[Federal Register Volume 75, Number 250 (Thursday, December 30, 2010)]
[Proposed Rules]
[Pages 82323-82325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32127]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 740
RIN 3133-AD83
Accuracy of Advertising and Notice of Insured Status
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule with request for comments.
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SUMMARY: The NCUA Board proposes to revise certain provisions of NCUA's
official advertising statement rule. Specifically, insured credit
unions will be required to include the statement in all radio and
television advertisements, annual reports, and statements of condition
required to be published by law. The NCUA Board also proposes to define
the term ``advertisement'' and clarify size requirements for the
official advertising statement in print materials.
DATES: Comments must be received on or before February 28, 2011.
ADDRESSES: You may submit comments 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.
[[Page 82324]]
NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the
instructions for submitting comments.
E-mail: Address to [email protected]. Include ``[Your
name] Comments on Proposed Rule 740, Accuracy of Advertising and Notice
of Insured Status'' in the e-mail subject line.
Fax: (703) 518-6319. Use the subject line described above
for e-mail.
Mail: Address to Mary Rupp, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria,
Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
Public Inspection: All public comments are available on the
agency's Web site at http://www.ncua.gov/RegulationsOpinionsLaws/comments as submitted, except as may not be possible for technical
reasons. Public comments will not be edited to remove any identifying
or contact information. Paper copies of comments may be inspected in
NCUA's law library at 1775 Duke Street, Alexandria, Virginia 22314, by
appointment weekdays between 9 a.m. and 3 p.m. To make an appointment,
call (703) 518-6546 or send an e-mail to [email protected].
FOR FURTHER INFORMATION CONTACT: Frank Kressman, Senior Staff Attorney,
Office of General Counsel, at the above address or telephone (703) 518-
6540.
SUPPLEMENTARY INFORMATION: Section 740.5 of NCUA's regulations requires
each insured credit union to include NCUA's official advertising
statement in all of its advertisements, including on its main internet
page. 12 CFR 740.5(a). The official advertising statement is in
substance as follows: ``This credit union is federally insured by the
National Credit Union Administration.'' Insured credit unions, at their
option, may use the short title ``Federally insured by NCUA'' or a
reproduction of NCUA's official sign, as depicted in Sec. 740.4(b), as
the official advertising statement. 12 CFR 740.4(b); 12 CFR 740.5(b).
The official advertising statement must be in a size and print that
is clearly legible. 12 CFR 740.5(b). If the official sign is used as
the official advertising statement, an insured credit union may alter
the font size to ensure its legibility as provided in Sec.
740.4(b)(2). 12 CFR 740.4(b)(2); 12 CFR 740.5(b).
A number of advertisements in the current rule, however, need not
include the official advertising statement.\1\ Among those currently
exempted advertisements are radio and television advertisements that do
not exceed 30 seconds in time. The NCUA Board proposes to rescind these
exemptions. NCUA believes that it is important for consumers of these
kinds of advertisements to know that the share accounts in the
advertising credit union are federally insured by NCUA. The NCUA Board
believes that the benefits of this action to consumers and credit
unions, namely, enhanced consumer confidence and NCUA name recognition,
will far outweigh the minor inconvenience associated with requiring the
inclusion of the official advertising statement in this context. The
NCUA Board intends for this proposal also to apply to television
display advertisements.
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\1\ Exempted advertisements in the current rule include: (1)
Statements of condition and reports of condition of an insured
credit union which are required to be published by state or federal
law or regulation; (2) Credit union supplies such as stationery
(except when used for circular letters), envelopes, deposit slips,
checks, drafts, signature cards, account passbooks, and noninsurable
certificates; (3) Signs or plates in the credit union office or
attached to the building or buildings in which the offices are
located; (4) Listings in directories; (5) Advertisements not setting
forth the name of the insured credit union; (6) Display
advertisements in credit union directories, provided the name of the
credit union is listed on any page in the directory with a symbol or
other descriptive matter indicating it is insured; (7) Joint or
group advertisements of credit union services where the names of
insured credit unions and noninsured credit unions are listed and
form a part of such advertisement; (8) Advertisements by radio that
do not exceed thirty (30) seconds in time; (9) Advertisements by
television, other than display advertisements, that do not exceed
thirty (30) seconds in time; (10) Advertisements that because of
their type or character would be impractical to include the official
advertising statement, including but not limited to, promotional
items such as calendars, matchbooks, pens, pencils, and key chains;
(11) Advertisements that contain a statement to the effect that the
credit union is insured by the National Credit Union Administration,
or that its accounts and shares or members are insured by the
Administration to the maximum insurance amount for each member or
shareholder; (12) Advertisements that do not relate to member
accounts, including but not limited to advertisements relating to
loans by the credit union, safekeeping box business or services,
traveler's checks on which the credit union is not primarily liable,
and credit life or disability insurance. 12 CFR Sec. 740.5(c).
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With respect to print advertisements, the NCUA Board proposes to
clarify the requirement that the official advertising statement must be
in a size and print that is clearly legible. 12 CFR 740.5(b). NCUA's
regulations do not dictate a specific font size be used for the
official advertising statement, and NCUA continues to believe this
makes sense considering advertisements can range from small magazine
advertisements to very large billboard advertisements. The NCUA Board
requires, however, that in any particular advertisement, in addition to
legibility, the font size for the official advertising statement may be
no smaller than the smallest font size used in other portions of the
advertisement intended to convey information to the consumer.
Also, the NCUA Board believes that an insured credit union's annual
report and other statements of condition required to be published by
law are significant and a form of advertisement and must include the
official advertising statement in a prominent position. Accordingly,
the NCUA Board proposes to amend Sec. 740.5 in this regard.
In summary, the proposal rescinds three exemptions from the general
rule requiring the use of the official advertising statement. Those
three include radio and television advertisements that do not exceed 30
seconds in time and annual reports and other statements of condition
required to be published by law. All other exemptions in Sec. 740.5(c)
remain in place. Finally, the current rule does not define the term
``advertisement.'' The NCUA Board proposes to clarify the rule by
proposing such a definition. The proposed definition is consistent with
that used by the Federal Deposit Insurance Corporation in its official
advertising statement rule. 12 CFR part 328.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact any proposed regulation may
have on a substantial number of small credit unions (those under $10
million in assets). The proposed amendments enhance consumer confidence
and do not impose a significant burden on credit unions. Accordingly,
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 within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601-612.
Paperwork Reduction Act
The proposed rule does not contain a ``collection of information''
within the meaning of section 3502(3) of the Paperwork Reduction Act of
1995 (44 U.S.C. 3502(3)) and would not increase paperwork requirements
under the Paperwork Reduction Act of 1995 or regulations of the Office
of Management and Budget.
[[Page 82325]]
Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests. In
adherence to fundamental federalism principles, NCUA, an independent
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies
with the executive order. The proposed rule would not have substantial
direct effect on the states, on the connection between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. NCUA has
determined that this proposed rule does not constitute a policy that
has federalism implications for purposes of the executive order.
The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
NCUA has determined that this proposed rule would not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat.
2681 (1998).
Agency Regulatory Goal
NCUA's goal is to promulgate clear and understandable regulations
that impose minimal regulatory burden. We request your comments on
whether the proposed amendments are understandable and minimally
intrusive if implemented as proposed.
List of Subjects in 12 CFR Part 740
Advertisements, Credit unions, Signs and symbols.
By the National Credit Union Administration Board on December
16, 2010.
Mary F. Rupp,
Secretary of the Board.
For the reasons discussed above, the NCUA Board proposes to amend
12 CFR part 740 as follows:
PART 740--ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS
1. The authority citation for part 740 continues to read as
follows:
Authority: 12 U.S.C. 1766, 1781, 1785, and 1789.
2. Revise Section 740.1 by redesignating paragraphs (b) and (c) as
paragraphs (c) and (d) and by adding a new paragraph (b) to read as
follows:
Sec. 740.1 Definitions.
* * * * *
(b) Advertisement as used in this part means a commercial message,
in any medium, that is designed to attract public attention or
patronage to a product or business.
* * * * *
3. Amend Sec. 740.5 by revising paragraph (a) to read as follows:
Sec. 740.5 Requirements for the official advertising statement.
(a) Each insured credit union must include the official advertising
statement, prescribed in paragraph (b) of this section, in all of its
advertisements including, but not limited to, annual reports,
statements of condition required to be published by law, radio and
television advertisements, and on its main Internet page, except as
provided in paragraph (c) of this section.
* * * * *
4. Amend Sec. 740.5 by:
a. Revising the third sentence of paragraph (b);
b. Removing and paragraphs (c)(1), (c)(8) and (c)(9); and
c. Redesignating paragraphs (c)(2), (c)(3), (c)(4), (c)(5), (c)(6),
(c)(7), (c)(10), (c)(11), and (c)(12), as paragraphs (c)(1) through
(c)(9) respectively.
The revised text reads as follows:
Sec. 740.5 Requirements for the official advertising statement.
(b) * * * The official advertising statement must be in a size and
print that is clearly legible and may be no smaller than the smallest
font size used in other portions of the advertisement intended to
convey information to the consumer. * * *
* * * * *
[FR Doc. 2010-32127 Filed 12-29-10; 8:45 am]
BILLING CODE 7535-01-P