83_FR_4471 83 FR 4450 - Involuntary Liquidation of Federal Credit Unions and Claims Procedures

83 FR 4450 - Involuntary Liquidation of Federal Credit Unions and Claims Procedures

NATIONAL CREDIT UNION ADMINISTRATION

Federal Register Volume 83, Issue 21 (January 31, 2018)

Page Range4450-4452
FR Document2018-01884

The NCUA Board (Board) proposes to amend part 709 of its rules to update and clarify the procedures that apply to claims administration for federally insured credit unions that enter involuntary liquidation. Specifically, the proposal would amend the current rule's payout priority provision by specifying the conditions that claims in the nature of severance must meet to be allowed as provable claims.

Federal Register, Volume 83 Issue 21 (Wednesday, January 31, 2018)
[Federal Register Volume 83, Number 21 (Wednesday, January 31, 2018)]
[Proposed Rules]
[Pages 4450-4452]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-01884]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / 
Proposed Rules

[[Page 4450]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 709

RIN 3133-AE82


Involuntary Liquidation of Federal Credit Unions and Claims 
Procedures

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule.

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SUMMARY: The NCUA Board (Board) proposes to amend part 709 of its rules 
to update and clarify the procedures that apply to claims 
administration for federally insured credit unions that enter 
involuntary liquidation. Specifically, the proposal would amend the 
current rule's payout priority provision by specifying the conditions 
that claims in the nature of severance must meet to be allowed as 
provable claims.

DATES: Comments must be received on or before April 2, 2018.

ADDRESSES: You may submit comments by any of the following methods 
(Please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA website: https://www.ncua.gov/regulation-supervision/Pages/rules/proposed.aspx. Follow the instructions for submitting 
comments.
     Email: Address to [email protected]. Include ``[Your 
name] Comments on ``Involuntary Liquidation of Federal Credit Unions 
and Claims Procedures'' in the email subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for email.
     Mail: Address to Gerard Poliquin, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.
    Public Inspection: All public comments are available on the 
agency's website at http://www.ncua.gov/RegulationsOpinionsLaws/comments as submitted, except as may not be possible for technical 
reasons. Public comments will not be edited to remove any identifying 
or contact information. Paper copies of comments may be inspected in 
NCUA's law library at 1775 Duke Street, Alexandria, Virginia 22314, by 
appointment weekdays between 9:00 a.m. and 3:00 p.m. To make an 
appointment, call (703) 518-6546 or send an email to [email protected].

FOR FURTHER INFORMATION CONTACT: Ian Marenna, Senior Trial Attorney, at 
1775 Duke Street, Alexandria, Virginia 22314, or telephone: (703) 518-
6540.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 1217 of the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989 (FIRREA) \1\ amended the Federal Credit Union 
Act (FCU Act) by adding Section 207(b), thereby creating a 
comprehensive statutory framework for the liquidation of federally 
insured credit unions.\2\ Section 207(b)(4) authorizes the Board to 
``prescribe regulations regarding the allowance or disallowance of 
claims by the liquidating agent and providing for administrative 
determination of claims and review of such determination.'' \3\ In 
accordance with this authority, the Board adopted part 709 in 1991.\4\
---------------------------------------------------------------------------

    \1\ Sec. 1217(a)(3), (4), Public Law 101-73. Sec. 1217(a)(3), 
(4).
    \2\ 12 U.S.C. 1787(b).
    \3\ 12 U.S.C. 1787(b)(4).
    \4\ 56 FR 56925 (Nov. 7, 1991).
---------------------------------------------------------------------------

    The Board is proposing changes to part 709 to clarify how severance 
claims will be treated in involuntary liquidations. Specifically, the 
proposed rule would create an exception to the generally applicable 
limitation on provability for severance claims as set out in the 
Board's regulation governing golden parachute payments.\5\
---------------------------------------------------------------------------

    \5\ 12 CFR part 750.
---------------------------------------------------------------------------

II. Summary of Proposed Changes

    Priority accorded wages, including vacation pay, sick leave, and 
severance. Section 709.5 sets forth the priorities by which claims will 
be paid from the liquidation estate. Currently, Sec.  709.5(b)(2) 
accords second priority to claims for wages, including vacation pay, 
sick leave, and severance, subordinate among unsecured claims only to 
administrative costs and expenses of liquidation. This section operates 
to protect those employees whose employment is terminated as a result 
of the appointment of the liquidating agent, but who may have worked 
some or all of the pay period immediately preceding the date of 
liquidation for which they had not been paid. The regulation 
contemplates that such an employee's final paycheck may include 
compensation for hours worked as well as accrued but unpaid sick leave 
and vacation time, as well as any severance to which he or she is 
entitled.
    This provision may be in tension with NCUA's separate regulatory 
authority to control the types and amounts of payments that may be made 
by federally insured credit unions to institution affiliated parties 
upon termination of their employment. Under the FCU Act, the Board is 
authorized to prohibit or limit ``golden parachute payments,'' defined 
to include payments that are contingent on the termination of the 
party's employment at the credit union and that are made when the 
credit union is in troubled financial condition.\6\ In addition, part 
750 of NCUA's regulations contains explicit limitations on the ability 
of an institution affiliated party to pursue a severance claim with the 
liquidating agent after a credit union has become insolvent and is 
placed in conservatorship or liquidation.\7\
---------------------------------------------------------------------------

    \6\ 12 U.S.C. 1786(t)(4); 12 CFR 750.1(d).
    \7\ 12 CFR 750.7.
---------------------------------------------------------------------------

    Thus, part 750 expressly provides that any claim for ``employee 
welfare benefits'' or other benefits that are contingent at the time of 
liquidation are not provable claims against the liquidating agent or 
payable as damages if the conservator or liquidating agent repudiates 
the relevant contract under 12 U.S.C. 1787(c). This bar covers claims 
for severance or other employee welfare benefits that are contingent at 
the time of liquidation, even if otherwise vested, including any 
contingency for termination of employment.\8\ This language is broad 
enough to extend to virtually any claim to benefits or entitlements 
(other than earned but unpaid wages) that remains unpaid as of the date 
of liquidation.
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

    Given the breadth of the language in Sec.  750.7, the Board 
believes clarification concerning the interplay with part 709 is 
necessary and appropriate. Claims for

[[Page 4451]]

unpaid wages or salary earned during the pay period immediately prior 
to the appointment of the conservator or liquidating agent will be 
allowed and accorded the second priority level under Sec.  709.5(b). 
Employees are also allowed to claim earned but unused paid time off as 
of the liquidation date, provided that the credit union had a written 
policy, as reflected in the employee handbook or other similar credit 
union record, permitting departing employees to receive payment for 
earned but unused paid time off with their last paycheck. Employees may 
also claim severance pay, provided that the amount of entitlement is 
determined under an objective formula made available to all employees 
and is specified in a written policy, as reflected in the employee 
handbook or other similar credit union record.
    The documentary evidence requirement reflects the standard for 
agreement-based claims against the liquidation estate and is intended 
to provide the liquidating agent an appropriate basis to determine that 
the credit union agreed to provide the benefits.\9\ Because not every 
credit union may have an employee handbook, the proposed rule would 
allow for other credit union records that evidence entitlement to the 
benefits.
---------------------------------------------------------------------------

    \9\ See 12 U.S.C. 1787(b)(9); D'Oench, Duhme & Co. v. Federal 
Deposit Ins. Corp., 315 U.S. 447 (1942). Under the FCU Act and 
relevant case law, a claimant may not sustain a claim against the 
liquidating agent based on an agreement unless the agreement was in 
writing, was executed by the credit union and the claimant, was 
approved by the credit union's board, and has continuously been an 
official credit union record.
---------------------------------------------------------------------------

    The Board intends for the provisions in part 750 restricting the 
provability of certain severance claims to be applicable in cases that 
involve executive level employees with separately negotiated employment 
contracts or similar benefit plans that are not generally available to 
all employees on a non-discriminatory basis. In such cases, the Board 
anticipates that the liquidating agent will exercise its power of 
repudiation \10\ concerning the employment contract and/or benefit 
plan, with the result being that neither the severance claim itself nor 
any claim for damages arising from the repudiation will be allowed as 
provable in the liquidation, pursuant to part 750. It should be noted 
that these limitations on provability are applicable whether or not the 
arrangement in question would be considered a prohibited golden 
parachute under part 750 for an open credit union.
---------------------------------------------------------------------------

    \10\ 12 U.S.C. 1787(c).
---------------------------------------------------------------------------

    Accordingly, the Board proposes to amend Sec.  709.5(b)(2) to 
provide that claims seeking employee benefits other than earned but 
undisbursed salary or wages, including earned but unused paid time off 
and severance pay, will be allowed to the extent that the credit union 
has adopted a written policy, as reflected in the employee handbook or 
other similar record, that establishes a right to such payments and 
that the amount of such payment is determined in accordance with an 
objective, non-discriminatory formula made available to all employees. 
The proposed rule also recognizes that state law may require such 
payments and accommodates this possibility.

III. Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact a rule may have on a 
substantial number of small entities (primarily those under $100 
million in assets). The severance provision imposes no new requirements 
on credit unions. Instead, it would provide a limited exception to an 
existing regulation that applies to liquidated credit unions. 
Accordingly, the proposed rule will not have a significant economic 
impact on a substantial number of small credit unions, and therefore, 
no regulatory flexibility analysis is 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 on regulated 
entities or modifies an existing burden. 44 U.S.C. 3507(d). For 
purposes of the PRA, a paperwork burden may take the form of a either a 
reporting or a recordkeeping requirement, both referred to as 
information collections. Part 709 only concerns credit unions that have 
failed and imposes no information collection requirements on existing 
credit unions. Accordingly, there are no PRA implications.

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 proposed rule would clarify certain 
procedures for NCUA's administration of liquidated federally insured 
credit unions. This proposed rule 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. The Board has determined that 
this proposed 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

    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).

List of Subjects in 12 CFR Part 709

    Credit unions, Involuntary liquidation.

    By the National Credit Union Administration Board, this 25th day 
of January, 2018.
Gerard Poliquin,
Secretary of the Board.
    For the reasons discussed in the preamble, NCUA proposes to amend 
12 CFR part 709 as follows:

PART 709--INVOLUNTARY LIQUIDATION OF FEDERAL CREDIT UNIONS AND 
ADJUDICATION OF CREDITOR CLAIMS INVOLVING FEDERALLY INSURED CREDIT 
UNIONS IN LIQUIDATION

0
1. The authority citation for part 709 is revised to read as follows:

    Authority: 12 U.S.C. 1757, 1766, 1767, 1786(h), 1786(t), and 
1787(b)(4), 1788, 1789, 1789a.

0
2. Revise paragraph (b)(2) of Sec.  709.5 to read as follows:


Sec.  709.5  Payout priorities in involuntary liquidation.

* * * * *
    (b) * * *
    (2) Claims for wages and salaries, including vacation, severance, 
and sick leave pay; provided, however, that, in accordance with Sec.  
750.7 of this chapter, no claim for vacation, severance, or sick leave 
pay is provable unless entitlement to the benefit is provided for in 
the credit union employee handbook or other written credit union 
record, is calculable in accordance with an objective formula, and is 
available to all employees who meet applicable eligibility 
requirements, such as minimum length of service, or if such

[[Page 4452]]

payment is required by applicable state or local law.
* * * * *
[FR Doc. 2018-01884 Filed 1-30-18; 8:45 am]
BILLING CODE 7535-01-P



                                                  4450

                                                  Proposed Rules                                                                                                 Federal Register
                                                                                                                                                                 Vol. 83, No. 21

                                                                                                                                                                 Wednesday, January 31, 2018



                                                  This section of the FEDERAL REGISTER                    RegulationsOpinionsLaws/comments as                    expenses of liquidation. This section
                                                  contains notices to the public of the proposed          submitted, except as may not be                        operates to protect those employees
                                                  issuance of rules and regulations. The                  possible for technical reasons. Public                 whose employment is terminated as a
                                                  purpose of these notices is to give interested          comments will not be edited to remove                  result of the appointment of the
                                                  persons an opportunity to participate in the            any identifying or contact information.                liquidating agent, but who may have
                                                  rule making prior to the adoption of the final
                                                                                                          Paper copies of comments may be                        worked some or all of the pay period
                                                  rules.
                                                                                                          inspected in NCUA’s law library at 1775                immediately preceding the date of
                                                                                                          Duke Street, Alexandria, Virginia 22314,               liquidation for which they had not been
                                                  NATIONAL CREDIT UNION                                   by appointment weekdays between 9:00                   paid. The regulation contemplates that
                                                  ADMINISTRATION                                          a.m. and 3:00 p.m. To make an                          such an employee’s final paycheck may
                                                                                                          appointment, call (703) 518–6546 or                    include compensation for hours worked
                                                  12 CFR Part 709                                         send an email to OGCMail@ncua.gov.                     as well as accrued but unpaid sick leave
                                                                                                          FOR FURTHER INFORMATION CONTACT: Ian                   and vacation time, as well as any
                                                  RIN 3133–AE82
                                                                                                          Marenna, Senior Trial Attorney, at 1775                severance to which he or she is entitled.
                                                                                                          Duke Street, Alexandria, Virginia 22314,                  This provision may be in tension with
                                                  Involuntary Liquidation of Federal
                                                                                                          or telephone: (703) 518–6540.                          NCUA’s separate regulatory authority to
                                                  Credit Unions and Claims Procedures
                                                                                                          SUPPLEMENTARY INFORMATION:                             control the types and amounts of
                                                  AGENCY:  National Credit Union                                                                                 payments that may be made by federally
                                                  Administration (NCUA).                                  I. Background                                          insured credit unions to institution
                                                  ACTION: Proposed rule.                                     Section 1217 of the Financial                       affiliated parties upon termination of
                                                                                                          Institutions Reform, Recovery and                      their employment. Under the FCU Act,
                                                  SUMMARY:   The NCUA Board (Board)                       Enforcement Act of 1989 (FIRREA) 1                     the Board is authorized to prohibit or
                                                  proposes to amend part 709 of its rules                 amended the Federal Credit Union Act                   limit ‘‘golden parachute payments,’’
                                                  to update and clarify the procedures                    (FCU Act) by adding Section 207(b),                    defined to include payments that are
                                                  that apply to claims administration for                 thereby creating a comprehensive                       contingent on the termination of the
                                                  federally insured credit unions that                    statutory framework for the liquidation                party’s employment at the credit union
                                                  enter involuntary liquidation.                          of federally insured credit unions.2                   and that are made when the credit
                                                  Specifically, the proposal would amend                  Section 207(b)(4) authorizes the Board                 union is in troubled financial
                                                  the current rule’s payout priority                      to ‘‘prescribe regulations regarding the               condition.6 In addition, part 750 of
                                                  provision by specifying the conditions                  allowance or disallowance of claims by                 NCUA’s regulations contains explicit
                                                  that claims in the nature of severance                  the liquidating agent and providing for                limitations on the ability of an
                                                  must meet to be allowed as provable                     administrative determination of claims                 institution affiliated party to pursue a
                                                  claims.                                                 and review of such determination.’’ 3 In               severance claim with the liquidating
                                                  DATES:  Comments must be received on                    accordance with this authority, the                    agent after a credit union has become
                                                  or before April 2, 2018.                                Board adopted part 709 in 1991.4                       insolvent and is placed in
                                                                                                             The Board is proposing changes to                   conservatorship or liquidation.7
                                                  ADDRESSES: You may submit comments                                                                                Thus, part 750 expressly provides that
                                                  by any of the following methods (Please                 part 709 to clarify how severance claims
                                                                                                          will be treated in involuntary                         any claim for ‘‘employee welfare
                                                  send comments by one method only):                                                                             benefits’’ or other benefits that are
                                                    • Federal eRulemaking Portal: http://                 liquidations. Specifically, the proposed
                                                                                                          rule would create an exception to the                  contingent at the time of liquidation are
                                                  www.regulations.gov. Follow the                                                                                not provable claims against the
                                                  instructions for submitting comments.                   generally applicable limitation on
                                                                                                          provability for severance claims as set                liquidating agent or payable as damages
                                                    • NCUA website: https://                                                                                     if the conservator or liquidating agent
                                                  www.ncua.gov/regulation-supervision/                    out in the Board’s regulation governing
                                                                                                          golden parachute payments.5                            repudiates the relevant contract under
                                                  Pages/rules/proposed.aspx. Follow the                                                                          12 U.S.C. 1787(c). This bar covers
                                                  instructions for submitting comments.                   II. Summary of Proposed Changes                        claims for severance or other employee
                                                    • Email: Address to regcomments@                                                                             welfare benefits that are contingent at
                                                                                                             Priority accorded wages, including
                                                  ncua.gov. Include ‘‘[Your name]                                                                                the time of liquidation, even if
                                                                                                          vacation pay, sick leave, and severance.
                                                  Comments on ‘‘Involuntary Liquidation                                                                          otherwise vested, including any
                                                                                                          Section 709.5 sets forth the priorities by
                                                  of Federal Credit Unions and Claims                                                                            contingency for termination of
                                                                                                          which claims will be paid from the
                                                  Procedures’’ in the email subject line.                                                                        employment.8 This language is broad
                                                    • Fax: (703) 518–6319. Use the                        liquidation estate. Currently,
                                                                                                          § 709.5(b)(2) accords second priority to               enough to extend to virtually any claim
                                                  subject line described above for email.                                                                        to benefits or entitlements (other than
                                                    • Mail: Address to Gerard Poliquin,                   claims for wages, including vacation
                                                                                                          pay, sick leave, and severance,                        earned but unpaid wages) that remains
                                                  Secretary of the Board, National Credit
sradovich on DSK3GMQ082PROD with PROPOSALS




                                                                                                          subordinate among unsecured claims                     unpaid as of the date of liquidation.
                                                  Union Administration, 1775 Duke                                                                                   Given the breadth of the language in
                                                  Street, Alexandria, Virginia 22314–                     only to administrative costs and
                                                                                                                                                                 § 750.7, the Board believes clarification
                                                  3428.                                                     1 Sec. 1217(a)(3), (4), Public Law 101–73. Sec.      concerning the interplay with part 709
                                                    • Hand Delivery/Courier: Same as                      1217(a)(3), (4).                                       is necessary and appropriate. Claims for
                                                  mail address.                                             2 12 U.S.C. 1787(b).
                                                    Public Inspection: All public                           3 12 U.S.C. 1787(b)(4).                                6 12    U.S.C. 1786(t)(4); 12 CFR 750.1(d).
                                                  comments are available on the agency’s                    4 56 FR 56925 (Nov. 7, 1991).                          7 12    CFR 750.7.
                                                  website at http://www.ncua.gov/                           5 12 CFR part 750.                                     8 Id.




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                                                                       Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Proposed Rules                                                  4451

                                                  unpaid wages or salary earned during                    claims seeking employee benefits other                 between the national government and
                                                  the pay period immediately prior to the                 than earned but undisbursed salary or                  the states, or on the distribution of
                                                  appointment of the conservator or                       wages, including earned but unused                     power and responsibilities among the
                                                  liquidating agent will be allowed and                   paid time off and severance pay, will be               various levels of government. The Board
                                                  accorded the second priority level under                allowed to the extent that the credit                  has determined that this proposed rule
                                                  § 709.5(b). Employees are also allowed                  union has adopted a written policy, as                 does not constitute a policy that has
                                                  to claim earned but unused paid time                    reflected in the employee handbook or                  federalism implications for purposes of
                                                  off as of the liquidation date, provided                other similar record, that establishes a               the executive order.
                                                  that the credit union had a written                     right to such payments and that the
                                                  policy, as reflected in the employee                    amount of such payment is determined                   The Treasury and General Government
                                                  handbook or other similar credit union                  in accordance with an objective, non-                  Appropriations Act, 1999—Assessment
                                                  record, permitting departing employees                  discriminatory formula made available                  of Federal Regulations and Policies on
                                                  to receive payment for earned but                       to all employees. The proposed rule also               Families
                                                  unused paid time off with their last                    recognizes that state law may require                    NCUA has determined that this rule
                                                  paycheck. Employees may also claim                      such payments and accommodates this                    will not affect family well-being within
                                                  severance pay, provided that the                        possibility.                                           the meaning of section 654 of the
                                                  amount of entitlement is determined
                                                                                                          III. Regulatory Procedures                             Treasury and General Government
                                                  under an objective formula made
                                                                                                                                                                 Appropriations Act, 1999, Public Law
                                                  available to all employees and is                       Regulatory Flexibility Act                             105–277, 112 Stat. 2681 (1998).
                                                  specified in a written policy, as
                                                  reflected in the employee handbook or                      The Regulatory Flexibility Act
                                                                                                                                                                 List of Subjects in 12 CFR Part 709
                                                  other similar credit union record.                      requires NCUA to prepare an analysis to
                                                     The documentary evidence                             describe any significant economic                         Credit unions, Involuntary
                                                  requirement reflects the standard for                   impact a rule may have on a substantial                liquidation.
                                                  agreement-based claims against the                      number of small entities (primarily
                                                                                                                                                                   By the National Credit Union
                                                  liquidation estate and is intended to                   those under $100 million in assets). The
                                                                                                                                                                 Administration Board, this 25th day of
                                                  provide the liquidating agent an                        severance provision imposes no new
                                                                                                                                                                 January, 2018.
                                                  appropriate basis to determine that the                 requirements on credit unions. Instead,
                                                                                                          it would provide a limited exception to                Gerard Poliquin,
                                                  credit union agreed to provide the
                                                  benefits.9 Because not every credit                     an existing regulation that applies to                 Secretary of the Board.
                                                  union may have an employee handbook,                    liquidated credit unions. Accordingly,                   For the reasons discussed in the
                                                  the proposed rule would allow for other                 the proposed rule will not have a                      preamble, NCUA proposes to amend 12
                                                  credit union records that evidence                      significant economic impact on a                       CFR part 709 as follows:
                                                  entitlement to the benefits.                            substantial number of small credit
                                                     The Board intends for the provisions                 unions, and therefore, no regulatory                   PART 709—INVOLUNTARY
                                                  in part 750 restricting the provability of              flexibility analysis is required.                      LIQUIDATION OF FEDERAL CREDIT
                                                  certain severance claims to be                          Paperwork Reduction Act                                UNIONS AND ADJUDICATION OF
                                                  applicable in cases that involve                                                                               CREDITOR CLAIMS INVOLVING
                                                  executive level employees with                            The Paperwork Reduction Act of 1995                  FEDERALLY INSURED CREDIT
                                                  separately negotiated employment                        (PRA) applies to rulemakings in which                  UNIONS IN LIQUIDATION
                                                  contracts or similar benefit plans that                 an agency by rule creates a new
                                                  are not generally available to all                      paperwork burden on regulated entities                 ■  1. The authority citation for part 709
                                                  employees on a non-discriminatory                       or modifies an existing burden. 44                     is revised to read as follows:
                                                  basis. In such cases, the Board                         U.S.C. 3507(d). For purposes of the
                                                  anticipates that the liquidating agent                  PRA, a paperwork burden may take the                     Authority: 12 U.S.C. 1757, 1766, 1767,
                                                  will exercise its power of repudiation 10               form of a either a reporting or a                      1786(h), 1786(t), and 1787(b)(4), 1788, 1789,
                                                                                                          recordkeeping requirement, both                        1789a.
                                                  concerning the employment contract
                                                  and/or benefit plan, with the result                    referred to as information collections.                ■ 2. Revise paragraph (b)(2) of § 709.5 to
                                                  being that neither the severance claim                  Part 709 only concerns credit unions                   read as follows:
                                                  itself nor any claim for damages arising                that have failed and imposes no
                                                  from the repudiation will be allowed as                 information collection requirements on                 § 709.5 Payout priorities in involuntary
                                                  provable in the liquidation, pursuant to                existing credit unions. Accordingly,                   liquidation.
                                                  part 750. It should be noted that these                 there are no PRA implications.                         *      *     *    *     *
                                                  limitations on provability are applicable
                                                                                                          Executive Order 13132                                     (b) * * *
                                                  whether or not the arrangement in
                                                  question would be considered a                             Executive Order 13132 encourages                       (2) Claims for wages and salaries,
                                                  prohibited golden parachute under part                  independent regulatory agencies to                     including vacation, severance, and sick
                                                  750 for an open credit union.                           consider the impact of their actions on                leave pay; provided, however, that, in
                                                     Accordingly, the Board proposes to                   state and local interests. In adherence to             accordance with § 750.7 of this chapter,
                                                  amend § 709.5(b)(2) to provide that                     fundamental federalism principles,                     no claim for vacation, severance, or sick
                                                                                                          NCUA, an independent regulatory                        leave pay is provable unless entitlement
sradovich on DSK3GMQ082PROD with PROPOSALS




                                                     9 See 12 U.S.C. 1787(b)(9); D’Oench, Duhme & Co.
                                                                                                          agency as defined in 44 U.S.C. 3502(5),                to the benefit is provided for in the
                                                  v. Federal Deposit Ins. Corp., 315 U.S. 447 (1942).     voluntarily complies with the executive
                                                  Under the FCU Act and relevant case law, a
                                                                                                                                                                 credit union employee handbook or
                                                  claimant may not sustain a claim against the            order. This proposed rule would clarify                other written credit union record, is
                                                  liquidating agent based on an agreement unless the      certain procedures for NCUA’s                          calculable in accordance with an
                                                  agreement was in writing, was executed by the           administration of liquidated federally                 objective formula, and is available to all
                                                  credit union and the claimant, was approved by the
                                                  credit union’s board, and has continuously been an      insured credit unions. This proposed                   employees who meet applicable
                                                  official credit union record.                           rule will not have a substantial direct                eligibility requirements, such as
                                                     10 12 U.S.C. 1787(c).                                effect on the states, on the connection                minimum length of service, or if such


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                                                  4452                 Federal Register / Vol. 83, No. 21 / Wednesday, January 31, 2018 / Proposed Rules

                                                  payment is required by applicable state                 (10D1A1), Veterans Health                                 We would revise § 17.35 by
                                                  or local law.                                           Administration, Department of Veterans                 simplifying the rule and adding a
                                                  *     *     *   *    *                                  Affairs, 810 Vermont Avenue NW,                        paragraph to address medical services
                                                  [FR Doc. 2018–01884 Filed 1–30–18; 8:45 am]             Washington, DC 20420, (303) 372–4629.                  provided to eligible veterans in the
                                                  BILLING CODE 7535–01–P                                  (This is not a toll-free number) or                    Republic of the Philippines. VA
                                                                                                          Joseph.Duran2@va.gov.                                  proposes to remove the phrase
                                                                                                          SUPPLEMENTARY INFORMATION: Section                     ‘‘sojourning or residing’’ as it creates an
                                                  DEPARTMENT OF VETERANS                                  1724 of title 38 United States Code                    unnecessary distinction. VA may
                                                  AFFAIRS                                                 (U.S.C.) prohibits VA from furnishing                  furnish medical care and services to any
                                                                                                          hospital care or medical services outside              veteran outside the United States,
                                                  38 CFR Part 17                                          any State except under specific                        regardless of whether the veteran is
                                                                                                          circumstances. VA is authorized under                  sojourning (temporarily staying), has
                                                  RIN 2900–AP55                                                                                                  established residence outside of the
                                                                                                          38 U.S.C. 1724(b)(1) to furnish care and
                                                                                                          services to an eligible veteran outside                United States, or in some other status
                                                  Medical Care in Foreign Countries and
                                                                                                          any State if VA ‘‘determines that such                 that does not fit the broad definitions of
                                                  Filing for Reimbursement for
                                                                                                          care and services are needed for the                   either ‘‘sojourning or residing.’’ In
                                                  Community Care Not Previously
                                                                                                          treatment of a service-connected                       addition, the term ‘‘sojourning’’ is
                                                  Authorized by VA
                                                                                                          disability of the veteran or as part of a              antiquated. While it remains a defined
                                                  AGENCY:    Department of Veterans Affairs.              rehabilitation program under chapter 31                term in many dictionaries it is not
                                                  ACTION:   Proposed rule.                                of this title.’’ VA furnishes health care              commonly used by the public. We
                                                                                                          to eligible veterans in the Republic of                would also amend the introductory
                                                  SUMMARY:    The Department of Veterans                                                                         sentence to refer to VA rather than the
                                                                                                          the Philippines under this authority. In
                                                  Affairs (VA) proposes to amend its                                                                             Secretary of VA which is how VA is
                                                                                                          addition, 38 U.S.C. 1724(c) provides
                                                  medical regulations related to hospital                                                                        referred to in recently published
                                                                                                          that ‘‘within the limits’’ of the Veterans
                                                  care and medical services in foreign                                                                           rulemakings. We would designate the
                                                                                                          Memorial Medical Center at Manila,
                                                  countries. We would amend the                                                                                  introductory sentence in this section as
                                                                                                          Republic of the Philippines, VA may
                                                  regulations to simplify and clarify the                                                                        paragraph (a), and current paragraphs
                                                                                                          enter into contracts to furnish necessary
                                                  scope of these rules. We would address                                                                         (a) and (b) as paragraphs (a)(1) and (2)
                                                                                                          hospital care to a veteran for any non-
                                                  medical services provided to eligible                                                                          respectively. Finally, we would change
                                                                                                          service-connected disability if such
                                                  veterans in the Republic of the                                                                                the references to ‘‘medical services’’ in
                                                                                                          veteran is unable to defray the expenses
                                                  Philippines, and remove regulations                                                                            the current regulation to ‘‘outpatient
                                                                                                          of necessary hospital care. VA may also                services.’’ The term ‘‘outpatient
                                                  related to grants to the Republic of the
                                                                                                          operate an outpatient clinic in the                    services’’ is similarly used in § 17.38
                                                  Philippines that are no longer supported
                                                                                                          Republic of the Philippines to furnish                 and other VA regulations instead of
                                                  by statutory authority. VA also proposes
                                                                                                          necessary medical services to a veteran                ‘‘medical services,’’ and we believe it is
                                                  to amend its medical regulations related
                                                                                                          who has a service-connected disability.                more understandable to the reader.
                                                  to filing claims for reimbursement of
                                                                                                          38 U.S.C. 1724(e).                                        We would add a new paragraph (b) to
                                                  medical expenses incurred for VA care
                                                                                                             Several sections of title 38 Code of                address hospital care and outpatient
                                                  not previously authorized.
                                                                                                          Federal Regulations (CFR) part 17                      services provided to eligible veterans in
                                                  DATES: Written comments must be
                                                                                                          address VA’s authority to provide for                  the Republic of the Philippines as
                                                  received on or before April 2, 2018.                    hospital care and medical services for                 authorized in 38 U.S.C. 1724. Paragraph
                                                  ADDRESSES: Written comments may be                      eligible veterans outside the United                   (b) would state that under the VA
                                                  submitted through                                       States, as well as submission of claims                Foreign Medical Program VA may
                                                  www.Regulations.gov; by mail or hand-                   for reimbursement for services obtained                furnish hospital care and outpatient
                                                  delivery to the Director, Regulations                   from community care providers outside                  services in the Republic of the
                                                  Management (00REG), Department of                       the United States. VA proposes to revise               Philippines to a veteran who meets the
                                                  Veterans Affairs, 810 Vermont Ave NW,                   or amend these regulations to                          requirements of § 17.35(a). VA may also
                                                  Room 1063B, Washington, DC 20420; or                    consolidate similar content, clarify                   provide outpatient services to a veteran
                                                  by fax to (202) 273–9026. Comments                      provisions, and ensure that these                      in the VA outpatient clinic in Manila for
                                                  should indicate that they are submitted                 regulations reflect current VA practice                the treatment of such veteran’s service-
                                                  in response to ‘‘RIN 2900–AP55—                         and statutory authority.                               connected conditions within the limits
                                                  Medical care in foreign countries and                                                                          of the clinic. A veteran’s non-service
                                                  filing for reimbursement for community                  § 17.35 Hospital Care and Outpatient
                                                                                                          Services in Foreign Countries                          connected conditions may also be
                                                  care not previously authorized by VA.’’                                                                        treated within the limits of the VA
                                                  Copies of comments received will be                        Current § 17.35 states that the                     outpatient clinic in Manila, if the
                                                  available for public inspection in the                  Secretary may furnish hospital care and                veteran has a service-connected
                                                  Office of Regulation Policy and                         medical services to any veteran                        disability.
                                                  Management, Room 1063B, between the                     sojourning or residing outside the                        Paragraph (c) would provide guidance
                                                  hours of 8 a.m. and 4:30 p.m. Monday                    United States, without regard to the                   on which sections of part 17 apply to
                                                  through Friday (except holidays). Please                veteran’s citizenship if necessary for                 claims for payment or reimbursement of
                                                  call (202) 461–4902 for an appointment                  treatment of a service-connected                       services not previously authorized by
sradovich on DSK3GMQ082PROD with PROPOSALS




                                                  (this is not a toll-free number). In                    disability, or any disability associated               the Foreign Medical Program. We would
                                                  addition, during the comment period,                    with and held to be aggravating a                      state that such claims are governed by
                                                  comments may be viewed online                           service-connected disability; or, if the               §§ 17.123–17.127 and 17.129–17.132.
                                                  through the Federal Docket Management                   care is furnished to a veteran                         This is consistent with the requirements
                                                  System (FDMS) at www.Regulations.gov.                   participating in a rehabilitation program              for claims for payment or
                                                  FOR FURTHER INFORMATION CONTACT:                        under 38 U.S.C. chapter 31 who requires                reimbursement for medical services not
                                                  Joseph Duran, Director, Policy and                      care for the reasons enumerated in 38                  previously authorized by VA provided
                                                  Planning, Office of Community Care                      CFR 17.47(i)(2).                                       within the United States.


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Document Created: 2018-01-31 00:57:32
Document Modified: 2018-01-31 00:57:32
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesComments must be received on or before April 2, 2018.
ContactIan Marenna, Senior Trial Attorney, at 1775 Duke Street, Alexandria, Virginia 22314, or telephone: (703) 518- 6540.
FR Citation83 FR 4450 
RIN Number3133-AE82

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