Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z); Delay of Effective Date, 18975-18981 [2017-08341]

Download as PDF 18975 Rules and Regulations Federal Register Vol. 82, No. 78 Tuesday, April 25, 2017 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Parts 1005 and 1026 [Docket No. CFPB–2017–0008] RIN 3170–AA69 Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z); Delay of Effective Date Bureau of Consumer Financial Protection. ACTION: Final rule; official interpretation; delay of effective date. AGENCY: The Bureau of Consumer Financial Protection (Bureau or CFPB) is issuing this final rule to delay the October 1, 2017 effective date of the rule governing Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) by six months, to April 1, 2018. DATES: The amendments in this final rule are effective on April 1, 2018. The effective date of the final rule published on November 22, 2016 (81 FR 83934) is delayed from October 1, 2017, to April 1, 2018. The effective date for the addition of § 1005.19(b) remains October 1, 2018. FOR FURTHER INFORMATION CONTACT: Thomas L. Devlin and Yaritza Velez, Counsels, and Kristine M. Andreassen, Senior Counsel, Office of Regulations, at 202–435–7700. SUPPLEMENTARY INFORMATION: SUMMARY: asabaliauskas on DSK3SPTVN1PROD with RULES Jkt 241001 A. The Prepaid Accounts Rulemaking In the Prepaid Accounts Final Rule, the Bureau extended Regulation E coverage to prepaid accounts and adopted provisions specific to such accounts, and generally expanded Regulation Z’s coverage to overdraft credit features that may be offered in conjunction with prepaid accounts.3 FR 83934 (Nov. 22, 2016). FR 13782 (Mar. 15, 2017). 3 81 FR 83934 (Nov. 22, 2016). The Bureau released a proposal regarding prepaid accounts under Regulations E and Z, including model and sample disclosure forms, for public comment on November 13, 2014. 79 FR 77102 (Dec. 23, 2014) (Prepaid Accounts NPRM). The Bureau had previously issued an advance notice of proposed rulemaking that posed a series of questions for public comment about how the Bureau might consider regulating general purpose reloadable 2 82 On October 5, 2016, the Bureau released a final rule to create comprehensive consumer protections for prepaid accounts under Regulation E, which implements the Electronic Fund Transfer Act (EFTA), and Regulation Z, which implements the Truth in Lending Act (TILA) (Prepaid 16:35 Apr 24, 2017 II. Background 1 81 I. Summary of the Final Rule VerDate Sep<11>2014 Accounts Final Rule).1 When it was issued, the Prepaid Accounts Final Rule had a general effective date of October 1, 2017. Through its efforts to support industry implementation of the Prepaid Accounts Final Rule, the Bureau learned that some industry participants believed that they would have difficulty complying with certain provisions of the Prepaid Accounts Final Rule that would have gone into effect on October 1, 2017. In order to facilitate compliance with the Prepaid Accounts Final Rule, and to allow an opportunity for the Bureau to assess whether any additional adjustments to the Rule are appropriate, the Bureau proposed to extend the general effective date of the Prepaid Accounts Final Rule by six months, to April 1, 2018 (Effective Date NPRM).2 Based on comments received, the Bureau is issuing this final rule to delay the October 1, 2017 effective date for the Prepaid Accounts Final Rule by six months, to April 1, 2018. The Bureau is also making conforming amendments to certain regulatory text and commentary adopted in the Prepaid Accounts Final Rule to reflect the effective date delay. The Bureau plans to release a notice of proposed rulemaking address at least two issues that have been identified as areas where the Prepaid Accounts Final Rule may be posing particular complexities for implementation. When the Bureau does so it will also seek comment on whether any further extension of the effective date is needed in light of the specific changes proposed. PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Upon issuing the Prepaid Accounts Final Rule, the Bureau initiated robust efforts to support industry implementation.4 Information regarding the Bureau’s Prepaid Accounts Final Rule implementation initiatives and available resources can be found on the Bureau’s regulatory implementation Web site at https:// www.consumerfinance.gov/policycompliance/guidance/implementationguidance/prepaid-rule/. B. Effective Date Delay As published, the Prepaid Accounts Final Rule had a general effective date of October 1, 2017. As discussed in the Effective Date NPRM, as part of its efforts to support industry implementation, the Bureau has discussed implementation efforts with a number of industry participants. As a result of those discussions, the Bureau learned that some industry participants were concerned for a variety of reasons that they would have difficulty in complying with certain aspects of the Prepaid Accounts Final Rule by October 1, 2017 while also ensuring continued availability of their prepaid products and with minimal disruption to consumers. For example, although the Bureau put in place an exception in Regulation E § 1005.18(h)(2) pursuant to which financial institutions are not required to pull and replace prepaid account access devices and packaging materials with non-compliant disclosures that were produced in the normal course of business prior to October 1, 2017, some industry participants indicated that they believed that they should in fact pull and replace non-compliant packaging due to concerns about legal and regulatory cards and other prepaid products. 77 FR 30923 (May 24, 2012). 4 These on-going efforts include: (1) The publication of a plain-language small entity compliance guide to help industry understand the Prepaid Accounts Final Rule; (2) the publication of various other implementation tools regarding the Prepaid Accounts Final Rule, including an executive summary of the rule, summaries of key changes for payroll card accounts and government benefit accounts, a prepaid account coverage chart, a summary of the rule’s effective date provisions, and a guide to preparing the short form disclosure; (3) the release of native design files for print and source code for web-based disclosures for all of the model and sample disclosure forms included in the Prepaid Accounts Final Rule; (4) meetings with industry, including trade associations and individual industry participants, to discuss and support their implementation efforts; and (5) participation in conferences and forums. E:\FR\FM\25APR1.SGM 25APR1 asabaliauskas on DSK3SPTVN1PROD with RULES 18976 Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules and Regulations exposure at both the Federal and State level, and in particular due to developments following release of the Prepaid Accounts Final Rule. Industry had also raised related concerns regarding the constrained production capacity of packaging manufacturers and other supply chain limitations resulting from increased industry demand leading up to the October 1, 2017 effective date. In addition, in the course of working to implement the Prepaid Accounts Final Rule, some industry participants raised concerns about what they describe as unanticipated complexities arising from the interaction of certain aspects of the rule with certain business models and practices, including those newly adopted, that they did not fully address in their comment letters on the Prepaid Accounts NPRM, which may complicate implementation and affect consumers. Based on its initial outreach to industry before issuing the Effective Date NPRM, the Bureau believed that a six-month delay would be sufficient for industry participants to ensure that they can comply with the Prepaid Accounts Final Rule with minimal disruption to consumers. The Bureau explained that, in particular, a six-month extension would both allow more time for package printing and allow pull-and-replace processes at retail locations to occur after the winter holiday season, which is a particularly busy time for retailers. Indeed, the Bureau understands that industry often effectuates pull-andreplace processes in the spring for precisely this reason. The Bureau also believed that a six-month delay would allow the Bureau adequate opportunity to consider possible additional amendments to the Prepaid Accounts Final Rule, and for industry to implement any such changes, without unnecessary disruption to consumers’ access to, and use of, prepaid accounts. The Bureau did not propose to delay the effective date of the requirement to submit prepaid account agreements to the Bureau in Regulation E § 1005.19(f)(2), which is October 1, 2018. The Bureau expected to have its agreement submission process in place by October 1, 2018, and, as discussed in the Effective Date NPRM, the Bureau’s pre-proposal outreach had not indicated that industry participants were concerned that they would not be able to meet the agreement submission effective date. In the Effective Date NPRM, the Bureau did not propose to amend any other substantive requirements of the Prepaid Accounts Final Rule. The purpose of that notice was not to seek VerDate Sep<11>2014 16:35 Apr 24, 2017 Jkt 241001 comment generally on policy decisions made in the Prepaid Accounts Final Rule that industry or other stakeholders might wish the Bureau to reconsider. Rather, the Bureau stated that it would continue its outreach to industry and other stakeholders to understand their experiences in implementing the Prepaid Accounts Final Rule. III. Summary of the Rulemaking Process, Comments Received, and the Final Rule A. Summary of the Rulemaking Process On March 9, 2017, the Bureau released the Effective Date NPRM with a request for public comment. It was published in the Federal Register on March 15, 2017.5 The Bureau solicited comment on all aspects of the Effective Date NPRM. In particular, the Bureau asked commenters to provide specific detail and any available data regarding current and planned practices, as well as relevant knowledge and specific facts about any benefits, costs, or other impacts on industry, consumers, and other stakeholders of the Effective Date NPRM. The Bureau also solicited comment about the impact of the Effective Date NPRM on consumers who use prepaid accounts. The Bureau solicited comment regarding the proposed extension of the general effective date to April 1, 2018, as well as alternative dates for extension. B. Comments Received The comment period for the Effective Date NPRM closed on April 5, 2017. The Bureau received 28 comment letters from consumer advocacy groups; national and regional trade associations; members of the prepaid industry, including issuing banks and credit unions, program managers, and a digital wallet provider; several think tanks; an association of State financial regulators; a group of State attorneys general; and several commenters who did not identify their affiliations.6 Industry and trade association commenters all supported the Bureau’s proposal to delay the effective date of most provisions of the Prepaid Accounts Final Rule; many expressly supported the Bureau’s proposed six-month delay. A number of commenters cited the Bureau’s concerns that some industry participants may need additional time to comply with the rule, in particular stating that providers might need to pull and replace non-compliant packaging notwithstanding the exception in the Prepaid Accounts Final Rule for prepaid 5 82 FR 13782 (Mar. 15, 2017). comment letters are publicly available at https://www.regulations.gov/. 6 These PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 account access devices and packaging materials with non-compliant disclosures that were produced in the normal course of business prior to the effective date of the rule. A prepaid issuer, a digital wallet provider, and a trade association each expressed support for a six-month delay of the effective date, contingent on the Bureau also revisiting the Prepaid Accounts Final Rule to address certain substantive provisions of the rule that they argued required changes to disclosures and business models that could not be implemented by April 1, 2018. The provisions that they cited relate to the linking of credit cards with digital wallets that are capable of storing funds and to error resolution and limitations on liability for prepaid accounts where the financial institution has not completed its consumer identification and verification process with respect to the account. These commenters requested a 12-month delay to the Prepaid Accounts Final Rule’s general effective date if the Bureau were unwilling to revisit those issues. Some industry and trade association commenters argued that the Bureau should delay the effective date further by 12 months; two trade associations advocated for an 18-month delay. The commenters who requested a delay longer than six months cited a variety of reasons, including, for example, the time needed to develop and review new and updated disclosures and related materials; time required to retool J-hook card packaging to accommodate disclosures required by the rule; limitations in production capacity to print new prepaid card collateral; and the time needed to coordinate system updates with processors, vendors, and other service providers. A few commenters cited other reasons as well, such as the need to develop new systems and operational processes related to providing longer account transaction histories and calculating summary totals of fees. One trade association stated that providers need to develop an automated process to track cardholder agreements for purposes of submitting those agreements to the Bureau, which it stated would need to be in place as of the October 1, 2017 effective date in order to adequately track agreements. Another trade association commenter urged the Bureau to delay the effective date for longer than six months so that the Bureau could conduct a comprehensive study on the effects that the Prepaid Accounts Final Rule will have on consumers, specifically related to availability of prepaid accounts and their costs to consumers. E:\FR\FM\25APR1.SGM 25APR1 asabaliauskas on DSK3SPTVN1PROD with RULES Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules and Regulations One credit union trade association commenter, requesting an 18-month extension, cited concerns that the proposed delayed effective date would coincide with the effective date of other regulations promulgated by the Bureau, in particular the provisions of the Bureau’s mortgage servicing rule pertaining to successors-in-interest and the provision of periodic statements to consumers who have filed for bankruptcy. An association of State financial regulators also stated the compliance investments necessitated by other regulations such as the increased data collection/reporting requirements under the Home Mortgage Disclosure Act and additional identification requirements under the Bank Secrecy Act/Customer Due Diligence rule promulgated by another federal agency as a reason for its support of a six-month delay. A coalition of 27 consumer advocacy groups urged the Bureau to implement the Prepaid Accounts Final Rule as soon as possible, citing the benefits of the rule for consumers who use prepaid accounts, and expressing concern that further delays in the effective date would cause harm to consumers. They stated that, if an extension is warranted, the Bureau should give the minimum extension necessary—which in their view would be no longer than the proposed six months—and not provide any further extensions. Another consumer advocacy group supported the Bureau’s proposal to delay the rule’s effective date by six months while reiterating that expeditious implementation of the Prepaid Accounts Final Rule remains essential to providing comprehensive consumer protections to users of prepaid accounts. Two think tanks urged the Bureau to consider the possible negative effects on consumers of any delay in the effective date of the rule. Another think tank supported the six-month delay, stating that otherwise there is a risk that providers might pull cards without replacing them, thus hampering consumers’ access to those products. The commenters who did not identify their affiliation varied in their comments, either expressing support for the proposed delay in effective date or arguing that the effective date should not be extended to ensure that consumers receive the protections of the Prepaid Accounts Final Rule. A group of State attorneys general expressed support for the rule generally but did not comment specifically on the effective date of the rule. Safe harbor for early compliance. Two trade association commenters urged the Bureau to establish a safe harbor for VerDate Sep<11>2014 16:35 Apr 24, 2017 Jkt 241001 prepaid providers that comply with the Prepaid Accounts Final Rule (or portions of it) prior to the rule’s effective date. These commenters expressed concerns that prepaid providers may be exposed to potential liability if they comply with the rule prior to the effective date, as they suggested the possibility that there may be some conflict between the Prepaid Accounts Final Rule and current requirements for payroll card accounts and government benefit accounts, though they did not provide any specific examples. One commenter stated that early compliance would benefit consumers and should not be discouraged. Section 1005.19(f)(2). The Bureau did not propose to delay the October 1, 2018 effective date of the requirement that prepaid account issuers submit prepaid account agreements to the Bureau, which is set forth in Regulation E § 1005.19(f)(2). The Bureau did, however, solicit comment on whether it should also delay that effective date. Commenters generally did not express concerns that the October 1, 2018 agreement submission effective date would create compliance issues. One of the trade association commenters advocating for an 18-month delay of the Prepaid Accounts Final Rule’s general effective date suggested that the Bureau contemplate a proportional delay for § 1005.19(f)(2), stating that it would help relieve pressure on credit unions that may need to submit credit card agreements pursuant to Regulation Z § 1026.58 for covered separate credit features accessible by hybrid prepaidcredit cards. Another trade association expressed concerns pertaining to general compliance with the requirement to submit prepaid account agreements to the Bureau, but did not suggest a delay to the effective date in § 1005.19(f)(2). A program manager expressed concerns about the challenges it is facing in complying with the agreement posting requirement in § 1005.19, which appears to be due, at least in part, to the number of prepaid account agreements it manages. This commenter suggested making the effective dates set forth in § 1005.19(f)(1) and (2) consistent, but did not request that the Bureau delay the effective date for the agreement submission requirement. A commenter who did not identify his or her affiliation supported the Bureau’s proposal not to delay the effective date of the agreement submission requirement, but suggested that the Bureau revisit that decision six months in advance of the effective date. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 18977 Substantive changes to the Prepaid Accounts Final Rule. As noted above, the Bureau did not propose in the Effective Date NPRM to amend any other substantive provisions of the Prepaid Accounts Final Rule, nor was the purpose of the Effective Date NPRM to seek comment generally on policy decisions made in the Prepaid Accounts Final Rule that industry or other stakeholders might wish the Bureau to reconsider. Nonetheless, many commenters used their comment letters to advocate for retaining, modifying, or eliminating various provisions of the rule. Commenters also suggested that the Bureau could use the additional time provided by delaying the effective date of the Prepaid Accounts Final Rule to revisit these issues. C. The Final Rule For the reasons set forth herein, the Bureau is finalizing as proposed a sixmonth delay of the October 1, 2017 effective date of the Prepaid Accounts Final Rule. In order to effect this change, the Bureau is also amending Regulation E §§ 1005.18(b)(2)(ix) and (h), and 1005.19(f)(1), and related commentary, to reflect the delayed effective date. The Bureau continues to believe that the Prepaid Accounts Final Rule will provide significant benefits to consumers and that, therefore, expeditious implementation remains essential to provide comprehensive consumer protections to users of prepaid accounts. Having reviewed the comments received, the Bureau continues to believe that a six-month delay of the effective date, when added to the nearly 12 months previously provided for in the Prepaid Accounts Final Rule, allows sufficient time for industry to implement the rule and provides for an appropriate balance between the interests of the consumers who will receive the benefits of the rule and the needs of industry for an adequate implementation period. The Bureau appreciates the issues raised by commenters advocating for a longer delay to the Prepaid Accounts Final Rule’s effective date, but does not believe that a longer delay is in fact warranted at this time. Based on industry outreach efforts and the comments received in response to the Effective Date NPRM, the Bureau has determined that it should revisit at least two substantive issues through a separate notice and comment rulemaking process. Those issues relate to the linking of credit cards into digital wallets that are capable of storing funds and to error resolution and limitations on liability for prepaid accounts that E:\FR\FM\25APR1.SGM 25APR1 asabaliauskas on DSK3SPTVN1PROD with RULES 18978 Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules and Regulations cannot be registered, have not yet been registered, or for which consumers have attempted but have not successfully completed the registration process. The Bureau is continuing to evaluate other concerns raised by industry and other stakeholders, including those discussed in comments on the Effective Date NPRM, and may address a limited number of other topics as well in its forthcoming proposal. The Bureau also will seek comment on whether any further extension of the effective date is needed in light of the specific changes proposed. Safe harbor for early compliance. The Bureau agrees with commenters that early compliance with the Prepaid Accounts Final Rule could benefit both industry and consumers. The Bureau is not aware of any conflicts between the requirements of the Prepaid Accounts Final Rule and the current regulations applying to accounts that will be covered by the rule, nor were any specified by commenters. To the extent that financial institutions are engaged in consumer-friendly practices that are not specifically required under current regulations, the Bureau encourages those institutions to continue those practices, whether or not those practices are required by the Prepaid Accounts Final Rule. For example, financial institutions that already provide access to more than 60 days of account history to all current accountholders, or that provide full Regulation E error resolution and limited liability protections to their accountholders, are encouraged to continue to do so in advance of the effective date. However, financial institutions should ensure that their disclosures do not suggest to consumers that they are engaged in a consumer-friendly practice that they have not yet implemented. The Bureau notes that the Prepaid Accounts Final Rule already contemplates that some aspects of the rule will be phased in, particularly with respect to the exception that does not require financial institutions to pull and replace non-compliant packaging that was manufactured, printed, or otherwise produced in the normal course of business prior to the effective date of the rule. Thus, the Bureau is not adding an explicit safe harbor for early compliance, although the Bureau does not believe that the absence of one will prevent financial institutions from implementing practices that are required by the Prepaid Accounts Final Rule prior to the effective date. The Bureau will seek comment in its forthcoming proposal on whether there are in fact any conflicts between requirements of the Prepaid Accounts VerDate Sep<11>2014 16:35 Apr 24, 2017 Jkt 241001 Final Rule and the current regulations applying to accounts that will be covered by the rule that would merit a more formal safe harbor. Section 1005.19(f)(2). The Bureau is maintaining the October 1, 2018 effective date set forth in Regulation E § 1005.19(f)(2) for the agreement submission requirement, as proposed. In the Effective Date NPRM, the Bureau indicated that its industry outreach had not indicated that the effective date of this provision was causing significant compliance concerns in and of itself, and the comments to the Effective Date NPRM support that conclusion. The Bureau does not believe that the few concerns raised by commenters warrant a delay to the October 1, 2018 effective date. IV. Legal Authority The Bureau is exercising its rulemaking authority pursuant to EFTA section 904(a) and (c), Dodd-Frank Act sections 1022(b)(1) and 1032(a), and TILA section 105(a) to delay the effective date of the Prepaid Accounts Final Rule. The legal authority for the Prepaid Accounts Final Rule is described in detail in the Prepaid Accounts Final Rule’s SUPPLEMENTARY INFORMATION.7 As amended by the Dodd-Frank Act, EFTA section 904(a) and (c) 8 authorizes the Bureau to prescribe regulations to carry out the purposes of EFTA and provide that such regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions, for any class of electronic fund transfers or remittance transfers as in the judgment of the Bureau are necessary or proper to effectuate the purposes of EFTA, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. As amended by the DoddFrank Act, TILA section 105(a) 9 directs the Bureau to prescribe regulations to carry out the purposes of TILA and provides that such regulations may contain such additional requirements, classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for all or any class of transactions as in the judgment of the Bureau are necessary or proper to effectuate the purposes of TILA, to prevent circumvention or evasion thereof, or to facilitate compliance therewith.10 Section 1032(a) 7 See, e.g., 81 FR 83934, 83958–60 (Nov. 22, 2016). 8 15 U.S.C. 1593b(a). 9 15 U.S.C. 1604(a). 10 TILA section 105(d) generally provides that a regulation requiring any disclosure that differs from the disclosures previously required by parts A, D, PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 of the Dodd-Frank Act11 provides that the Bureau may prescribe rules to ensure that the features of any consumer financial product or service, both initially and over the term of the product or service, are fully, accurately, and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits, and risks associated with the product or service, in light of the facts and circumstances. Additionally, under Dodd-Frank Act section 1022(b)(1),12 the Bureau has general authority to prescribe rules as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of the Federal consumer financial laws, and to prevent evasions thereof. EFTA, TILA, and Title X of the DoddFrank Act are Federal consumer financial laws. Accordingly, in finalizing this rule, the Bureau is exercising its authority under DoddFrank Act section 1022(b) 13 to prescribe rules under EFTA, TILA, and Title X of the Dodd-Frank Act that carry out the purposes and objectives and prevent evasion of those laws. Section 1022(b)(2) of the Dodd-Frank Act 14 prescribes certain standards for rulemaking that the Bureau must follow in exercising its authority under section 1022(b)(1). V. Provisions Affected by the Final Rule 1005.18 Requirements for Financial Institutions Offering Prepaid Accounts 18(b) Pre-Acquisition Disclosure Requirements 18(b)(2) Short Form Disclosure Content 18(b)(2)(ix) Disclosure of Additional Fee Types Regulation E § 1005.18(b)(2) describes the short form disclosure content requirements for prepaid accounts. Section 1005.18(b)(2)(ix) contains requirements specifically regarding additional fee types. Section or E of TILA shall have an effective date ‘‘of that October 1 which follows by at least six months the date of promulgation.’’ Section 105(d) further provides that the Bureau ‘‘may at its discretion take interim action by regulation, amendment, or interpretation to lengthen the period of time permitted for creditors or lessors to adjust their forms to accommodate new requirements.’’ Although the Bureau desires to have the rule take effect as soon as feasible given its value for consumers, the Bureau is using its discretion under TILA section 105(d) to lengthen the period in this instance. The Bureau believes that the changes the Prepaid Accounts Final Rule will require to disclosures pursuant to Regulation Z warrant a delayed effective date that conforms to the rest of the rule. 11 12 U.S.C. 5532(a). 12 12 U.S.C. 5512(b)(1). 13 12 U.S.C. 5512(b). 14 12 U.S.C. 5512(b)(2). E:\FR\FM\25APR1.SGM 25APR1 Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules and Regulations 1005.18(b)(2)(ix)(D) describes the timing requirements for the initial assessment of an additional fee types disclosure, and § 1005.18(b)(2)(ix)(E) describes the timing for the periodic reassessment and update of additional fee types disclosures. The Bureau is revising the dates in the regulatory text and headings in § 1005.18(b)(2)(ix)(D)(1) through (3) and in comments 18(b)(2)(ix)(D)(1)–1, 18(b)(2)(ix)(D)(2)–1, 18(b)(2)(ix)(E)(2)– 1.i through iii, and 18(b)(2)(ix)(E)(3)–1 to reflect the new April 1, 2018 effective date. The Bureau is not, however, changing the October 1, 2014 date in § 1005.18(b)(2)(ix)(D)(1) and related commentary, which is the beginning of the time frame for which financial institutions may calculate additional fee types to disclose, so as not to inconvenience financial institutions that have already prepared their additional fee types calculations in reliance on that date. 18(h) Effective Date and Special Transition Rules for Disclosure Provisions Regulation E § 1005.18(h) sets forth several provisions to make clearer the Prepaid Accounts Final Rule’s general October 1, 2017 effective date. The Bureau is revising the dates in the regulatory text and headings throughout § 1005.18(h) and in comments 18(h)–1, 2, 6.i and 6.ii to reflect the new April 1, 2018 effective date. 1005.19 Internet Posting of Prepaid Account Agreements 19(f) Effective Date asabaliauskas on DSK3SPTVN1PROD with RULES 19(f)(1) Effective Date Regulation E § 1005.19(f)(1) sets forth the general effective date for the prepaid account agreement posting requirements in § 1005.19, other than the delayed requirement to submit prepaid account agreements to the Bureau pursuant to § 1005.19(b), as addressed in § 1005.19(f)(2). The Bureau is revising the date in the regulatory text of § 1005.19(f)(1) to reflect the new April 1, 2018 effective date. As discussed above, the Bureau is not delaying the October 1, 2018 date for submission of agreements to the Bureau. VI. Effective Date The Bureau is delaying the October 1, 2017 effective date of the Prepaid Accounts Final Rule by six months, to April 1, 2018. Additionally, the Bureau is making conforming amendments to Regulation E §§ 1005.18(b)(2)(ix) and (h) and 1005.19(f)(1), and related commentary, as described above, which will also become effective April 1, 2018. This final rule with respect to the VerDate Sep<11>2014 16:35 Apr 24, 2017 Jkt 241001 effective date of the Prepaid Accounts Final Rule will become effective 30 days after publication in the Federal Register, as required under section 553(d) of the Administrative Procedure Act.15 VII. Dodd-Frank Act Section 1022(b) Analysis In developing the final rule, the Bureau has considered the potential benefits, costs, and impacts required by section 1022(b)(2) of the Dodd-Frank Act. Specifically, section 1022(b)(2) calls for the Bureau to consider the potential benefits and costs of a regulation to consumers and covered persons, including the potential reduction of consumer access to consumer financial products or services, the impact on depository institutions and credit unions with $10 billion or less in total assets as described in section 1026 of the Dodd-Frank Act, and the impact on consumers in rural areas. In addition, 12 U.S.C. 5512(b)(2)(B) directs the Bureau to consult, before and during the rulemaking, with appropriate prudential regulators or other Federal agencies, regarding consistency with the objectives those agencies administer. The Bureau consulted, or offered to consult with, the prudential regulators, the Department of the Treasury, the Securities and Exchange Commission, and the Federal Trade Commission regarding consistency with any prudential, market, or systemic objectives administered by these agencies. The Bureau previously considered the benefits, costs, and impacts of the Prepaid Accounts Final Rule’s major provisions.16 The Bureau also previously considered the benefits, costs, and impacts of delaying the effective date in the Effective Date NPRM and solicited comment regarding that discussion.17 Where comments discuss the benefits or costs of delaying the effective date in the context of commenting on the merits of the provision, the Bureau has addressed those comments above. In this respect, the Bureau’s section 1022(b)(2) discussion is not limited to the discussion in this part of the final rule. In considering the relevant potential benefits, costs, and impacts, the Bureau has applied its knowledge and expertise concerning consumer financial markets and information received in response to its request for comment. Compared to the baseline established by the Prepaid 15 5 U.S.C. 553(d). FR 83934, 84269 (Nov. 22, 2016). 17 82 FR 13782, 13785 (Mar. 15, 2017). 16 81 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 18979 Accounts Final Rule,18 the delay of the effective date of the Prepaid Accounts Final Rule will generally benefit covered persons by facilitating initial compliance with the Prepaid Accounts Final Rule’s requirements and delaying the start of ongoing compliance costs. Because covered persons retain the option of complying with the Prepaid Accounts Final Rule’s original effective date, any delay in the effective date will not increase costs to providers. Consumers may experience both benefits and costs from a delay in the effective date. If a delay in the effective date helps to preserve consumer access to covered products by minimizing industry disruption, both consumers and covered persons will benefit. However, the Bureau believes that delaying the effective date may also delay consumers’ realization of benefits arising from the protections provided by the Prepaid Accounts Final Rule, thereby potentially imposing a cost on consumers. One think tank commenter stated that, although prepaid providers often offer some protections voluntarily, providers may alter or remove protections so long as the rule is not in effect. Another think tank commenter stated that the primary cost of the delay would be that consumers would not have the information needed to make appropriate choices among card products. However, the commenter also stated that providers have made improvements with respect to disclosure recently and that it believed that the risk of consumers not having adequate information for decisionmaking during the intervening period was low. The Bureau does not expect the final rule to have a differential impact on depository institutions and credit unions with $10 billion or less in total assets, as described in section 1026 of the Dodd-Frank Act, or on consumers in rural areas. The Bureau does not believe that the delay in the effective date will reduce consumer access to consumer financial products and services, and it may increase consumer access by decreasing the possibility of industry disruption arising from the Prepaid Accounts Final Rule’s implementation. VIII. Regulatory Flexibility Act Analysis The Regulatory Flexibility Act 19 as amended by the Small Business Regulatory Enforcement Fairness Act of 18 The Bureau has discretion in any rulemaking to choose an appropriate scope of analysis with respect to potential benefits, costs, and impacts and an appropriate baseline. 19 Public Law 96–354, 94 Stat. 1164 (1980). E:\FR\FM\25APR1.SGM 25APR1 18980 Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules and Regulations asabaliauskas on DSK3SPTVN1PROD with RULES 1996 20 (RFA) requires each agency to consider the potential impact of its regulations on small entities, including small businesses, small governmental units, and small not-for-profit organizations.21 The RFA defines a ‘‘small business’’ as a business that meets the size standard developed by the Small Business Administration (SBA) pursuant to the Small Business Act.22 The RFA generally requires an agency to conduct an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) of any rule subject to notice-and-comment rulemaking requirements, unless the agency certifies that the rule would not have a significant economic impact on a substantial number of small entities.23 The Bureau also is subject to certain additional procedures under the RFA involving the convening of a panel to consult with small entity representatives prior to proposing a rule for which an IRFA is required.24 The undersigned certified that the Effective Date NPRM would not have a significant economic impact on a substantial number of small entities and that an IRFA was therefore not required. The Bureau arrived at this conclusion because the Effective Date NPRM would delay the effective date of the Prepaid Accounts Final Rule, which itself would not have a significant economic impact on a substantial number of small entities.25 Upon considering relevant comments, the Bureau’s conclusion that the rule will not have a significant economic impact on a substantial number of small entities is unchanged. Therefore, a FRFA is not required.26 As discussed above, this final rule delays the effective date of the Prepaid Accounts Final Rule to April 1, 2018. The six-month delay in the effective date will benefit small entities by providing additional flexibility with 20 Public Law 104–21, section 241, 110 Stat. 847, 864–65 (1996). 21 5 U.S.C. 601 through 612. The term ‘‘ ‘small organization’ means any not-for-profit enterprise which is independently owned and operated and is not dominant in its field, unless an agency establishes [an alternative definition under notice and comment].’’ 5 U.S.C. 601(4). The term ‘‘ ‘small governmental jurisdiction’ means governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand, unless an agency establishes [an alternative definition after notice and comment].’’ 5 U.S.C. 601(5). 22 5 U.S.C. 601(3). The Bureau may establish an alternative definition after consulting with the SBA and providing an opportunity for public comment. Id. 23 5 U.S.C. 601 through 612. 24 5 U.S.C. 609. 25 81 FR 83934, 84308 (Nov. 22, 2016). 265 U.S.C. 605(b). VerDate Sep<11>2014 16:35 Apr 24, 2017 Jkt 241001 respect to the timing of the Prepaid Accounts Final Rule’s implementation. In addition to generally providing increased flexibility, the delay in the effective date will permit small entities to delay the commencement of any ongoing costs that result from complying with the Prepaid Accounts Final Rule. Because small entities retain the option of complying with the Prepaid Accounts Final Rule’s original effective date, the final rule’s delay of the effective date will not increase costs incurred by small entities relative to the baseline established by the Prepaid Accounts Final Rule. Accordingly, the undersigned hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities. IX. Paperwork Reduction Act Under the Paperwork Reduction Act of 1995 (PRA),27 Federal agencies are generally required to seek Office of Management and Budget (OMB) approval for information collection requirements prior to implementation. The collections of information related to the Prepaid Accounts Final Rule have been previously reviewed and approved by OMB in accordance with the PRA and assigned OMB Control Number 3170–0014 (Regulation E) and 3170– 0015 (Regulation Z). Under the PRA, the Bureau may not conduct or sponsor and, notwithstanding any other provision of law, a person is not required to respond to an information collection unless the information collection displays a valid control number assigned by OMB. The Bureau has determined that this final rule will not have any new or revised information collection requirements (recordkeeping, reporting, or disclosure requirements) on covered entities or members of the public that would constitute collections of information requiring OMB approval under the PRA. List of Subjects in 12 CFR Part 1005 Banking, Banks, Consumer protection, Credit unions, Electronic fund transfers, National banks, Remittance transfers, Reporting and recordkeeping requirements, Savings Associations. Authority and Issuance For the reasons set forth above, Regulation E, 12 CFR part 1005, as amended November 22, 2016, at 81 FR 83934, is further amended as follows: 27 44 PO 00000 U.S.C. 3501 et seq. Frm 00006 Fmt 4700 Sfmt 4700 PART 1005—ELECTRONIC FUND TRANSFERS (REGULATION E) 1. The authority citation for part 1005 continues to read as follows: ■ Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1693b. Subpart B is also issued under 12 U.S.C. 5601 and 15 U.S.C. 1693o–1. Subpart A—General § 1005.18 Requirements for financial institutions offering prepaid accounts. 2. Section 1005.18 is amended by revising all references to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’ in paragraphs (b)(2)(ix)(D)(1) through (3) and (h). ■ § 1005.19 Internet posting of prepaid account agreements. 3. Section 1005.19 is amended by revising the reference to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’ in paragraph (f)(1). ■ 4. In Supplement I to part 1005: ■ a. Under Section 1005.18— Requirements for Financial Institutions Offering Prepaid Accounts: ■ i. In subsection 18(b)(2)(ix)(D)(1) Existing Prepaid Account Programs as of October 1, 2017, the subsection heading and paragraph 1 are amended by revising all references to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’. ■ ii. In subsection 18(b)(2)(ix)(D)(2) Existing Prepaid Account Programs as of October 1, 2017 with Unavailable Data, the subsection heading and paragraph 1 are amended by revising all references to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’. ■ iii. In subsection 18(b)(2)(ix)(E)(2) Periodic Reassessment, paragraphs 1.i through iii are amended by: ■ A. Revising all references to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’. ■ B. Revising all references to ‘‘October 1, 2019’’ to read ‘‘April 1, 2020’’. ■ C. Revising the reference to ‘‘January 1, 2020’’ to read ‘‘July 1, 2020’’. ■ iv. In subsection 18(b)(2)(ix)(E)(3) Fee Schedule Change, paragraph 1 is amended by revising the reference to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’. ■ v. In subsection 18(h) Effective Date and Special Transition Rules for Disclosure Provisions, paragraphs 1 and 2 are amended by revising all references to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’. ■ vi. In subsection 18(h) Effective Date and Special Transition Rules for Disclosure Provisions, paragraph 6 introductory text and paragraph 6.i are amended by: ■ A. Revising all references to ‘‘October 1, 2017’’ to read ‘‘April 1, 2018’’. ■ E:\FR\FM\25APR1.SGM 25APR1 Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules and Regulations B. Revising the reference to ‘‘November 1, 2017’’ to read ‘‘May 1, 2018’’. ■ C. Revising the reference to ‘‘October 1, 2018’’ to read ‘‘April 1, 2019’’. ■ D. Revising the reference to ‘‘October 1, 2019’’ to read ‘‘April 1, 2020’’. ■ vii. In subsection 18(h) Effective Date and Special Transition Rules for Disclosure Provisions, paragraph 6.ii is revised to read as follows: ■ Supplement I to Part 1005—Official Interpretations * * * * * Section 1005.18—Requirements for Financial Institutions Offering Prepaid Accounts * * * * * 18(h) Effective Date and Special Transition Rules for Disclosure Provisions * * * * * 6. Account information not available on April 1, 2018. * * * ii. Summary totals of fees. A financial institution must display a summary total of the amount of all fees assessed by the financial institution on the consumer’s prepaid account for the prior calendar month and for the calendar year to date pursuant to § 1005.18(c)(5) beginning April 1, 2018. If, on April 1, 2018, the financial institution does not have readily accessible the data necessary to calculate the summary totals of fees for the prior calendar month or the calendar year to date, the financial institution may provide the summary totals using the data it has until the financial institution has accumulated the data necessary to display the summary totals as required by § 1005.18(c)(5). That is, the financial institution would first display the monthly fee total beginning on May 1, 2018 for the month of April, and the year-to-date fee total beginning on April 1, 2018, provided the financial institution discloses that it is displaying the year-to-date total beginning on April 1, 2018 rather than for the entire calendar year 2018. On January 1, 2019, financial institutions must begin displaying year-to-date fee totals for calendar year 2019. * * * * * asabaliauskas on DSK3SPTVN1PROD with RULES ■ Dated: April 19, 2017. Richard Cordray, Director, Bureau of Consumer Financial Protection. [FR Doc. 2017–08341 Filed 4–24–17; 8:45 am] BILLING CODE 4810–AM–P VerDate Sep<11>2014 16:35 Apr 24, 2017 Jkt 241001 18981 DEPARTMENT OF TRANSPORTATION Authority for This Rulemaking Federal Aviation Administration The FAA’s authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency’s authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it removes NOTAM information in Class D extension airspace and amends the airport’s geographic coordinates in associated Class D and Class E airspace for the above noted airports in Aspen, CO, and Pueblo, CO. 14 CFR Part 71 [Docket No. FAA–2017–0054; Airspace Docket No. 17–ANM–2] Amendment of Class D and Class E Airspace; Aspen, CO; and Pueblo, CO Federal Aviation Administration (FAA), DOT. ACTION: Final rule, technical amendment. AGENCY: This action amends the legal description of the Class E airspace designated as an extension, at Aspen Pitkin County/Sardy Field, Aspen, CO, and Pueblo Memorial Airport, Pueblo, CO, eliminating the Notice to Airmen (NOTAM) part-time status. This action also updates the geographic coordinates of these airports in the associated Class D and E airspace areas to match the FAA’s current aeronautical database. This action does not affect the charted boundaries or operating requirements of the airspace. DATES: Effective 0901 UTC, June 22, 2017. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments. ADDRESSES: FAA Order 7400.11A, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at https:// www.faa.gov/air_traffic/publications/. For further information, you can contact the Airspace Policy Group, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC, 20591; telephone: 202– 267–8783. The Order is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741– 6030, or go to https://www.archives.gov/ federal_register/code_of_federalregulations/ibr_locations.html. FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15. FOR FURTHER INFORMATION CONTACT: Tom Clark, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone (425) 203–4511. SUPPLEMENTARY INFORMATION: SUMMARY: PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 History The FAA Aeronautical Information Services branch found the Class E airspace designated as an extension for Aspen Pitkin County/Sardy Field, Aspen, CO, and Pueblo Memorial Airport, Pueblo, CO, as published in FAA Order 7400.11A, Airspace Designations and Reporting Points, does not require part-time status. Also, after a review, the FAA found the geographic coordinates referenced in the airspace legal descriptions under Class D and Class E airspace areas for Aspen Pitkin County/Sardy Field, Aspen, CO, and Pueblo Memorial Airport, Pueblo, CO do not match the FAA’s current aeronautical database. This rulemaking makes these updates. Class D and Class E airspace designations are published in paragraph 5000, 6002, 6004, and 6005, respectively, of FAA Order 7400.11A dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order. Availability and Summary of Documents for Incorporation by Reference This document amends FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11A lists Class A, B, C, D, and E airspace areas, E:\FR\FM\25APR1.SGM 25APR1

Agencies

BUREAU OF CONSUMER FINANCIAL PROTECTION

[Federal Register Volume 82, Number 78 (Tuesday, April 25, 2017)]
[Rules and Regulations]
[Pages 18975-18981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08341]

========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

========================================================================

Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules
and Regulations

[[Page 18975]]

BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Parts 1005 and 1026

[Docket No. CFPB-2017-0008]
RIN 3170-AA69

Prepaid Accounts Under the Electronic Fund Transfer Act
(Regulation E) and the Truth in Lending Act (Regulation Z); Delay of
Effective Date

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official interpretation; delay of effective date.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau or CFPB)
is issuing this final rule to delay the October 1, 2017 effective date
of the rule governing Prepaid Accounts Under the Electronic Fund
Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z)
by six months, to April 1, 2018.

DATES: The amendments in this final rule are effective on April 1,
2018. The effective date of the final rule published on November 22,
2016 (81 FR 83934) is delayed from October 1, 2017, to April 1, 2018.
The effective date for the addition of Sec. 1005.19(b) remains October
1, 2018.

FOR FURTHER INFORMATION CONTACT: Thomas L. Devlin and Yaritza Velez,
Counsels, and Kristine M. Andreassen, Senior Counsel, Office of
Regulations, at 202-435-7700.

SUPPLEMENTARY INFORMATION:

I. Summary of the Final Rule

On October 5, 2016, the Bureau released a final rule to create
comprehensive consumer protections for prepaid accounts under
Regulation E, which implements the Electronic Fund Transfer Act (EFTA),
and Regulation Z, which implements the Truth in Lending Act (TILA)
(Prepaid Accounts Final Rule).\1\ When it was issued, the Prepaid
Accounts Final Rule had a general effective date of October 1, 2017.
Through its efforts to support industry implementation of the Prepaid
Accounts Final Rule, the Bureau learned that some industry participants
believed that they would have difficulty complying with certain
provisions of the Prepaid Accounts Final Rule that would have gone into
effect on October 1, 2017. In order to facilitate compliance with the
Prepaid Accounts Final Rule, and to allow an opportunity for the Bureau
to assess whether any additional adjustments to the Rule are
appropriate, the Bureau proposed to extend the general effective date
of the Prepaid Accounts Final Rule by six months, to April 1, 2018
(Effective Date NPRM).\2\
---------------------------------------------------------------------------

\1\ 81 FR 83934 (Nov. 22, 2016).
\2\ 82 FR 13782 (Mar. 15, 2017).
---------------------------------------------------------------------------

Based on comments received, the Bureau is issuing this final rule
to delay the October 1, 2017 effective date for the Prepaid Accounts
Final Rule by six months, to April 1, 2018. The Bureau is also making
conforming amendments to certain regulatory text and commentary adopted
in the Prepaid Accounts Final Rule to reflect the effective date delay.
The Bureau plans to release a notice of proposed rulemaking address
at least two issues that have been identified as areas where the
Prepaid Accounts Final Rule may be posing particular complexities for
implementation. When the Bureau does so it will also seek comment on
whether any further extension of the effective date is needed in light
of the specific changes proposed.

II. Background

A. The Prepaid Accounts Rulemaking

In the Prepaid Accounts Final Rule, the Bureau extended Regulation
E coverage to prepaid accounts and adopted provisions specific to such
accounts, and generally expanded Regulation Z's coverage to overdraft
credit features that may be offered in conjunction with prepaid
accounts.\3\ Upon issuing the Prepaid Accounts Final Rule, the Bureau
initiated robust efforts to support industry implementation.\4\
Information regarding the Bureau's Prepaid Accounts Final Rule
implementation initiatives and available resources can be found on the
Bureau's regulatory implementation Web site at https://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/prepaid-rule/.
---------------------------------------------------------------------------

\3\ 81 FR 83934 (Nov. 22, 2016). The Bureau released a proposal
regarding prepaid accounts under Regulations E and Z, including
model and sample disclosure forms, for public comment on November
13, 2014. 79 FR 77102 (Dec. 23, 2014) (Prepaid Accounts NPRM). The
Bureau had previously issued an advance notice of proposed
rulemaking that posed a series of questions for public comment about
how the Bureau might consider regulating general purpose reloadable
cards and other prepaid products. 77 FR 30923 (May 24, 2012).
\4\ These on-going efforts include: (1) The publication of a
plain-language small entity compliance guide to help industry
understand the Prepaid Accounts Final Rule; (2) the publication of
various other implementation tools regarding the Prepaid Accounts
Final Rule, including an executive summary of the rule, summaries of
key changes for payroll card accounts and government benefit
accounts, a prepaid account coverage chart, a summary of the rule's
effective date provisions, and a guide to preparing the short form
disclosure; (3) the release of native design files for print and
source code for web-based disclosures for all of the model and
sample disclosure forms included in the Prepaid Accounts Final Rule;
(4) meetings with industry, including trade associations and
individual industry participants, to discuss and support their
implementation efforts; and (5) participation in conferences and
forums.
---------------------------------------------------------------------------

B. Effective Date Delay

As published, the Prepaid Accounts Final Rule had a general
effective date of October 1, 2017. As discussed in the Effective Date
NPRM, as part of its efforts to support industry implementation, the
Bureau has discussed implementation efforts with a number of industry
participants. As a result of those discussions, the Bureau learned that
some industry participants were concerned for a variety of reasons that
they would have difficulty in complying with certain aspects of the
Prepaid Accounts Final Rule by October 1, 2017 while also ensuring
continued availability of their prepaid products and with minimal
disruption to consumers. For example, although the Bureau put in place
an exception in Regulation E Sec. 1005.18(h)(2) pursuant to which
financial institutions are not required to pull and replace prepaid
account access devices and packaging materials with non-compliant
disclosures that were produced in the normal course of business prior
to October 1, 2017, some industry participants indicated that they
believed that they should in fact pull and replace non-compliant
packaging due to concerns about legal and regulatory

[[Page 18976]]

exposure at both the Federal and State level, and in particular due to
developments following release of the Prepaid Accounts Final Rule.
Industry had also raised related concerns regarding the constrained
production capacity of packaging manufacturers and other supply chain
limitations resulting from increased industry demand leading up to the
October 1, 2017 effective date.
In addition, in the course of working to implement the Prepaid
Accounts Final Rule, some industry participants raised concerns about
what they describe as unanticipated complexities arising from the
interaction of certain aspects of the rule with certain business models
and practices, including those newly adopted, that they did not fully
address in their comment letters on the Prepaid Accounts NPRM, which
may complicate implementation and affect consumers.
Based on its initial outreach to industry before issuing the
Effective Date NPRM, the Bureau believed that a six-month delay would
be sufficient for industry participants to ensure that they can comply
with the Prepaid Accounts Final Rule with minimal disruption to
consumers. The Bureau explained that, in particular, a six-month
extension would both allow more time for package printing and allow
pull-and-replace processes at retail locations to occur after the
winter holiday season, which is a particularly busy time for retailers.
Indeed, the Bureau understands that industry often effectuates pull-
and-replace processes in the spring for precisely this reason. The
Bureau also believed that a six-month delay would allow the Bureau
adequate opportunity to consider possible additional amendments to the
Prepaid Accounts Final Rule, and for industry to implement any such
changes, without unnecessary disruption to consumers' access to, and
use of, prepaid accounts.
The Bureau did not propose to delay the effective date of the
requirement to submit prepaid account agreements to the Bureau in
Regulation E Sec. 1005.19(f)(2), which is October 1, 2018. The Bureau
expected to have its agreement submission process in place by October
1, 2018, and, as discussed in the Effective Date NPRM, the Bureau's
pre-proposal outreach had not indicated that industry participants were
concerned that they would not be able to meet the agreement submission
effective date.
In the Effective Date NPRM, the Bureau did not propose to amend any
other substantive requirements of the Prepaid Accounts Final Rule. The
purpose of that notice was not to seek comment generally on policy
decisions made in the Prepaid Accounts Final Rule that industry or
other stakeholders might wish the Bureau to reconsider. Rather, the
Bureau stated that it would continue its outreach to industry and other
stakeholders to understand their experiences in implementing the
Prepaid Accounts Final Rule.

III. Summary of the Rulemaking Process, Comments Received, and the
Final Rule

A. Summary of the Rulemaking Process

On March 9, 2017, the Bureau released the Effective Date NPRM with
a request for public comment. It was published in the Federal Register
on March 15, 2017.\5\ The Bureau solicited comment on all aspects of
the Effective Date NPRM. In particular, the Bureau asked commenters to
provide specific detail and any available data regarding current and
planned practices, as well as relevant knowledge and specific facts
about any benefits, costs, or other impacts on industry, consumers, and
other stakeholders of the Effective Date NPRM. The Bureau also
solicited comment about the impact of the Effective Date NPRM on
consumers who use prepaid accounts. The Bureau solicited comment
regarding the proposed extension of the general effective date to April
1, 2018, as well as alternative dates for extension.
---------------------------------------------------------------------------

\5\ 82 FR 13782 (Mar. 15, 2017).
---------------------------------------------------------------------------

B. Comments Received

The comment period for the Effective Date NPRM closed on April 5,
2017. The Bureau received 28 comment letters from consumer advocacy
groups; national and regional trade associations; members of the
prepaid industry, including issuing banks and credit unions, program
managers, and a digital wallet provider; several think tanks; an
association of State financial regulators; a group of State attorneys
general; and several commenters who did not identify their
affiliations.\6\
---------------------------------------------------------------------------

\6\ These comment letters are publicly available at https://www.regulations.gov/.
---------------------------------------------------------------------------

Industry and trade association commenters all supported the
Bureau's proposal to delay the effective date of most provisions of the
Prepaid Accounts Final Rule; many expressly supported the Bureau's
proposed six-month delay. A number of commenters cited the Bureau's
concerns that some industry participants may need additional time to
comply with the rule, in particular stating that providers might need
to pull and replace non-compliant packaging notwithstanding the
exception in the Prepaid Accounts Final Rule for prepaid account access
devices and packaging materials with non-compliant disclosures that
were produced in the normal course of business prior to the effective
date of the rule.
A prepaid issuer, a digital wallet provider, and a trade
association each expressed support for a six-month delay of the
effective date, contingent on the Bureau also revisiting the Prepaid
Accounts Final Rule to address certain substantive provisions of the
rule that they argued required changes to disclosures and business
models that could not be implemented by April 1, 2018. The provisions
that they cited relate to the linking of credit cards with digital
wallets that are capable of storing funds and to error resolution and
limitations on liability for prepaid accounts where the financial
institution has not completed its consumer identification and
verification process with respect to the account. These commenters
requested a 12-month delay to the Prepaid Accounts Final Rule's general
effective date if the Bureau were unwilling to revisit those issues.
Some industry and trade association commenters argued that the
Bureau should delay the effective date further by 12 months; two trade
associations advocated for an 18-month delay. The commenters who
requested a delay longer than six months cited a variety of reasons,
including, for example, the time needed to develop and review new and
updated disclosures and related materials; time required to retool J-
hook card packaging to accommodate disclosures required by the rule;
limitations in production capacity to print new prepaid card
collateral; and the time needed to coordinate system updates with
processors, vendors, and other service providers. A few commenters
cited other reasons as well, such as the need to develop new systems
and operational processes related to providing longer account
transaction histories and calculating summary totals of fees. One trade
association stated that providers need to develop an automated process
to track cardholder agreements for purposes of submitting those
agreements to the Bureau, which it stated would need to be in place as
of the October 1, 2017 effective date in order to adequately track
agreements. Another trade association commenter urged the Bureau to
delay the effective date for longer than six months so that the Bureau
could conduct a comprehensive study on the effects that the Prepaid
Accounts Final Rule will have on consumers, specifically related to
availability of prepaid accounts and their costs to consumers.

[[Page 18977]]

One credit union trade association commenter, requesting an 18-
month extension, cited concerns that the proposed delayed effective
date would coincide with the effective date of other regulations
promulgated by the Bureau, in particular the provisions of the Bureau's
mortgage servicing rule pertaining to successors-in-interest and the
provision of periodic statements to consumers who have filed for
bankruptcy. An association of State financial regulators also stated
the compliance investments necessitated by other regulations such as
the increased data collection/reporting requirements under the Home
Mortgage Disclosure Act and additional identification requirements
under the Bank Secrecy Act/Customer Due Diligence rule promulgated by
another federal agency as a reason for its support of a six-month
delay.
A coalition of 27 consumer advocacy groups urged the Bureau to
implement the Prepaid Accounts Final Rule as soon as possible, citing
the benefits of the rule for consumers who use prepaid accounts, and
expressing concern that further delays in the effective date would
cause harm to consumers. They stated that, if an extension is
warranted, the Bureau should give the minimum extension necessary--
which in their view would be no longer than the proposed six months--
and not provide any further extensions. Another consumer advocacy group
supported the Bureau's proposal to delay the rule's effective date by
six months while reiterating that expeditious implementation of the
Prepaid Accounts Final Rule remains essential to providing
comprehensive consumer protections to users of prepaid accounts.
Two think tanks urged the Bureau to consider the possible negative
effects on consumers of any delay in the effective date of the rule.
Another think tank supported the six-month delay, stating that
otherwise there is a risk that providers might pull cards without
replacing them, thus hampering consumers' access to those products.
The commenters who did not identify their affiliation varied in
their comments, either expressing support for the proposed delay in
effective date or arguing that the effective date should not be
extended to ensure that consumers receive the protections of the
Prepaid Accounts Final Rule. A group of State attorneys general
expressed support for the rule generally but did not comment
specifically on the effective date of the rule.
Safe harbor for early compliance. Two trade association commenters
urged the Bureau to establish a safe harbor for prepaid providers that
comply with the Prepaid Accounts Final Rule (or portions of it) prior
to the rule's effective date. These commenters expressed concerns that
prepaid providers may be exposed to potential liability if they comply
with the rule prior to the effective date, as they suggested the
possibility that there may be some conflict between the Prepaid
Accounts Final Rule and current requirements for payroll card accounts
and government benefit accounts, though they did not provide any
specific examples. One commenter stated that early compliance would
benefit consumers and should not be discouraged.
Section 1005.19(f)(2). The Bureau did not propose to delay the
October 1, 2018 effective date of the requirement that prepaid account
issuers submit prepaid account agreements to the Bureau, which is set
forth in Regulation E Sec. 1005.19(f)(2). The Bureau did, however,
solicit comment on whether it should also delay that effective date.
Commenters generally did not express concerns that the October 1, 2018
agreement submission effective date would create compliance issues. One
of the trade association commenters advocating for an 18-month delay of
the Prepaid Accounts Final Rule's general effective date suggested that
the Bureau contemplate a proportional delay for Sec. 1005.19(f)(2),
stating that it would help relieve pressure on credit unions that may
need to submit credit card agreements pursuant to Regulation Z Sec.
1026.58 for covered separate credit features accessible by hybrid
prepaid-credit cards. Another trade association expressed concerns
pertaining to general compliance with the requirement to submit prepaid
account agreements to the Bureau, but did not suggest a delay to the
effective date in Sec. 1005.19(f)(2).
A program manager expressed concerns about the challenges it is
facing in complying with the agreement posting requirement in Sec.
1005.19, which appears to be due, at least in part, to the number of
prepaid account agreements it manages. This commenter suggested making
the effective dates set forth in Sec. 1005.19(f)(1) and (2)
consistent, but did not request that the Bureau delay the effective
date for the agreement submission requirement. A commenter who did not
identify his or her affiliation supported the Bureau's proposal not to
delay the effective date of the agreement submission requirement, but
suggested that the Bureau revisit that decision six months in advance
of the effective date.
Substantive changes to the Prepaid Accounts Final Rule. As noted
above, the Bureau did not propose in the Effective Date NPRM to amend
any other substantive provisions of the Prepaid Accounts Final Rule,
nor was the purpose of the Effective Date NPRM to seek comment
generally on policy decisions made in the Prepaid Accounts Final Rule
that industry or other stakeholders might wish the Bureau to
reconsider. Nonetheless, many commenters used their comment letters to
advocate for retaining, modifying, or eliminating various provisions of
the rule. Commenters also suggested that the Bureau could use the
additional time provided by delaying the effective date of the Prepaid
Accounts Final Rule to revisit these issues.

C. The Final Rule

For the reasons set forth herein, the Bureau is finalizing as
proposed a six-month delay of the October 1, 2017 effective date of the
Prepaid Accounts Final Rule. In order to effect this change, the Bureau
is also amending Regulation E Sec. Sec. 1005.18(b)(2)(ix) and (h), and
1005.19(f)(1), and related commentary, to reflect the delayed effective
date.
The Bureau continues to believe that the Prepaid Accounts Final
Rule will provide significant benefits to consumers and that,
therefore, expeditious implementation remains essential to provide
comprehensive consumer protections to users of prepaid accounts. Having
reviewed the comments received, the Bureau continues to believe that a
six-month delay of the effective date, when added to the nearly 12
months previously provided for in the Prepaid Accounts Final Rule,
allows sufficient time for industry to implement the rule and provides
for an appropriate balance between the interests of the consumers who
will receive the benefits of the rule and the needs of industry for an
adequate implementation period. The Bureau appreciates the issues
raised by commenters advocating for a longer delay to the Prepaid
Accounts Final Rule's effective date, but does not believe that a
longer delay is in fact warranted at this time.
Based on industry outreach efforts and the comments received in
response to the Effective Date NPRM, the Bureau has determined that it
should revisit at least two substantive issues through a separate
notice and comment rulemaking process. Those issues relate to the
linking of credit cards into digital wallets that are capable of
storing funds and to error resolution and limitations on liability for
prepaid accounts that

[[Page 18978]]

cannot be registered, have not yet been registered, or for which
consumers have attempted but have not successfully completed the
registration process. The Bureau is continuing to evaluate other
concerns raised by industry and other stakeholders, including those
discussed in comments on the Effective Date NPRM, and may address a
limited number of other topics as well in its forthcoming proposal. The
Bureau also will seek comment on whether any further extension of the
effective date is needed in light of the specific changes proposed.
Safe harbor for early compliance. The Bureau agrees with commenters
that early compliance with the Prepaid Accounts Final Rule could
benefit both industry and consumers. The Bureau is not aware of any
conflicts between the requirements of the Prepaid Accounts Final Rule
and the current regulations applying to accounts that will be covered
by the rule, nor were any specified by commenters. To the extent that
financial institutions are engaged in consumer-friendly practices that
are not specifically required under current regulations, the Bureau
encourages those institutions to continue those practices, whether or
not those practices are required by the Prepaid Accounts Final Rule.
For example, financial institutions that already provide access to more
than 60 days of account history to all current accountholders, or that
provide full Regulation E error resolution and limited liability
protections to their accountholders, are encouraged to continue to do
so in advance of the effective date. However, financial institutions
should ensure that their disclosures do not suggest to consumers that
they are engaged in a consumer-friendly practice that they have not yet
implemented.
The Bureau notes that the Prepaid Accounts Final Rule already
contemplates that some aspects of the rule will be phased in,
particularly with respect to the exception that does not require
financial institutions to pull and replace non-compliant packaging that
was manufactured, printed, or otherwise produced in the normal course
of business prior to the effective date of the rule. Thus, the Bureau
is not adding an explicit safe harbor for early compliance, although
the Bureau does not believe that the absence of one will prevent
financial institutions from implementing practices that are required by
the Prepaid Accounts Final Rule prior to the effective date. The Bureau
will seek comment in its forthcoming proposal on whether there are in
fact any conflicts between requirements of the Prepaid Accounts Final
Rule and the current regulations applying to accounts that will be
covered by the rule that would merit a more formal safe harbor.
Section 1005.19(f)(2). The Bureau is maintaining the October 1,
2018 effective date set forth in Regulation E Sec. 1005.19(f)(2) for
the agreement submission requirement, as proposed. In the Effective
Date NPRM, the Bureau indicated that its industry outreach had not
indicated that the effective date of this provision was causing
significant compliance concerns in and of itself, and the comments to
the Effective Date NPRM support that conclusion. The Bureau does not
believe that the few concerns raised by commenters warrant a delay to
the October 1, 2018 effective date.

IV. Legal Authority

The Bureau is exercising its rulemaking authority pursuant to EFTA
section 904(a) and (c), Dodd-Frank Act sections 1022(b)(1) and 1032(a),
and TILA section 105(a) to delay the effective date of the Prepaid
Accounts Final Rule.
The legal authority for the Prepaid Accounts Final Rule is
described in detail in the Prepaid Accounts Final Rule's Supplementary
Information.\7\ As amended by the Dodd-Frank Act, EFTA section 904(a)
and (c) \8\ authorizes the Bureau to prescribe regulations to carry out
the purposes of EFTA and provide that such regulations may contain such
classifications, differentiations, or other provisions, and may provide
for such adjustments and exceptions, for any class of electronic fund
transfers or remittance transfers as in the judgment of the Bureau are
necessary or proper to effectuate the purposes of EFTA, to prevent
circumvention or evasion thereof, or to facilitate compliance
therewith. As amended by the Dodd-Frank Act, TILA section 105(a) \9\
directs the Bureau to prescribe regulations to carry out the purposes
of TILA and provides that such regulations may contain such additional
requirements, classifications, differentiations, or other provisions,
and may provide for such adjustments and exceptions for all or any
class of transactions as in the judgment of the Bureau are necessary or
proper to effectuate the purposes of TILA, to prevent circumvention or
evasion thereof, or to facilitate compliance therewith.\10\ Section
1032(a) of the Dodd-Frank Act\11\ provides that the Bureau may
prescribe rules to ensure that the features of any consumer financial
product or service, both initially and over the term of the product or
service, are fully, accurately, and effectively disclosed to consumers
in a manner that permits consumers to understand the costs, benefits,
and risks associated with the product or service, in light of the facts
and circumstances. Additionally, under Dodd-Frank Act section
1022(b)(1),\12\ the Bureau has general authority to prescribe rules as
may be necessary or appropriate to enable the Bureau to administer and
carry out the purposes and objectives of the Federal consumer financial
laws, and to prevent evasions thereof.
---------------------------------------------------------------------------

\7\ See, e.g., 81 FR 83934, 83958-60 (Nov. 22, 2016).
\8\ 15 U.S.C. 1593b(a).
\9\ 15 U.S.C. 1604(a).
\10\ TILA section 105(d) generally provides that a regulation
requiring any disclosure that differs from the disclosures
previously required by parts A, D, or E of TILA shall have an
effective date ``of that October 1 which follows by at least six
months the date of promulgation.'' Section 105(d) further provides
that the Bureau ``may at its discretion take interim action by
regulation, amendment, or interpretation to lengthen the period of
time permitted for creditors or lessors to adjust their forms to
accommodate new requirements.'' Although the Bureau desires to have
the rule take effect as soon as feasible given its value for
consumers, the Bureau is using its discretion under TILA section
105(d) to lengthen the period in this instance. The Bureau believes
that the changes the Prepaid Accounts Final Rule will require to
disclosures pursuant to Regulation Z warrant a delayed effective
date that conforms to the rest of the rule.
\11\ 12 U.S.C. 5532(a).
\12\ 12 U.S.C. 5512(b)(1).
---------------------------------------------------------------------------

EFTA, TILA, and Title X of the Dodd-Frank Act are Federal consumer
financial laws. Accordingly, in finalizing this rule, the Bureau is
exercising its authority under Dodd-Frank Act section 1022(b) \13\ to
prescribe rules under EFTA, TILA, and Title X of the Dodd-Frank Act
that carry out the purposes and objectives and prevent evasion of those
laws. Section 1022(b)(2) of the Dodd-Frank Act \14\ prescribes certain
standards for rulemaking that the Bureau must follow in exercising its
authority under section 1022(b)(1).
---------------------------------------------------------------------------

\13\ 12 U.S.C. 5512(b).
\14\ 12 U.S.C. 5512(b)(2).
---------------------------------------------------------------------------

V. Provisions Affected by the Final Rule

1005.18 Requirements for Financial Institutions Offering Prepaid
Accounts

18(b) Pre-Acquisition Disclosure Requirements
18(b)(2) Short Form Disclosure Content
18(b)(2)(ix) Disclosure of Additional Fee Types
Regulation E Sec. 1005.18(b)(2) describes the short form
disclosure content requirements for prepaid accounts. Section
1005.18(b)(2)(ix) contains requirements specifically regarding
additional fee types. Section

[[Page 18979]]

1005.18(b)(2)(ix)(D) describes the timing requirements for the initial
assessment of an additional fee types disclosure, and Sec.
1005.18(b)(2)(ix)(E) describes the timing for the periodic reassessment
and update of additional fee types disclosures. The Bureau is revising
the dates in the regulatory text and headings in Sec.
1005.18(b)(2)(ix)(D)(1) through (3) and in comments 18(b)(2)(ix)(D)(1)-
1, 18(b)(2)(ix)(D)(2)-1, 18(b)(2)(ix)(E)(2)-1.i through iii, and
18(b)(2)(ix)(E)(3)-1 to reflect the new April 1, 2018 effective date.
The Bureau is not, however, changing the October 1, 2014 date in Sec.
1005.18(b)(2)(ix)(D)(1) and related commentary, which is the beginning
of the time frame for which financial institutions may calculate
additional fee types to disclose, so as not to inconvenience financial
institutions that have already prepared their additional fee types
calculations in reliance on that date.
18(h) Effective Date and Special Transition Rules for Disclosure
Provisions
Regulation E Sec. 1005.18(h) sets forth several provisions to make
clearer the Prepaid Accounts Final Rule's general October 1, 2017
effective date. The Bureau is revising the dates in the regulatory text
and headings throughout Sec. 1005.18(h) and in comments 18(h)-1, 2,
6.i and 6.ii to reflect the new April 1, 2018 effective date.

1005.19 Internet Posting of Prepaid Account Agreements

19(f) Effective Date
19(f)(1) Effective Date
Regulation E Sec. 1005.19(f)(1) sets forth the general effective
date for the prepaid account agreement posting requirements in Sec.
1005.19, other than the delayed requirement to submit prepaid account
agreements to the Bureau pursuant to Sec. 1005.19(b), as addressed in
Sec. 1005.19(f)(2). The Bureau is revising the date in the regulatory
text of Sec. 1005.19(f)(1) to reflect the new April 1, 2018 effective
date. As discussed above, the Bureau is not delaying the October 1,
2018 date for submission of agreements to the Bureau.

VI. Effective Date

The Bureau is delaying the October 1, 2017 effective date of the
Prepaid Accounts Final Rule by six months, to April 1, 2018.
Additionally, the Bureau is making conforming amendments to Regulation
E Sec. Sec. 1005.18(b)(2)(ix) and (h) and 1005.19(f)(1), and related
commentary, as described above, which will also become effective April
1, 2018. This final rule with respect to the effective date of the
Prepaid Accounts Final Rule will become effective 30 days after
publication in the Federal Register, as required under section 553(d)
of the Administrative Procedure Act.\15\
---------------------------------------------------------------------------

\15\ 5 U.S.C. 553(d).
---------------------------------------------------------------------------

VII. Dodd-Frank Act Section 1022(b) Analysis

In developing the final rule, the Bureau has considered the
potential benefits, costs, and impacts required by section 1022(b)(2)
of the Dodd-Frank Act. Specifically, section 1022(b)(2) calls for the
Bureau to consider the potential benefits and costs of a regulation to
consumers and covered persons, including the potential reduction of
consumer access to consumer financial products or services, the impact
on depository institutions and credit unions with $10 billion or less
in total assets as described in section 1026 of the Dodd-Frank Act, and
the impact on consumers in rural areas. In addition, 12 U.S.C.
5512(b)(2)(B) directs the Bureau to consult, before and during the
rulemaking, with appropriate prudential regulators or other Federal
agencies, regarding consistency with the objectives those agencies
administer. The Bureau consulted, or offered to consult with, the
prudential regulators, the Department of the Treasury, the Securities
and Exchange Commission, and the Federal Trade Commission regarding
consistency with any prudential, market, or systemic objectives
administered by these agencies.
The Bureau previously considered the benefits, costs, and impacts
of the Prepaid Accounts Final Rule's major provisions.\16\ The Bureau
also previously considered the benefits, costs, and impacts of delaying
the effective date in the Effective Date NPRM and solicited comment
regarding that discussion.\17\ Where comments discuss the benefits or
costs of delaying the effective date in the context of commenting on
the merits of the provision, the Bureau has addressed those comments
above. In this respect, the Bureau's section 1022(b)(2) discussion is
not limited to the discussion in this part of the final rule.
---------------------------------------------------------------------------

\16\ 81 FR 83934, 84269 (Nov. 22, 2016).
\17\ 82 FR 13782, 13785 (Mar. 15, 2017).
---------------------------------------------------------------------------

In considering the relevant potential benefits, costs, and impacts,
the Bureau has applied its knowledge and expertise concerning consumer
financial markets and information received in response to its request
for comment. Compared to the baseline established by the Prepaid
Accounts Final Rule,\18\ the delay of the effective date of the Prepaid
Accounts Final Rule will generally benefit covered persons by
facilitating initial compliance with the Prepaid Accounts Final Rule's
requirements and delaying the start of ongoing compliance costs.
Because covered persons retain the option of complying with the Prepaid
Accounts Final Rule's original effective date, any delay in the
effective date will not increase costs to providers.
---------------------------------------------------------------------------

\18\ The Bureau has discretion in any rulemaking to choose an
appropriate scope of analysis with respect to potential benefits,
costs, and impacts and an appropriate baseline.
---------------------------------------------------------------------------

Consumers may experience both benefits and costs from a delay in
the effective date. If a delay in the effective date helps to preserve
consumer access to covered products by minimizing industry disruption,
both consumers and covered persons will benefit. However, the Bureau
believes that delaying the effective date may also delay consumers'
realization of benefits arising from the protections provided by the
Prepaid Accounts Final Rule, thereby potentially imposing a cost on
consumers. One think tank commenter stated that, although prepaid
providers often offer some protections voluntarily, providers may alter
or remove protections so long as the rule is not in effect. Another
think tank commenter stated that the primary cost of the delay would be
that consumers would not have the information needed to make
appropriate choices among card products. However, the commenter also
stated that providers have made improvements with respect to disclosure
recently and that it believed that the risk of consumers not having
adequate information for decision-making during the intervening period
was low.
The Bureau does not expect the final rule to have a differential
impact on depository institutions and credit unions with $10 billion or
less in total assets, as described in section 1026 of the Dodd-Frank
Act, or on consumers in rural areas. The Bureau does not believe that
the delay in the effective date will reduce consumer access to consumer
financial products and services, and it may increase consumer access by
decreasing the possibility of industry disruption arising from the
Prepaid Accounts Final Rule's implementation.

VIII. Regulatory Flexibility Act Analysis

The Regulatory Flexibility Act \19\ as amended by the Small
Business Regulatory Enforcement Fairness Act of

[[Page 18980]]

1996 \20\ (RFA) requires each agency to consider the potential impact
of its regulations on small entities, including small businesses, small
governmental units, and small not-for-profit organizations.\21\ The RFA
defines a ``small business'' as a business that meets the size standard
developed by the Small Business Administration (SBA) pursuant to the
Small Business Act.\22\
---------------------------------------------------------------------------

\19\ Public Law 96-354, 94 Stat. 1164 (1980).
\20\ Public Law 104-21, section 241, 110 Stat. 847, 864-65
(1996).
\21\ 5 U.S.C. 601 through 612. The term `` `small organization'
means any not-for-profit enterprise which is independently owned and
operated and is not dominant in its field, unless an agency
establishes [an alternative definition under notice and comment].''
5 U.S.C. 601(4). The term `` `small governmental jurisdiction' means
governments of cities, counties, towns, townships, villages, school
districts, or special districts, with a population of less than
fifty thousand, unless an agency establishes [an alternative
definition after notice and comment].'' 5 U.S.C. 601(5).
\22\ 5 U.S.C. 601(3). The Bureau may establish an alternative
definition after consulting with the SBA and providing an
opportunity for public comment. Id.
---------------------------------------------------------------------------

The RFA generally requires an agency to conduct an initial
regulatory flexibility analysis (IRFA) and a final regulatory
flexibility analysis (FRFA) of any rule subject to notice-and-comment
rulemaking requirements, unless the agency certifies that the rule
would not have a significant economic impact on a substantial number of
small entities.\23\ The Bureau also is subject to certain additional
procedures under the RFA involving the convening of a panel to consult
with small entity representatives prior to proposing a rule for which
an IRFA is required.\24\
---------------------------------------------------------------------------

\23\ 5 U.S.C. 601 through 612.
\24\ 5 U.S.C. 609.
---------------------------------------------------------------------------

The undersigned certified that the Effective Date NPRM would not
have a significant economic impact on a substantial number of small
entities and that an IRFA was therefore not required. The Bureau
arrived at this conclusion because the Effective Date NPRM would delay
the effective date of the Prepaid Accounts Final Rule, which itself
would not have a significant economic impact on a substantial number of
small entities.\25\ Upon considering relevant comments, the Bureau's
conclusion that the rule will not have a significant economic impact on
a substantial number of small entities is unchanged. Therefore, a FRFA
is not required.\26\
---------------------------------------------------------------------------

\25\ 81 FR 83934, 84308 (Nov. 22, 2016).
\26\5 U.S.C. 605(b).
---------------------------------------------------------------------------

As discussed above, this final rule delays the effective date of
the Prepaid Accounts Final Rule to April 1, 2018. The six-month delay
in the effective date will benefit small entities by providing
additional flexibility with respect to the timing of the Prepaid
Accounts Final Rule's implementation. In addition to generally
providing increased flexibility, the delay in the effective date will
permit small entities to delay the commencement of any ongoing costs
that result from complying with the Prepaid Accounts Final Rule.
Because small entities retain the option of complying with the Prepaid
Accounts Final Rule's original effective date, the final rule's delay
of the effective date will not increase costs incurred by small
entities relative to the baseline established by the Prepaid Accounts
Final Rule.
Accordingly, the undersigned hereby certifies that this final rule
will not have a significant economic impact on a substantial number of
small entities.

IX. Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA),\27\ Federal
agencies are generally required to seek Office of Management and Budget
(OMB) approval for information collection requirements prior to
implementation. The collections of information related to the Prepaid
Accounts Final Rule have been previously reviewed and approved by OMB
in accordance with the PRA and assigned OMB Control Number 3170-0014
(Regulation E) and 3170-0015 (Regulation Z). Under the PRA, the Bureau
may not conduct or sponsor and, notwithstanding any other provision of
law, a person is not required to respond to an information collection
unless the information collection displays a valid control number
assigned by OMB.
---------------------------------------------------------------------------

\27\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

The Bureau has determined that this final rule will not have any
new or revised information collection requirements (recordkeeping,
reporting, or disclosure requirements) on covered entities or members
of the public that would constitute collections of information
requiring OMB approval under the PRA.

List of Subjects in 12 CFR Part 1005

Banking, Banks, Consumer protection, Credit unions, Electronic fund
transfers, National banks, Remittance transfers, Reporting and
recordkeeping requirements, Savings Associations.

Authority and Issuance

For the reasons set forth above, Regulation E, 12 CFR part 1005, as
amended November 22, 2016, at 81 FR 83934, is further amended as
follows:

PART 1005--ELECTRONIC FUND TRANSFERS (REGULATION E)

0
1. The authority citation for part 1005 continues to read as follows:

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1693b. Subpart B is
also issued under 12 U.S.C. 5601 and 15 U.S.C. 1693o-1.

Subpart A--General

Sec. 1005.18 Requirements for financial institutions offering prepaid
accounts.

0
2. Section 1005.18 is amended by revising all references to ``October
1, 2017'' to read ``April 1, 2018'' in paragraphs (b)(2)(ix)(D)(1)
through (3) and (h).

Sec. 1005.19 Internet posting of prepaid account agreements.

0
3. Section 1005.19 is amended by revising the reference to ``October 1,
2017'' to read ``April 1, 2018'' in paragraph (f)(1).

0
4. In Supplement I to part 1005:
0
a. Under Section 1005.18--Requirements for Financial Institutions
Offering Prepaid Accounts:
0
i. In subsection 18(b)(2)(ix)(D)(1) Existing Prepaid Account Programs
as of October 1, 2017, the subsection heading and paragraph 1 are
amended by revising all references to ``October 1, 2017'' to read
``April 1, 2018''.
0
ii. In subsection 18(b)(2)(ix)(D)(2) Existing Prepaid Account Programs
as of October 1, 2017 with Unavailable Data, the subsection heading and
paragraph 1 are amended by revising all references to ``October 1,
2017'' to read ``April 1, 2018''.
0
iii. In subsection 18(b)(2)(ix)(E)(2) Periodic Reassessment, paragraphs
1.i through iii are amended by:
0
A. Revising all references to ``October 1, 2017'' to read ``April 1,
2018''.
0
B. Revising all references to ``October 1, 2019'' to read ``April 1,
2020''.
0
C. Revising the reference to ``January 1, 2020'' to read ``July 1,
2020''.
0
iv. In subsection 18(b)(2)(ix)(E)(3) Fee Schedule Change, paragraph 1
is amended by revising the reference to ``October 1, 2017'' to read
``April 1, 2018''.
0
v. In subsection 18(h) Effective Date and Special Transition Rules for
Disclosure Provisions, paragraphs 1 and 2 are amended by revising all
references to ``October 1, 2017'' to read ``April 1, 2018''.
0
vi. In subsection 18(h) Effective Date and Special Transition Rules for
Disclosure Provisions, paragraph 6 introductory text and paragraph 6.i
are amended by:
0
A. Revising all references to ``October 1, 2017'' to read ``April 1,
2018''.

[[Page 18981]]

0
B. Revising the reference to ``November 1, 2017'' to read ``May 1,
2018''.
0
C. Revising the reference to ``October 1, 2018'' to read ``April 1,
2019''.
0
D. Revising the reference to ``October 1, 2019'' to read ``April 1,
2020''.
0
vii. In subsection 18(h) Effective Date and Special Transition Rules
for Disclosure Provisions, paragraph 6.ii is revised to read as
follows:

Supplement I to Part 1005--Official Interpretations

* * * * *

Section 1005.18--Requirements for Financial Institutions Offering
Prepaid Accounts

* * * * *
18(h) Effective Date and Special Transition Rules for Disclosure
Provisions
* * * * *

0
6. Account information not available on April 1, 2018. * * *
ii. Summary totals of fees. A financial institution must display a
summary total of the amount of all fees assessed by the financial
institution on the consumer's prepaid account for the prior calendar
month and for the calendar year to date pursuant to Sec. 1005.18(c)(5)
beginning April 1, 2018. If, on April 1, 2018, the financial
institution does not have readily accessible the data necessary to
calculate the summary totals of fees for the prior calendar month or
the calendar year to date, the financial institution may provide the
summary totals using the data it has until the financial institution
has accumulated the data necessary to display the summary totals as
required by Sec. 1005.18(c)(5). That is, the financial institution
would first display the monthly fee total beginning on May 1, 2018 for
the month of April, and the year-to-date fee total beginning on April
1, 2018, provided the financial institution discloses that it is
displaying the year-to-date total beginning on April 1, 2018 rather
than for the entire calendar year 2018. On January 1, 2019, financial
institutions must begin displaying year-to-date fee totals for calendar
year 2019.
* * * * *

Dated: April 19, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-08341 Filed 4-24-17; 8:45 am]
BILLING CODE 4810-AM-P

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