00-32476. Community Development Revolving Loan Program for Credit Unions

AGENCY:

National Credit Union Administration (NCUA).

ACTION:

Interim final rule with request for comments.

SUMMARY:

The NCUA is revising its regulations pertaining to the Community Development Revolving Loan Program for Credit Unions (CDRLP) to make more flexible the manner in which NCUA may deliver technical assistance to participating credit unions. This revision reflects the broad authority granted to NCUA by the Federal Credit Union Act (Act) in this context.

DATES:

Effective December 21, 2000. NCUA welcomes comments on this interim final rule. Comments must be received on or before February 20, 2001.

ADDRESSES:

Comments should be directed to Becky Baker, Secretary of the Board. Mail or hand-deliver comments to: National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. You may also fax comments to [phone] or e-mail comments to [e-mail]. Please send comments by one method only.

FOR FURTHER INFORMATION CONTACT:

Frank S. Kressman, Staff Attorney, at the above address, or telephone: [phone].

SUPPLEMENTARY INFORMATION:

The CDRLP is intended to support the community development activities of participating credit unions. It does this by making low interest loans and providing technical assistance to those credit unions. This increases economic and employment opportunities for the credit unions' low-income members.

The Act authorizes the NCUA Board to use interest earned by the CDRLP to provide technical assistance to participating credit unions. 12 U.S.C. 1772c-1. The regulation implementing this authority provides: “Based on available earnings, NCUA may contract with outside providers to render technical assistance to participating credit unions.” 12 CFR 705.10. When this rule was initially adopted, the rule's preamble noted, “NCUA plans to contract with a provider that can render necessary technical assistance to credit unions selected for participation in the [Community Development Revolving Loan] Program.” 52 FR 34891, September 16, 1987. The NCUA Board later amended the regulation to allow the agency to contract with more than one technical assistance provider. 58 FR 21648, April 23, 1993. The technical assistance provision in the regulation is more restrictive than the statutory authority granted to the NCUA Board by the Act.

Congress has recently appropriated an additional $1 million to the CDRLP, $350,000 of which is specifically earmarked for technical assistance. NCUA has determined that, in conjunction with this additional funding, it is an appropriate time to amend § 705.10. The NCUA Board has determined that § 705.10 is unnecessarily restrictive and may interfere with the CDRLP's ability to provide technical assistance to participating credit unions efficiently. Specifically, the CDRLP should have the flexibility to provide technical assistance to participating credit unions directly or through outside providers selected by the credit unions or NCUA. Applications for CDRLP technical assistance are available from NCUA and will be processed in accordance with established NCUA procedures and guidelines.

Interim Final Rule

The NCUA Board is issuing this rule as an interim final rule because there is a strong public interest in having in place rules that make CDRLP technical assistance as readily accessible and easily deliverable to participating credit unions as possible. This interim rule provides additional benefit to participating credit unions with no additional burden. Accordingly, for good cause, the Board finds that, pursuant to 5 U.S.C. 553(b)(3)(B), notice and public procedures are impracticable, unnecessary, and contrary to the public interest; and, pursuant to 5 U.S.C. 553(d)(3), the rule shall be effective immediately and without 30 days advance notice of publication. Although the rule is being issued as an interim final rule and is effective immediately, the NCUA Board encourages interested parties to submit comments.

Regulatory Procedures

Regulatory Flexibility Act

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact any regulation may have on a substantial number of small entities. For purposes of this analysis, credit unions under $1 million in assets will be considered small entities.

The NCUA Board has determined and certifies that this rule will not have a significant economic impact on a substantial number of small entities. The reason for this determination is that the revision provides the CDRLP with more options and flexibility in providing technical assistance to participating credit unions without any additional regulatory burden or expense to credit unions. Accordingly, the NCUA has determined that a Regulatory Flexibility Analysis is not required.

Paperwork Reduction Act

NCUA has determined that the revision does not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget.

Executive Order 13132

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their regulatory actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. This rule will apply to some state-chartered credit unions, but it will not have substantial 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. NCUA has determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order.

Agency Regulatory Goal

NCUA's goal is to promulgate clear and understandable regulations that impose minimal regulatory burden. We request your comments on whether this rule is understandable and minimally intrusive.

List of Subjects in 12 CFR Part 705

• Community development
• Credit unions
• Loan programs-housing and community development
• Reporting and recordkeeping requirements
• Technical assistance

By the National Credit Union Administration Board, on December 14, 2000.

Becky Baker,

Secretary of the Board.

For the reasons stated above, NCUA amends 12 CFR part 705 as follows:

PART 705—COMMUNITY DEVELOPMENT REVOLVING LOAN PROGRAM FOR CREDIT UNIONS

1. The authority citation for part 705 continues to read as follows:

Authority: 12 U.S.C. 1772c-1; 42 U.S.C. 9822 and 9822 note.

2. Remove the first sentence of § 705.10 and add 3 sentences in its place to read as follows:

§ 705.10

Technical assistance.

NCUA may provide technical assistance to participating credit unions directly or through outside providers selected by the credit unions or NCUA. NCUA will base technical assistance on funds availability, the needs of the participating credit union, and a demonstrated capability of the participating credit union to provide financial and related services to its members. NCUA will consider applications for technical assistance and determine whether to grant them in accordance with established procedures and standards that are publicly available. * * *