59318

Proposed Rules Federal Register Vol. 83, No. 226

Friday, November 23, 2018

This section of the FEDERAL REGISTER ADDRESSES: Submit your comments on receives adverse comments, a timely contains notices to the public of the proposed this rule by any of the following document will be published issuance of rules and regulations. The methods: withdrawing the direct final rule and all purpose of these notices is to give interested • Federal eRulemaking Portal: Go to public comments received will be persons an opportunity to participate in the http://www.regulations.gov and, in the addressed in a subsequent final rule rule making prior to the adoption of the final lower ‘‘Search Regulations and Federal rules. based on this action. Actions’’ box, select ‘‘Rural Utilities Dated: November 9, 2018. Service’’ from the agency drop-down Anne C. Hazlett, DEPARTMENT OF AGRICULTURE menu, then click on ‘‘Submit.’’ In the Docket ID column, select RUS–18– Assistant to the Secretary, Rural Development. Rural - Service AGENCY–0005 to submit or view public comments and to view supporting and Bill Northey, Rural Housing Service related materials available Under Secretary, Farm Production and electronically. Information on using Conservation. Rural Utilities Service Regulations.gov, including instructions [FR Doc. 2018–25522 Filed 11–21–18; 8:45 am] for accessing documents, submitting BILLING CODE P Farm Service Agency comments, and viewing the docket after the close of the comment period, is 7 CFR Part 1970 available through the site’s ‘‘User Tips’’ NATIONAL link. ADMINISTRATION • RIN 0572–AC44 Postal Mail/Commercial Delivery: Please send your comment addressed to 12 CFR Parts 704 and 713 Rural Development Environmental Michele Brooks, Rural Development RIN 3133–AE87 Regulation for Rural Infrastructure Innovation Center, Regulations Team Projects Lead, U.S. Department of Agriculture, Fidelity Bonds 1400 Independence Ave. SW, Stop AGENCY: Rural Business-Cooperative 1522, Room 1562, Washington, DC AGENCY: National Credit Union Service, Rural Housing Service, Rural 20250. Please state that your comment Administration (NCUA). Utilities Service, Farm Service Agency, refers to Docket No. RUS–18–AGENCY– ACTION: Proposed rule. USDA. 0005. Other Information: Additional SUMMARY: The NCUA Board (Board) is ACTION: Proposed rule. information about Rural Development seeking comment on a proposed rule and its programs is available on the that would amend its regulations SUMMARY: The United States Department internet at https://www.usda.gov/topics/ regarding fidelity bonds under Part 704 of Agriculture (USDA) Rural rural. for corporate credit unions and under Development (RD), comprised of the FOR FURTHER INFORMATION CONTACT: Part 713 for natural person credit Rural Business-Cooperative Service Kellie McGinness Kubena, Director, unions. The proposed rule would (RBS), Rural Housing Service (RHS), Engineering and Environmental Staff, accomplish four objectives. First, it and Rural Utilities Service (RUS), Rural Utilities Service, USDA Rural would strengthen a board of directors’ hereafter referred to as the Agency, Development, 1400 Independence Ave. oversight of a credit union’s fidelity proposes amending the Agency’s SW, Mail Stop 1571, Room 2242, bond coverage. Second, it would ensure Environmental Policies and Procedures Washington, DC 20250–1571, Phone: that there is an adequate period to regulation to allow the Agency 202–720–1649. discover and file fidelity bond claims Administrators limited flexibility to SUPPLEMENTARY INFORMATION: In the following a credit union’s liquidation. obligate federal funds for infrastructure Third, it would codify a 2017 NCUA projects prior to completion of the rules section of this issue of the Federal Register, Rural Development is Office of General Counsel legal opinion environmental review while ensuring that permits a natural person credit full compliance with National concurrently publishing this action as a direct final rule without prior proposal union’s fidelity bond to include Environmental Policy Act (NEPA) coverage for certain credit union service procedures prior to project construction because the Agency views this as a non- controversial action and anticipates no organizations (CUSOs). Fourth, it would and disbursement of funding. The clarify the documents subject to Board proposed change will allow RD to more adverse comments. The language in the direct final rule will also serve as the approval and require that all bond forms fully meet the Administration’s goals to receive Board approval every ten years. speed the initiation of infrastructure language for this proposed rule. See the DATES: Comments must be received on projects and encourage planned SUPPLEMENTARY INFORMATION provided or before January 22, 2019. community economic development in the direct final rule for the applicable without additional cost to taxpayers or SUPPLEMENTARY INFORMATION on this ADDRESSES: You may submit comments change to environmental review action. If no adverse comments are by any of the following methods (Please requirements. received in response to the direct final send comments by one method only): rule, no further action will be taken on • NCUA website: http:// DATE: Electronic and written comments this proposed rule and the action will www.ncua.gov/news/proposed_regs/ must be received on or before December become effective at the time specified in proposed_regs.html. Follow the 24, 2018. the direct final rule. If the Agency instructions for submitting comments.

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• Email: Address to regcomments@ control as collateral or otherwise, give bond b. Regulatory Reform Task Force in a corporate company holding a ncua.gov. Include ‘‘[Your name] In August 2017, the Board published Comments on Notice of Proposed certificate of authority from the Secretary of Treasury . . . as an acceptable surety on and sought comment on the NCUA’s Rulemaking (Fidelity Bonds)’’ in the 8 Federal bonds. Any such bond or bonds shall regulatory reform agenda (Agenda). email subject line. • be in a form approved by the Board with a The Agenda identifies those regulations Fax: (703) 518–6319. Use the view to providing surety coverage to the the Board intends to amend or repeal subject line described above for email. Federal credit union with reference to loss by • because they are outdated, ineffective, Mail: Address to Gerard Poliquin, reason of acts of fraud or dishonesty or excessively burdensome. This is Secretary of the Board, National Credit including forgery, theft, embezzlement, consistent with the spirit of Executive Union Administration, 1775 Duke wrongful abstraction, or misapplication on Order 13777.9 Although the NCUA, as the part of the person, directly or through Street, Alexandria, Virginia 22314– an independent agency, is not required 3428. connivance with others, and such other • surety coverages as the Board may determine to comply with Executive Order 13777, Hand Delivery/Courier: Same as the Board has chosen to comply with it mail address. to be reasonably appropriate. Any such bond or bonds shall be in such an amount in in spirit and has reviewed all of the Public inspection: All public relation to the . . . assets of the Federal NCUA’s regulations to that end. One of comments are available on the agency’s credit union as the Board may from time to the items in the Agenda is related to the website at http://www.ncua.gov/ time prescribe by regulation[.] 3 NCUA’s regulations on fidelity bonds. RegulationsOpinionsLaws/comments as Parts 704 and 713 of the NCUA’s The Agenda supports exploring ways to submitted, except as may not be regulations implement the requirements implement the requirements of the FCU possible for technical reasons. Public of the FCU Act regarding fidelity Act in this context in the least costly comments will not be edited to remove bonds.4 Parts 704 and 713 reiterate the way possible. The Agenda further notes any identifying or contact information. statutory requirement that certain credit that while the FCU Act mandates Paper copies of comments may be union employees and appointed and fidelity bond coverage, the NCUA’s inspected in the NCUA’s law library, elected officials are subject to fidelity objective should be to allow a credit 1775 Duke Street, Alexandria, Virginia bond coverage. The parts also establish union to make a business decision based 22314, by appointment weekdays the requirements for a fidelity bond, the on its own circumstances and needs. between 9:00 a.m. and 3:00 p.m. To acceptable bond forms, and the This would effectively reduce the make an appointment, call (703) 518– minimum permissible coverage. Both NCUA’s involvement in a credit union’s 6540 or send an email to OGCMail@ parts require a credit union’s board of operational decisions while remaining ncua.gov. directors to review annually its fidelity consistent with the FCU Act. FOR FURTHER INFORMATION CONTACT: Rob bond coverage to ensure it is adequate c. The 2017 Legal Opinion Robine, Trial Attorney, or Rachel in relation to the potential risks facing As discussed above, Part 713 Ackmann, Staff Attorney, Office of the credit union and the minimum establishes the minimum requirements General Counsel, 1775 Duke Street, requirements set by the Board. Part 713 for a fidelity bond for a natural person Alexandria, VA 22314–3428 or is made applicable to all federally credit union. One such requirement telephone (703) 548–2601. insured, state-chartered credit unions under Part 713 is that fidelity bonds be SUPPLEMENTARY INFORMATION: (FISCUs) through § 741.201 of the purchased in an ‘‘individual policy.’’ 10 NCUA’s regulations.5 I. Introduction The ‘‘individual policy’’ provision was Part 704 was recently revised to II. Proposed Rule intended to prevent multiple credit amend the provision that determines the III. Section-by-Section Analysis unions from being insured under one maximum amount a credit union may IV. Request for Comment fidelity bond policy. The Board V. Regulatory Procedures pay for a covered loss, or , prohibited such joint coverage because before the fidelity bond insurer makes a I. Introduction the loss suffered by one or two of the payment. The NCUA restricts the joint policyholders could reduce the a. Background and Legal Authority deductible a corporate credit union may amount of available coverage for the pay to limit the potential losses to it if The Federal Credit Union Act (FCU other policyholders to below the Act) requires that certain credit union there is a covered claim. The maximum required minimum amount.11 Before employees and appointed and elected deductible allowed is a percentage of a 2017, the NCUA’s Office of General officials be subject to fidelity bond corporate credit union’s capital based Counsel (OGC) had issued legal coverage.1 The FCU Act directs the on its leverage ratio. For example, if a opinions stating that a credit union may Board to promulgate regulations corporate credit union has a greater than not include one or more CUSOs or other concerning both the amount and 2.25 leverage ratio then it may have a parties as additional insureds under its character of fidelity bond coverage and maximum deductible that is 15 percent fidelity bond because of the ‘‘individual to approve bond forms.2 The pertinent of its tier 1 capital. The recent final rule policy’’ limitation.12 It came to OGC’s portion of the FCU Act provides: updated this provision to reference tier 6 attention, however, that some bond 1 capital instead of core capital. Part issuers may have been interpreting their The Board is . . . directed to require that 713, however, has not been every person appointed or elected by any policies to permit the issuance of bonds Federal credit union to any position substantively revised since 2005 when that covered credit unions and their requiring the receipt, payment, or custody of the NCUA issued a final rule 7 money or other personal property owned by modernizing Part 713. 8 82 FR 39702 (Aug. 22, 2017). a Federal credit union or in its custody or 9 E.O. 13771 (Jan. 30, 2017). 3 12 U.S.C. 1766(h). 10 12 CFR 713.3(a). There is not an analogous 1 12 U.S.C. 1761a, 1761b, and 1766. 4 12 CFR pts. 704 and 713. provision for corporate credit unions under Part 2 The FCU Act also grants the Board the powers 5 12 CFR 741.201. 704, therefore, the legal opinion relates only to to require such other surety coverage as the Board 6 80 FR 25932 (May 6, 2015). fidelity bonds for natural person credit unions may determine to be reasonably appropriate; to 7 70 FR 61713 (Oct. 26, 2005. In 2012, the NCUA under Part 713. approve a blanket bond in lieu of individual bonds; revised Part 713 by removing reference to the 11 64 FR 28178 (May 27, 1999). and to approve bond coverage in excess of agency’s former Regulatory Flexibility Program. 77 12 OGC Legal Op. 14–0311 (Mar. 21, 2014); see minimum surety coverage. FR 74112 (Dec. 13, 2012). also OGC Legal Op. 04–0744 (Sept. 21, 2004).

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CUSOs, despite OGC’s opinions to the applications for purchase or renewal of forms would expire on January 1, 2029. contrary. This prompted OGC to review its fidelity bond coverage. After review, For additional background, see the the regulation and approved bond the corporate credit union’s board must discussion below for proposed changes forms. As a result of that review, OGC pass a resolution approving the to § 713.4. issued another legal opinion in purchase or renewal of fidelity bond 18(c)(4) September 2017 that rescinded and coverage and delegate one member of replaced all previous legal opinions that the board, who is not an employee of The proposed rule would add a new addressed the ‘‘individual policy’’ the corporate credit union, to sign the § 704.18(c)(4) to ensure there is an requirement.13 The 2017 opinion purchase or renewal agreement and all adequate discovery period, the period to concluded that the ‘‘individual policy’’ attachments. No board members may be discover and file a claim, following a requirement of § 713.3(a) of the NCUA’s a signatory on consecutive purchase or corporate credit union’s liquidation. regulations generally prohibits joint renewal agreements for the same fidelity The revised requirements reflect the coverage under fidelity bonds, but does bond coverage policy. This proposed changes proposed for natural person not prohibit a credit union from amendment is identical to proposed credit unions in Part 713. The proposed purchasing a fidelity bond that covers changes to Part 713 for natural person rule would require fidelity bonds to both the credit union and certain of its credit unions. For additional include an option for the liquidating CUSOs, as discussed more fully below. background, see the discussion below agent to purchase coverage in the event for proposed changes to § 713.2(b). of an involuntary liquidation that II. Proposed Rule extends the discovery period for a OGC’s review of Part 713 extended 18(c) covered loss for at least two years after beyond the issue of joint coverage and The proposed rule would make liquidation. In the case of a voluntary revealed several inconsistencies significant revisions to current liquidation, fidelity bonds would be between the regulation and approved § 704.18(c). In the proposed rule, required to remain in effect, or provide bond forms. The review also revealed § 704.18(c) is split into five new that the discovery period is extended, several outdated provisions the Board subparagraphs, each of which is for at least four months after the final now seeks to update to ensure the safe described in more detail below. distribution of assets. For additional and sound operation of credit unions 18(c)(1) background, see the discussion below and to protect the National Credit Union for proposed changes to §§ 713.3(a)(3) Share Fund (NCUSIF). The The proposed rule would state that a and (4). Board believes that many of the corporate credit union’s fidelity bond 18(c)(5) concerns identified by OGC, as coverage must be purchased from a discussed more fully below, are also company holding a certificate of The proposed rule would require relevant for corporate credit unions. authority from the Secretary of the corporate credit union bonds to include Therefore, where appropriate, the Board Treasury. This is not a substantive a provision requiring written is also proposing amendments to the change from the current requirements notification by surety to the NCUA NCUA’s corporate credit union and has only been amended to reflect when a credit union’s bond is regulations under Part 704. The specific the comparable language in Part 713. terminated or when the coverage of an details of the proposed amendments are 18(c)(2) employee, director, officer, supervisory discussed below. or credit committee member has been Proposed § 704.18(c)(2) would state terminated. The NCUA also must be III. Section-by-Section Analysis that fidelity bonds must provide notified in writing by surety if a Part 704 coverage for the fraud and dishonesty of deductible is increased above all employees, directors, officers, and permissible limits. This is not a In general, Part 704 applies to all supervisory and credit committee substantive change from the current federally insured corporate credit members. This is not a substantive requirements. unions. Section 704.18 provides the change from the current requirements. fidelity bond requirements for such 18(d)–18(f) 18(c)(3) credit unions. Proposed changes to the The proposed rule would not make specific subparagraphs of § 704.18 are The proposed rule would any changes to paragraphs (d), (e), and discussed below. substantively amend the requirements (f). for a corporate credit union’s approved Sec. 704.18 Fidelity Bond Coverage bond forms. The revised requirements Part 713 18(a) reflect the changes proposed for natural In general, Part 713 applies to all The proposed rule would not make person credit unions in Part 713. The federally insured natural person credit any changes to paragraph (a). proposed rule would require the Board unions and provides the fidelity bond to approve all bond forms before a requirements for them. Proposed 18(b) corporate credit union may use them. In changes to the specific subsections of The proposed rule would amend addition, a credit union may not use any Part 713 are discussed below. current § 704.18(b) by dividing bond form that has been amended since paragraph (b) into two subparts. Current receiving Board approval or any rider, Sec. 713.1 What is the scope of this paragraph (b) would remain unchanged endorsement, renewal, or other section? and be designated paragraph (b)(1). The document that limits coverage of The proposed rule would retain most proposed rule would add a new approved bond forms without first of the current § 713.1 without change, paragraph as (b)(2). Proposed paragraph receiving approval from the Board. As with the following exceptions. The (b)(2) would require that a corporate would be required under proposed Part proposed rule would add the words credit union’s board of directors and 713, approval of all bond forms expires ‘‘federally insured’’ before the words supervisory committee must review all 10 years after the date the Board ‘‘credit union’’ to more precisely approved or reapproved use of the bond describe which credit unions are subject 13 OGC Legal Op. 17–0959 (Sept. 26, 2017). form. Any currently approved bond to the section. The current rule uses the

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term ‘‘credit union’’ and ‘‘federal credit annually review its fidelity bond and NCUSIF has sustained increased losses union’’ interchangeably to mean other insurance coverage to ensure it is due to voided fidelity bond coverage. ‘‘federal credit union.’’ As discussed in adequate. The proposed rule would take Before 2010, bond rescission was not a the background section, the that review a step further and require a material concern for the NCUA. Since requirements in Part 713 are applicable FICU’s board, and, if applicable, its 2010, however, the NCUA has had at to both federal credit unions and supervisory committee, to review all least three claims denied due to FISCUs.14 For clarity, the proposed rule applications for purchase or renewal of rescinded fidelity bond coverage and would cross reference the requirement fidelity bond coverage. The Board the NCUA is concerned that the in Part 741 that FISCUs must comply believes this change will help ensure frequency of rescinded coverage will with Part 713 and would refer to the board is addressing the adequacy of continue to increase. As of June 2018, federally insured credit unions (FICUs) the coverage at all stages, rather than at the NCUSIF has already lost in excess throughout the rule instead of federal an annual point in time that may be of $10 million from fidelity bonds that credit unions. The Board does not retrospective, and require additional were voided due to the signatory being intend any substantive changes by this steps by the FICU to remedy a aware of the fraudulent activities and amendment and only intends to deficiency. litigation related to denied claims is increase the clarity and internal The Board is also proposing to require ongoing and may result in additional consistency of Part 713. a FICU’s supervisory committee to expenses. The proposed rule would also include conduct a review of all applications for The Board believes the proposed a cross reference for corporate credit purchase or renewal of fidelity coverage, changes are only a minimal increase in unions and would state that corporate in addition to the board. The Board regulatory burden as the FICU’s board is credit unions must comply with believes this is a function within the already required to annually review its § 704.18 instead of Part 713. responsibilities of a FICU’s supervisory fidelity bond coverage, but would committee and will add an additional Sec. 713.2 What are the meaningfully mitigate the risk to the layer of review. For FISCUs operating responsibilities of a federally insured NCUSIF associated with fidelity bond without a supervisory committee, its credit union’s board of directors under coverage rescission. The Board notes board should implement controls or this section? that this proposed requirement is also establish procedures for conducting advantageous to individual FICUs, as 2(a) their own analysis of the FISCU’s this will help prevent them from losing The proposed rule would amend fidelity bond coverage, as opposed to coverage absent involuntary liquidation. current § 713.2 by dividing the section relying on recommendations from the FISCU’s officers. Sec. 713.3 What bond coverage must a into two subparagraphs. Current § 713.2 federally insured credit union have? would become paragraph (a). The As noted, the proposed rule would proposed rule would retain most of the also require a FICU’s board to, after The proposed rule would amend current § 713.2 without change, with the conducting its review, pass a resolution current § 713.3 by renumbering and following exception. For consistency approving the purchase or renewal of revising the section. Current § 713.3 with the rest of Part 713, the term fidelity coverage and designating a would become paragraph (a), current ‘‘Federal credit union’’ would be revised member of the board, who is not an paragraphs (a) and (b) would be to ‘‘federally insured credit union.’’ employee of the FICU, to sign renumbered as paragraphs (a)(1) and applications for purchase, bond (a)(2), and two new subparagraphs 2(b) renewals, and any accompanying would be added as (a)(3) and (a)(4). The proposed rule would add a new attestations. Also as mentioned, the Finally, a new paragraph (b) would also paragraph (b) to § 713.2. Proposed Board is proposing to require that the be added. paragraph (b) increases a board of member of the board acting as signatory 3(a)(2) directors’ oversight responsibility of its rotate each time the FICU purchases or FICU’s fidelity bond coverage. renews fidelity coverage. The purpose of Current paragraph (b) of § 713.3 states Specifically, the Board is proposing to these requirements is to address the that, at a minimum, a credit union’s require a FICU’s board, and, if issue of rescission of fidelity coverage fidelity bond coverage must include applicable, a FICU’s supervisory when the signatory to the application to fidelity bonds that cover fraud and committee, to review all applications for purchase or renew coverage is dishonesty. The proposed rule would purchase or renewal of bond coverage knowledgeable of fraudulent activity. If remove the redundant phrase ‘‘[i]nclude and to pass a board resolution the signatory to the application for fidelity bonds that’’ in current approving the purchase or renewal. The purchase or renewal is knowledgeable paragraph (b). The proposed rule would proposed rule would also require a of fraudulent activity, the bond issuer read ‘‘At a minimum, your bond FICU’s board to delegate one board may void the policy and not make a coverage must: . . . Cover fraud and member, who is not an employee of the payout when losses are discovered. The dishonesty by all employees, directors, FICU, to sign the attestation for bond NCUA believes that a non-employee officers, supervisory committee purchase or renewal. This proposal board member, who would not be members, and credit committee would prohibit the same board member involved in the day-to-day operations of members;’’. The change is non- from signing the attestation for renewal a FICU, is less likely to be responsible substantive and only intended to in consecutive years. for a fraudulent activity than an remove the unnecessary language and The Board notes the current rule employee. The NCUA also believes that clarify the requirement. already requires a FICU’s board to rotating signatories would reduce the potential for the signatory to be 3(a)(3) 14 Part 713 is applicable to all FISCUs through knowledgeable of the fraudulent The proposed rule would add a new § 741.201 of the NCUA’s regulations, which states activity. paragraph (a)(3) to § 713.3. Proposed that any credit union which makes application for In the case where the NCUA is a paragraph (a)(3) would require a FICU to share insurance must have the minimum fidelity bond coverage stated in Part 713 in order for its liquidating agent of a FICU, the NCUSIF have fidelity bond coverage that application to be approved and for such share would suffer losses due to the fidelity includes an option for the liquidating insurance coverage to continue. bond being voided. In recent years, the agent to purchase coverage that extends

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the discovery period, the period to prevent unnecessary losses to the fidelity bonds with each other.19 The discover and file a claim, for at least two NCUSIF due to contract technicalities. commenter was concerned that a loss years after liquidation. Fidelity bonds The proposed rule would require that caused by one or two of the joint mitigate the risk presented by fidelity bond coverage provide a policyholders could reduce the amount fraudulent and other dishonest acts to discovery period of two years because of available coverage for the other the NCUSIF and have served as a the FCU Act provides members with 18 policyholders to below the required significant source of recovery in months after the appointment of a minimum amount. In addressing this liquidations caused by fraud. However, liquidating agent to claim their insured comment, the Board provided in § 713.3 the NCUA, as liquidating agent, can accounts.16 Therefore, the Board is that a FICU must purchase its own only file a claim if it discovers the loss providing six months to discover and individual policy.20 The regulation did during the contractual period permitted make a claim for fidelity bond coverage not, however, define ‘‘individual for filling a claim. Historically, it had following the end of the 18-month policy.’’ been standard for fidelity bonds to statutory period for unclaimed accounts. Since inclusion of this provision in permit a reasonable period for discovery Further, in the Board’s experience, most the NCUA’s regulations, OGC has issued and filing a claim following a FICU’s liquidations are resolved within two two public legal opinions interpreting involuntary liquidation. The NCUA has years. The Board considers two years a the meaning of ‘‘individual policy’’ and identified approximately $1 million in reasonable period to resolve the FICU’s opining on the type of coverage that is claims paid to the NCUSIF that were affairs, discover any losses from prohibited under § 713.3(a).21 A 2014 identified during an extended discovery fraudulent or dishonest acts, and file a OGC legal opinion states that a FICU period from 2006 to 2013. Since then, claim under the fidelity bond. The may not include one or more of its however, insurers have removed Board does not expect this proposed CUSOs or other parties as additional standard discovery coverage provisions requirement to result in any additional insureds under its fidelity bond.22 In a from fidelity bond contracts. Currently, cost or burden on FICUs. The 2004 legal opinion, OGC opined that a most fidelity bonds provide that the liquidating agent would bear the cost of CUSO that provides management bond’s coverage terminates immediately any extension of a discovery period services for multiple credit unions upon a credit union’s liquidation and following an involuntary liquidation. could not purchase a single fidelity that the ability to purchase an bond with each credit union named as additional period to discover loss is at 3(a)(4) an insured.23 In both letters, OGC the sole discretion of the insurer. The Board is also proposing to add a explained the purpose of the individual Under such contracts, the NCUA, as policy requirement is to avoid diluting liquidating agent, would not have new paragraph (a)(4) to § 713.3 to include a requirement that, for the individual credit union’s coverage. authority to extend the discovery period As noted above, OGC issued a third following a FICU’s closure. There are voluntary liquidations, a FICU’s fidelity bond coverage remain in effect, or legal opinion on the ‘‘individual policy’’ some instances when liquidation occurs requirement in 2017 (2017 legal unexpectedly and there is insufficient provide that the discovery period is extended, for at least four months after opinion). The 2017 legal opinion time to discover a claim before rescinded and replaced the previous liquidation, or where there is a covered the final distribution of assets. The Board notes that this is currently two opinions and expanded the loss, but it is unknown with the permissibility for certain joint coverage specificity required for filing a claim. In required for federal credit unions in Part 710, the NCUA’s voluntary liquidation provisions under the ‘‘individual such a case, even if the liquidating agent policy’’ requirement. OGC and the subsequently discovers a covered loss, regulations, and that this proposed change only reflects that requirement, NCUA’s Office of Examination and the fidelity bond issuer may deny the Insurance determined this broader claim. If this happens when the NCUA and does not impose an additional burden for federal credit unions.17 This interpretation was both within the is liquidating agent, the NCUA would NCUA’s legal authority under the FCU either be forced into litigation to receive requirement would represent a new burden, however, for FISCUs. The Board Act and a safe and sound practice for payment for the covered loss or not FICUs. For clarity and ease of reference, recover for the loss. In either situation, believes that this requirement would impose only a minor burden for FISCUs, the Board now seeks to incorporate the the NCUSIF bears additional losses than 2017 legal opinion into Part 713. if the fidelity bond permitted a and would be beneficial to its members, as any recovery following a voluntary The Board, therefore, is proposing to reasonable period of discovery. In amend § 713.3 to permit a FICU to have addition to reducing losses to the termination would flow through to members. a fidelity bond that also covers its NCUSIF, any funds recovered due to an CUSO(s). This is permissible if the FICU extended discovery period may also be 3(b) owns greater than 50 percent of a CUSO available to pay the failed FICU’s it wishes to cover, or a covered CUSO 15 The Board is proposing to amend creditors and uninsured depositors. is organized by the FICU for the purpose § 713.3 to allow a FICU to have a fidelity In an attempt to address this gap in of handling certain of its business bond that covers both it and certain of coverage, it has been the NCUA’s transactions and composed exclusively its CUSOs, as more fully discussed practice to provide notice that there may of its employees. The 50 percent below. Section 713.3 requires that a be a potential claim before a liquidation. threshold reflects the standard for bond, at a minimum, must be purchased This informal solution, however, lacks accounting consolidation under in ‘‘an individual policy.’’ 18 The NCUA legal clarity and results in unnecessary generally accepted accounting added this section to Part 713 in a 1999 risk that an insurer may deny a claim principles, or GAAP. A FICU would following an involuntary liquidation. final rule in response to a commenter who pointed out that there had been The proposed rule would provide the 19 64 FR 28718, 28719 (May 27, 1999). NCUA with an explicit right to extend instances of FICUs jointly purchasing 20 Id. at 28719. the discovery period, which should 21 OGC Legal Op. 04–0744 (Sep. 21, 2004); and 16 12 U.S.C. 1787(o). OGC Legal Op. 14–1013 (Mar. 21, 2014). 15 For the priority of payment following a 17 12 CFR 710.2(c). 22 OGC Legal Op. 14–1013 (Mar. 21, 2014). liquidation, see 12 U.S.C. 1787(b)(11). 18 12 CFR 713.3. 23 OGC Legal Op. 04–0744 (Sep. 21, 2004).

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directly benefit from any fidelity bond approved bond forms by contacting the approved-bond forms were being insurance proceeds collected by a NCUA’s Office of Public and interpreted in a way that was contrary consolidated CUSO.24 This proposed Congressional Affairs. The proposed to the NCUA’s understanding of how rule, however, would not eliminate the rule would rewrite this provision for the bond forms would be used. In prohibition against joint coverage of clarity, but would not make any addition, a review of previously entities not majority owned by the substantive changes. approved bond forms, as part of issuing FICU, such as other credit unions or the 2017 legal opinion, revealed several 4(c) non-majority-owned CUSOs. The Board instances of outdated provisions, believes this amendment will provide Current paragraph (b), renumbered as additions that had not been approved by greater flexibility to FICUs without paragraph (c), sets forth which fidelity the Board, and some forms that affecting safety and soundness.25 bonds and fidelity bond documents contained provisions that were contrary require Board approval. The proposed to the FCU Act and Part 713 of the Sec. 713.4 What bond forms may a rule also would set forth which fidelity federally insured credit union use? NCUA’s regulations. To avoid instances bonds and fidelity bond documents of this in the future, the Board is The current rule provides that the require Board approval, but would proposing to sunset its approval of a NCUA will maintain a current list of rewrite this provision for clarity. The bond form after a period of ten years. bond forms approved by the Board for proposed rule states in paragraph (c) This ten-year period will begin on the use by FICUs. The rule also states that that ‘‘Credit unions may not use any of date the Board approves a bond form. a FICU must obtain the approval of the the following without first receiving The Board notes, however, that the ten- Board before it can use any other basic approval from the NCUA Board.’’ No year period will not toll or start over bond form or any rider or endorsement substantive changes are intended by this when a bond carrier submits a revision that limits coverage of an approved revision, and the revision is only to an approved bond. For example, if bond form. The Board is proposing to intended to clarify the Board’s the Board approves a bond form on amend § 713.4 to make several changes expectation for FICUs. January 1, 2020, and that bond form is to reflect the practices of the NCUA, 4(c)(1) subsequently amended and approved by clarify the list of documents that must the Board on January 1, 2021, then the have Board approval, and address the The Board is clarifying that any bond bond form will still expire on January 1, expiration and continuing review of form that has been amended or changed 2030, ten years from the date the Board approved bond forms. Any questions since the Board approved it requires issued its initial approval. regarding the NCUA’s approval of new approval from the Board. The The Board believes this ten-year fidelity bond forms can be directed to Board notes that this policy is the sunset provision will provide a the NCUA’s OGC, (703) 518–6540, or current practice whereby bond issuers definitive date at which an approved the Office of Examination and submit amended bond forms to the bond form will be reviewed by the Insurance, (703) 518–6360. Board for approval under current Board to determine if it is still in § 713.4(b)(1). This proposed change is 4(a) compliance with the NCUA’s only intended to make the regulation regulations. While this provision will Current § 713.4(a) states that a current clearer with respect to this requirement. listing of basic bond forms that may be require expired bond forms to be used without prior Board approval is on 4(c)(2) resubmitted to the Board, having a clear the NCUA’s website. The Board is Current § 713.4(b)(2) requires any date upon which the Board’s approval proposing to clarify this requirement by rider or endorsement that limits will sunset will help all interested dividing paragraph (a) into two coverage of approved basic bond forms parties prepare to resubmit the bond paragraphs. Proposed paragraph (a) to be approved by the Board. The form to ensure continuity in coverage would explicitly state that ‘‘the NCUA proposed rule would clarify the list of and operations. The Board also notes Board must approve all bond forms documents that must receive Board that should it determine, upon re- before federally insured credit unions approval. The Board is proposing to review, that a bond form does not may use them.’’ state explicitly that renewal forms (and comply with the NCUA’s regulations, the Board would not require FICUs with 4(b) any other document) that limit the coverage of approved bond forms must coverage under that bond to seek new Proposed paragraph (b) would state also receive Board approval. The Board coverage. In these situations, the Board that approved bond forms are listed on is clarifying the list of documents would require FICUs to seek new the NCUA’s website and may be used by subject to approval because the Board is coverage under an approved bond form a FICU without further NCUA approval. aware of instances where the renewal or after its current coverage expires per the If a FICU is unable to access the NCUA’s continuation of coverage forms included terms of the contract between the FICU website, it can get a current listing of language affecting the bond coverage, and the bond issuer. including language that limited the With respect to bond forms that the 24 As discussed in the 2017 legal opinion, the bond coverage. As such, it is the Board’s Board has approved before 2019, the NCUA has previously approved certain nominee Board is proposing to allow its approval provisions that included limited joint coverage. For belief that the renewal form is an example, a nominee provision may state that a loss extension of the bond form and thus this on these forms to continue until January sustained by any ‘‘nominee’’ organized by the is not an additional burden but further 1, 2029. The Board believes this date for insured for the purpose of handling certain of its clarification of what constitutes the sunset of its approval will provide all business transactions and composed exclusively of bond form. currently approved bonds with at least its employees shall be deemed to be loss sustained ten years before they must be submitted by the insured. 4(d) 25 Note, the proposal is not making a comparable for review and re-approval. The Board amendment to Part 704. Corporate credit unions are The Board is proposing to add a new believes this will achieve the goal of not required to purchase fidelity bonds subject to paragraph (d) to sunset its approval on ensuring all approved bond forms an individual policy requirement. Therefore, the comply with the NCUA’s regulations proposed amendment to clarify the individual all bond forms ten years after the form policy requirement is only applicable to natural is approved. The impetus for this without imposing unnecessary burden person credit unions. provision is the discovery that Board on FICUs or bond issuers.

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In addition to including a sunset Estimated Total Annual Reponses: 10. their forms every ten years would be provision, the Board is also proposing to Estimated Hours per Response: 1. spread out among all FICUs and the cost clarify its right and ability to review a Estimated Total Annual Burden to each FICU would be negligible. bond form at any time. The Board notes Hours: 10. Additionally, the proposed requirement that if it does undertake a review of an Affected Public: Private Sector: Not- that boards, and if applicable, approved bond form during the ten-year for-profit institutions; and supervisory committees, must approve period, this will not re-start or toll the other for-profits. purchases and renewals would impose expiration period and the Board’s The NCUA invites comments on: (a) no direct cost on FICUs. Accordingly, approval of that form will still sunset Whether the collections of information the NCUA certifies that the proposed ten years from the date the Board issued are necessary for the proper rule will not have a significant its original approval. performance of the agencies’ functions, economic impact on a substantial including whether the information has number of small FICUs. Sec. 713.5–§ 713.7 practical utility; (b) the accuracy of the As discussed above, the proposed rule estimates of the burden of the c. Executive Order 13132 would use the term federally insured information collections, including the Executive Order 13132 encourages credit union instead of federal credit validity of the methodology and independent regulatory agencies to union in each of §§ 713.5, 713.6, and assumptions used; (c) ways to enhance consider the impact of their actions on 713.7 for consistency and clarity. the quality, utility, and clarity of the state and local interests. The NCUA, an information to be collected; (d) ways to independent regulatory agency as IV. Request for Comment minimize the burden of the information defined in 44 U.S.C. 3502(5), voluntarily The Board invites comment on all collections on respondents, including complies with the executive order to aspects of this proposed rulemaking. In through the use of automated collection adhere to fundamental federalism particular, the Board seeks comment on techniques or other forms of information principles. This proposed rule will not whether FICUs anticipate any increase technology; and (e) estimates of capital have a direct effect on the states, on the in compliance burden under the or start-up costs and costs of operation, relationship between the national proposed rule. maintenance, and purchase of services government and the states, or on the to provide information. distribution of power and V. Regulatory Procedures All comments are a matter of public responsibilities among the various a. Paperwork Reduction Act record. Comments regarding the levels of government. The NCUA has information collection requirements of The Paperwork Reduction Act of 1995 therefore determined that this proposed this rule should be sent to (1) Dawn rule does not constitute a policy that has (PRA) applies to rulemakings in which Wolfgang, NCUA PRA Clearance an agency by rule creates a new federalism implications for purposes of Officer, National Credit Union the executive order. paperwork burden on regulated entities Administration, 1775 Duke Street, Suite or modifies an existing burden. For 5080, Alexandria, Virginia 22314, or Fax d. Assessment of Federal Regulations purposes of the PRA, a paperwork No. 703–519–8572, or Email at and Policies on Families burden may take the form of a reporting, [email protected] and the (2) The NCUA has determined that this disclosure, or recordkeeping Office of Information and Regulatory proposed rule would not affect family requirement, each referred to as an Affairs, Office of Management and well-being within the meaning of § 654 information collection. The NCUA may Budget, Attention: Desk Officer for of the Treasury and General not conduct or sponsor, and the NCUA, New Executive Office Building, Government Appropriations Act, 1999, respondent is not required to respond Room 10235, Washington, DC 20503, or Public Law 105–277, 112 Stat. 2681 to, an information collection unless it email at OIRA_Submission@ (1998). displays a currently valid Office of OMB.EOP.gov. Management and Budget (OMB) control List of Subjects in 12 CFR Parts 704 number. b. Regulatory Flexibility Act and 713 A proposed change to Part 713 would The Regulatory Flexibility Act (RFA) Bonds, Credit unions, Insurance. require NCUA approval on all bond generally requires that, in connection forms expired after a period of 10 years with a notice of proposed rulemaking, By the National Credit Union Administration Board on November 15, 2018. from the date of NCUA approval or an agency prepare and make available reapproved of its use. The bond for public comment an initial regulatory Gerard Poliquin, company would be required to seek flexibility analysis that describes the Secretary of the Board. NCUA approval before a bond form may impact of a proposed rule on small For the reasons discussed above, the be used by a FICU. The information entities. A regulatory flexibility analysis NCUA is proposing to amend 12 CFR collection burden associated with this is not required, however, if the agency parts 704 and 713 as follows: proposed new requirements is minimal, certifies that the rule will not have a only affecting an estimated two entities significant economic impact on a PART 704—CORPORATE CREDIT annually; for an increase of two hours substantial number of small entities UNIONS to the currently approved OMB control (defined for purposes of the RFA to ■ number 3133–0170. include credit unions with assets less 1. The authority citation for part 704 Title of Information Collection: than $100 million) and publishes its is revised to read as follows: Fidelity Bond and Insurance Coverage certification and a short, explanatory Authority: 12 U.S.C. 1762, 1766(a), 1772a, for Federal Credit Unions, 12 CFR part statement in the Federal Register 1781, 1789, and 1795e. 713. together with the rule. ■ 2. Section 704.18 is amended by OMB Control Number: 3133–0170. The Board does not believe that the revising paragraphs (b) and (c) to read Estimated Number of Respondents: proposed rule would have a significant as follows: 10. economic impact on a substantial Estimated Annual Frequency of number of small entities. Any increased § 704.18 Fidelity bond coverage. Response: 1. costs for the bond insurer to resubmit * * * * *

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(b) Review of bond coverage. (1) The requiring written notification by surety purchase or renewal agreement and all board of directors of each corporate to NCUA: attachments; provided, however, that no credit union shall, at least annually, (i) When the fidelity bond of a credit board members may be a signatory on carefully review the bond coverage in union is terminated in its entirety; consecutive purchase or renewal force to determine its adequacy in (ii) When fidelity bond coverage is agreements for the same fidelity bond relation to risk exposure and to the terminated, by issuance of a written coverage policy. minimum requirements in this section. notice, on an employee, director, officer, ■ 7. Revise § 713.3 to read as follows: (2) The board of directors and the supervisory or credit committee supervisory committee of each corporate § 713.3 What bond coverage must a member; or federally insured credit union have? credit union must review all (iii) When a deductible is increased applications for purchase or renewal of above permissible limits. Said (a) At a minimum, your bond its fidelity bond coverage. After review, notification shall be sent to NCUA and coverage must: (1) Be purchased in an individual the credit union’s board must pass a shall include a brief statement of cause policy from a company holding a resolution approving the purchase or for termination or increase. certificate of authority from the renewal of fidelity bond coverage and * * * * * delegate one member of the board, who Secretary of the Treasury; (2) Cover fraud and dishonesty by all is not an employee of the credit union, PART 713—FIDELITY BOND AND employees, directors, officers, to sign the purchase or renewal INSURANCE COVERAGE FOR supervisory committee members, and agreement and all attachments. FEDERALLY INSURED CREDIT credit committee members; Provided, however, that no board UNIONS (3) Include an option for the members may be a signatory on liquidating agent to purchase coverage consecutive purchase or renewal ■ 3. The authority citation for Part 713 continues to read as follows: in the event of an involuntary agreements for the same fidelity bond liquidation that extends the discovery coverage policy. Authority: 12 U.S.C. 1761a, 1761b, period for a covered loss for at least two (c) Minimum coverage; approved 1766(a), 1766(h), 1789(a)(11). years after liquidation; and forms. (1) The fidelity bond coverage ■ 4. The heading for part 713 is revised (4) In the case of a voluntary must be purchased from a company as set forth above. liquidation, remain in effect, or provide holding a certificate of authority from ■ 5. Revise § 713.1 to read as follows: that the discovery period is extended, the Secretary of the Treasury. for at least four months after the final (2) Fidelity bonds must provide § 713.1 What is the scope of this section? distribution of assets, as required in coverage for the fraud and dishonesty of This section provides the § 710.2(c) of this chapter. all employees, directors, officers, and requirements for fidelity bonds for (b) The requirement in paragraph (a) supervisory and credit committee federally insured credit union of this section does not prohibit a members. employees and officials and for other federally insured credit union from (3) The NCUA Board must approve all insurance coverage for losses such as having a fidelity bond that also covers bond forms before a corporate credit theft, holdup, vandalism, etc., caused by union may use them. Corporate credit its credit union service organization persons outside the credit union. (CUSO(s)), provided the federally unions may not use any bond form that Federally insured, state-chartered credit has been amended since the time the insured credit union owns more than 50 unions are required by § 741.201 of this percent of the CUSO(s) or the CUSO(s) NCUA Board approved the form or any chapter to comply with the fidelity bond rider, endorsement, renewal, or other is organized by the federally insured coverage requirements of this part. credit union for the purpose of handling document that limits coverage of Corporate credit unions must comply approved bond forms without receiving certain of its business transactions and with § 704.18 of this chapter in lieu of composed exclusively of the federally approval from the NCUA Board. this part. Approval on all bond forms expires 10 insured credit union’s employees. ■ 6. Revise § 713.2 to read as follows: ■ 8. Revise § 713.4 to read as follows: years after the date the NCUA Board approved or reapproved use of the bond § 713.2 What are the responsibilities of a § 713.4 What bond forms may a federally form; provided, however, that any bond federally insured credit union’s board of insured credit union use? forms approved before 2019 will expire directors under this section? (a) The NCUA Board must approve all on January 1, 2029 and an NCUA Board- (a) The board of directors of each bond forms before federally insured approved amendment to a bond form federally insured credit union must at credit unions may use them. does not toll or cause the 10-year period least annually review its fidelity and (b) Bond forms the NCUA Board has to restart. The NCUA reserves the right other insurance coverage to ensure that approved for use by federally insured to review a bond form at any point after it is adequate in relation to the potential credit union are listed on the NCUA’s its approval. risks facing the federally insured credit website, http://www.ncua.gov, and may (4) Fidelity bonds must include an union and the minimum requirements be used by federally insured credit option for the liquidating agent to set by the NCUA Board; and unions without further NCUA approval. purchase coverage in the event of an (b) The board of directors, and, if If you are unable to access the NCUA’s involuntary liquidation that extends the applicable, the supervisory committee website, you can obtain a current listing discovery period for a covered loss for of each federally insured credit union, of approved bond forms by contacting at least two years after liquidation. In must review all applications for the NCUA’s Office of Public and the case of a voluntary liquidation, purchase or renewal of its fidelity bond Congressional Affairs. fidelity bonds must remain in effect, or coverage. After review, the federally (c) Federally insured credit union provide that the discovery period is insured credit union’s board must pass unions may not use any of the following extended, for at least four months after a resolution approving the purchase or without first receiving approval from the final distribution of assets. renewal of fidelity bond coverage and the NCUA Board: (5) Notwithstanding the foregoing, all delegate one member of the board, who (1) Any bond form that has been bonds must include a provision, in a is not an employee of the federally amended or changed since the time the form approved by the NCUA Board, insured credit union, to sign the NCUA Board approved the form; and

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(2) Any rider, endorsement, renewal, DEPARTMENT OF TRANSPORTATION www.regulations.gov by searching for or other document that limits coverage and locating Docket No. FAA–2018– of approved bond forms. Federal Aviation Administration 0963; or in person at Docket Operations (d) Approval on all bond forms between 9 a.m. and 5 p.m., Monday 14 CFR Part 39 expires after a period of 10 years from through Friday, except Federal holidays. The AD docket contains this NPRM, the the date the NCUA Board approved or [Docket No. FAA–2018–0963; Product regulatory evaluation, any comments reapproved use of the bond form. Identifier 2018–NM–135–AD] received, and other information. The Provided, however, that: RIN 2120–AA64 street address for Docket Operations (1) Any bond forms approved before Airworthiness Directives; Dassault (phone: 800–647–5527) is in the 2019 will expire on January 1, 2029. Aviation Airplanes ADDRESSES section. Comments will be (2) An NCUA Board-approved available in the AD docket shortly after amendment to a bond form does not toll AGENCY: Federal Aviation receipt. or cause the 10-year period to restart; Administration (FAA), DOT. FOR FURTHER INFORMATION CONTACT: Tom and ACTION: Notice of proposed rulemaking Rodriguez, Aerospace Engineer, International Section, Transport (3) The NCUA reserves the right to (NPRM). Standards Branch, FAA, 2200 South review a bond form at any point after its SUMMARY: We propose to adopt a new 216th St., Des Moines, WA 98198; approval. airworthiness directive (AD) for certain telephone and fax 206–231–3226. § 713.5 [AMENDED] Dassault Aviation Model FAN JET SUPPLEMENTARY INFORMATION: FALCON, and FAN JET FALCON ■ 9. Section 713.5 is amended by: SERIES C, D, E, F, and G airplanes. This Comments Invited ■ a. In paragraphs (a) and (b) remove the proposed AD was prompted by a We invite you to send any written word ‘‘federal’’ before the words ‘‘credit determination that new or more relevant data, views, or arguments about union’s’’ and add in its place the words restrictive airworthiness limitations and this proposal. Send your comments to ‘‘federally insured’’ each place they maintenance requirements are an address listed under the ADDRESSES necessary. This proposed AD would appear. section. Include ‘‘Docket No. FAA– require revising the existing 2018–0963; Product Identifier 2018– ■ b. In paragraph (c) add the words maintenance or inspection program, as NM–135–AD’’ at the beginning of your ‘‘federally insured’’ before the words applicable, to incorporate new or more comments. We specifically invite ‘‘credit union,’’ ‘‘credit unions,’’ or restrictive airworthiness limitations and comments on the overall regulatory, ‘‘credit union’s’’ each place they appear. maintenance requirements. We are economic, environmental, and energy ■ c. In paragraph (e) remove the word proposing this AD to address the unsafe aspects of this NPRM. We will consider ‘‘your’’ and add in its place the words condition on these products. all comments received by the closing ‘‘a federally insured credit union’s’’. DATES: We must receive comments on date and may amend this NPRM this proposed AD by January 7, 2019. because of those comments. § 713.6 [AMENDED] ADDRESSES: You may send comments, We will post all comments we ■ 10. In § 713.6 remove the word using the procedures found in 14 CFR receive, without change, to http:// ‘‘federal’’ before the words ‘‘credit 11.43 and 11.45, by any of the following www.regulations.gov, including any union’s’’ or ‘‘credit unions’’ and add the methods: personal information you provide. We • will also post a report summarizing each words ‘‘federally insured’’ before the Federal eRulemaking Portal: Go to substantive verbal contact we receive words ‘‘credit union’s,’’ ‘‘credit unions,’’ http://www.regulations.gov. Follow the instructions for submitting comments. about this NPRM. and ‘‘credit union’’ each place they • appear. Fax: 202–493–2251. Discussion • Mail: U.S. Department of ■ 11. Revise § 713.7 to read as follows: Transportation, Docket Operations, M– The European Aviation Safety Agency (EASA), which is the Technical Agent § 713.7 May the NCUA Board require a 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, for the Member States of the European federally insured credit union to secure Union, has issued EASA AD 2018–0193, additional insurance coverage? Washington, DC 20590. • Hand Delivery: Deliver to Mail dated September 3, 2018 (referred to The NCUA Board may require address above between 9 a.m. and 5 after this as the Mandatory Continuing additional coverage when the NCUA p.m., Monday through Friday, except Airworthiness Information, or ‘‘the Board determines that a federally Federal holidays. MCAI’’), to correct an unsafe condition insured credit union’s current coverage For service information identified in for certain Dassault Aviation Model is inadequate. The federally insured this NPRM, contact Dassault Falcon Jet FAN JET FALCON and FAN JET credit union must purchase this Corporation, Teterboro Airport, P.O. FALCON SERIES C, D, E, F, and G additional coverage within 30 days. Box 2000, South Hackensack, NJ 07606; airplanes. The MCAI states: [FR Doc. 2018–25402 Filed 11–21–18; 8:45 am] telephone 201–440–6700; internet In June 1988, the Federal Aviation http://www.dassaultfalcon.com. You Administration sponsored a conference of BILLING CODE 7535–01–P may view this service information at the ageing aircraft, during which the decision FAA, Transport Standards Branch, 2200 was taken to pay particular attention to those. South 216th St., Des Moines, WA. For The ATA [Air Transport Association] and the AIA [Aerospace Industries Association] information on the availability of this committed themselves to identify and to set material at the FAA, call 206–231–3195. up procedures to ensure continued structural Examining the AD Docket integrity on ageing aircraft. Prompted by these actions, Dassault developed the SSIP You may examine the AD docket on [Supplemental Structural Inspection the internet at http:// Program], aiming to guarantee the

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