[Federal Register Volume 63, Number 209 (Thursday, October 29, 1998)]
[Proposed Rules]
[Pages 57942-57943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28878]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
Organization and Operations of Federal Credit Unions
AGENCY: National Credit Union Administration (NCUA).
ACTION: Notice of proposed rulemaking and request for comments.
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SUMMARY: The NCUA is proposing to incorporate into its regulations the
agency's longstanding interpretation that federal credit unions (FCUs)
are authorized, within limits, to make charitable contributions and
donations. NCUA seeks to increase regulatory effectiveness by making it
easier for FCUs to locate applicable rules regarding the making of
charitable contributions and donations. NCUA seeks to increase
regulatory effectiveness by making it easier for FCUs to locate
applicable rules regarding the making of charitable contributions and
donations.
DATES: Comments must be received on or before January 27, 1999.
ADDRESSES: Direct comments to Becky Baker, Secretary of the Board. Mail
or hand-deliver comments to: National Credit Union Administration, 1775
Duke Street, Alexandria, Virginia 22314-3428. Fax comments to (703)
518-6319. Please send comments by one method only.
FOR FURTHER INFORMATION CONTACT: Frank S. Kressman, Staff Attorney,
Division of Operations, Office of General Counsel, at the above address
or telephone:
(703) 518-6540.
SUPPLEMENTARY INFORMATION:
NCUA has a policy of continually reviewing its regulations to
``update, clarify and simplify existing regulations and eliminate
redundant and unnecessary provisions.'' Interpretive Rulings and Policy
Statements (IRPS) 87-2, Developing and Reviewing Government
Regulations. As part of this regulatory review program, NCUA also
reviews its IRPS to determine their current effectiveness.
NCUA issued IRPS 79-6 to clarify its position on FCUs making
charitable contributions and donations. 44 FR 56691 (October 2, 1979).
In IRPS 79-6, NCUA acknowledged the benefits associated with FCUs
making charitable contributions and donations. Also, NCUA stated that
the making of charitable contributions and donations is an activity
incidental to an FCU's business within the scope of powers set forth in
the Federal Credit Union Act. 12 U.S.C. 1757(17).
As a result of the review of IRPS 79-6, NCUA seeks to increase
regulatory effectiveness by making it easier for FCUs to locate
applicable rules regarding the making of charitable contributions and
donations. Accordingly, NCUA is proposing to add a new Sec. 701.25 that
will incorporate the policies of IRPS 79-6 into NCUA regulations. This
new rule will be located in part 701 so it will be in the same place as
other regulatory provisions regarding the organization and operations
of FCUs. The language of the new rule is somewhat different from that
of the IRPS, but the rationale and limitations are the same.
This proposal addresses charitable contributions and donations only
and does not include political contributions and donations of FCUs,
which are governed by the Federal Election Campaign Act (2 U.S.C.
441b). Additionally, all charitable contributions and donations by FCUs
must be made in accordance with applicable Federal Credit Union Bylaws
including those addressing conflicts of interest and FCU board of
directors meetings. FCU Bylaws Art. XIX, Sec. 4 and Art. VIII, Sec. 8.
Finally, NCUA intends that an FCU's board of directors, if it chooses,
can establish a budget for charitable contributions and donations and
authorize an executive committee of directors or appropriate FCU senior
officials to disburse those funds in accordance with the proposal.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact any proposed regulation may
have on a substantial number of small entities (primarily those under
$1 million in assets). The NCUA has determined and certifies that the
proposed amendment, if adopted, will not have a significant economic
impact on a substantial number of small credit unions. Accordingly, the
NCUA has determined that a Regulatory Flexibility Analysis is not
required.
Paperwork Reduction Act
NCUA has determined that the proposed amendments do not increase
paperwork requirements under the Paperwork Reduction Act of 1995 and
regulations of the Office of Management and Budget. .
Executive Order 12612
Executive Order 12612 requires NCUA to consider the effect of its
actions on state interests. The proposal only applies to federal credit
unions. NCUA has determined that the proposed amendment does not
constitute a significant regulatory action for purposes of Executive
Order 12612.
List of Subjects in 12 CFR Part 701
Charitable contributions, Credit unions.
By the National Credit Union Administration Board on October 22,
1998.
Becky Baker,
Secretary of the Board.
For the reasons set forth in the preamble, it is proposed that 12
CFR part 701 be amended as follows:
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
1. The authority citation for part 701 continues to read as
follows:
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1759, 1761a,
1761b, 1766, 1767, 1782, 1784, 1787, and 1789. Section 701.6 is also
authorized by 31 U.S.C. 3717. Section 701.31 is also authorized by
15 U.S.C. 1601 et seq., 42 U.S.C. 1861 and 42 U.S.C. 3601-3610.
Section 701.35 is also authorized by 42 U.S.C. 4311-4312.
2. Part 701 is amended by adding Sec. 701.25 to read as follows:
Sec. 701.25 Charitable contributions and donations.
(a) A federal credit union may make charitable contributions and/or
donate funds only to:
(1) An organization that is a tax exempt organization under Section
501(c)(3) of the Internal Revenue Code and is located in or conducts
its activities in a community in which the federal credit union has a
principal place of business; or
(2) An organization that is a tax exempt organization under Section
501(c)(3) of the Internal Revenue Code
[[Page 57943]]
and operates primarily to promote and develop credit unions.
(b) The board of directors must approve charitable contributions
and/or donations, and the approval must be based on a determination by
the board of directors that the contributions and/or donations are in
the best interests of the credit union and are reasonable given the
financial condition of the credit union.
[FR Doc. 98-28878 Filed 10-28-98; 8:45 am]
BILLING CODE 7535-01-U
