82 FR 29699 - Prevailing Rate Systems

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 82, Issue 125 (June 30, 2017)

Page Range		29699-29699
FR Document		2017-13805

Federal Register, Volume 82 Issue 125 (Friday, June 30, 2017)

[Federal Register Volume 82, Number 125 (Friday, June 30, 2017)]
[Rules and Regulations]
[Page 29699]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-13805]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 82, No. 125 / Friday, June 30, 2017 / Rules 
and Regulations

[[Page 29699]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 532


Prevailing Rate Systems

CFR Correction

    In Title 5 of the Code of Federal Regulations, Parts 1 to 699, 
revised as of January 1, 2017, on page 464, in Part 532, Subpart B, 
Appendix C, under MINNESOTA, Minneapolis-St. Paul, Area of Application. 
Survey area plus:, Minnesota:, the first occurrence of ``Freeborn'' is 
replaced with ``Fillmore''.

[FR Doc. 2017-13805 Filed 6-29-17; 8:45 am]
 BILLING CODE 1301-00-D

29699

Rules and Regulations Federal Register
Vol. 82, No. 125

Friday, June 30, 2017

This section of the FEDERAL REGISTER DATES: The effective date for this rule is transferred into the securitization trust
contains regulatory documents having general July 31, 2017. could be recovered in bankruptcy or in
applicability and legal effect, most of which FOR FURTHER INFORMATION CONTACT: John a credit union liquidation. Generally, to
are keyed to and codified in the Code of satisfy the legal isolation condition, the
Nilles, Senior Capital Markets
Federal Regulations, which is published under transferred financial assets must have
50 titles pursuant to 44 U.S.C. 1510. Specialist, Office of Examination and
Insurance, at (703) 518–1174; or John H. been presumptively placed beyond the
The Code of Federal Regulations is sold by Brolin, Senior Staff Attorney, Office of reach of the transferor, its creditors, a
the Superintendent of Documents. General Counsel, at (703) 518–6438; bankruptcy trustee, or in the case of a
National Credit Union Administration, FICU, NCUA as conservator or
1775 Duke Street, Alexandria, VA liquidating agent. Thus, current § 709.10
OFFICE OF PERSONNEL 22314. addresses only purported sales which
MANAGEMENT meet the conditions for off balance sheet
SUPPLEMENTARY INFORMATION:
accounting treatment under GAAP. The
5 CFR Part 532 I. Background implementation of accounting rules
Prevailing Rate Systems In 2000, when it adopted a regulation since 2000, however, has created
codified at 12 CFR 709.10,1 the Board uncertainty for loan participation and
CFR Correction clarified the scope of its statutory potential securitization participants.
In Title 5 of the Code of Federal authority as conservator or liquidating A. Modifications to GAAP Accounting
Regulations, Parts 1 to 699, revised as of agent to disaffirm or repudiate contracts Standards
January 1, 2017, on page 464, in Part of an FICU with respect to transfers of
532, Subpart B, Appendix C, under financial assets by a FICU in connection In 2009, the Financial Accounting
MINNESOTA, Minneapolis-St. Paul, with a securitization or participation. Standards Board (‘‘FASB’’) finalized
Area of Application. Survey area plus:, Current § 709.10 provides that a modifications to GAAP through
Minnesota:, the first occurrence of conservator or liquidating agent will not Statement of Financial Accounting
‘‘Freeborn’’ is replaced with ‘‘Fillmore’’. use its statutory authority to disaffirm or Standards No. 166, (now codified in
repudiate contracts to reclaim, recover, FASB Accounting Standards
[FR Doc. 2017–13805 Filed 6–29–17; 8:45 am]
or recharacterize as property of a FICU Codification (ASC) Topic 860, Transfers
BILLING CODE 1301–00–D and Servicing) and Statement of
or the liquidation estate any financial
assets transferred by the FICU in Financial Accounting Standards No. 167
connection with a securitization or in (now codified in FASB ASC Topic 810,
NATIONAL CREDIT UNION Consolidation) (together, the ‘‘2009
ADMINISTRATION the form of a participation, provided
that such transfer meets all conditions GAAP Modifications’’). The 2009 GAAP
12 CFR Part 709 for sale accounting treatment under Modifications made changes that affect
generally accepted accounting whether a special purpose entity
RIN 3133–AE41 (‘‘SPE’’) must be consolidated for
principles (‘‘GAAP’’).2 Current § 709.10
also provides a ‘‘safe harbor’’ by financial reporting purposes, thereby
Safe Harbor subjecting many SPEs to GAAP
confirming ‘‘legal isolation’’ if all other
AGENCY: National Credit Union standards for off balance sheet consolidation requirements. These
Administration (NCUA). accounting treatment, along with some accounting changes could require a
ACTION: Final rule. additional conditions focusing on the FICU to consolidate an issuing entity to
enforceability of the transaction, were which financial assets have been
SUMMARY: The NCUA Board (‘‘Board’’) is met by the transfer in connection with transferred for securitization on to its
issuing this final rule to amend its a securitization or a participation. balance sheet for financial reporting
regulations regarding the treatment by Satisfaction of ‘‘legal isolation’’ is vital purposes primarily because an affiliate
the Board, as liquidating agent or to securitization transactions because of of the FICU retains control over the
conservator (‘‘liquidating agent’’ or the risk that the pool of financial assets financial assets. Given the 2009 GAAP
‘‘conservator,’’ respectively) of a Modifications, legal and accounting
federally insured credit union (‘‘FICU’’), 1 65 FR 55442 (Sept. 14, 2000). treatment of a transaction may no longer
of financial assets transferred by the 2 In the Proposal, NCUA stated that the agency be aligned. As a result, the safe harbor
credit union in connection with a had not previously stated that federal credit unions provision of the 2000 Rule may not
securitization or a participation. The (‘‘FCUs’’) have the authority to issue asset-backed apply to a transfer in connection with a
securities (‘‘ABS’’) and that its understanding was
final rule replaces NCUA’s current safe that no FCU had done so. NCUA also does not
securitization that does not qualify for
harbor for financial assets transferred in believe that any federally insured, state-chartered off balance sheet accounting treatment.
connection with securitizations and credit unions (‘‘FISCUs’’) have issued ABS. FASB ASC Topic 860 also affects the
participations in which the financial Therefore, the securitization aspect of the 2000 Rule treatment of participation interests
has not been applied. In connection with this final
mstockstill on DSK30JT082PROD with RULES

assets were transferred in compliance rule updating the 2000 Rule, the Office of General
transferred by a FICU, in that it defines
with the existing regulation, and defines Counsel recently published a legal opinion letter on participating interests as pari-passu,
the conditions for safe harbor protection NCUA’s Web site, which finds that the pro-rata interests in financial assets, and
for securitizations and participations for securitization of assets is a power incidental to the subjects the sale of a participation
operation of FCUs. Accordingly, if an FCU (or a
which transfers of financial assets FISCU if permitted by state law) issues ABS, these
interest to the same conditions as the
would be made after the effective date amendments to § 709.10 are necessary to preserve sale of financial assets. FASB ASC
of this rule. the safe harbor for investors. Topic 860 provides that transfers of

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Document Created: 2017-06-30 06:01:38
Document Modified: 2017-06-30 06:01:38

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
FR Citation		82 FR 29699