3133-0168 Supporting Statement 2016

SUPPORTING STATEMENT FOR PAPERWORK REDUCTION ACT SUBMISSIONS
Maximum Borrowing Authority, 12 CFR 741.2
3133-0168

A. Justification
1. Necessity of Information Collection
Section 741.2 of the NCUA Rules and Regulations (12 CFR 741.2) places a maximum
borrowing limitation on federally insured credit unions of 50 percent of paid-in and unimpaired
capital and surplus. This limitation is statutory for federal credit unions. The collection of
information requirement is for federally insured state-chartered credit unions seeking a waiver
from the borrowing limit. These credit unions must submit a detailed safety and soundness
analysis, a proposed aggregate amount, a letter from the state regulator approving the request and
an explanation of the need for the waiver to the NCUA Regional Director. This collection of
information is necessary to protect the National Credit Union Share Insurance Fund (“Fund”).
The NCUA Board has determined that borrowing in excess of 50 percent of paid-in and
unimpaired capital and surplus may cause an undue risk to the Fund and a loss of confidence in
the credit union system. The NCUA must be made aware of and be able to monitor those credit
unions seeking a waiver from the requirement.
2. Purpose and Use of the Information Collection
The information is used by NCUA to determine whether or not a particular federally insured
state-chartered credit union will be granted a waiver from the maximum borrowing limitation.
Borrowing in excess of this amount without the proper safety and soundness limitations in place
may cause direct losses to the Fund and indirect losses to all federally insured credit unions since
they capitalize and maintain the Fund.
3. Consideration Given to Information Technology
Applicants for waivers may use multiple forms of communication to submit information
supporting the waiver request, including submission by electronic means.
4. Duplication
There is no duplication. This information is not otherwise reported by credit unions and only
requires credit unions seeking a waiver to provide an explanation for their need for a waiver.
5. Effect on Small Entities
This information collection is required of any federally insured state-chartered credit union that
seeks a waiver from the maximum borrowing limit of federally insured credit unions, irrespective
of size. The information required is the minimum necessary to demonstrate that exceeding the
borrowing limit will not result in a risk to the credit union, and by extension the Credit Union
Share Insurance Fund.

6. Consequences of not Collecting Information
Since this is only a one-time requirement, the submission is required as infrequently as possible.
Less frequent collection would not promote safety and soundness for federally insured statechartered credit unions.
7. Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)
None – the collection is conducted within the Guidelines.
8. Consultations Outside the Agency
Notice of the proposed collection and request for public comment was published with a 60-day
comment period in the Federal Register on August 16, 2016 (81 FR 54608). No comments were
received regarding this collection.
9. Payment or Gift
There is no payment or gift to respondents.
10. Confidentiality
Credit union examination reports and any documents directly related are exempt from the
Freedom of Information Act, pursuant to exemption 8, 5 U.S.C. 552(b)(8).
No other guarantee of confidentiality is provided to the respondent.
11. Sensitive Questions
There are no questions of a sensitive nature.
12. Burden of the Information Collection
It is projected that two credit unions will submit an exemption request each year. The time
estimated for each credit union fulfilling this requirement is eight hours. NCUA believes eight
hours is a reasonable amount of time needed to provide such an explanation. The hour burden
for the collection is 16 hours at a rate of $35, totaling $560.
13. Capital start-up costs and operation and maintenance costs.
All equipment needed to collect, prepare, and submit financial statements, when required, is
equipment used for the customary and usual business of the credit union. There is no special or
additional equipment.
14. Costs to the Federal Government

It is estimated the NCUA spends four hours reviewing each credit union submission. We
estimate an $80 average loaded hourly cost for NCUA’s time. Therefore, the estimated cost to
the Federal government is $720.
15. Changes in Burden
This is a reinstatement of a previously approved collection. There are no program changes or
adjustments.
16. Information Collection Planned for Statistical Purposes
This information is not used for statistical purposes.
17. Approval to Omit OMB Expiration Date
There is no written instrument for collecting this information on which to display an expiration
date. The OMB Control Number and expiration date will be displayed on the Federal
Government’s electronic PRA docket at Reginfo.gov.
18. Exceptions to Certification for Paperwork Reduction Act Submissions
There are no exceptions to the certification statement.

B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
This collection does not involve statistical methods.