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consolidated assets that substantially
exceed the $600 million asset threshold
at which a banking organization is
considered a ‘‘small entity’’ under SBA
regulations. Because the final SCCL rule
does not apply to any small entities for
purposes of the RFA, the amendments
to the rule to extend the initial
compliance dates applicable to FBOs
subject to SCCL with respect to their
combined U.S. operations would not
affect any small entity for purposes of
the RFA. The Board’s final rule would
not impose any new recordkeeping,
reporting, or other compliance
requirements. In light of the foregoing,
the Board believes that the final rule
would not have a significant economic
impact on a substantial number of small
entities.
D. Solicitation of Comments on the Use
of Plain Language
Section 722 of the Gramm-LeachBliley Act (Pub. L. 106–102, 113 Stat.
1338, 1471, 12 U.S.C. 4809) requires the
Federal banking agencies to use plain
language in all proposed and final rules
published after January 1, 2000. The
Board sought to present the final rule in
a simple and straightforward manner
and did not receive any comments on
the use of plain language.
List of Subjects in 12 CFR Part 252
Administrative practice and
procedure, Banks, banking, Federal
Reserve System, Holding companies,
Reporting and recordkeeping
requirements, Securities.
For the reasons stated in the
preamble, the Board of Governors of the
Federal Reserve System amends 12 CFR
part 252 as follows:
PART 252—ENHANCED PRUDENTIAL
STANDARDS (REGULATION YY)
1. The authority citation for part 252
continues to read as follows:

■

Authority: 12 U.S.C. 321–338a, 481–486,
1467a, 1818, 1828, 1831n, 1831o, 1831p–1,
1831w, 1835, 1844(b), 1844(c), 3101 et seq.,
3101 note, 3904, 3906–3909, 4808, 5361,
5362, 5365, 5366, 5367, 5368, 5371.

2. Section 252.170(c)(1) is revised to
read as follows:

■

§ 252.170 Applicability and general
provisions.
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*
*
*
*
(c) Applicability of this subpart—(1)
Foreign banking organizations. (i) A
foreign banking organization that is a
covered foreign entity as of October 5,
2018, must comply with the
requirements of this subpart, including

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By order of the Board of Governors of the
Federal Reserve System, May 1, 2020.
Ann Misback,
Secretary of the Board.
[FR Doc. 2020–09665 Filed 5–27–20; 8:45 am]
P

NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 702
RIN 3133–AF19

Temporary Regulatory Relief in
Response to COVID–19—Prompt
Corrective Action
National Credit Union
Administration (NCUA).
ACTION: Interim final rule.
AGENCY:

The NCUA Board (Board) is
temporarily modifying certain
regulatory requirements to help ensure
that federally insured credit unions
(FICUs) remain operational and liquid
during the COVID–19 crisis.
Specifically, the Board is issuing two
temporary changes to its prompt
corrective action (PCA) regulations. The
first amends its regulations to
temporarily enable the Board to issue an
order applicable to all FICUs to waive
the earnings retention requirement for
any FICU that is classified as adequately
capitalized. The second modifies its
regulations with respect to the specific
documentation required for net worth
restoration plans (NWRPs) for FICUs
that become undercapitalized. These
temporary modifications will be in
place until December 31, 2020.
DATES: This rule is effective on May 28,
2020. Comments must be received on or
before June 29, 2020.
ADDRESSES: You may submit written
comments, identified by RIN 3133–
AF19, 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.
SUMMARY:

Authority and Issuance

*

but not limited to § 252.172, beginning
on January 1, 2022, unless that time is
extended by the Board in writing.
(ii) Notwithstanding paragraph
(c)(1)(i) of this section, a foreign banking
organization that is a major foreign
banking organization as of October 5,
2018, must comply with the
requirements of this subpart, including
but not limited to § 252.172, beginning
on July 1, 2021, unless that time is
extended by the Board in writing.
*
*
*
*
*

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• Fax: (703) 518–6319. Include
‘‘[Your Name]—Comments on
Temporary Regulatory Relief Rule in
Response to COVID–19—Prompt
Corrective Action’’ in the transmittal.
• 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: You may view all
public comments on the Federal
eRulemaking Portal at http://
www.regulations.gov as submitted,
except for those we cannot post for
technical reasons. The NCUA will not
edit or remove any identifying or
contact information from the public
comments submitted. Due to social
distancing measures in effect, the usual
opportunity to inspect paper copies of
comments in the NCUA’s law library is
not currently available. After social
distancing measures are relaxed, visitors
may make an appointment to review
paper copies by calling (703) 518–6540
or emailing [email protected].
FOR FURTHER INFORMATION CONTACT:
Policy and Analysis: Amanda Parkhill,
Director, Policy Division, Office of
Examination and Insurance, at (703)
518–6360; Legal: Marvin Shaw and
Thomas Zells, Staff Attorneys, Office of
General Counsel, at (703) 518–6540; or
by mail at: National Credit Union
Administration, 1775 Duke Street,
Alexandria, Virginia 22314.
SUPPLEMENTARY INFORMATION:
I. Background
A. COVID–19 Pandemic
The COVID–19 pandemic has created
uncertainty for FICUs and their
members. The Board is working with
federal and state regulatory agencies, in
addition to FICUs, to assist FICUs in
managing their operations and to
facilitate continued assistance to credit
union members and communities
impacted by the coronavirus. As part of
these ongoing efforts, the Board is
temporarily modifying certain
regulatory requirements to help ensure
that FICUs continue to operate
efficiently, to ensure that FICUs
maintain sufficient liquidity, and to
account for the potential temporary
increase in shares that FICUs may
experience during the COVID–19
pandemic. Specifically, the temporary
amendments in this interim final rule
will allow FICUs to better utilize
resources by reducing the
administrative burden associated with a
temporary increase in shares. The Board
has concluded that the amendments

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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Rules and Regulations
will provide FICUs with necessary
additional flexibility in a manner
consistent with the NCUA’s
responsibility to maintain the safety and
soundness of the credit union system.
The temporary amendments are
effective upon publication and will be
in place through the end of calendar
year 2020.
B. Prompt Corrective Action
1. Statutory Provisions
In 1998, Congress enacted the Credit
Union Membership Access Act
(‘‘CUMAA’’).1 CUMAA amended the
Federal Credit Union Act (‘‘the Act’’) to
require the NCUA to adopt by regulation
a system of PCA consisting of minimum
capital standards and corresponding
remedies to improve the net worth of
federally-insured ‘‘natural person’’
credit unions.2 The purpose of PCA is
to ‘‘resolve the problems of insured
credit unions at the least possible longterm loss to the [National Credit Union
Share Insurance Fund (‘NCUSIF’)].’’ 3
The statute designated three principal
components of PCA: (1) A framework
combining mandatory actions
prescribed by statute with discretionary
actions developed by the NCUA; (2) an
alternative system of PCA to be
developed by the NCUA for FICUs
which CUMAA defines as ‘‘new;’’ and
(3) a risk-based net worth requirement
to apply to FICUs which the NCUA
defines as ‘‘complex.’’ For FICUs other
than those meeting the statutory
definition of a ‘‘new’’ FICU, CUMAA
mandated a framework of mandatory
and discretionary supervisory actions
indexed to five statutory net worth
categories. These categories include
‘‘well capitalized,’’ ‘‘adequately
capitalized,’’ ‘‘undercapitalized,’’
‘‘significantly undercapitalized,’’ and
‘‘critically undercapitalized.’’ The
mandatory actions and conditions
triggering conservatorship and
liquidation are expressly prescribed by
statute.4 To supplement the mandatory
actions, the statute directed the NCUA
to develop discretionary actions which
are ‘‘comparable’’ to the ‘‘discretionary
safeguards’’ available under section 38
of the Federal Deposit Insurance Act,
which is the statute that applies PCA to
other federally-insured depository
institutions.5
1 Pubic

Law 105–219, 112 Stat. 913 (1998).
U.S.C. 1790d et seq.
3 12 U.S.C. 1790d(a)(1).
4 12 U.S.C. 1790d(e), (f), (g), and (i); 12 U.S.C.
1786(h)(1)(F); 12 U.S.C. 1786(a)(3)(A)(1).
5 12 U.S.C. 1790d(b)(1)(A); S. Rep. No. 193, 105th
Cong., 2d Sess. 12 (1998) (S. Rep.); H.R. Rep. No.
472, 105th Cong; see also 12 U.S.C. 1831o (Section
38 of the Federal Deposit Insurance Act setting forth
the PCA requirements for banks).

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The Act addresses the earnings
retention requirement applicable to
FICUs that are not well capitalized.6
Such FICUs are required to annually set
aside as net worth an amount equal to
not less than 0.4% of their total assets.7
The Board has the authority to decrease
the earnings retention requirement.8 To
accomplish this, the Board may issue an
order, if it determines that the decrease
is necessary to avoid a significant
redemption of shares and further the
purpose of that PCA provision of the
Act. The Act also requires the Board to
periodically review any order issued
under that section.9
Separately, 12 U.S.C. 1790d(f) sets
forth requirements related to NWRPs,
which FICUs must submit to the NCUA
and which the NCUA must review when
a FICU becomes undercapitalized. The
regulatory provisions addressing the
procedures and documentation
requirements for NWRPs are codified at
12 CFR 702.206 and are detailed below.
2. Regulatory Provisions
In February 2000, the NCUA Board
adopted part 702 and subpart L of part
747, establishing a comprehensive
system of PCA that combines mandatory
supervisory actions prescribed by the
statute with discretionary supervisory
actions developed by the NCUA (2000
final rule).10 Each of these supervisory
actions index to the five statutory net
worth categories noted above. In
addition, the 2000 final rule permits the
NCUA to impose ‘‘other action to better
carry out the purpose of PCA’’ than any
discretionary supervisory action
available in that category.11 In the
proposal that provided the basis for the
2000 final rule, the Board noted that
‘‘Part 702 also amplifies the terms of the
statutory exception to the 0.4%
minimum set aside. Specifically, the
Board stated that it interprets the phrase
by order to indicate that exceptions to
the 0.4% statutory minimum are to be
granted on a case-by-case basis.’’ 12 The
Board has historically interpreted these
orders on a case-by-case basis. However,
given the current unprecedented
situation where many FICUs broadly
face similar circumstances that affect
net worth, the Board has determined
that it is appropriate to implement the
changes in this rule, as detailed below.
In this rulemaking, the Board is
adopting two changes to the PCA
6 12

U.S.C. 1790d(e).
U.S.C. 1790d(e)(1).
8 12 U.S.C. 1790d(e)(2).
9 12 U.S.C. 1790d(e)(2)(B).
10 65 FR 8560 (Feb. 18, 2000).
11 12 CFR 702.202(b)(9).
12 64 FR 27090 (May 18, 1999).
7 12

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31953

requirements. The first amends
§ 702.201 of the NCUA’s regulations to
allow the Board to temporarily waive
the earnings retention requirement for
an adequately capitalized FICU, and the
second modifies § 702.206(c) of the
NCUA’s regulations with respect to
NWRPs.
Section III of this preamble discusses
the temporary regulatory amendments
in greater detail.
II. Legal Authority
The Board is issuing this interim final
rule pursuant to its authority under the
Act.13 The Act grants the Board a broad
mandate to issue regulations governing
both federal credit unions and, more
generally, all FICUs. For example,
section 120 of the Act is a general grant
of regulatory authority and authorizes
the Board to prescribe rules and
regulations for the administration of the
Act.14 Section 209 of the Act is a
plenary grant of regulatory authority to
issue rules and regulations necessary or
appropriate for the Board to carry out its
role as share insurer for all FICUs.15
Other provisions of the Act confer
specific rulemaking authority to address
prescribed issues or circumstances.16
Accordingly, the Act grants the Board
broad rulemaking authority to ensure
that the credit union industry and the
NCUSIF remain safe and sound. Such
specific rulemaking authority is set forth
in section 216(b) with respect to PCA.17
III. Section-by-Section Analysis
A. Section 702.201—Earnings Retention
Requirement for ‘‘Adequately
Capitalized’’ FICUs
With respect to earnings retention, a
FICU that is classified as ‘‘adequately
capitalized’’ or lower must increase the
dollar amount of its net worth quarterly
by an amount equivalent to at least
1⁄10th of a percent of its total assets and
must quarterly transfer at least that
amount (for a total of 0.4% annually)
from undivided earnings to its regular
reserve account every quarter until it is
‘‘well capitalized.’’ 18 The purpose of
this provision is to restore a FICU that
is less than well capitalized to a well13 12

U.S.C. 1751 et seq.
U.S.C. 1766(a).
15 12 U.S.C. 1789.
16 An example of a provision of the Act that
provides the Board with specific rulemaking
authority is section 207 (12 U.S.C. 1787), which is
a specific grant of authority over share insurance
coverage, conservatorships, and liquidations.
17 12 U.S.C. 1790d(b).
18 This relief is provided for FICUs that are
required to make an earnings retention transfer
under §§ 702.201, 702.202, 702.203, 702.204,
702.304, and 702.305.
14 12

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capitalized position in an incremental
manner.
As discussed above, current § 702.201
provides that the Board may waive this
requirement on a case-by-case basis
upon application by an affected FICU.
The Act provides broader authority for
the Board to issue an order to waive this
requirement and does not require an
application or individual orders.19 In
response to the COVID–19 pandemic
and resulting economic disruption, the
Board has determined that it is
appropriate to amend § 702.201
temporarily to provide express
regulatory authority for the Board to
issue a single order waiving the earnings
retention requirement for all FICUs that
are classified as adequately capitalized
during this time, subject to the
applicable Regional Director retaining
authority to subsequently require an
application if a particular FICU poses
undue risk to the NCUSIF or exhibits
material safety and soundness concerns.
Amending the regulation in this manner
will allow the Board to respond to
circumstances broadly affecting many
FICUs with a single issuance rather than
numerous individual waiver approvals.
This provision will be effective on May
28, 2020 and will expire on December
31, 2020, consistent with other recent
COVID–19 regulatory relief rules that
the Board has issued. Separate from this
regulatory amendment, the Board
intends to issue the order described
above, which will be applicable to
adequately capitalized FICUs and will
grant relief from the earnings retention
requirement without requiring those
FICUs to submit applications and
receive individual waiver approvals,
subject to the qualification noted above.
The Board is exercising this authority
under 12 U.S.C. 1790d(e)(2) in order to
enhance flexibility in the application of
the earnings retention requirement to
avoid a reduction of shares and thus
retain system liquidity and capital
adequacy, thereby furthering the
purpose of PCA. The Board further
notes that during this time, FICU
operations have been significantly
disrupted because of stay-at-home
orders, reduced staff, and related
complications. This procedure will
lessen the administrative burden on
FICUs, and the NCUA in providing this
relief, by avoiding the need for
numerous waiver applications and
responses. The Board notes that
qualification in the planned order
regarding FICUs that pose undue risk or
material safety and soundness concerns
19 See 1 U.S.C. 1 (providing that unless context
indicates otherwise, words importing the singular
also apply to several persons or parties).

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will help ensure that the purposes of
PCA are maintained during this time.
This approach affords the agency the
flexibility to address potential
difficulties faced by FICUs during this
time of unprecedented economic
hardship. The Board also notes that the
current, specific requirements on
earnings retention waivers are based on
a regulatory provision rather than a
specific statutory directive.20
Accordingly, the Board has flexibility to
modify the regulatory provision to
address the financial circumstances of
individual FICUs as well as the broader
credit union system. This is consistent
with the overall statutory structure of
PCA, which combines both mandatory
and discretionary provisions.
Credit union members are facing
unprecedented pressures and looking to
FICUs to provide necessary credit or
access to funds, which could place
strain on FICU liquidity. Allowing for a
broad order relieving adequately
capitalized FICUs from this requirement
is consistent with the statutory criteria
for issuing such an order, namely
avoiding a significant redemption of
shares and furthering the purpose of 12
U.S.C. 1790d to ‘‘resolve the problems
of insured credit unions at the least
possible long-term loss to the Fund.’’ 21
Accordingly, the Board is amending
§ 702.201 to adopt the temporary
provision to issue a broadly applicable
order. The Board plans to issue through
a separate action an order consistent
with this new provision to set forth the
terms of relief from the earnings
retention requirement.
B. Section 702.206(c)—Net Worth
Restoration Plans (NWRPs); Contents of
NWRP
With respect to NWRPs, the Act
provides a broad directive that a FICU
that is less than adequately capitalized
must submit an applicable net worth
restoration plan to the NCUA. The
NCUA, by regulation, has provided
additional details to flesh out this
statutory provision. Section 702.206(a)
of the NCUA’s regulations specifies the
schedule for filing the plan, and
§ 702.206(c) of the NCUA’s regulations
outlines the contents of a net worth
restoration plan.22
20 The Board notes that 12 U.S.C. 1790d(e)(1)
requires earnings retention. However, additional
provisions in 12 CFR part 702, including those
related to timing and the content of the application,
supplement this statutory provision.
21 12 U.S.C. 1790d(a)(1).
22 12 CFR 702.206(c). Under the current
regulation, an NWRP must—
• Specify—
Æ A quarterly timetable of steps the credit union
will take to increase its net worth ratio so that it

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The Board has decided that it is
appropriate to waive the net worth
restoration plan content requirements
for FICUs that become classified as
undercapitalized (has a net worth ratio
of 4 percent to 5.99 percent)
predominantly as a result of share
growth. In these cases, the FICU may
submit a significantly simpler net worth
restoration plan to the applicable
Regional Director noting that the FICU
fell to undercapitalized because of share
growth. Specifically, a FICU would be
required to attest that its reduction in
capital was caused by share growth and
that such share growth is a temporary
condition due to the COVID–19
pandemic. Federally insured, statechartered credit unions must comply
with applicable state requirements
when submitting NWRPs for state
supervisory authority approval.
When reviewing NWRPs submitted
under this authority, the Regional
Director will determine if the decrease
in the net worth ratio was
predominantly a result of share growth.
To assess the reason for the decrease,
the Regional Director will analyze the
numerator and denominator of the net
worth ratio. If there is no change or an
increase in the numerator and an
increase in the denominator, this would
indicate that the decrease in the net
worth ratio was due to share growth. If
there is an increase in the denominator
and a decrease in the numerator, the
Regional Director will analyze whether
the decrease in the numerator would
have caused the credit union to fall to
a lower net worth classification if there
were no change in the denominator. If
so, the credit union’s net worth decline
would not be predominantly due to
share growth and the credit union
becomes ‘‘adequately capitalized’’ by the end of the
term of the NWRP, and to remain so for four (4)
consecutive calendar quarters. If ‘‘complex,’’ the
credit union is subject to a risk-based net worth
requirement that may require a net worth ratio
higher than six percent (6%) to become ‘‘adequately
capitalized’’;
Æ The projected amount of earnings to be
transferred to the regular reserve account in each
quarter of the term of the NWRP as required under
§ 702.201(a), or as permitted under § 702.201(b);
Æ How the credit union will comply with the
mandatory and any discretionary supervisory
actions imposed on it by the NCUA Board under
this subpart;
Æ The types and levels of activities in which the
credit union will engage; and
Æ If reclassified to a lower category under
§ 702.102(b), the steps the credit union will take to
correct the unsafe or unsound practice(s) or
condition(s);
• Include pro forma financial statements,
including any off-balance sheet items, covering a
minimum of the next two years; and
• Contain such other information as the NCUA
Board has required.

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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Rules and Regulations
would not be eligible to submit a
streamlined NWRP.
The Board has determined that it is
appropriate to modify the regulation
addressing NWRPs given the disruption
caused by the COVID–19 pandemic. The
Board believes that it will be able to
fulfill its statutory duty to evaluate the
net worth restoration plan even if the
plan is more concise and streamlined
than plans submitted prior to the
COVID–19 crisis. Such a streamlined
approach is acceptable because the more
extensive information required under
the current requirements may not be
practicable or useful under the current
situation. Further, the current
requirement addresses methods for the
Board to evaluate the plan and not for
approval. The Board believes it can
determine if a plan is acceptable even if
it lacks some of the detailed
submissions that the current regulation
specifies. The Board further notes that if
a FICU temporary falls below being
adequately capitalized (or lower)
because of share growth, the risk is
limited and net worth will likely
increase as the shares are withdrawn.
IV. Regulatory Procedures

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A. Administrative Procedure Act
The Board is issuing the interim final
rule without prior notice and the
opportunity for public comment and the
delayed effective date ordinarily
prescribed by the Administrative
Procedure Act (APA).23 Pursuant to the
APA, general notice and the opportunity
for public comment are not required
with respect to a rulemaking when an
‘‘agency for good cause finds (and
incorporates the finding and a brief
statement of reasons therefor in the
rules issued) that notice and public
procedure thereon are impracticable,
unnecessary, or contrary to the public
interest.’’ 24
The Board believes that the public
interest is best served by implementing
the interim final rule immediately upon
publication in the Federal Register. The
Board notes that the COVID–19
pandemic is unprecedented. It is a
rapidly changing and difficult to
anticipate how the disruptions caused
by the pandemic will manifest
themselves within the financial system
and how individual FICUs may be
impacted. Because of the widespread
impact of a pandemic and the speed
with which disruptions have
transmitted throughout the United
States, the Board believes it is has good
cause to determine that ordinary notice
23 5
24 5

U.S.C. 553.
U.S.C. 553(b)(3).

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and public procedure are impracticable
and that moving expeditiously in the
form of an interim final rule is in the
best of interests of the public and the
FICUs that serve that public. The
temporary regulatory changes are
proactive steps that are designed to
alleviate potential liquidity and
resource strains including strains on
capital adequacy and are undertaken
with expedience to ensure the
maximum intended effects are in place
at the earliest opportunity.
The Board values public input in its
rulemakings and believes that providing
the opportunity for comment enhances
its regulations. Accordingly, the Board
is soliciting comments on its rules even
when not required under the APA, such
as for the rules it issues on an interimfinal basis. The amendment made by the
interim final rule will automatically
expire at the close of December 31,
2020, and are limited in number and
scope. For these reasons, the Board
finds that there is good cause consistent
with the public interest to issue the rule
without advance notice and comment.25
The APA also requires a 30-day
delayed effective date, except for (1)
substantive rules which grant or
recognize an exemption or relieve a
restriction; (2) interpretative rules and
statements of policy; or (3) as otherwise
provided by the agency for good
cause.26 Because the rule relieves
currently codified limitations and
restrictions, the interim final rule is
exempt from the APA’s delayed
effective date requirement. As an
alternative basis to make the rule
effective without the 30-day delayed
effective date, the Board finds there is
good cause to do so for the same reasons
set forth above regarding advance notice
and opportunity for comment.
B. Congressional Review Act
For purposes of the Congressional
Review Act,27 the Office of Management
and Budget (OMB) makes a
determination as to whether a final rule
constitutes a ‘‘major’’ rule. If the OMB
deems a rule to be a ‘‘major rule,’’ the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.
The Congressional Review Act defines
a ‘‘major rule’’ as any rule that the
25 For the same reasons, the Board is not
providing the usual 60-day comment period before
finalizing this rule. See NCUA Interpretive Ruling
and Policy Statement (IRPS) 87–2, as amended by
IRPS 03–2 and IRPS 15–1. 80 FR 57512 (Sept. 24,
2015), available at https://www.ncua.gov/files/
publications/irps/IRPS1987-2.pdf.
26 5 U.S.C. 553(d).
27 5 U.S.C. 801–808.

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Administrator of the Office of
Information and Regulatory Affairs of
the OMB finds has resulted in or is
likely to result in (A) an annual effect
on the economy of $100,000,000 or
more; (B) a major increase in costs or
prices for consumers, individual
industries, Federal, State, or local
government agencies or geographic
regions, or (C) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
on the ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.28
For the same reasons set forth above,
the Board is adopting the interim final
rule without the delayed effective date
generally prescribed under the
Congressional Review Act. The delayed
effective date required by the
Congressional Review Act does not
apply to any rule for which an agency
for good cause finds (and incorporates
the finding and a brief statement of
reasons therefor in the rule issued) that
notice and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.29 In light of
current market uncertainty, the Board
believes that delaying the effective date
of the rule would be contrary to the
public interest for the same reasons
discussed above.
As required by the Congressional
Review Act, the Board will submit the
final rule and other appropriate reports
to Congress and the Government
Accountability Office for review.
C. 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 reporting, recordkeeping, or a
third-party disclosure requirement,
referred to as an information collection.
The amendment to § 702.201 is
decreasing the earnings retention
requirement for all FICUs that are
classified as adequately capitalized
during this time. Currently, FICUs must
request a waiver for each quarterly
transfer made from undivided earning to
its regular reserve account until well
capitalized. By the actions of this rule
the waiver requirement is temporary
suspended for adequately capitalized
credit unions and the information
collection requirement will be reduced
28 5
29 5

U.S.C. 804(2).
U.S.C. 808.

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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Rules and Regulations

from 113 respondents providing three
waivers annually to 23 respondents.
Section 702.206 provides that a FICU
that is less than adequately capitalized
must submit an applicable NWRP to the
NCUA. The temporary rule allows a
FICU that becomes undercapitalized to
submit a significantly simpler NWRP to
NCUA, which will reduce the estimated
burden associated with the preparation
from 27 hours to 2 hours. This would
affect an estimated 31 FICUs that would
fall under the category of
undercapitalized.
The information collection
requirements of part 702 (subparts A
through D) are currently covered by
OMB control number 3133–0154. These
temporary amendments will reduce the
number of estimated responses from 482
to 155, with a decrease in the estimated
total burden hours by 2,854, for a total
information collection burden of 569
hours.
NCUA has obtain emergency approval
from the Office of Management and
Budget for a 6-month period. During
this time the Agency will accept public
comments on the information collection
requirements and take appropriate
action in the final request for PRA
approval.
OMB Control Number: 3133–0154.
Title of information collection:
Prompt Corrective Actions, 12 CFR 702
(Subparts A–D).
Estimated number of respondents: 89.
Estimated number of responses per
respondent: 1.74.
Estimated total annual responses:
155.
Estimated burden per response: 3.67.
Estimated total annual burden: 569.
The NCUA invites comments on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the proposed collection
of information, including the validity of
the methodology and assumptions used;
(c) ways to enhance the quality, utility
and clarity of the information to be
collected; and (d) ways to minimize the
burden of the collection of information
on those who are to respond, including
through the use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology; and (e) estimates of capital
or start-up costs and cost of operation,
maintenance, and purchase of services
to provide information.
All comments are a matter of public
records. Interested persons are invited
to submit written comments on the

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information collection to Dawn
Wolfgang, National Credit Union
Administration, 1775 Duke Street, Suite
6032, Alexandria, Virginia 22314; Fax
No. 703–519–8579; or email at
[email protected]. Given the
limited in-house staff because of the
COVID–19 pandemic, email comments
are preferred.
D. Executive Order 13132
Executive Order 13132 30 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. The NCUA, an
independent regulatory agency, as
defined in 44 U.S.C. 3502(5), voluntarily
complies with the Executive order to
adhere to fundamental federalism
principles. The interim final rule will
not have substantial direct effects on the
states, on the relationship between the
National Government and the states, or
on the distribution of power and
responsibilities among the various
levels of government. The Board has
therefore determined that this rule does
not constitute a policy that has
federalism implications for purposes of
the Executive order.
E. Assessment of Federal Regulations
and Policies on Families
The NCUA has determined that this
interim final rule will not affect family
well-being within the meaning of
Section 654 of the Treasury and General
Government Appropriations Act,
1999.31
F. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
generally requires that when an agency
issues a proposed rule or a final rule
pursuant to the APA 32 or another law,
the agency must prepare a regulatory
flexibility analysis that meets the
requirements of the RFA and publish
such analysis in the Federal Register.33
Specifically, the RFA normally requires
agencies to describe the impact of a
rulemaking on small entities by
providing a regulatory impact analysis.
For purposes of the RFA, the Board
considers FICUs with assets less than
$100 million to be small entities.34
As discussed previously, consistent
with the APA,35 the Board has
determined for good cause that general
notice and opportunity for public
30 Executive Order 13132 on Federalism, was
signed by former President Clinton on August 4,
1999, and subsequently published in the Federal
Register on August 10, 1999 (64 FR 43255).
31 Public Law 105–277, 112 Stat. 2681 (1998).
32 5 U.S.C. 553(b).
33 5 U.S.C. 603, 604.
34 NCUA IRPS 15–1. 80 FR 57512 (Sept. 24, 2015).
35 5 U.S.C. 553(b)(3)(B).

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comment is unnecessary, and therefore
the Board is not issuing a notice of
proposed rulemaking. Rules that are
exempt from notice and comment
procedures are also exempt from the
RFA requirements, including
conducting a regulatory flexibility
analysis, when among other things the
agency for good cause finds that notice
and public procedure are impracticable,
unnecessary, or contrary to the public
interest. Accordingly, the Board has
concluded that the RFA’s requirements
relating to initial and final regulatory
flexibility analysis do not apply.
Nevertheless, the Board seeks
comment on whether, and the extent to
which, the interim final rule would
affect a significant number of small
entities.
List of Subjects in 12 CFR Part 702
Credit unions, Reporting and
recordkeeping requirements.
By the NCUA Board, this 21st day of May
2020.
Gerard Poliquin,
Secretary of the Board.

For the reasons set forth above, the
Board amends 12 CFR part 702 as
follows:
PART 702—CAPITAL ADEQUACY
1. The authority citation for part 702
continues to read as follows:

■

Authority: 12 U.S.C. 1766(a), 1790d.

2. Amend § 702.201 by redesignating
paragraphs (b)(1) and (2) as paragraphs
(b)(1)(i) and (ii), respectively, and
adding a new paragraph (b)(2) to read as
follows:

■

§ 702.201 Prompt corrective action for
‘‘adequately capitalized’’ credit unions.

*

*
*
*
*
(b) * * *
(2) Notwithstanding paragraph (a) of
this section, starting on May 28, 2020
and ending on December 31, 2020, for
a credit union that is adequately
capitalized:
(i) The NCUA Board may issue an
administrative order specifying
temporary revisions to the earnings
retention requirement, to the extent the
NCUA Board determines that such
lesser amount—
(A) Is necessary to avoid a significant
redemption of shares; and
(B) Would further the purpose of this
part.
(ii) Despite the issuance of an
administrative order under paragraph
(b)(2) of the section, the Regional
Director may require a credit union to
submit an earnings transfer waiver
under paragraph (b)(1) if the credit

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Federal Register / Vol. 85, No. 103 / Thursday, May 28, 2020 / Rules and Regulations
union poses an undue risk the National
Credit Union Share Insurance Fund or
exhibits material safety and soundness
concerns.
*
*
*
*
*
■ 3. Amend § 702.206 by adding
paragraph (c)(4) to read as follows:
§ 702.206

Net worth restoration plans.

*

*
*
*
*
(c) * * *
(4) Notwithstanding paragraphs (c)(1),
(2), and (3) of this section, the Board
may permit a credit union that is
undercapitalized to submit to the
Regional Director a streamlined NWRP
plan attesting that its reduction in
capital was caused by share growth and
that such share growth is a temporary
condition due to COVID–19. A
streamlined NWRP plan is permitted
between May 28, 2020 and December
31, 2020.
*
*
*
*
*
[FR Doc. 2020–11384 Filed 5–27–20; 8:45 am]
BILLING CODE 7535–01–P

DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
19 CFR Chapter I
Transportation Security Administration
49 CFR Chapter XII
Notification of Arrival Restrictions
Applicable to Flights Carrying Persons
Who Have Recently Traveled From or
Were Otherwise Present Within the
Federative Republic of Brazil
U.S. Customs and Border
Protection (CBP) and U.S.
Transportation Security Administration
(TSA), Department of Homeland
Security (DHS).
ACTION: Notification of arrival
restrictions.
AGENCY:

This document announces the
decision of the Secretary of Homeland
Security to direct all flights to the
United States carrying persons who
have recently traveled from, or were
otherwise present within, the Federative
Republic of Brazil (Brazil) to arrive at
one of the United States airports where
the United States Government is
focusing public health resources. This
document updates the previous
decisions of the Secretary of Homeland
Security: To direct all flights to the
United States carrying persons who
have recently traveled from, or were
otherwise present within, the People’s

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SUMMARY:

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Republic of China (excluding the
Special Administrative Regions of Hong
Kong and Macau) to arrive at one of the
United States airports where the United
States Government is focusing public
health resources (effective February 2,
2020); to direct all flights to the United
States carrying persons who have
recently traveled from, or were
otherwise present within, the Islamic
Republic of Iran to arrive at one of the
United States airports where the United
States Government is focusing public
health resources (effective March 2,
2020); to direct all flights to the United
States carrying persons who have
recently traveled from, or were
otherwise present within, the countries
of the Schengen Area, to arrive at one
of the United States airports where the
United States Government is focusing
public health resources (effective March
13, 2020); and to direct all flights to the
United States carrying persons who
have recently traveled from, or were
otherwise present within, the United
Kingdom, excluding overseas territories
outside of Europe, or the Republic of
Ireland to arrive at one of the United
States airports where the United States
Government is focusing public health
resources (effective March 16, 2020).
Specifically, this document adds two
airports (Fort Lauderdale-Hollywood
International Airport (FLL) and George
Bush Intercontinental/Houston Airport
(IAH)) to the list of airports where such
flights may land.
DATES: Flights departing after 11:59 p.m.
Eastern Daylight Time (EDT) on
Tuesday, May 26, 2020, and covered by
the arrival restrictions announced or
modified in this document are required
to land at one of the airports identified
in this document. These arrival
restrictions will continue until
cancelled or modified by the Secretary
of Homeland Security and notification
is published in the Federal Register of
such cancellation or modification.
FOR FURTHER INFORMATION CONTACT:
Matthew S. Davies, Office of Field
Operations, U.S. Customs and Border
Protection at 202–325–2073.
SUPPLEMENTARY INFORMATION:
Background
In Proclamation 9994 of March 13,
2020 (Declaring a National Emergency
Concerning the Novel Coronavirus
Disease (COVID–19) Outbreak),
President Trump declared a national
emergency recognizing the threat that
the novel (new) coronavirus known as
SARS–CoV–2 poses to the Nation’s
healthcare systems. The President
declared the policy of the United States
to respond to the ongoing,

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31957

unprecedented outbreak of COVID–19
(the disease caused by SARS–CoV–2)
with every tool and resource available to
the United States Government.
Consistent with this policy, the
President has suspended and limited
the entry of aliens recently present in
certain foreign jurisdictions where
significant COVID–19 outbreaks have
occurred. These jurisdictions include
the People’s Republic of China
(excluding the Special Administrative
Regions of Hong Kong and Macau), the
Islamic Republic of Iran, the Schengen
Area, the United Kingdom (excluding
overseas territories outside of Europe),
the Republic of Ireland, and, effective at
11:59 p.m. EDT on May 26, 2020, the
Federative Republic of Brazil.
The potential for widespread further
transmission of this virus by infected
individuals seeking to enter the United
States threatens the security of our
transportation system and
infrastructure, and the national security.
Noting the President’s actions and
recent pronouncements by the World
Health Organization (WHO) and the
Centers for Disease Control and
Prevention (CDC) for the novel
coronavirus outbreak, including the
categorization by WHO of COVID–19 as
a pandemic on March 11, 2020, and to
assist in preventing the introduction,
transmission, and spread of this
communicable disease globally and in
the United States, DHS, in coordination
with CDC and other Federal, state, and
local agencies charged with protecting
the American public, is implementing
enhanced protocols to ensure that all
travelers seeking to enter the United
States with recent travel from, or who
were otherwise recently present within,
Brazil are provided appropriate public
health services.
DHS previously published similar
arrival restrictions in the Federal
Register. This document does not
modify those documents, except that the
Secretary is adding two airports to the
list of airports where flights subject to
those arrival restrictions are permitted
to land. The previously published
arrival restrictions are as follows:
• Notification of Arrival Restrictions
Applicable to Flights Carrying Persons
Who Have Recently Traveled From or
Were Otherwise Present Within the
People’s Republic of China, 85 FR 6044
(Feb. 4, 2020);
• Notification of Arrival Restrictions
Applicable to Flights Carrying Persons
Who Have Recently Traveled From or
Were Otherwise Present Within the
People’s Republic of China, 85 FR 7214
(Feb. 7, 2020);
• Notification of Arrival Restrictions
Applicable to Flights Carrying Persons

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