81 FR 85110 - Community Development Revolving Loan Fund

NATIONAL CREDIT UNION ADMINISTRATION

Federal Register Volume 81, Issue 227 (November 25, 2016)

Page Range		85110-85113
FR Document		2016-28229
The NCUA Board (Board) is finalizing a rule to make several technical amendments to NCUA's rule governing the Community Development Revolving Loan Fund (CDRLF). The amendments will make the rule more succinct and improve its transparency, organization, and ease of use by credit unions.
Federal Register, Volume 81 Issue 227 (Friday, November 25, 2016)
[Federal Register Volume 81, Number 227 (Friday, November 25, 2016)]
[Rules and Regulations]
[Pages 85110-85113]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28229]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 705

RIN 3133-AE58


Community Development Revolving Loan Fund

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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

SUMMARY: The NCUA Board (Board) is finalizing a rule to make several 
technical amendments to NCUA's rule governing the Community Development 
Revolving Loan Fund (CDRLF). The amendments will make the rule more 
succinct and improve its transparency, organization, and ease of use by 
credit unions.

DATES: This rule is effective December 27, 2016.

FOR FURTHER INFORMATION CONTACT: Geetha Valiyil, Manager, Grants and 
Loans, Office of Small Credit Union Initiatives, or Justin Anderson, 
Senior Staff Attorney, Office of General Counsel, at 1775 Duke Street, 
Alexandria, VA 22314 or telephone (703) 518-6645 (Ms. Valiyil) or (703) 
518-6540 (Mr. Anderson).

SUPPLEMENTARY INFORMATION: 

A. Background

    In June 2016, the Board issued a proposed rule to amend NCUA's 
CDRLF rule.\1\ The proposed amendments were largely technical in nature 
or clarified NCUA's practices with respect to disbursing money from the 
CDRLF.
---------------------------------------------------------------------------

    \1\ 81 FR 40197 (June 21, 2016).
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B. Summary of Comments

    NCUA received three comments on the proposed rule, all of which 
were generally supportive of the rule. One commenter, however, did 
request additional changes and clarifications.

[[Page 85111]]

These comments are addressed in the section-by-section analysis below.

C. Section-by-Section Analysis

    As the Board did not receive any comments on the amendments to 
Sec. Sec.  705.1, 705.6, and 705.9, which relate to the authority and 
purpose of the part, terms for grants, and reporting, the Board is 
finalizing these amendments as proposed.
    Sec.  705.2 Definitions. This section provides definitions used 
throughout the rule. The proposed rule removed unnecessary and 
duplicative definitions. One commenter requested that the Board 
reconsider the removal of the definition of ``Fund.'' The commenter 
stated that this term is specifically relevant to the CDRLF rule and 
should remain. As noted in the preamble, this term is already defined 
in Sec.  705.1. The Board continues to believe a second definition of 
``Fund'' is unnecessary and is, therefore, finalizing the amendments to 
this section as proposed.
    Sec.  705.5. Terms and Conditions. This section outlines the terms 
and conditions for CDRLF loans. Currently, this section has an 
aggregate loan limit of $300,000, which prevents NCUA from making loans 
that exceed this amount. As noted in the proposal, the Board sought to 
remove this limit to allow NCUA to grant loans in excess of $300,000 
and to provide more flexibility for the agency to meet changing loan 
demands. One commenter believed that the proposed removal of the 
aggregate loan limit from the rule could lead to NCUA instituting lower 
aggregate limits, which could harm credit unions. This commenter 
suggested including language in the rule that explicitly instructs that 
there is no aggregate limit for loans or technical assistance grants.
    As noted in the preamble to the proposed rule, the Board proposed 
eliminating the aggregate loan limit to help credit unions. As the 
current aggregate loan limit is an upper limit, NCUA is currently free 
to set a lower amount for CDRLF loans but cannot offer a higher amount. 
The proposed removal of this limit will allow NCUA to offer higher loan 
amounts. As the proposed removal of the limit will help, rather than 
harm credit unions, the Board is adopting this change as proposed. 
Further, as there is currently no aggregate limit for technical 
assistance grants and the grant amounts vary each year, the Board does 
not believe it is necessary to add the additional language suggested by 
this commenter.
    This commenter also requested more substantive terms and conditions 
for technical assistance grants. While the commenter did not specify 
what additional terms and conditions the Board should add, the 
commenter did suggest that the terms and conditions for grants are 
``scarce in comparison'' to those for loans. The Board notes that as 
grants are not required to be repaid, unlike loans made under the CDRLF 
program, there is no need for more comprehensive terms and conditions. 
Further, the Board's goal in proposing amendments to the CDRLF rule was 
to make the rule more user friendly and simpler; adding additional 
terms and conditions where they are not needed would frustrate that 
purpose. Finally, as noted in the proposed rule, any additional terms 
and conditions for loans or grants will be specified in the Notice of 
Funding Opportunity and not in the regulatory text.
    Current Sec.  705.6. Application and award processes. This section 
specifies the procedures a credit union must follow to apply for a loan 
or grant from the CDRLF. The Board sought to make this section clearer 
and more accurate by proposing amendments that made this section easier 
to follow and more reflective of NCUA's current practices. One 
commenter requested clarification on whether a credit union is required 
to obtain approval from the applicable regional director before 
submitting an application. NCUA has never required such prior approval 
in the past, and the Board clarifies it is not doing so now.
    Sec.  705.10. Appeals. The Board proposed to add this new section 
to contain all applicable appeals language in one section, which would 
make the rule more user friendly. One commenter requested clarification 
on the appeal rights in proposed Sec.  705.10(a). Specifically, this 
commenter believes that this section could be interpreted as only 
applying to loans and not to grants. In relevant portion, proposed 
Sec.  705.10(a) reads as follows: ``Appeals of Non-Qualification. A 
Qualifying Credit Union whose application for a loan or technical 
assistance grant has been denied, under Sec.  705.7(f) of this part, 
for failure of a qualification may appeal that decision to the NCUA 
Board in accordance with the following . . .''
    The Board believes this section clearly applies to both loans and 
technical assistance grants. Conversely subsection (b) of this proposed 
section states that it only applies to technical assistance grants. The 
Board is adopting the amendments to this section as proposed.

Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires NCUA to prepare an 
analysis to describe any significant economic impact any proposed 
regulation may have on a substantial number of small entities. NCUA 
considers credit unions having less than $100 million in assets to be 
small for purposes of RFA. The revisions to part 705 are designed to 
update and streamline the rule, thereby reducing the burden for credit 
unions that are seeking financial awards, whether in the form of a 
technical assistance grant or a loan. NCUA has determined and certifies 
that this rule, if adopted, will not have a significant economic impact 
on a substantial number of small credit unions. Accordingly, the NCUA 
has determined that an RFA analysis is not required.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in 
which an agency by rule creates a new paperwork burden or increases an 
existing burden. For purposes of the PRA, a paperwork burden may take 
the form of a reporting or recordkeeping requirement, both referred to 
as information collections. The changes in this rule are technical in 
nature and will not create new paperwork burdens or modify any existing 
paperwork burdens.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their 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 rulemaking will not have a substantial 
direct effect on the states, on the connection 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.

The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this 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).

[[Page 85112]]

List of Subjects in 12 CFR Part 705

    Community programs, Credit unions, Grants, Loans, Low income, 
Revolving fund.

    By the National Credit Union Administration Board on November 
17, 2016.
Gerard Poliquin,
Secretary of the Board.

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

PART 705--COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT 
UNIONS

0
1. The authority citation for part 705 continues to read as follows:

    Authority: 12 U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1782, 
1784, 1785 and 1786.

0
2. Amend Sec.  705.1 by revising paragraphs (c) through (e) to read as 
follows:


Sec.  705.1  Authority, purpose, and scope.

* * * * *
    (c) NCUA's policy is to revolve the loan funds to credit unions as 
often as practical in order to achieve maximum economic impact on as 
many credit unions as possible.
    (d) The financial awards provided to credit unions through the Fund 
will better enable them to support the communities in which they 
operate; provide basic financial services to low-income residents of 
these communities, and result in more opportunities for the residents 
of those communities to improve their financial circumstances.
    (e) The Fund is intended to support the efforts of credit unions 
through loans and technical assistance grants needed for:
    (1) Providing basic financial and related services to residents in 
their communities;
    (2) Enhancing their capacity to better serve their members and the 
communities in which they operate; and
    (3) Responding to emergencies.

0
3. Revise Sec.  705.2 to read as follows:


Sec.  705.2   Definitions.

    For purposes of this part, the following terms shall have the 
meanings assigned to them in this section.
    Application means a form supplied by the NCUA by which a Qualifying 
Credit Union may apply for a loan or a technical assistance grant from 
the Fund.
    Loan is an award in the form of an extension of credit from the 
Fund to a Participating Credit Union that must be repaid, with 
interest.
    Low-income Members are those members defined in Sec.  701.34 of 
this chapter.
    Notice of Funding Opportunity means the Notice NCUA publishes 
describing one or more loan or technical assistance grant programs or 
initiatives currently being supported by the Fund and inviting 
Qualifying Credit Unions to submit applications to participate in the 
program(s) or initiatives(s).
    Participating Credit Union refers to a Qualifying Credit Union that 
has submitted an application for a loan or a technical assistance grant 
from the Fund which has been approved by NCUA. A Participating Credit 
Union shall not be deemed to be an agency, department, or 
instrumentality of the United States because of its receipt of a 
financial award from the Fund.
    Program means the Community Development Revolving Loan Fund Program 
under which NCUA makes loans and technical assistance grants available 
to credit unions.
    Qualifying Credit Union means a credit union that may be, or has 
agreed to be, examined by NCUA, with a current low-income designation 
pursuant to Sec.  701.34(a)(1) or Sec.  741.204 of this chapter or, in 
the case of a non-federally insured, state-chartered credit union, a 
low-income designation from a state regulator, made under appropriate 
state standards with the concurrence of NCUA. Services to low-income 
members must include, at a minimum, offering share accounts and loans.
    Technical Assistance Grant means an award of money from the Fund to 
a Participating Credit Union that does not have to be repaid.

0
4. Amend Sec.  705.5 as follows:
0
a. Revise the section heading.
0
b. Revise paragraph (b).
0
c. Amend paragraph (h) by adding the words ``security agreements (if 
any),'' between the words ``repayment obligations,'' and ``and 
covenants,''.
    The revisions read as follows:


Sec.  705.5   Terms and conditions for loans.

* * * * *
    (b) Funding Limits. NCUA will publish any applicable loan funding 
limits in the applicable Notice of Funding Opportunity.
* * * * *


Sec.  705.8   [Removed]

0
5. Remove Sec.  705.8.


Sec. Sec.  705.6 and 705.7   [Redesignated as Sec. Sec.  705.7 and 
705.8]

0
6. Redesignate Sec. Sec.  705.6 and 705.7 as Sec. Sec.  705.7 and 
705.8, respectively;

0
7. Add new Sec.  705.6 to read as follows:


Sec.  705.6  Terms and conditions for technical assistance grants.

    (a) Participating Credit Unions must comply with the terms and 
conditions for technical assistance grants specified for each funding 
opportunity offered under a Notice of Funding Opportunity.
    (b) NCUA will establish applicable funding limits for technical 
assistance grants in the Notice of Funding Opportunity.

0
8. Amend redesignated Sec.  705.7 as follows:
0
a. Revise paragraph (a).
0
b. Revise paragraph (c)(4).
0
c. Revise paragraphs (f) and (g).
    The revisions read as follows:


Sec.  705.7   Application and award processes.

    (a) Notice of Funding Opportunity. NCUA will publish a Notice of 
Funding Opportunity in the Federal Register and on its Web site. The 
Notice of Funding Opportunity will describe the loan and technical 
assistance grant programs for the period in which funds are available. 
It also will announce special initiatives, the amount of funds 
available, funding priorities, permissible uses of funds, funding 
limits, deadlines, and other pertinent details. The Notice of Funding 
Opportunity will also advise potential applicants on how to obtain an 
Application and related materials. NCUA may supplement the information 
contained in the Notice of Funding Opportunity through such other media 
as it determines appropriate, including Letters to Credit Unions, press 
releases, direct notices to Qualifying Credit Unions, and announcements 
on its Web site.
* * * * *
    (c) * * *
    (4) Examination Information and Applicable Concurrence. In 
evaluating a Qualifying Credit Union, NCUA will consider all 
information provided by NCUA staff or state supervisory authority staff 
that performed the Qualifying Credit Union's most recent examination. 
In addition:
    (i) NCUA will only provide a loan to a qualifying federal credit 
union with the concurrence of that credit union's supervising Regional 
Director; and
    (ii) NCUA will only provide a loan to a qualifying state-charted 
credit union with the written concurrence of the applicable Regional 
Director and the credit union's state supervisory authority. A 
qualifying state-chartered credit union should notify its state 
supervisory authority that it is applying for a loan from the Fund 
before submitting its application to NCUA. However, a qualifying state-
chartered credit union is not required to obtain

[[Page 85113]]

concurrence before applying for a loan. NCUA will obtain the 
concurrence directly from the state supervisory authority rather than 
through the qualifying state-chartered credit union. Additionally, 
before NCUA will provide a loan to a qualifying state-charted credit 
union the credit union must make copies of its state examination 
reports available to NCUA and agree to examination by NCUA.
* * * * *
    (f) Notice of Award. NCUA will determine whether an application 
meets NCUA's standards established by this part and the related Notice 
of Funding Opportunity. NCUA will provide written notice to a 
Qualifying Credit Union as to whether or not it has qualified for a 
loan or technical assistance grant under this part. A Qualifying Credit 
Union whose application has been denied for failure of a qualification 
may appeal that decision in accordance with Sec.  705.10 of this part.
    (g) Disbursement--(1) Loans. Before NCUA will disburse a loan, the 
Participating Credit Union must sign the loan agreement, promissory 
note, and any other loan related documents. NCUA may, in its 
discretion, choose not to disburse the entire amount of the loan at 
once.
    (2) Technical Assistance Grants. NCUA will disburse technical 
assistance grants in such amounts, and in accordance with such terms 
and conditions, as NCUA may establish. In general, technical assistance 
grants are provided on a reimbursement basis, to cover expenditures 
approved in advance by NCUA and supported by receipts evidencing 
payment by the Participating Credit Union.

0
9. Revise Sec.  705.9(b) to read as follows:


Sec.  705.9   Reporting and monitoring.

* * * * *
    (b) Reporting--(1) Reporting to NCUA. A Participating Credit Union 
must complete and submit to NCUA all required reports, at such times 
and in such formats as NCUA will direct. Such reports must describe how 
the Participating Credit Union has used the loan or technical 
assistance grant proceeds and the results it has obtained, in relation 
to the programs, policies, or initiatives identified by the 
Participating Credit Union in its application. NCUA may request 
additional information as it determines appropriate.
    (2) Reporting to Members--(i) Loans. A Participating Credit Union 
that receives a loan under this part must report on the progress of 
providing needed community services to the Participating Credit Union's 
members once a year, either at the annual meeting or in a written 
report sent to all members. The Participating Credit Union must also 
submit to NCUA the written report or a summary of the report provided 
to members.
    (ii) Technical Assistance Grants. A Participating Credit Union that 
receives a technical assistance grant under this part should report on 
the progress of providing needed community services to the 
Participating Credit Union's members once a year, either at the annual 
meeting or in a written report sent to all members.
* * * * *

0
10. Revise Sec.  705.10 to read as follows:


Sec.  705.10   Appeals.

    (a) Appeals of non-qualification. A Qualifying Credit Union whose 
application for a loan or technical assistance grant has been denied, 
under Sec.  705.7(f), for failure of a qualification may appeal that 
decision to the NCUA Board in accordance with the following:
    (1) Within thirty days of its receipt of a notice of non-
qualification, a credit union may appeal the decision to the NCUA 
Board. The scope of the NCUA Board's review is limited to the threshold 
question of qualification and not the issue of whether, among qualified 
applicants, a particular loan or technical assistance grant is funded.
    (2) The foregoing procedure shall apply only with respect to 
Applications received by NCUA during an open period in which funds are 
available and NCUA has called for Applications. Any Application 
submitted by an applicant during a period in which NCUA has not called 
for Applications will be rejected, except for those Applications 
submitted under Sec.  705.8. Any such rejection shall not be subject to 
appeal or review by the NCUA Board.
    (b) Appeals of technical assistance grant reimbursement denials. 
Pursuant to NCUA Interpretative Ruling and Policy Statement 11-1, any 
Participating Credit Union may appeal a denial of a technical 
assistance grant reimbursement to NCUA's Supervisory Review Committee. 
All appeals of technical assistance grant reimbursements must be 
submitted to the Supervisory Review Committee within 30 days from the 
date of the denial. The decisions of the Supervisory Review Committee 
are final and may not be appealed to the NCUA Board.

[FR Doc. 2016-28229 Filed 11-23-16; 8:45 am]
 BILLING CODE 7535-01-P
85110 Federal Register / Vol. 81, No. 227 / Friday, November 25, 2016 / Rules and Regulations

production area to enter the fresh Colorado potato industry, and all § 948.386 Handling regulation.
market. The anticipated increase in interested persons were invited to * * * * *
volume is expected to translate into attend the meeting and participate in (a) * * *
greater returns for handlers and Committee deliberations on all issues. (3) 11⁄2-inch minimum to 21⁄4-inch
producers, and more purchasing options Like all Committee meetings, the March maximum diameter (Size B). U.S.
for consumers. 17, 2016, meeting was a public meeting, Commercial grade or better, except that
After discussing possible alternatives and all entities, both large and small, red varieties may be U.S. No. 2 grade or
to this change, the Committee were able to express views on this issue. better.
determined that a relaxation in the A proposed rule concerning this * * * * *
grade requirement for Size B red action was published in the Federal
potatoes should meet the industry’s Dated: November 18, 2016.
Register on August 1, 2016 (81 FR
current needs while maintaining the Bruce Summers,
50406). Copies of the rule were made
integrity of the order’s quality available to all interested Colorado Associate Administrator, Agricultural
objectives. During its deliberations, the Marketing Service.
potato producers and handlers. Finally,
Committee considered making no the rule was made available through the [FR Doc. 2016–28252 Filed 11–23–16; 8:45 am]
changes to the handling regulation, as internet by USDA and the Office of the BILLING CODE 3410–02–P
well as relaxing the grade requirement Federal Register. A 60-day comment
for all Size B potatoes. The Committee period ending September 30, 2016, was
believes that a relaxation in the provided to allow interested persons to NATIONAL CREDIT UNION
handling regulation for Size B red respond to the proposal. No comments ADMINISTRATION
potatoes is necessary to allow handlers were received.
to pursue new markets, but lowering the A small business guide on complying 12 CFR Part 705
grade requirement for all other types with fruit, vegetable, and specialty crop RIN 3133–AE58
and varieties of Size B potatoes to U.S. marketing agreements and orders may
No. 2 grade or better could erode the be viewed at: http://www.ams.usda.gov/ Community Development Revolving
quality reputation of the area’s rules-regulations/moa/small-businesses. Loan Fund
production. Therefore, the Committee Any questions about the compliance
found that there were no other viable AGENCY: National Credit Union
guide should be sent to Richard Lower
alternatives to the proposal as Administration (NCUA).
at the previously mentioned address in
recommended. ACTION: Final rule.
the FOR FURTHER INFORMATION CONTACT
In accordance with the Paperwork section.
Reduction Act of 1995 (44 U.S.C. SUMMARY: The NCUA Board (Board) is
After consideration of all relevant finalizing a rule to make several
Chapter 35), the order’s information matter presented, including the
collection requirements have been technical amendments to NCUA’s rule
information and recommendation governing the Community Development
previously approved by the Office of submitted by the Committee and other
Management and Budget (OMB) and Revolving Loan Fund (CDRLF). The
available information, it is hereby found amendments will make the rule more
assigned OMB No. 0581–0178, (Generic that this rule, as hereinafter set forth,
Vegetable and Specialty Crops). No succinct and improve its transparency,
will tend to effectuate the declared organization, and ease of use by credit
changes in those requirements as a policy of the Act.
result of this action are necessary. unions.
It is further found that good cause
Should any changes become necessary, DATES: This rule is effective December
exists for not postponing the effective
they would be submitted to OMB for 27, 2016.
date of this rule until 30 days after
approval. FOR FURTHER INFORMATION CONTACT:
publication in the Federal Register (5
This final rule relaxes the minimum U.S.C. 553) because handlers are already Geetha Valiyil, Manager, Grants and
grade requirements under the Colorado shipping potatoes from the 2016 crop, Loans, Office of Small Credit Union
Area 2 potato marketing order. and handlers want to take advantage of Initiatives, or Justin Anderson, Senior
Accordingly, this action will not impose the relaxation as soon as possible. Staff Attorney, Office of General
any additional reporting or Further, handlers are aware of this rule, Counsel, at 1775 Duke Street,
recordkeeping requirements on either which was recommended at a public Alexandria, VA 22314 or telephone
small or large potato handlers. As with meeting. Also, a 60-day comment period (703) 518–6645 (Ms. Valiyil) or (703)
all Federal marketing order programs, was provided for in the proposed rule. 518–6540 (Mr. Anderson).
reports and forms are periodically SUPPLEMENTARY INFORMATION:
reviewed to reduce information List of Subjects in 7 CFR Part 948
requirements and duplication by A. Background
Marketing agreements, Potatoes,
industry and public sector agencies. Reporting and recordkeeping In June 2016, the Board issued a
As noted in the initial regulatory requirements. proposed rule to amend NCUA’s CDRLF
flexibility analysis, USDA has not rule.1 The proposed amendments were
identified any relevant Federal rules For the reasons set forth in the
largely technical in nature or clarified
that duplicate, overlap or conflict with preamble, 7 CFR part 948 is amended as
NCUA’s practices with respect to
this final rule. follows:
disbursing money from the CDRLF.
AMS is committed to complying with
PART 948—IRISH POTATOES GROWN B. Summary of Comments
the E-Government Act, to promote the
IN COLORADO
use of the internet and other NCUA received three comments on
ehiers on DSK5VPTVN1PROD with RULES

information technologies to provide ■ 1. The authority citation for 7 CFR the proposed rule, all of which were
increased opportunities for citizen part 948 continues to read as follows: generally supportive of the rule. One
access to Government information and commenter, however, did request
Authority: 7 U.S.C. 601–674.
services, and for other purposes. additional changes and clarifications.
In addition, the Committee’s meeting ■ 2. In § 948.386, paragraph (a)(3) is
was widely publicized throughout the revised to read as follows: 1 81 FR 40197 (June 21, 2016).

VerDate Sep<11>2014 14:00 Nov 23, 2016 Jkt 241001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\25NOR1.SGM 25NOR1
Federal Register / Vol. 81, No. 227 / Friday, November 25, 2016 / Rules and Regulations 85111

These comments are addressed in the technical assistance grants. While the Regulatory Procedures
section-by-section analysis below. commenter did not specify what Regulatory Flexibility Act
C. Section-by-Section Analysis additional terms and conditions the
Board should add, the commenter did The Regulatory Flexibility Act (RFA)
As the Board did not receive any suggest that the terms and conditions for requires NCUA to prepare an analysis to
comments on the amendments to grants are ‘‘scarce in comparison’’ to describe any significant economic
§§ 705.1, 705.6, and 705.9, which relate impact any proposed regulation may
those for loans. The Board notes that as
to the authority and purpose of the part, have on a substantial number of small
grants are not required to be repaid,
terms for grants, and reporting, the entities. NCUA considers credit unions
Board is finalizing these amendments as unlike loans made under the CDRLF
having less than $100 million in assets
proposed. program, there is no need for more to be small for purposes of RFA. The
§ 705.2 Definitions. This section comprehensive terms and conditions. revisions to part 705 are designed to
provides definitions used throughout Further, the Board’s goal in proposing update and streamline the rule, thereby
the rule. The proposed rule removed amendments to the CDRLF rule was to reducing the burden for credit unions
unnecessary and duplicative make the rule more user friendly and that are seeking financial awards,
definitions. One commenter requested simpler; adding additional terms and whether in the form of a technical
that the Board reconsider the removal of conditions where they are not needed assistance grant or a loan. NCUA has
the definition of ‘‘Fund.’’ The would frustrate that purpose. Finally, as determined and certifies that this rule,
commenter stated that this term is noted in the proposed rule, any if adopted, will not have a significant
specifically relevant to the CDRLF rule additional terms and conditions for economic impact on a substantial
and should remain. As noted in the loans or grants will be specified in the number of small credit unions.
preamble, this term is already defined in Notice of Funding Opportunity and not Accordingly, the NCUA has determined
§ 705.1. The Board continues to believe in the regulatory text. that an RFA analysis is not required.
a second definition of ‘‘Fund’’ is
unnecessary and is, therefore, finalizing Current § 705.6. Application and Paperwork Reduction Act
the amendments to this section as award processes. This section specifies The Paperwork Reduction Act of 1995
proposed. the procedures a credit union must (PRA) applies to rulemakings in which
§ 705.5. Terms and Conditions. This follow to apply for a loan or grant from an agency by rule creates a new
section outlines the terms and the CDRLF. The Board sought to make paperwork burden or increases an
conditions for CDRLF loans. Currently, this section clearer and more accurate existing burden. For purposes of the
this section has an aggregate loan limit by proposing amendments that made PRA, a paperwork burden may take the
of $300,000, which prevents NCUA this section easier to follow and more form of a reporting or recordkeeping
from making loans that exceed this reflective of NCUA’s current practices. requirement, both referred to as
amount. As noted in the proposal, the One commenter requested clarification information collections. The changes in
Board sought to remove this limit to on whether a credit union is required to this rule are technical in nature and will
allow NCUA to grant loans in excess of obtain approval from the applicable not create new paperwork burdens or
$300,000 and to provide more flexibility regional director before submitting an modify any existing paperwork burdens.
for the agency to meet changing loan application. NCUA has never required
demands. One commenter believed that Executive Order 13132
such prior approval in the past, and the
the proposed removal of the aggregate Board clarifies it is not doing so now. Executive Order 13132 encourages
loan limit from the rule could lead to independent regulatory agencies to
NCUA instituting lower aggregate limits, § 705.10. Appeals. The Board consider the impact of their actions on
which could harm credit unions. This proposed to add this new section to state and local interests. In adherence to
commenter suggested including contain all applicable appeals language fundamental federalism principles,
language in the rule that explicitly in one section, which would make the NCUA, an independent regulatory
instructs that there is no aggregate limit rule more user friendly. One commenter agency as defined in 44 U.S.C. 3502(5),
for loans or technical assistance grants. requested clarification on the appeal voluntarily complies with the executive
As noted in the preamble to the rights in proposed § 705.10(a). order. This rulemaking will not have a
proposed rule, the Board proposed Specifically, this commenter believes substantial direct effect on the states, on
eliminating the aggregate loan limit to that this section could be interpreted as the connection between the national
help credit unions. As the current only applying to loans and not to grants. government and the states, or on the
aggregate loan limit is an upper limit, In relevant portion, proposed § 705.10(a) distribution of power and
NCUA is currently free to set a lower reads as follows: ‘‘Appeals of Non- responsibilities among the various
amount for CDRLF loans but cannot Qualification. A Qualifying Credit levels of government. NCUA has
offer a higher amount. The proposed Union whose application for a loan or determined that this rule does not
removal of this limit will allow NCUA technical assistance grant has been constitute a policy that has federalism
to offer higher loan amounts. As the denied, under § 705.7(f) of this part, for implications for purposes of the
proposed removal of the limit will help, failure of a qualification may appeal that executive order.
rather than harm credit unions, the decision to the NCUA Board in
Board is adopting this change as The Treasury and General Government
accordance with the following . . .’’ Appropriations Act, 1999—Assessment
proposed. Further, as there is currently
no aggregate limit for technical The Board believes this section of Federal Regulations and Policies on
assistance grants and the grant amounts clearly applies to both loans and Families
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vary each year, the Board does not technical assistance grants. Conversely The NCUA has determined that this
believe it is necessary to add the subsection (b) of this proposed section rule will not affect family well-being
additional language suggested by this states that it only applies to technical within the meaning of section 654 of the
commenter. assistance grants. The Board is adopting Treasury and General Government
This commenter also requested more the amendments to this section as Appropriations Act, 1999, Public Law
substantive terms and conditions for proposed. 105–277, 112 Stat. 2681 (1998).

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Federal Register / Vol. 81, No. 227 / Friday, November 25, 2016 / Rules and Regulations 85113

concurrence before applying for a loan. Participating Credit Union’s members DEPARTMENT OF TRANSPORTATION
NCUA will obtain the concurrence once a year, either at the annual meeting
directly from the state supervisory or in a written report sent to all Federal Aviation Administration
authority rather than through the members. The Participating Credit
qualifying state-chartered credit union. Union must also submit to NCUA the 14 CFR Part 39
Additionally, before NCUA will provide written report or a summary of the [Docket No. FAA–2016–5597; Directorate
a loan to a qualifying state-charted report provided to members. Identifier 2016–NM–009–AD; Amendment
credit union the credit union must make (ii) Technical Assistance Grants. A 39–18715; AD 2016–23–08]
copies of its state examination reports Participating Credit Union that receives RIN 2120–AA64
available to NCUA and agree to a technical assistance grant under this
examination by NCUA. part should report on the progress of Airworthiness Directives; The Boeing
* * * * * providing needed community services Company Airplanes
(f) Notice of Award. NCUA will to the Participating Credit Union’s
determine whether an application meets AGENCY: Federal Aviation
members once a year, either at the
NCUA’s standards established by this Administration (FAA), DOT.
annual meeting or in a written report
part and the related Notice of Funding sent to all members. ACTION: Final rule.
Opportunity. NCUA will provide
* * * * * SUMMARY: We are adopting a new
written notice to a Qualifying Credit
Union as to whether or not it has ■ 10. Revise § 705.10 to read as follows: airworthiness directive (AD) for all The
qualified for a loan or technical Boeing Company Model 737–400 series
assistance grant under this part. A § 705.10 Appeals. airplanes. This AD was prompted by
Qualifying Credit Union whose reports of cracks in the upper chord of
(a) Appeals of non-qualification. A the overwing stub beams at body station
application has been denied for failure Qualifying Credit Union whose
of a qualification may appeal that (STA) 578 emanating from the rivet
application for a loan or technical location common to the crease beam
decision in accordance with § 705.10 of assistance grant has been denied, under
this part. inner chord and the overwing stub beam
§ 705.7(f), for failure of a qualification upper chord. This AD requires
(g) Disbursement—(1) Loans. Before may appeal that decision to the NCUA
NCUA will disburse a loan, the repetitive inspections for cracking, and
Board in accordance with the following: related investigative and corrective
Participating Credit Union must sign the
loan agreement, promissory note, and (1) Within thirty days of its receipt of actions if necessary. We are issuing this
any other loan related documents. a notice of non-qualification, a credit AD to prevent the unsafe condition on
NCUA may, in its discretion, choose not union may appeal the decision to the these products.
to disburse the entire amount of the loan NCUA Board. The scope of the NCUA DATES: This AD is effective December
at once. Board’s review is limited to the 30, 2016.
(2) Technical Assistance Grants. threshold question of qualification and The Director of the Federal Register
NCUA will disburse technical assistance not the issue of whether, among approved the incorporation by reference
grants in such amounts, and in qualified applicants, a particular loan or of a certain publication listed in this AD
accordance with such terms and technical assistance grant is funded. as of December 30, 2016.
conditions, as NCUA may establish. In (2) The foregoing procedure shall ADDRESSES: For service information
general, technical assistance grants are apply only with respect to Applications identified in this final rule, contact
provided on a reimbursement basis, to received by NCUA during an open Boeing Commercial Airplanes,
cover expenditures approved in advance period in which funds are available and Attention: Contractual & Data Services
by NCUA and supported by receipts NCUA has called for Applications. Any (C&DS), 2600 Westminster Blvd., MC
evidencing payment by the Participating Application submitted by an applicant 110–SK57, Seal Beach, CA 90740–5600;
Credit Union. during a period in which NCUA has not telephone 562–797–1717; Internet
■ 9. Revise § 705.9(b) to read as follows: called for Applications will be rejected, https://www.myboeingfleet.com. You
except for those Applications submitted may view this referenced service
§ 705.9 Reporting and monitoring. under § 705.8. Any such rejection shall information at the FAA, Transport
* * * * * not be subject to appeal or review by the Airplane Directorate, 1601 Lind Avenue
(b) Reporting—(1) Reporting to NCUA. NCUA Board. SW., Renton, WA. You may view this
A Participating Credit Union must referenced service information at the
(b) Appeals of technical assistance
complete and submit to NCUA all FAA, Transport Airplane Directorate,
grant reimbursement denials. Pursuant
required reports, at such times and in 1601 Lind Avenue SW., Renton, WA.
to NCUA Interpretative Ruling and
such formats as NCUA will direct. Such For information on the availability of
Policy Statement 11–1, any Participating
reports must describe how the this material at the FAA, call 425–227–
Credit Union may appeal a denial of a
Participating Credit Union has used the 1221. It is also available on the Internet
technical assistance grant
loan or technical assistance grant at http://www.regulations.gov by
reimbursement to NCUA’s Supervisory
proceeds and the results it has obtained, searching for and locating Docket No.
Review Committee. All appeals of
in relation to the programs, policies, or FAA–2016–5597.
initiatives identified by the Participating technical assistance grant
Credit Union in its application. NCUA reimbursements must be submitted to Examining the AD Docket
may request additional information as it the Supervisory Review Committee You may examine the AD docket on
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determines appropriate. within 30 days from the date of the the Internet at http://
(2) Reporting to Members—(i) Loans. denial. The decisions of the Supervisory www.regulations.gov by searching for
A Participating Credit Union that Review Committee are final and may and locating Docket No. FAA–2016–
receives a loan under this part must not be appealed to the NCUA Board. 5597; or in person at the Docket
report on the progress of providing [FR Doc. 2016–28229 Filed 11–23–16; 8:45 am] Management Facility between 9 a.m.
needed community services to the BILLING CODE 7535–01–P and 5 p.m., Monday through Friday,

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Document Created: 2016-11-23 23:17:59
Document Modified: 2016-11-23 23:17:59
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		This rule is effective December 27, 2016.
Contact		Geetha Valiyil, Manager, Grants and Loans, Office of Small Credit Union Initiatives, or Justin Anderson, Senior Staff Attorney, Office of General Counsel, at 1775 Duke Street, Alexandria, VA 22314 or telephone (703) 518-6645 (Ms. Valiyil) or (703) 518-6540 (Mr. Anderson).
FR Citation		81 FR 85110
RIN Number		3133-AE58
CFR Associated		Community Programs; Credit Unions; Grants; Loans; Low Income and Revolving Fund