Manual for Federal Credit Unions, NCUA 8022, as revised.

(1) The term, "total assets," as used in this section shall mean the sum of all -assets.

(b) Supervision fee certificate. The treasurer of each Federal credit union shall certify as to the correctness of the Supervision Fee Certificate, Form NCUA 1300 Rev. He shall send, not later than January 31 of each year, the original Supervision Fee Certificate and as many copies as the Administration may request, together with a check in payment of the supervision fee stated on the Supervision Fee Certificate to be due, to the National Credit Union Administration in Washington, D.C. Copies of the Supervision Fee Certificate form may be obtained from any Regional Office.

(c) Checks in payment of supervision fees. All checks in payment of supervision fees shall be made payable to the National Credit Union Administration.

(d) Audit of supervision fee computation and payment. Whenever the Bureau makes a regular or special examination of a Federal credit union, the employee of the Administration making the examination will audit the computation and payment of annual supervision fee(s) for the years which have elapsed since the last previous audit. Such employee shall adjust any errors in computation and the Federal credit union shall deliver to such employee a check payable to the National Credit Union Administration to cover the amount of any underpayment of the supervision fee(s). The decision of the employee of the Bureau as to the amount due shall be final and conclusive: Provided, That the Federal credit union may make the supplementary payment subject to the results of an appeal from the employee's decision to the Regional Director: Provided, further, That the Federal credit union shall file such appeal within 30 days from the date of the employee's decision. If the audit discloses that an overpayment has been made, the employee of the Bureau is authorized to advise and assist the Federal credit union to prepare and file a request for a refund of the amount of overpayment. Such request should be addressed to the Regional Director.

[25 F.R. 5286, June 14, 1960, as amended at 36 F.R. 18637, Sept. 18, 1971. Redesignated at 85 F.R. 17398, Nov. 13, 1970.]

§ 701.7 Fee for examination.

(a) Each Federal credit union shall pay the Administration a fee for each

examination in accordance with the schedule of fees fixed from time to time by the Administrator.

(b) In establishing such fees, the Administrator shall consider the anticipated aggregate cost of the examination program including supervision, salaries, travel and all other items which affect the cost of the examination program.

(c) The fee for examinations of Federal credit unions with assets of less than $25,000 shall not exceed 50 cents per hundred dollars of assets as of the effective date of the examination. The Administrator may establish a minimum fee for examination which shall not exceed $25.00. The Administrator may waive the fee for an examination within twelve months after the date a charter is approved if the payment would, in the opinion of the Administrator, cause a hardship.

(d) Each Federal credit union shall be notified at least 30 days prior to the effective date of any schedule of fees fixed pursuant to this section. Upon receipt of such notification interested persons may submit written data, views, or arguments for consideration by the Administrator, and the Administrator may, after consideration, make such revisions in the proposed schedule or such change in the effective date as he deems appropriate. Each Federal credit union shall be notified of such revision or change not less than 15 days prior to the final effective date.

§ 701.8 Fee for examination of Federal credit unions in liquidation.

Federal credit unions in liquidation may be examined prior to or following completion of liquidation. A fee assessed in accordance with the most recent schedule of examination fees prescribed by the Administrator as provided in § 701.7 shall be paid for each such examination.

§ 701.9 Loans by Federal credit unions to other credit unions.

(a) Upon authorization of its board of directors, or a duly authorized and appointed executive committee, a Federal credit union may invest its funds in loans to other credit unions in the total amount not exceeding 25 percent of its paid-in and unimpaired capital and surplus. The terms of the loans shall not exceed 1 year.

(b) Prior to making such loans, the Federal credit union shall require the

borrowing credit union to furnish the following:

(1) A current financial and statistical report;

(2) A certified copy of the resolution of the board of directors or the executive committee authorizing such borrowing; and

(3) A certificate from the secretary of the credit union that the persons negotiating the loan and executing the note are officers of the credit union and are authorized to act in its behalf, and that such borrowing does not exceed the maximum borrowing power of the borrowing credit union.

[34 F.R. 1398, Jan. 29, 1969]

§ 701.10

Establishment of a cash fund.

The board of directors of a Federal credit union may authorize the establishment of or changes in a cash fund for making change, cashing checks, or other purposes. Before such authorization is given, the directors will consider whether a need for the fund exists and will insure that adequate safeguards and accountability will exist to protect the fund.

[34 F.R. 1398, Ján. 29, 1969. Redesignated, 35 FR. 17398, Nov. 13, 1970]

§ 701.11 Election report.

Each operating Federal credit union shall file annually with the Regional Director, within 10 days after the election or appointment of officials, a report setting forth the names and addresses of its officials. Copies of the standard form of report prescribed by the Administration (NCUA 4501) may be obtained from the Regional Director or from the Administration in Washington, D.C.

[25 FR. 5286, June 14, 1960, as amended at 36 FR. 18637, Sept. 18, 1971. Redesignated, 35 F.R. 17398, Nov. 13, 1970]

§ 701.12 Supervisory committee audits.

(a) The supervisory committee of each Federal credit union shall make or cause to be made, as a minimum, two audits each calendar year. These audits shall be made as of the dates and in accordance with the standards outlined in the "Supervisory Committee Manual for Federal Credit Unions" (NCUA 8023). One audit shall be a comprehensive annual audit, covering the period elapsed since the last comprehensive annual audit. A report of this audit on Form FCU-701 shall be promptly made to the board of directors of the Federal credit union, and, upon request, to the Regional Director. A sum

mary of the report shall be submitted to the members at the next annual meeting. A report of the second audit shall be promptly made to the board of directors on Form FCU-702, and, upon request, to the Regional Director. A summary of the report of the second audit also shall be submitted to the members at the next annual meeting.

(b) The supervisory committee is responsible for the preparation and maintenance of work papers used in the audits. These work papers shall be made available by the committee for review by the Federal Credit Union Examiner during his supervisory examination.

(c) The supervisory committee shall conduct supplementary audits upon request of the Administrator. The committee also may conduct additional audits on its own initiative.

[34 F.R. 1398, Jan. 29, 1969, as amended at 36 F.R. 18637, Sept. 18, 1971. Redesignated, 35 F.R. 17398, Nov. 13, 1970]

§ 701.13 Financial and statistical and other reports.

(a) Each operating Federal credit union shall file in the Regional Office on or before January 15 of each year an annual Financial and Statistical report on Form NCUA 5300 as of the previous December 31. Form NCUA 5300 is furnished to all Federal credit unions by the Administration, and copies may be obtained from any Regional Office.

(b) When it is deemed necessary or desirable and upon written notice from the Administrator, Federal credit unions shall file, in accordance with instructions contained in such notice as to time and place, such Financial and Statistical or other reports as of such date or dates as shall be prescribed in such notice.

(c) When it is deemed necessary because of the condition of the Federal credit union and upon written notice from the Administrator or Regional Director, the Federal credit union shall file, in accordance with the instructions contained in such notice as to time and place, Financial and Statistical reports including reports on Form FCU-109, as of such date or dates as shall be prescribed in such notice.

[25 FR 5286, June 14, 1960, as amended at 36 FR 18637, Sept. 18, 1971. Redesignated, 35 FR 17398, Nov. 13, 1970]

§ 701.14 Instructions for officials.

The National Credit Union Administration has published a number of manuals and booklets for use by officials of

Federal credit unions in carrying out their duties. These publications, as listed and described below, are hereby incorporated by reference.

(a) Handbook for Federal credit unions. This manual, designated NCUA 8021, contains instructions for directors and officers of Federal credit unions. A copy is mailed to each Federal credit union at the time the approved organization certificate is delivered to the incorporators by the Administration. Additional copies are for sale at the Government Printing Office. Revisions in the Handbook are made from time to time and are mailed to all Federal credit unions. Announcements of revisions are carried in the NCUA Quarterly for the benefit of the general public. The Handbook contains a "ready reference," which indexes the Handbook, the Federal Credit Union Act, standard bylaws, the rules and regulations, and the accounting, supervisory committee and credit manuals. The reference is updated as necessary.

(b) Accounting manual for Federal credit unions. This manual, designated NCUA 8022, contains information on standard accounting procedures, types of records, and standard accounting forms for Federal credit unions. Provision is made for the development of substitutes for any of the forms and for their use without advance approval by the Bureau. The substitute forms, however, must meet criteria set forth in the manual. A copy of the manual is mailed to each Federal credit union at the time the approved organization certificate is delivered to the incorporators by the Administration. Additional copies are for sale at the Government Printing Office. Revisions are handled in the same way as revisions for the Handbook.

(c) Supervisory committee manual for Federal credit unions. This manual, designated NCUA 8023, contains auditing procedures to be followed by supervisory committees of Federal credit unions and samples of audit workpapers for the use of committee members. A copy is mailed to each Federal credit union at the time the approved organization certificate is delivered to the incorporators by the Administration. Additional copies are for sale at the Government Printing Office. Revisions are handled in the same was as revisions for the Handbook.

(d) Credit manual for Federal credit unions. This manual, designated NCUA 8024, contains instructions for members of the credit committee, for loan officers,

and for other officials and employees of Federal credit unions. A copy is mailed to each Federal credit union at the time the approved organization certificate is delivered to the incorporators by the Administration. Additional copies are for sale at the Government Printing Office. Revisions are handled in the same way as revisions for the Handbook.

(e) Federal credit union bylaws. This publication, designated NCUA 8001, contains the standard Federal credit union bylaws. A copy is mailed to each Federal credit union at the time the approved organization certificate is delivered to the incorporators by the Administration. Additional copies are for sale at the Government Printing Office. Revisions are handled in the same way as revisions for the Handbook.

(f) Organizing a Federal credit union. This booklet, designated NCUA 8007, contains guidelines for persons considering the organization of a Federal credit union. This booklet contains the guidelines for standard amendments to a federal credit union charter and bylaws. Copies are furnished to such persons and are available upon request.

(g) Data processing guidelines for Federal credit unions. This booklet, designated NCUA 8009, contains instructions for use by Federal credit unions utilizing data processing equipment. It is available from NCUA headquarters in Washington or from any regional office. Revisions are announced in the NCUA Quarterly and are made available upon request.

(h) Sale and redemption of U.S. Savings Bonds by Federal credit unions. This booklet, designated NCUA 8032, contains instructions for Federal credit unions which handle U.S. Savings Bonds. It is available from NCUA headquarters in Washington or from any Regional Office. Revisions are announced in the NCUA Quarterly and are made available upon request.

[33 F.R. 15867, Oct. 26, 1968, as amended at 36 F.R. 18637, 18638, Sept. 18, 1971; 37 FR. 6182, Mar. 25, 1972; 38 FR 7217, 7218, Mar. 19, 1973. Redesignated, 35 FR 17398, Nov. 13, 1970]

NOTE: For a description of changes made to various publications described in § 701.14, see 38 FR 7217, Mar. 19, 1973.

§ 701.15 Other publications.

In addition to the publications listed in 701.14 the National Credit Union Administration publishes the following materials which are hereby incorporated by reference.

(a) NCUA Quarterly. A quarterly publication containing news about the Federal Credit Union Program, including changes in regulations and manual revisions. Copies are furnished all Federal credit unions and additional copies may be obtained upon request to NCUA headquarters or any regional office.

(b) Annual Report of the Federal Credit Union Program. This publication, designated NCUA 8000, contains a great deal of statistical material relating to Federal credit unions. Copies are furnished all Federal credit unions and additional copies may be obtained upon request to NCUA headquarters or to any regional office.

(c) Selected operating statistics for Federal credit unions. This publication contains selected Federal credit union statistics and was developed for the information of Federal Credit Union Examiners. It is, however, available for inspection and copying at NCUA headquarters or any regional office.

(d) State-chartered credit unions. This publication, designated NCUA 8003, contains information furnished NCUA by supervisors of State-chartered credit unions. It is published annually, and may be obtained from NCUA headquarters or from any regional office.

(e) Accounting machine handbook for Federal credit unions. This publication, designated NCUA 8020, contains advice to Federal credit unions on the use of accounting machines. It is available upon request to NCUA headquarters or any regional office.

[33 F.R. 15867, Oct. 26, 1968, as amended at 36 FR 18637, 18638, Sept. 18, 1971; 37 FR 6182, Mar. 25, 1972; 38 FR 7217, 7218, Mar. 19, 1973. Redesignated, 35 FR 17398, Nov. 13, 1970]

NOTE: For a description of changes made to various publications described in § 701.15, see 38 FR 7217, Mar. 19, 1973.

§ 701.16 Statements of policy and interpretations.

In order to make available to the public any statements of policy and interpretations which do not appear in the publications set out in § 701.15, and which may be relied on or cited as precedent, the Administration has established a file in each regional office and at its headquarters. This file, "Statements of Policy and Interpretations for the Public," is available for inspection and copying.

[33 FR. 15868, Oct. 26, 1968, as amended at 36 F.R. 18637, Sept. 18, 1971. Redesignated, 35 F.R. 17398, Nov. 13, 1970]

Any interested person may petition the Administrator for the issuance, amendment, or repeal of any regulation by submitting such petition in writing together with a complete and concise statement of the petitioner's interest in the subject matter and the reasons why the petition should be granted. Such petition shall be submitted to the Administration in Washington, D.C.

§ 701.19 Retirement benefits for employees of Federal credit unions. Federal credit unions may make provision for reasonable retirement benefits for employees and for officers who are compensated in conformance with the Act and the bylaws, but no Federal credit union shall undertake to administer its own retirement plan. § 701.20

Surety bond coverage for Federal credit unions.

(a) The board of directors of each Federal credit union shall at least semiannually carefully review the bond coverage in force in order to ascertain its adequacy in relation to the exposure and to the minimum requirements fixed from time to time by the Administrator.

(b) All surety bonds must provide for faithful-performance-of-duty coverage for any officer or employee while performing any of the duties of the treasurer as prescribed in the Act, the bylaws, or rules and regulations of the Administration.

(c) No form of surety bond shall be used except as is approved by the Administrator. Credit Union Blanket Bond, Standard Form No. 23 of the Surety Association of America (revised to May 1950), plus Faithful Performance Rider (for use with this form to broaden Clause (A)) (revised to May 1950) shall be

considered as the minimum coverage required and is hereby approved. Credit Union Blanket Bonds-NCUA Optional Forms 576, 577, 578, and 579-are also approved. No other bond form may be used unless specifically approved in writing by the Administrator. No form of surety bond is approved for use by a Federal credit union having its office outside of the continental United States unless by the terms of the bond or by an appropriate rider attached thereto the provisions of the bond are made applicable within the jurisdiction in which the office of such Federal credit union is located.

(d) All sureties writing Federal credit union bonds must hold a certificate of authority from the Secretary of the Treasury under the act of Congress approved July 30, 1947 (6 U.S.C., secs. 613), as an acceptable surety on Federal Bonds in the State or jurisdiction concerned.

(e) The schedule of coverage set forth in paragraph (f) of this section shall not be deemed to cover cash funds of $1,000 or more. When the cash fund is $1,000 or more, additional coverage-to the full amount of the fund-will be required up to total surety bond coverage of $5 million.

(f) The following schedule shall be deemed as the minimum requirements only:

provide proper protection to meet any circumstances by obtaining adequate bond (and insurance) coverage in excess of the above minimum schedule.

(g) The Administrator may require additional coverage for any Federal credit union when, in his opinion, the surety bonds in force are insufficient to provide adequate surety coverage and it shall be the duty of the board of directors of the Federal credit union to obtain such additional coverage within 30 days after the date of written notice.

[36 F.R. 7004, Apr. 13, 1971, as amended at 36 F.R. 23140, Dec. 4, 1971]

§ 701.21 Payment or amortization of

loans.

(a) Within the limits of the Act and such further limits as may be imposed by the board of directors pursuant to the Act and the bylaws, the credit committee, or a duly appointed and authorized loan officer, of a Federal credit union, in arriving at the terms of payment or amortization of an approved loan to a member, shall take into account, among other factors deemed relevant, the source of funds and the regularity and frequency of receipt of funds which the borrower proposes to utilize for the purpose, the borrower's other commitments and anticipated needs over the loan period, and the best interests of the credit union.

(b) Pursuant to the bylaws, the board of directors of a Federal credit union by resciution may require that all loans approved by the credit committee, or by a duly appointed and authorized loan officer, or that certain classes of such loans, shall provide for payment or amortization by periodic, substantially equal, payments of principal which are to be made at intervals shorter than 12 months and which are sufficient to retire the loan at its maturity.

(c) Subject to any limitations imposed by the board of directors as provided for by paragraphs (a) and (b) of this section, the credit committee, or a duly appointed and authorized loan officer, may approve loans with maturities of 1 year or less which provide for retirement thereof by a single payment of the principal at maturity.

(d) (1) Subject to any limitations imposed by the board of directors as provided for in paragraphs (a) and (b) of this section, loans with maturities in excess of 1 year approved by the credit committee, or a duly appointed and au