Supporting Statement A

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National Credit Union Administration
SUPPORTING STATEMENT

Purchase, Sale, and Pledge of Eligible Obligations, 12 CFR 701.23

OMB No. 3133-0127


    A. JUSTIFICATION

    1. Circumstances that make the collection of information necessary.

	The Federal Credit Union (FCU) Act limits the amount of eligible obligations an FCU is permitted to purchase, sell, pledge, discount, receive or dispose of under Section 107(13).  NCUA’s rules and regulations further govern this limitation by prescribing additional requirements under §701.23.  Section 701.23 generally requires that purchased eligible obligations be obligations of the purchasing FCU’s members.  However, §701.23 provides certain exceptions to the general requirements.  The regulation authorizes FCUs to purchase the eligible obligations of any federally insured credit union (FICU) or the notes of a liquidating credit union without regard to whether they are obligations of the purchasing FCU’s members.

    2. Purpose and use of the information collected.

	The information collections will be used to ensure an FCU has instituted a safe and sound program related to the purchase, sale, and pledge of eligible obligations.  Any such restrictions applicable to state-chartered credit unions would be based on state laws or regulations.

    3. Use of information technology.

	Credit unions can use any method available to develop, retain, and submit the information collections. 

    4. Duplication of information.

	These information collections are not duplicated anywhere else. 

    5. Efforts to reduce burden on small entities.

	These information collections will not have a significant burden on small entities.  While all FCUs are able to engage in the purchase, sale, and pledge of eligible obligations, many small entities will not participate in this activity.  Those that elect to engage in this activity will be subject to the same requirements to ensure safety and soundness. 

    6. Consequences of not conducting collection. 

	If the information collection in not conducted, FCUs will not have documentation to show that the eligible obligation transactions are compliant with the regulations and are conducted in a safe and sound manner with credit union board approval. 

    7. Inconsistencies with guidelines in 5 CFR 1320.5(d)(2).

	There are no special circumstances. This collection is consistent with the guidelines in 5 CFR 1320.5(d)(2).

    8. Efforts to consult with persons outside the agency.

A Proposed Rule was published in the Federal Register on February 25, 2026, at 91 FR 9188, soliciting comments from the public. Comments were summarized and addressed in the final rulemaking.


    9. Payment or gifts to respondent.

There is no intent by NCUA to provide payment or gifts for information collected.

    10. Assurance of confidentiality.

There is no assurance of confidentiality other than that provided by law.

    11. Questions of a sensitive nature.

	No questions of a sensitive nature are asked.  The information collection does not collect any Personally Identifiable Information (PII).

    12. Burden of information collection.

There are approximately 343 credit FCUs that are purchasing eligible obligations. NCUA expects FCUs to maintain written policies and schedules of eligible obligations that have been purchased, sold, or pledged. 










12 CFR
Information Collection Activity
Type of Burden
Respondents
# Responses per Respondent
Total Annual Responses
Time per Response (Hours)
Total Annual Burden
701.23
Develop written policies to purchase, sell, or pledge eligible obligations.
Record keeping
343
1
343
6
2,058
(b)(1)







701.23
Retain a written agreement and schedule of eligible obligations purchased in the purchaser’s office, when purchasing eligible obligations.
Record keeping
343
36
12,348
0.25
3,087
(b)(3)(ii)







701.23
Request written approval prior to purchasing eligible obligations of a liquidating credit union.
Reporting
35
1
35
8
280
(b)(3)(iii)







701.23 (b)(6)
Internal written purchase policies
Record keeping
343
1
343
4
1,372
701.23
Retain a written agreement and schedule of eligible obligations sold in the seller’s officer, when selling eligible obligations.
Record keeping
144
43
6,192
0.25
1,548
(c)(2)







701.23
Retain copies of the original loan documents when pledging eligible obligations.
Record keeping
343
11
3,773
0.25
943.25
(d)(1)(ii)







701.23
Retain a written agreement and schedule of eligible obligations pledged in the credit union’s office, when pledging eligible obligations.
Record keeping
343
11
3,773
0.25
943.25
(d)(1)(iii)







701.23
Submit a written request to NCUA seeking expanded authority related to the purchase of eligible obligations from another federally insured credit union.
Reporting
0
1
0
8
0
(g)(1)







701.23
Submit an appeal to the NCUA Board regarding a regional director’s determination of the expanded authority request.
Reporting
0
1
0
20
0
(g)(1)







 Totals
343

26,807

10,231.5
*NCUA provides record retention guidelines for credit unions in Appendix A to Part 749 and recommends that the credit union’s board of directors approve a records retention schedule authorizing the disposal of certain records on a continual basis upon expiration of specified retention period.  It is also advised that records, for a particular period, should not be destroyed until both a comprehensive annual audit by the supervisor committee and a supervisory examination by the NCUA have been made for that period.

	Based on a labor wage rate of $42.80 per hour, the cost to respondents is $14,680. 

    13. Capital start-up or on-going operations and maintenance costs.

	There are no capital start-up or on-going operation and maintenance cost.

    14. Annualized costs to Federal government.

Most of the information collections will be reviewed as part of the normal exam process and will not result in additional cost to the federal government.  The only additional cost is the requests for NCUA approval prior to purchasing eligible obligations of a liquidating credit union.  NCUA estimates that it will take NCUA staff 8 hours, on average, to review and respond to a credit union’s request to purchase eligible obligations of a liquidating credit unions.  At a rate of $85 per hour, the estimated cost for NCUA to review these requests is $19,800.

    15. Changes in burden.

The NCUA published a proposed rule to remove the recordkeeping requirement for 12 CFR 701.23(g). Due to the elimination of the previous part 701.23(g), the overall annual burden decreased from 10,918 to 10,231.5. 


    16. Information collection planned for statistical purposes.

	Not applicable.  The information collection is not used for statistical purposes.

    17. Request non-display the expiration date of the OMB control number.

The OMB control number and expiration date associated with this PRA submission will be displayed on the Federal Government’s electronic PRA docket website at www.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.