12 Cfr 741.11

lpowell on DSK54DXVN1OFR with $$_JOB

§ 741.9

12 CFR Ch. VII (1–1–16 Edition)

§ 741.11 Foreign branching.
(a) Application and prior NCUA approval required. Any credit union insured under title II of the Act 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 instillation or embassy outside the
United States. The regional director
will have 60 days to approve or deny
the request.
(b) Contents of application. The application must include a business plan,
written approval by the state super-

visory agency if the applicant is a
state-chartered credit union, and documentation evidencing written permission from the host country to establish
the branch that explicitly recognizes
NCUA’s authority to examine and take
any enforcement action, including conservatorship and liquidation actions.
(c) Contents of business plan. The written business plan must address the following:
(1) Analysis of market conditions in
the area where the branch is to be established;
(2) The credit union’s plan for addressing foreign currency risk;
(3) Operating facilities, including office space/equipment and supplies;
(4) Safeguarding of assets, bond coverage, insurance coverage, and records
preservation;
(5) Written policies regarding the
branch
(shares,
lending,
capital,
charge-offs, collections);
(6) The field of membership or portion of the field of membership to be
served through the foreign branch and
the financial needs of the members to
be served and services and products to
be provided;
(7) Detailed pro forma financial statements for branch operations (balance
sheet and income and expense projections) for the first and second year including assumptions;
(8) Internal controls including cash
disbursal procedures for shares and
loans at the branch;
(9) Accounting procedures used to
identify branch activity and performance; and
(10) Foreign income taxation and employment law.
(d) Revocation of approval. A state
regulator that revokes approval of the
branch office must notify NCUA of the
action once it issues the notice of revocation. The regional director may revoke approval of the branch office for
failure to follow the business plan in a
material respect or for substantive and
documented safety and soundness reasons. If the regional director revokes
the approval, the credit union will have
six months from the date of the revocation letter to terminate the operations
of the branch. The credit union can appeal this revocation directly to the

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National Credit Union Administration

§ 741.201

NCUA Board within 30 days of the date
of the revocation letter.
(e) Insurance coverage. Accounts at
foreign branches are insured by the
NCUSIF only if denominated in U.S.
dollars and only if payable, by the
terms of the account agreement, at a
U.S. office of the credit union. If the
host country requires insurance from
its own system, accounts will not be
insured by the National Credit Union
Share Insurance Fund.

lpowell on DSK54DXVN1OFR with $$_JOB

[68 FR 23030, Apr. 30, 2003]

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