§ 702.1 - Authority, purpose, scope, and other supervisory authority.

§ 702.1 Authority, purpose, scope, and other supervisory authority.

Cross Reference

Link to an amendment published at 80 FR 66706, Oct. 29, 2015.

Cross Reference

This amendment was delayed until Jan. 1, 2020, at 83 FR 55467, Nov. 6, 2018.

Cross Reference

This amendment was further delayed until Jan. 1, 2022, at 84 FR 68781, Dec. 17, 2019.

Cross Reference

Link to a correction published at 85 FR 62210, Oct. 2, 2020.

Cross Reference

Link to an amendment published at 86 FR 15401, Mar. 23, 2021.

(a) Authority. Subparts A, and B and C of this part and subpart L of part 747 of this chapter are issued by the National Credit Union Administration (NCUA) pursuant to section sections 120 and 216 of the Federal Credit Union Act (FCUA), 12 U.S.C. 1766 and 1790d (section 1790d), as added revised by section 301 of the Credit Union Membership Access Act, Pub. L. No. Public Law 105-219, 112 Stat. 913 (1998). Subpart D of this part is issued pursuant to FCUA section 120, 12 U.S.C. 1766.

(b) Purpose. The express purpose of prompt corrective action under section 1790d is to resolve the problems of federally insured credit unions at the least possible long-term loss to the National Credit Union Share Insurance Fund. This part carries Subparts A and B of this part carry out the purpose of prompt corrective action by establishing a framework of minimum capital requirements, and mandatory and discretionary supervisory actions , applicable according to a credit union's net worth ratiocapital classification, designed primarily to restore and improve the net worth capital adequacy of federally insured credit unions.

(c) Scope. This part implements Subparts A and B of this part implement the provisions of section 1790d as they apply to federally insured credit unions, whether federally- or state-chartered; to such credit unions defined as “new” pursuant to section 1790d(b)(2); and to such credit unions defined as “complex” pursuant to section 1790d(d). Certain of these provisions also apply to officers and directors of federally insured credit unions. Subpart C applies capital planning and stress testing to credit unions defined as covered credit unions under § 702.302. This part does not apply to corporate credit unions. Procedures Unless otherwise provided, procedures for issuing, reviewing and enforcing orders and directives issued under this part are set forth in subpart L of part 747 of this chapter, 12 CFR 747. 2001 et seq.

(d) Other supervisory authority. Neither § section 1790d nor this part in any way limits the authority of the NCUA Board or appropriate State state official under any other provision of law to take additional supervisory actions to address unsafe or unsound practices or conditions, or violations of applicable law or regulations. Action taken under this part may be taken independently of, in conjunction with, or in addition to any other enforcement action available to the NCUA Board or appropriate State state official, including issuance of cease and desist orders, orders of prohibition, suspension and removal, or assessment of civil money penalties, or any other actions authorized by law.

[80 FR 66706, Oct. 29, 2015; 85 FR 62210, Oct. 2, 2020, as amended at 86 FR 15401, Mar. 23, 2021]