CUNA Regulatory Comment Call
April 21, 2008
NCUA Seeks Comments On A Proposed Rulemaking That Would Increase The Options Regarding The Advertising Requirements Of Insured Credit Unions
The National Credit Union Administration Board is seeking comments on a notice of proposed rulemaking under Part 740 of its regulations regarding advertising. The proposal was approved for comments at the Boards April meeting. Click here for the comment request published in the Federal Register.
CUNA staff will be reviewing comments received regarding the proposal and drafting a comment letter based on that input. The comment period ends June 27, please submit all comments for incorporation into CUNA's comment letter by June 18, 2008.
- NCUA has issued a proposed notice of rulemaking on whether it should revise its requirements for use of the official insurance sign and official advertising statement.
- The agencys proposal would give credit unions more flexibility for the requirements they must meet in advertising that they are federally insured.
- More specifically, the proposal would allow an insured credit union to either:
- Use the official statement, This credit union is federally insured by the National Credit Union Administration;
- Use a condensed statement, Federally insured by NCUA; or
- Simply display the official insurance sign in their advertisements.
- Currently, insured credit unions are permitted to use the condensed statement only if accompanied by the official sign.
Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at firstname.lastname@example.org and to Regulatory Research Counsel Luke Martone at email@example.com; or mail them to Mary and Luke c/o CUNAs Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6032, if you would like a copy of the request.
The Federal Credit Union Act requires that each insured credit union shall display at each place of business maintained by that credit union a sign or signs relating to the insurance of the share accounts of the institutions, in accordance with regulations to be prescribed by the Board. 12 U.S.C. 1785(a).
Based on its authority, NCUA requires insured credit unions to display either the basic advertising statement or the shortened version along with the official sign. 12 C.F.R. Part 740. As noted above, the basic advertising statement is, This credit union is federally insured by the National Credit Union Administration. In order for a credit union to use the shortened version, Federally insured by NCUA, it currently must be accompanied by the official sign.
POTENTIAL IMPACT OF THE PROPOSED RULEMAKING
The proposal would eliminate the requirement that the shortened version of the advertising statement be used only in conjunction with the official sign. This minor change would simply expand the options credit unions would have in letting the public know they are insured with the NCUA.
According to the draft proposal released by the NCUA, the proposed rulemaking would have little, if any, negative impact. Regarding the Regulatory Flexibility Act, the NCUA has determined and certifies that the proposed rule, if adopted, will not have a significant economic impact on a substantial number of small credit unions. Similarly, the agency has stated that the proposal would not increase paperwork requirements under the Paperwork Reduction Act.
Here are some suggested questions on which to comment on:
- Is independent use of the shortened version of the advertising statement, Federally insured by NCUA,
sufficiently effective in letting the public know that a credit union is insured?
- Do you foresee any potential negative effects of the proposal? Such as increased regulatory burden.
- Are there any issues concerning the proposed rulemaking that require greater clarification from the NCUA?
- Are there any other relevant issues?
Eric Richard General Counsel (202) 508-6742 firstname.lastname@example.org |
Mary Mitchell Dunn SVP & Deputy General Counsel (202) 508-6736 email@example.com
Jeffrey Bloch Assistant General Counsel (202) 508-6732 firstname.lastname@example.org
Lilly Thomas Assistant General Counsel (202) 508-6733 email@example.com
Luke Martone Senior Regulatory Counsel (202) 508-6743 firstname.lastname@example.org