FINAL-0167 Part 741 11 Justification Foreign Branching

Supporting Statement for Paperwork Reduction Act Submission
12 CFR Part 741.11 of NCUA's Rules and Regulations
Foreign Branching
3133-0167
September 2013
A. JUSTIFICATION
1. Explain the circumstances that make the collection of information necessary.
Identify any legal or administrative requirements that necessitate the collection.
Part 741, Section 741.11 of the NCUA Rules and Regulations contains a provision that
any insured credit union must apply for and receive approval from the regional director
before establishing a credit union branch outside the United States unless the foreign
branch is located on a United States military institution or embassy outside the United
States. The application must include (1) a business plan, (2) written approval by the
state supervisory agency if the applicant is a state-chartered credit union, and (3)
documentation evidencing written permission from the host country to establish the
branch that explicitly recognizes NCUA’s authority to examine and take any
enforcement actions, including conservatorship and liquidation actions.
The business plan must contain at a minimum the following:
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Analysis of market conditions in the area the branch is to be established;
The credit union’s plan for addressing foreign currency risk;
Operating facilities;
Safeguarding of assets, insurance coverage, and records preservation;
Written policies;
The field of membership to be served;
Pro forma financial statements for the first and second year of operations;
Internal controls;
Accounting procedures used to analyze branch performance; and
Foreign income taxation.

2. Indicate how, by whom, and for what purpose the information is to be used. Except
for a new collection, indicate the actual use the agency has made of the information
received from the current collection.
The information will be used by the NCUA to assist staff in determining the safety and
soundness of the credit union’s decision in establishing a branch overseas and prevent
potential losses to the credit union and the National Credit Union Share Insurance
Fund.

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3. Describe whether, and to what extent, the collection of information involves the use
of automated, electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic submission of
responses, and the basis for the decision for adopting this means of collection. Also
describe any consideration of using information technology to reduce burden.
New information technology cannot be universally utilized to reduce the data collection
and reporting burden.
4. Describe efforts to identify duplication. Show specifically why any similar
information already available cannot be used or modified for use for the purposes
described in Item 2 above.
There is no duplication. The application is only necessary if the credit union wants to
establish an overseas branch under Part 741, Section 741.11.
5. If the collection of information impacts small business or other small entities (Item 5
of OMB Ford 83-I), describe any methods used to minimize burden.
The collection of information does not impact small business.
6. Describe the consequence to Federal program or policy activities if the collection is
not conducted or is conducted less frequently, as well as any technical or legal
obstacles to reducing burden.
The credit union is required to submit an application and business plan for approval to
establish a foreign branch. This is in conformance with standard business policies and
does not cause undue burden on the credit union.
7. Explain any special circumstances that would cause an information collection be
conducted in a manner:
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requiring respondents to report information to the agency more often than
quarterly;

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requiring respondents to prepare a written response to a collection of
information in fewer than 30 days after receipt of it;

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requiring respondents to submit more than an original and two copies any
document;

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requiring respondents to retain records, other than health, medical, government
contract, grant-in-aid, or tax records for more than three years;

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in connection with a statistical survey, that is not designed to produce valid and
reliable results than can be generalized to the universe of study;

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

requiring the use of a statistical data classification that has not be reviewed and
approved by OMB;

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that includes a pledge of confidentiality that is not supported by authority
established in statute or regulation, that is not supported by disclosure and data
security policies that are consistent with the pledge, or which unnecessarily
impedes sharing of data with other agencies for compatible confidential use; or

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requiring respondents to submit proprietary trade secret, or other confidential
information unless the agency can demonstrate that it has instituted procedures
to protect the information’s confidentiality to the extent permitted by law.

None. The collection is done within the above guidelines.
8. Describe efforts to consult with persons outside the agency to obtain their views on
the availability of data, frequency of collection, the clarity of instructions and record
keeping, disclosure, or reporting format (if any), and on the data elements to be
recorded, disclosed, or reported.
Notice of the proposed information collection and request for comment was published
with a 60-day comment period in the Federal Register on July 19, 2013 (78 FR 43241).
NCUA did not receive any comments regarding the collection.
9. Explain any decision to provide any payment or gift to respondents, other than
reenumeration of contractors or grantees.
There is no decision to provide payment or gifts to respondents.
10. Describe any assurance of confidentiality provided to respondents and the basis for
the assurance in statute, regulation, or agency policy.
No assurance of confidentiality is provided to respondents.
11. Provide additional justification for any questions of a sensitive nature, such as
sexual behavior and attitudes, religious beliefs, and other matters that are commonly
considered private. This justification should include the reasons why the agency
considers the questions necessary, the specific uses to made of the information, the
explanation to be given to persons from whom the information is requested, and any
steps to be taken to obtain their consent.
Such questions are not contained in the information gathered.
12. Provide estimates of the hour burden of the collection of information. The
statement should:
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Indicate the number of respondents, frequency of response, annual hour
burden, and an explanation of how the burden was estimated. Unless directed
to do so, agencies should not conduct special surveys to obtain information on
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which to base hour burden estimates. Consultation with a sample (fewer than
10) of potential respondents is desirable. If the hour burden on respondents is
expected to vary widely because of differences in activity, size, or complexity,
show the range of estimated hour burden, and explain the reasons for the
variance. Generally, estimates should not include burden hours for customary
and usual business practices.
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If this request for approval covers more than one form, provide separate hour
burden estimates for each form and aggregate the hour burdens in Item 13 of
OMB Form 83-I.

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Provide estimates of annualized cost to respondents for the hour burdens for
collections of information, identifying and using appropriate wage rate
categories. The cost of contracting our or paying outside parties for information
collection activities should not be included here. Instead, this cost should be
included in Item 14.

Our experience indicates very few federally insured credit unions establish foreign
branches at locations that are not military installations. We conservatively estimate
approximately three credit unions may submit an application and business plan for the
ability to establish an overseas branch each year. We estimate it requires sixteen
hours to complete an application and business plan.
The burden of the collection of information is as follows:
Application/Business Plan

3 x 16 hours

48 hours

13. Provide an estimate of the total annual cost burden to respondents or record
keepers resulting from the collection of information. (Do not include the cost of any
hour burden shown in Items 12 and 14).
We estimate at most three credit unions will seek approval for foreign branches. At an
estimated cost of $31 per hour to complete three applications of 16 hours each, will
result in an annual burden of $1,488.
14. Provide estimates of annualized cost to the Federal government. Also, provide a
description of the method used to estimate cost, which should include quantification of
hours, operational expenses (such as equipment, overhead, printing, and support staff),
and any other expense that would not have been incurred without this collection of
information. Agencies also may aggregate cost estimates from Items 12, 13, and 14 in
a single table.
NCUA staff will review the information. Therefore, the outside cost to NCUA is
negligible.
15. Explain the reasons for any program changes or adjustments reported in Items 13
or 14 of the OMB Form 83-I.

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We have made adjustments to item 13 because we have experienced limited interest
among federally insured credit unions in establishing offices overseas at locations that
are not military facilities.
16. For collections of information whose results will be published, outline plans for
tabulation, and any publication. Address any complex analytical techniques that will be
used. Provide the time schedule for the entire project, including beginning and ending
dates of the collection of information, completion of report, publication dates, and other
actions.
There are no plans to publish the results of the collection of information.
17. If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons that display would be inappropriate.
NCUA is not seeking approval to not display the expiration date of OMB approval of the
information collection.
18. Explain each exception to the certification statement identified in Item 19,
“Certification for Paperwork Reduction Act Submissions,” of OMB Form 83-I.
There are no exceptions to the certification statement.

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