 8:45 am]
BILLING CODE 7535-01-P
