Electronic Fund Transfers, 66644-66649 [2010-27191]
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Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulations
there is no limit to the volume that may
be shipped, market forces of supply and
demand and the extent to which any
maritime shipments are in addition to—
rather than in place of—shipments by
truck will determine the size of any
market effects of the rule. These actions
will allow additional options for
shipping Hass avocados from Mexico to
the United States and allow Mexican
exporters to ship full container or truck
loads from multiple packinghouses
while continuing to provide an
appropriate level of protection against
the introduction of plant pests.
U.S. producers of avocado are
predominantly small entities. Other
small entities that theoretically could be
affected by the rule include fresh
avocado importers, brokers, truck
drivers, and maritime shippers. The
price and supply impacts that this rule
may have on U.S. entities are not
known.
Executive Order 12988
This final rule allows Hass avocados
to be imported into the United States
from Mexico in bulk consignments and
in consignments from multiple
packinghouses when phytosanitary
safeguarding is maintained from the
packinghouse to the first port of entry in
the United States. State and local laws
and regulations regarding Hass avocados
imported under this rule will be
preempted while the fruit is in foreign
commerce. Fresh avocados are generally
imported for immediate distribution and
sale to the consuming public, and
remain in foreign commerce until sold
to the ultimate consumer. The question
of when foreign commerce ceases in
other cases must be addressed on a caseby-case basis. No retroactive effect will
be given to this rule, and this rule will
not require administrative proceedings
before parties may file suit in court
challenging this rule.
Paperwork Reduction Act
This final rule contains no new
information collection or recordkeeping
requirements under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
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List of Subjects in 7 CFR Part 319
Coffee, Cotton, Fruits, Imports, Logs,
Nursery stock, Plant diseases and pests,
Quarantine, Reporting and
recordkeeping requirements, Rice,
Vegetables.
Accordingly, we are amending 7 CFR
part 319 as follows:
■
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PART 319—FOREIGN QUARANTINE
NOTICES
1. The authority citation for part 319
continues to read as follows:
■
Authority: 7 U.S.C. 450, 7701–7772, and
7781–7786; 21 U.S.C. 136 and 136a; 7 CFR
2.22, 2.80, and 371.3.
2. Section 319.56–30 is amended as
follows:
■ a. In paragraph (c)(3)(v), by removing
the words ‘‘shipping boxes’’ and adding
the words ‘‘containers in which they
will be shipped’’ in their place.
■ b. In paragraph (c)(3)(vi), by removing
the words ‘‘in boxes’’ and adding the
words ‘‘for shipping’’ in their place.
■ c. By revising paragraphs (c)(3)(vii)
and (c)(3)(viii) to read as set forth below.
■ d. By removing paragraphs (f) and (g)
and redesignating paragraphs (h) and (i)
as paragraphs (f) and (g), respectively.
■ e. In newly redesignated paragraph
(g), by adding the words ‘‘, crates, or
bulk shipping bins’’ after the words
‘‘original shipping boxes’’ and by
removing the words ‘‘new boxes’’ and
adding the words ‘‘new packaging’’ in
their place.
■
§ 319.56–30 Hass avocados from
Michoacan, Mexico.
*
*
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(c) * * *
(3) * * *
(vii) The avocados must be packed in
clean, new boxes or bulk shipping bins,
or in clean plastic reusable crates. The
boxes, bins, or crates must be clearly
marked with the identity of the grower,
packinghouse, and exporter, and with
the statement ‘‘Not for importation or
distribution in Puerto Rico or U.S.
Territories.’’ The boxes, bins, or crates
must be covered with a lid, insect-proof
mesh, or other material to protect the
avocados from fruit-fly infestation prior
to leaving the packinghouse. Those
safeguards must be intact at the time the
consignment arrives in the United
States.
(viii) The packed avocados must be
placed in a refrigerated truck or
refrigerated container and remain in that
truck or container while in transit
through Mexico to the port of export for
consignments shipped by air or sea or
the port of first arrival in the United
States for consignments shipped by
land. Prior to leaving the packinghouse,
the truck or container must be secured
by the Mexican NPPO with a seal that
will be broken when the truck or
container is opened. The seal may be
broken and a new seal applied by the
Mexican NPPO if the truck or container
stops at another approved packinghouse
for additional avocados meeting the
requirements of this section to be placed
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in the truck or container. The seal on
the refrigerated truck or refrigerated
container must be intact at the time the
truck or container reaches the port of
export in Mexico or the port of first
arrival in the United States.
*
*
*
*
*
Done in Washington, DC, this 25th day of
October 2010.
Kevin Shea,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. 2010–27426 Filed 10–28–10; 8:45 am]
BILLING CODE 3410–34–P
FEDERAL RESERVE SYSTEM
12 CFR Part 205
[Regulation E; Docket No. R–1377]
Electronic Fund Transfers
Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
AGENCY:
The Board is amending
Regulation E, which implements the
Electronic Fund Transfer Act, and the
official staff commentary to the
regulation, in order to implement
legislation that modifies the effective
date of certain disclosure requirements
in the gift card provisions of the Credit
Card Accountability Responsibility and
Disclosure Act of 2009.
DATES: This final rule is effective
November 29, 2010.
FOR FURTHER INFORMATION CONTACT:
Dana Miller or Mandie Aubrey, Senior
Attorneys, Ky Tran-Trong or Vivian
Wong, Counsels, Division of Consumer
and Community Affairs, Board of
Governors of the Federal Reserve
System, Washington, DC 20551, at (202)
452–2412 or (202) 452–3667. For users
of Telecommunications Device for the
Deaf (TDD) only, contact (202) 263–
4869.
SUMMARY:
SUPPLEMENTARY INFORMATION:
I. Statutory Background
On May 22, 2009, the Credit Card
Accountability Responsibility and
Disclosure Act of 2009 (Credit Card Act)
was signed into law.1 Section 401 of the
Credit Card Act amended the Electronic
Fund Transfer Act, 15 U.S.C. 1693 et
seq., and imposed certain restrictions on
a person’s ability to impose dormancy,
inactivity, or service fees with respect to
gift certificates, store gift cards, and
general-use prepaid cards. In addition,
the Credit Card Act generally prohibited
1 Public
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the issuance or sale of such products if
they expire earlier than five years from
the date of issuance of a gift certificate
or the date on which funds were last
loaded to a store gift card or general-use
prepaid card.
Section 403 of the Credit Card Act
required that the gift card and related
provisions of the Credit Card Act
become effective 15 months after
enactment, or on August 22, 2010. See
EFTA Section 915(d)(3). The Board
published a final rule implementing the
gift card provisions of the Credit Card
Act on April 1, 2010 (final gift card
rule). 75 FR 16580. As mandated by the
Credit Card Act, the final gift card rule
has an effective date of August 22, 2010.
On July 27, 2010, Congress passed
legislation amending Section 403 of the
Credit Card Act to delay the effective
date of certain gift card disclosure
provisions of the Credit Card Act for
certificates or cards produced prior to
April 1, 2010 (Gift Card Amendment).2
The Gift Card Amendment provides a
delayed effective date with respect to
these provisions in order to permit the
sale of card stock produced before that
date until January 31, 2011, so long as
certain conditions are met, including
the provision of in-store disclosures.
Moreover, the substantive fee and
expiration date protections provided by
the Credit Card Act continue to apply to
all certificates or cards sold to a
consumer on or after August 22, 2010.
Due to the time constraints imposed by
the August 22, 2010 effective date of the
Credit Card Act, the Board issued an
interim final rule revising the April
2010 final gift card rule in order to
implement the Gift Card Amendment,
75 FR 50683 (Aug. 17, 2010), but stated
its intent to consider comments on the
interim final rule. The Board is adopting
the final rule today.
II. Overview of Public Comment;
Summary of Final Rule
The Board received two comments on
the interim final rule from a credit
union trade association and a bankers’
trade association. Both commenters
generally supported the interim final
rule. The bankers’ trade association
suggested that the Board exercise its
exception authority to eliminate in-store
disclosures where cards sold meet the
final gift card rule’s substantive fee and
expiration date protections. This
commenter also requested an extension
of the delayed effective date. No other
comments were received. The final rule
adopts the interim final rule as issued,
with minor non-substantive edits.
2 Public Law 111–209, 124 Stat. 2254 (July 27,
2010).
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With respect to gift certificates, store
gift cards, and general-use prepaid cards
produced prior to April 1, 2010, the Gift
Card Amendment delayed the effective
date of the disclosure requirements in
EFTA Sections 915(b)(3) and (c)(2)(B)
(as amended by the Credit Card Act)
until January 31, 2011, provided that
several specified conditions are met.
The final rule implements the Gift Card
Amendment.
The Gift Card Amendment did not
address the status of additional
requirements adopted in the Board’s
final gift card rule that were not
contained in the Credit Card Act. As a
result, persons seeking to take advantage
of the relief afforded by the Gift Card
Amendment would have been unable to
do so if certain of these additional
provisions became effective on August
22, 2010. For example, § 205.20(e)(1) of
the final gift card rule prohibits any
person from selling or issuing a
certificate or card unless the consumer
has had a reasonable opportunity to
purchase a certificate or card with at
least five years remaining until the
certificate or card expiration date. Thus,
a card produced prior to April 1, 2010
that has a card expiration date of less
than five years could not be sold under
the final gift card rule, notwithstanding
the provisions of the Gift Card
Amendment. Therefore, in order to
carry out the intended purpose of the
Gift Card Amendment, the final rule
also delays the effective date of certain
of these supplemental requirements.
As in the interim final rule, the final
rule revises §§ 205.20(c) and (g) of the
final gift card rule (‘‘Form of
Disclosures’’ and ‘‘Compliance Dates,’’
respectively) and adds a new § 205.20(h)
(‘‘Temporary Exemption’’).
III. Section-by-Section Analysis
20(c) Form of Disclosures
20(c)(2) Format
To take advantage of the delayed
effective date, the Gift Card Amendment
requires that certain disclosures be
made to the consumer through in-store
signage, messages during customer
service calls, Web sites, and general
advertising. These disclosure
requirements are implemented through
§ 205.20(h)(2) of the final rule,
discussed in more detail below.
Section 205.20(c)(2) of the final gift
card rule generally requires disclosures
to be made in writing or electronically,
and in retainable form. The Board
believes such requirements are
unnecessary with respect to the
disclosures required by § 205.20(h)(2).
For example, it would be impracticable
to provide in-store signage under
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§ 205.20(h)(2) in a retainable form.
Moreover, the disclosures required by
§ 205.20(h)(2) are intended to relieve the
burden of replacing non-compliant card
stock with card stock bearing
disclosures that comply with the final
gift card rule, so the Board believes that
the format standards in § 205.20(c)(2)
are less appropriate in this instance.
Commenters supported the Board’s
stance in this regard.
Section 205.20(c)(2) has been revised
to provide that the disclosures required
by § 205.20(h)(2) need not be made in a
retainable form. For similar reasons,
§ 205.20(c)(2) is revised to provide that
the prior-to-purchase disclosures
required by § 205.20(c)(3) need not be
provided in a retainable form. Section
205.20(c)(2) has also been revised to
make clear that the disclosures required
by § 205.20(h)(2) may be provided
orally.
20(g) Compliance Dates
20(g)(1) Effective Date for Gift
Certificates, Store Gift Cards, and
General-Use Prepaid Cards
The final gift card rule became
effective August 22, 2010, consistent
with the Credit Card Act. Consistent
with the interim final rule, to give effect
to the delayed effective date set forth in
the Gift Card Amendment, the final rule
revises § 205.20(g)(1) of the final gift
card rule to state that, except as
provided in new § 205.20(h), § 205.20
applies to any gift certificate, store gift
card, or general-use prepaid card sold to
a consumer on or after August 22, 2010,
or provided to a consumer as a
replacement for such certificate or card.
20(g)(2) Effective Date for Loyalty,
Award, or Promotional Gift Cards
Section 205.20(g)(2) of the final gift
card rule sets forth a special transition
rule for the disclosure requirements
applicable to loyalty, award, and
promotional gift cards. Specifically,
§ 205.20(g)(2) provides that the
disclosure requirements in
§ 205.20(a)(4)(iii) apply to any card,
code or other device provided to a
consumer in connection with a loyalty,
award, or promotional program where
the period of eligibility for the program
begins on or after August 22, 2010. The
Gift Card Amendment does not
specifically delay the effective date of
the disclosures required by
§ 205.20(a)(4)(iii), and accordingly the
effective date for loyalty, award, and
promotional cards was unchanged both
in the interim final rule and in this final
rule.
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20(h) Temporary Exemption
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20(h)(1) Delayed Effective Date
As discussed above, the Gift Card
Amendment delays the effective date of
certain disclosure requirements in EFTA
Sections 915(b)(3) and (c)(2)(B). Section
205.20(h)(1) implements the delayed
effective date. Specifically,
§ 205.20(h)(1) provides that, for any gift
certificate, store gift card, or general-use
prepaid card produced prior to April 1,
2010, the effective date of the
requirements of paragraphs (c)(3), (d)(2),
(e)(1), (e)(3), and (f) of this section is
January 31, 2011, provided that an
issuer of such certificate or card meets
several specified conditions.
One commenter urged the Board to
extend the delayed effective date an
additional 24 months. By its terms, the
Gift Card Amendment permits issuers to
sell existing card stock until January 31,
2011, the end of the 2010 holiday
season. The Board believes that further
extension of the effective date would be
inconsistent with the legislation.
Provisions of the Final Gift Card Rule
Subject to the Delayed Effective Date
Section 205.20(h)(1) delays the
effective dates of §§ 205.20(d)(2) and
(e)(3)(i) of the final gift card rule.
Section 205.20(d)(2), which
implemented EFTA Section
915(b)(3)(A), prohibits the imposition of
any dormancy, inactivity, or service fee
unless, among other things, certain
specified clear and conspicuous
disclosures about the fees are made on
the certificate or card. Section
205.20(e)(3)(i), which implemented
EFTA Section 915(c)(2)(B), requires
disclosure of the expiration date for the
certificate or card’s underlying funds—
or the fact that the underlying funds do
not expire—on the certificate or card.
These disclosure requirements are
subject to the delayed effective date
under the Gift Card Amendment for
certificates or cards produced prior to
April 1, 2010.
In addition, § 205.20(h)(1) delays the
effective dates of §§ 205.20(e)(1),
(e)(3)(ii), (e)(3)(iii), and (f). Section
205.20(e)(1) prohibits the issuance or
sale of certificates or cards, unless
policies and procedures have been
established to ensure that a consumer
will have a reasonable opportunity to
purchase a certificate or card with at
least five years remaining until the
certificate or card expiration date.
Section 205.20(e)(3)(ii) requires the
disclosure on the certificate or card of
a toll-free telephone number, and, if one
is maintained, a Web site that a
consumer may use to obtain a
replacement certificate or card after
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expiration if the underlying funds may
be available. Section 205.20(e)(3)(iii)
requires certain disclosures on the
certificate or card about expiration and
replacement cards, except where a nonreloadable certificate or card bears an
expiration date that is at least seven
years from the date of manufacture.
Section 205.20(f) requires additional fee
disclosures on or with the certificate or
card, and, similar to § 205.20(e)(3)(ii),
disclosure on the certificate or card of
a toll-free telephone number, and, if one
is maintained, a Web site that a
consumer may use to obtain fee
information. As discussed in more
detail in the final gift card rule, these
provisions were adopted pursuant to the
Board’s authority under EFTA Sections
904(a) and 915(d)(2), as amended by the
Credit Card Act.
Although not mandated by the Gift
Card Amendment, the Board believes
that the effective date of §§ 205.20(e)(1),
(e)(3)(iii), and (f) should also be delayed
in order to carry out the intended
purpose of the Gift Card Amendment.
For example, some gift cards produced
before April 1, 2010 may bear expiration
dates of less than five years, which
would not comply with § 205.20(e)(1). If
the Board did not provide for a delayed
effective date with respect to
§ 205.20(e)(1), issuers would not be
permitted to sell this existing card stock,
even if issuers otherwise satisfied the
statutory prerequisites to qualify for
relief under the Gift Card Amendment.
Such a result would undermine the
purpose of the Gift Card Amendment.
Finally, § 205.20(h)(1) delays the
effective date of § 205.20(c)(3). Section
205.20(c)(3) requires that the disclosures
required by §§ 205.20(d)(2), (e)(3), and
(f)(1) be made prior to purchase. As
discussed in more detail in the final gift
card rule, § 205.20(c)(3) was adopted
pursuant to both the statutory mandate
(in EFTA Section 915(c)(3)(B)) and the
Board’s authority under EFTA Section
904(a). For the reasons discussed above,
any disclosures that are required to be
provided prior to purchase under
§ 205.20(c)(3) are subject to the delayed
effective date, provided that the issuer
complies with the conditions specified
in § 205.20(h)(1).
Conditions Imposed
To take advantage of the Gift Card
Amendment’s delayed effective date, an
issuer of the certificate or card must
meet several specified conditions. First,
the issuer must comply with the other
provisions of § 205.20, including the
section’s substantive restrictions on the
imposition of fees. Second, the issuer
must not impose an expiration date with
respect to the funds underlying such a
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certificate or card. Third, the issuer
must, at the consumer’s request and at
no cost to the consumer, replace such
certificate or card if the certificate or
card has funds remaining. Finally, the
issuer must satisfy the disclosure
requirements of new § 205.20(h)(2),
discussed in more detail below. See
§§ 205.20(h)(1)(i)–(iv).
Comment 20(h)(1)–1 is adopted with
minor, non-substantive edits for clarity.
Comment 20(h)(1)–1 explains that
certificates or cards produced prior to
April 1, 2010 may be sold to a consumer
for a limited time without satisfying the
requirements of § 205.20(c)(3), (d)(2),
(e)(1), (e)(3), and (f), provided that
issuers of such certificates or cards
comply with the additional substantive
and disclosure requirements of
§§ 205.20(h)(1)(i)–(iv). Issuers of
certificates or cards produced prior to
April 1, 2010 need not satisfy these
additional requirements if the
certificates or cards fully comply with
the final gift card rule. Thus, if on
August 22, 2010 an issuer sells gift cards
produced prior to April 1, 2010 that do
not have fees and do not expire, and
which otherwise comply with the final
gift card rule, that issuer would not then
be required to make the in-store signage
and other disclosures required by
§ 205.20(h)(2) with respect to those gift
cards because those cards satisfy the
requirements of the final gift card rule.
Comment 20(h)(1)–2 clarifies when
the temporary relief afforded by the Gift
Card Amendment expires. This
comment explains that certificates or
cards produced prior to April 1, 2010
that do not fully comply with the final
gift card rule may not be issued or sold
to consumers on or after January 31,
2011.
20(h)(2) Additional Disclosures
The Gift Card Amendment imposes
certain additional disclosure
requirements in order for an issuer to
take advantage of the delayed effective
date. Section 205.20(h)(2) of the final
rule implements these disclosure
requirements, largely tracking the
language of the statute, and with minor
non-substantive edits from the interim
final rule for clarity. Specifically,
§ 205.20(h)(2) provides that issuers
relying on the delayed effective date in
§ 205.20(h)(1) must disclose through instore signage, messages during customer
service calls, Web sites, and general
advertising, that: (i) The underlying
funds of such certificate or card do not
expire; (ii) consumers holding such
certificate or card have a right to a free
replacement certificate or card, which
must be accompanied by the packaging
and materials typically associated with
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such certificate or card; and (iii) any
dormancy, inactivity, or service fee for
such certificate or card that might
otherwise be charged will not be
charged if such fees do not comply with
Section 915 of the Electronic Fund
Transfer Act.
One commenter requested that the
Board exercise its exception authority to
eliminate these additional disclosures
where the certificate or card meets the
final gift card rule’s fee limitations and
other substantive restrictions. If the
Board were to take such an action,
consumers could be sold cards that, on
their face, contain disclosures that do
not reflect the certificate or card’s actual
terms. In particular, consumers may
elect to discard an expired gift card
notwithstanding the fact that the
underlying funds remain valid after the
card expiration, and thus be denied the
Credit Card Act’s protections. Thus, the
Board believes that the disclosures
required by the Gift Card Amendment
are necessary to alert the consumer
about the protections afforded them by
the Credit Card Act.
In some cases, issuers may not have
direct control over in-store signage and
store advertisements. Accordingly,
comment 20(h)(2)–1 explains that
issuers may make the disclosures
required by § 205.20(h)(2) through a
third party, such as a retailer or
merchant. For example, an issuer may
have a merchant install in-store signage
with the disclosures required by
§ 205.20(h)(2) on the issuer’s behalf.
Comment 20(h)(2)–2 also clarifies that
§ 205.20(h)(2) does not impose an
obligation on an issuer to advertise
certificates or cards.
20(h)(3) Expiration of Disclosure
Requirements
The Gift Card Amendment requires
the additional disclosures to be
maintained until January 31, 2013. The
Board believes that such a requirement
is appropriate with respect to Web sites
that a certificate or card recipient may
visit and phone numbers that a recipient
may call for more information. For
example, a gift card recipient may call
a customer service phone number
printed on the card to obtain more
information about the card’s fees or
terms of expiration. See
§ 205.20(h)(3)(ii).
However, certificates or cards sold on
or after January 31, 2011 must comply
with §§ 205.20(a)–(f) of the final gift
card rule. Because consumers would
only be able to purchase cards that are
fully compliant with the Credit Card Act
from that date forward, consumers
purchasing certificates or cards might
mistakenly believe that the additional
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disclosures set forth in the Gift Card
Amendment stated in advertisements or
in-store signage are applicable to their
certificates or cards. Thus, the Board
believes that requiring issuers to
maintain Gift Card Amendment-related
advertisements or in-store signage on or
after January 31, 2011 could be
confusing and even misleading to
consumers because certificates or cards
that do not comply with the final gift
card rule cannot be issued or sold after
that date.
For this reason, the Board is
exercising its exception authority in
EFTA Section 904(c) to provide that,
with respect to in-store signage and
general advertising, the disclosure
requirements of § 205.20(h)(2) are not
required to be provided on or after
January 31, 2011. See § 205.20(h)(3)(i).
Section 904(c) of the EFTA provides
that regulations prescribed by the Board
may contain any classifications,
differentiations, or other provisions, and
may provide for such adjustments or
exceptions for any class of electronic
fund transfers that in the judgment of
the Board are necessary or proper to
effectuate the purposes of the title, to
prevent circumvention or evasion, or to
facilitate compliance.
IV. Legal Authority
General Rulemaking Authority
Section 401(d)(1) of the Credit Card
Act directs the Board to prescribe rules
to carry out the gift card provisions of
the Credit Card Act. The Board is
exercising its authority under Section
401(d)(1) to implement the provisions of
the Credit Card Act as superseded by
the Gift Card Amendment with respect
to the delayed effective date of the
requirements in §§ 205.20(d)(2) and
(e)(1)(i), and part of § 205.20(c)(3).
Section 401(d)(2) of the Credit Card
Act requires the Board to determine the
extent to which the individual
definitions and provisions of the EFTA
and Regulation E should apply to gift
certificates, store gift cards, and generaluse prepaid cards. See EFTA Section
915(d)(2); 15 U.S.C. 1693m(d)(2).
Further, Section 904(a) of the EFTA
authorizes the Board to prescribe
regulations necessary to carry out the
purposes of the title. The express
purposes of the EFTA are to establish
‘‘the rights, liabilities, and
responsibilities of participants in
electronic fund transfer systems’’ and to
provide ‘‘individual consumer rights.’’
See EFTA Section 902(b); 15 U.S.C.
1693. The Board is exercising its
authority under EFTA Sections 904(a)
and 915(d)(2) for the reasons discussed
above to provide for the delayed
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effective date of the disclosure
requirements of §§ 205.20(e)(1),
205.20(e)(3)(ii)–(iii), and 205.20(f), and
part of § 205.20(c)(3).
Finally, as discussed above, the Board
is exercising its authority under EFTA
Section 904(c) to implement
§ 205.20(h)(3)(i), which clarifies that,
with respect to in-store signage and
general advertising, the disclosures
required by § 205.20(h)(2) are not
required to be provided on or after
January 31, 2011.
V. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires an initial
and final regulatory flexibility analysis
only when 5 U.S.C. 553 requires
publication of a notice of proposed
rulemaking. See 5 U.S.C. 603(a), 604(a).
As discussed in the interim final rule,
the Board found good cause under 5
U.S.C. 553(b)(3)(B) to conclude that
publication of a notice of proposed
rulemaking was impracticable.
Accordingly, the Board is not required
to perform an initial or final regulatory
flexibility analysis. Nonetheless, the
Board is publishing a final regulatory
flexibility analysis. Based on its analysis
and for the reasons stated below, the
Board believes that the final rule is not
likely to have a significant economic
impact on a substantial number of small
entities.
1. Statement of the need for, and
objectives of, the final rule. This final
rule implements the Gift Card
Amendment by delaying the effective
date of certain disclosures required by
the Credit Card Act. This final rule also
carries out the intended purpose of the
Gift Card Amendment by delaying the
effective date of certain supplemental
requirements adopted in the final gift
card rule. The Board believes that these
revisions to Regulation E are within
Congress’s broad grant of authority to
the Board to adopt provisions that carry
out the purposes of the Credit Card Act
and to facilitate compliance with the
EFTA. These revisions facilitate
compliance with the EFTA by
permitting gift certificates, store gift
cards, and general-use prepaid cards
produced prior to April 1, 2010 to be
sold through January 31, 2011, even if
they do not state the disclosures
required under the final gift card rule,
so long as consumers continue to
receive specified substantive protections
with respect to certificate or card fees
and expiration dates.
2. Small entities affected by the final
rule. The number of small entities
affected by this final rule is unknown,
as discussed in more detail in the
Regulatory Flexibility Analysis in the
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final gift card rule. 75 FR 16610 (Apr.
1, 2010). The delayed effective date of
certain disclosures on certificates and
cards will reduce the burden and
compliance costs for small institutions
by providing relief from the requirement
to remove and destroy non-compliant
certificates and cards and to replace
them with compliant certificates or
cards, so long as consumers are
provided substantive rights under the
rule and so long as alternative specified
disclosures are made.
3. Reporting, recordkeeping, and
compliance requirements. The
compliance requirements of this final
rule are described above in Part III.
Section-by-Section Analysis.
4. Steps taken to minimize economic
impact on small entities. As previously
noted, the final rule implements the
statutory mandate to delay the effective
date of certain gift card provisions of the
Credit Card Act. The final rule also
delays the effective date of certain
additional requirements finalized in the
April 2010 final gift card rule. As such,
the final rule minimizes the economic
impact of the final gift card rule on
small entities.
5. Other federal rules. The Board has
not identified any federal rules that
duplicate, overlap, or conflict with the
final revisions to Regulation E.
VI. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act (PRA) of 1995 (44 U.S.C.
3506; 5 CFR part 1320 Appendix A.1),
the Board reviewed the final rule under
the authority delegated to the Board by
the Office of Management and Budget
(OMB). The collection of information
that is subject to the PRA by this final
rule is found in 12 CFR part 205. The
Federal Reserve may not conduct or
sponsor, and an organization is not
required to respond to, this information
collection unless the information
collection displays a currently valid
OMB control number. The OMB control
number is 7100–0200.
This information collection is
required to provide benefits for
consumers and is mandatory. See 15
U.S.C. 1693 et seq. Since the Board does
not collect any information, no issue of
confidentiality arises. The respondents/
recordkeepers are for-profit financial
institutions, including small businesses.
Institutions are required to retain
records for 24 months, but this
regulation does not specify types of
records that must be retained.
The Gift Card Amendment amends
section 403 of the Credit Card Act to
delay the effective date of certain gift
card disclosure provisions of the Credit
Card Act for certificates or cards
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13:56 Oct 28, 2010
Jkt 223001
produced prior to April 1, 2010. The
Gift Card Amendment provides an
extended effective date with respect to
these provisions in order to permit the
sale of existing card stock until January
31, 2011. The final rule published today
revises the April 2010 final gift card rule
in order to implement the Gift Card
Amendment.
While the final rule delays the
implementation of several disclosure
requirements (§§ 205.20(c)(3), (d)(2),
(e)(1), and (e)(3)), and temporarily
implements several other requirements
(§§ 205.20(h)), it does not change the
overall burden associated with
Regulation E. The Federal Reserve
believes that the original burden
estimates are more than sufficient to
cover the temporary requirements. The
estimates and total burden (738,600
hours) therefore will remain unchanged
as published in the final rule. The
Federal Reserve continues to expect that
the amount of time required to
implement each of the proposed
changes for a given institution may vary
based on the size and complexity of the
respondent.
The other federal financial agencies
are responsible for estimating and
reporting to OMB the total paperwork
burden for the institutions for which
they have administrative enforcement
authority. They may, but are not
required to, use the Federal Reserve’s
burden estimation methodology. Using
the Federal Reserve’s method, the total
annual burden for the respondents
regulated by the federal financial
agencies is estimated to be 4,430,659
hours. This estimate also remains
unchanged.
The Federal Reserve has a continuing
interest in the public’s opinions of our
collections of information. At any time,
comments regarding the burden
estimate, or any other aspect of this
collection of information, including
suggestions for reducing the burden,
may be sent to: Secretary, Board of
Governors of the Federal Reserve
System, Washington, DC 20551; and to
the Office of Management and Budget,
Paperwork Reduction Project (7100–
0200), Washington, DC 20503.
List of Subjects in 12 CFR Part 205
Consumer protection, Electronic fund
transfers, Federal Reserve System,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Board adopts as final the
interim final rule published at 75 FR
50683, August 17, 2010, with the
following changes:
■
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PART 205—ELECTRONIC FUND
TRANSFERS (REGULATION E)
1. The authority citation for part 205
continues to read as follows:
■
Authority: 15 U.S.C. 1693b.
2. In § 205.20 paragraphs (c)(2) and
(g)(1) are republished and paragraph (h)
is revised to read as follows:
■
§ 205.20 Requirements for gift cards and
gift certificates.
*
*
*
*
*
(c) * * *
(2) Format. Disclosures made under
this section generally must be provided
to the consumer in written or electronic
form. Except for the disclosures in
paragraphs (c)(3) and (h)(2), written and
electronic disclosures made under this
section must be in a retainable form.
Only disclosures provided under
paragraphs (c)(3) and (h)(2) of this
section may be given orally.
*
*
*
*
*
(g) * * *
(1) Effective date for gift certificates,
store gift cards, and general-use prepaid
cards. Except as provided in paragraph
(h), the requirements of this section
apply to any gift certificate, store gift
card, or general-use prepaid card sold to
a consumer on or after August 22, 2010,
or provided to a consumer as a
replacement for such certificate or card.
*
*
*
*
*
(h) Temporary exemption. (1) Delayed
effective date. For any gift certificate,
store gift card, or general-use prepaid
card produced prior to April 1, 2010,
the effective date of the requirements of
paragraphs (c)(3), (d)(2), (e)(1), (e)(3),
and (f) of this section is January 31,
2011, provided that an issuer of such
certificate or card:
(i) Complies with all other provisions
of this section;
(ii) Does not impose an expiration
date with respect to the funds
underlying such certificate or card;
(iii) At the consumer’s request,
replaces such certificate or card if it has
funds remaining at no cost to the
consumer; and
(iv) Satisfies the requirements of
paragraph (h)(2) of this section.
(2) Additional disclosures. Issuers
relying on the delayed effective date in
§ 205.20(h)(1) must disclose through instore signage, messages during customer
service calls, Web sites, and general
advertising, that:
(i) The underlying funds of such
certificate or card do not expire;
(ii) Consumers holding such
certificate or card have a right to a free
replacement certificate or card, which
must be accompanied by the packaging
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and materials typically associated with
such certificate or card; and
(iii) Any dormancy, inactivity, or
service fee for such certificate or card
that might otherwise be charged will not
be charged if such fees do not comply
with Section 915 of the Electronic Fund
Transfer Act.
(3) Expiration of additional disclosure
requirements. The disclosures in
paragraph (h)(2) of this section:
(i) Are not required to be provided on
or after January 31, 2011, with respect
to in-store signage and general
advertising.
(ii) Are not required to be provided on
or after January 31, 2013, with respect
to messages during customer service
calls and Web sites.
*
*
*
*
*
■ 3. In Supplement I to part 205, new
paragraph 20(h) is revised as follows:
Supplement I to Part 205—Official Staff
Interpretations
*
*
*
*
*
Section 205.20—Requirements for Gift Cards
and Gift Certificates
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*
*
*
*
*
20(h) Temporary Exemption
20(h)(1)—Delayed Effective Date
1. Application to certificates or cards
produced prior to April 1, 2010. Certificates
or cards produced prior to April 1, 2010 may
be sold to a consumer on or after August 22,
2010 without satisfying the requirements of
§ 205.20(c)(3), (d)(2), (e)(1), (e)(3), and (f)
through January 30, 2011, provided that
issuers of such certificates or cards comply
with the additional substantive and
disclosure requirements of §§ 205.20(h)(1)(i)
through (iv). Issuers of certificates or cards
produced prior to April 1, 2010 need not
satisfy these additional requirements if the
certificates or cards fully comply with the
rule (§§ 205.20(a) through (f)). For example,
the in-store signage and other disclosures
required by § 205.20(h)(2) do not apply to gift
cards produced prior to April 1, 2010 that do
not have fees and do not expire, and which
otherwise comply with the rule.
2. Expiration of temporary exemption.
Certificates or cards produced prior to April
1, 2010 that do not fully comply with
§§ 205.20(a) through (f) may not be issued or
sold to consumers on or after January 31,
2011.
20(h)(2)—Additional Disclosures
1. Disclosures through third parties. Issuers
may make the disclosures required by
§ 205.20(h)(2) through a third party, such as
a retailer or merchant. For example, an issuer
may have a merchant install in-store signage
with the disclosures required by
§ 205.20(h)(2) on the issuer’s behalf.
2. General advertising disclosures. Section
205.20(h)(2) does not impose an obligation
on the issuer to advertise gift certificates,
store gift cards, or general-use prepaid cards.
VerDate Mar<15>2010
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By order of the Board of Governors of the
Federal Reserve System, October 22, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010–27191 Filed 10–28–10; 8:45 am]
BILLING CODE 6210–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2010–0516; Directorate
Identifier 2009–NM–251–AD; Amendment
39–16484; AD 2010–22–05]
RIN 2120–AA64
Airworthiness Directives; Fokker
Services B.V. Model F.28 Mark 0070
and 0100 Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
We are adopting a new
airworthiness directive (AD) for the
products listed above. This AD results
from mandatory continuing
airworthiness information (MCAI)
originated by an aviation authority of
another country to identify and correct
an unsafe condition on an aviation
product. The MCAI describes the unsafe
condition as:
SUMMARY:
When preparing for landing, the flight crew
of a F28 Mark 0100 (Fokker 100) aeroplane
observed a main landing gear (MLG) unsafe
indication after landing gear down selection.
* * * [T]he right (RH) MLG was partly
extended and the left (LH) MLG door was
open but without the MLG being extended.
* * *
Subsequent investigation revealed that the
cause of the MLG extension problem was the
(partially) blocked hydraulic return line from
the MLG selector valve by pieces of hard
plastic. These were identified as parts of the
poppet seat of PBSOV [parking brake shut-off
valve] Part Number (P/N) 70379. * * *
This condition, if not detected and
corrected, could lead to further events where
the MLG fails to extend, possibly resulting in
loss of control of the aeroplane during
landing.
*
*
*
*
*
We are issuing this AD to require
actions to correct the unsafe condition
on these products.
DATES: This AD becomes effective
December 3, 2010.
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of December 3, 2010.
ADDRESSES: You may examine the AD
docket on the Internet at https://
PO 00000
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Fmt 4700
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66649
www.regulations.gov or in person at the
U.S. Department of Transportation,
Docket Operations, M–30, West
Building Ground Floor, Room W12–140,
1200 New Jersey Avenue, SE.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Tom
Rodriguez, Aerospace Engineer,
International Branch, ANM–116,
Transport Airplane Directorate, FAA,
1601 Lind Avenue, SW., Renton,
Washington 98057–3356; telephone
(425) 227–1137; fax (425) 227–1149.
SUPPLEMENTARY INFORMATION:
Discussion
We issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would
apply to the specified products. That
NPRM was published in the Federal
Register on May 18, 2010 (75 FR 27668).
That NPRM proposed to correct an
unsafe condition for the specified
products. The MCAI states:
When preparing for landing, the flight crew
of a F28 Mark 0100 (Fokker 100) aeroplane
observed a main landing gear (MLG) unsafe
indication after landing gear down selection.
The approach was aborted and the landing
gear unsafe procedure was accomplished. As
this did not produce the desired effect, a low
pass was performed and the control tower
confirmed that the right (RH) MLG was partly
extended and the left (LH) MLG door was
open but without the MLG being extended.
Eventually the aeroplane landed with partly
extended landing gear, without resulting in
serious injuries to the occupants.
Subsequent investigation revealed that the
cause of the MLG extension problem was the
(partially) blocked hydraulic return line from
the MLG selector valve by pieces of hard
plastic. These were identified as parts of the
poppet seat of PBSOV [parking brake shut-off
valve] Part Number (P/N) 70379. The PBSOV
installed on the incident aeroplane was a
modified version of P/N 70379, identified by
suffix ‘‘A’’ behind the serial number on the
identification plate. This modification was
introduced by Eaton, the valve manufacturer,
with Eaton Service Bulletin (SB) 70379–32–
01 and includes replacement of the original
poppet with clamped hard plastic seat by an
improved poppet assembly with screwed-on
seat. When the affected valve was opened, it
was confirmed that it contained the
improved poppet assembly. The poppet seat
fragments found in the return system
therefore originated from a previously
installed (pre SB 70379–32–01) P/N 70379
PBSOV and must have been present in the
return/pressure line prior to installation of
the modified PBSOV.
This condition, if not detected and
corrected, could lead to further events where
the MLG fails to extend, possibly resulting in
loss of control of the aeroplane during
landing.
For the reasons described above, this
[EASA] AD requires the [detailed] inspection
of the associated hydraulic lines, irrespective
what type PBSOV is installed, removal of
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]]>Agencies
[Federal Register Volume 75, Number 209 (Friday, October 29, 2010)]
[Rules and Regulations]
[Pages 66644-66649]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27191]
=======================================================================
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 205
[Regulation E; Docket No. R-1377]
Electronic Fund Transfers
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Board is amending Regulation E, which implements the
Electronic Fund Transfer Act, and the official staff commentary to the
regulation, in order to implement legislation that modifies the
effective date of certain disclosure requirements in the gift card
provisions of the Credit Card Accountability Responsibility and
Disclosure Act of 2009.
DATES: This final rule is effective November 29, 2010.
FOR FURTHER INFORMATION CONTACT: Dana Miller or Mandie Aubrey, Senior
Attorneys, Ky Tran-Trong or Vivian Wong, Counsels, Division of Consumer
and Community Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551, at (202) 452-2412 or (202) 452-3667. For
users of Telecommunications Device for the Deaf (TDD) only, contact
(202) 263-4869.
SUPPLEMENTARY INFORMATION:
I. Statutory Background
On May 22, 2009, the Credit Card Accountability Responsibility and
Disclosure Act of 2009 (Credit Card Act) was signed into law.\1\
Section 401 of the Credit Card Act amended the Electronic Fund Transfer
Act, 15 U.S.C. 1693 et seq., and imposed certain restrictions on a
person's ability to impose dormancy, inactivity, or service fees with
respect to gift certificates, store gift cards, and general-use prepaid
cards. In addition, the Credit Card Act generally prohibited
[[Page 66645]]
the issuance or sale of such products if they expire earlier than five
years from the date of issuance of a gift certificate or the date on
which funds were last loaded to a store gift card or general-use
prepaid card.
---------------------------------------------------------------------------
\1\ Public Law 111-24, 123 Stat. 1734 (2009).
---------------------------------------------------------------------------
Section 403 of the Credit Card Act required that the gift card and
related provisions of the Credit Card Act become effective 15 months
after enactment, or on August 22, 2010. See EFTA Section 915(d)(3). The
Board published a final rule implementing the gift card provisions of
the Credit Card Act on April 1, 2010 (final gift card rule). 75 FR
16580. As mandated by the Credit Card Act, the final gift card rule has
an effective date of August 22, 2010.
On July 27, 2010, Congress passed legislation amending Section 403
of the Credit Card Act to delay the effective date of certain gift card
disclosure provisions of the Credit Card Act for certificates or cards
produced prior to April 1, 2010 (Gift Card Amendment).\2\ The Gift Card
Amendment provides a delayed effective date with respect to these
provisions in order to permit the sale of card stock produced before
that date until January 31, 2011, so long as certain conditions are
met, including the provision of in-store disclosures. Moreover, the
substantive fee and expiration date protections provided by the Credit
Card Act continue to apply to all certificates or cards sold to a
consumer on or after August 22, 2010. Due to the time constraints
imposed by the August 22, 2010 effective date of the Credit Card Act,
the Board issued an interim final rule revising the April 2010 final
gift card rule in order to implement the Gift Card Amendment, 75 FR
50683 (Aug. 17, 2010), but stated its intent to consider comments on
the interim final rule. The Board is adopting the final rule today.
---------------------------------------------------------------------------
\2\ Public Law 111-209, 124 Stat. 2254 (July 27, 2010).
---------------------------------------------------------------------------
II. Overview of Public Comment; Summary of Final Rule
The Board received two comments on the interim final rule from a
credit union trade association and a bankers' trade association. Both
commenters generally supported the interim final rule. The bankers'
trade association suggested that the Board exercise its exception
authority to eliminate in-store disclosures where cards sold meet the
final gift card rule's substantive fee and expiration date protections.
This commenter also requested an extension of the delayed effective
date. No other comments were received. The final rule adopts the
interim final rule as issued, with minor non-substantive edits.
With respect to gift certificates, store gift cards, and general-
use prepaid cards produced prior to April 1, 2010, the Gift Card
Amendment delayed the effective date of the disclosure requirements in
EFTA Sections 915(b)(3) and (c)(2)(B) (as amended by the Credit Card
Act) until January 31, 2011, provided that several specified conditions
are met. The final rule implements the Gift Card Amendment.
The Gift Card Amendment did not address the status of additional
requirements adopted in the Board's final gift card rule that were not
contained in the Credit Card Act. As a result, persons seeking to take
advantage of the relief afforded by the Gift Card Amendment would have
been unable to do so if certain of these additional provisions became
effective on August 22, 2010. For example, Sec. 205.20(e)(1) of the
final gift card rule prohibits any person from selling or issuing a
certificate or card unless the consumer has had a reasonable
opportunity to purchase a certificate or card with at least five years
remaining until the certificate or card expiration date. Thus, a card
produced prior to April 1, 2010 that has a card expiration date of less
than five years could not be sold under the final gift card rule,
notwithstanding the provisions of the Gift Card Amendment. Therefore,
in order to carry out the intended purpose of the Gift Card Amendment,
the final rule also delays the effective date of certain of these
supplemental requirements.
As in the interim final rule, the final rule revises Sec. Sec.
205.20(c) and (g) of the final gift card rule (``Form of Disclosures''
and ``Compliance Dates,'' respectively) and adds a new Sec. 205.20(h)
(``Temporary Exemption'').
III. Section-by-Section Analysis
20(c) Form of Disclosures
20(c)(2) Format
To take advantage of the delayed effective date, the Gift Card
Amendment requires that certain disclosures be made to the consumer
through in-store signage, messages during customer service calls, Web
sites, and general advertising. These disclosure requirements are
implemented through Sec. 205.20(h)(2) of the final rule, discussed in
more detail below.
Section 205.20(c)(2) of the final gift card rule generally requires
disclosures to be made in writing or electronically, and in retainable
form. The Board believes such requirements are unnecessary with respect
to the disclosures required by Sec. 205.20(h)(2). For example, it
would be impracticable to provide in-store signage under Sec.
205.20(h)(2) in a retainable form. Moreover, the disclosures required
by Sec. 205.20(h)(2) are intended to relieve the burden of replacing
non-compliant card stock with card stock bearing disclosures that
comply with the final gift card rule, so the Board believes that the
format standards in Sec. 205.20(c)(2) are less appropriate in this
instance. Commenters supported the Board's stance in this regard.
Section 205.20(c)(2) has been revised to provide that the
disclosures required by Sec. 205.20(h)(2) need not be made in a
retainable form. For similar reasons, Sec. 205.20(c)(2) is revised to
provide that the prior-to-purchase disclosures required by Sec.
205.20(c)(3) need not be provided in a retainable form. Section
205.20(c)(2) has also been revised to make clear that the disclosures
required by Sec. 205.20(h)(2) may be provided orally.
20(g) Compliance Dates
20(g)(1) Effective Date for Gift Certificates, Store Gift Cards, and
General-Use Prepaid Cards
The final gift card rule became effective August 22, 2010,
consistent with the Credit Card Act. Consistent with the interim final
rule, to give effect to the delayed effective date set forth in the
Gift Card Amendment, the final rule revises Sec. 205.20(g)(1) of the
final gift card rule to state that, except as provided in new Sec.
205.20(h), Sec. 205.20 applies to any gift certificate, store gift
card, or general-use prepaid card sold to a consumer on or after August
22, 2010, or provided to a consumer as a replacement for such
certificate or card.
20(g)(2) Effective Date for Loyalty, Award, or Promotional Gift Cards
Section 205.20(g)(2) of the final gift card rule sets forth a
special transition rule for the disclosure requirements applicable to
loyalty, award, and promotional gift cards. Specifically, Sec.
205.20(g)(2) provides that the disclosure requirements in Sec.
205.20(a)(4)(iii) apply to any card, code or other device provided to a
consumer in connection with a loyalty, award, or promotional program
where the period of eligibility for the program begins on or after
August 22, 2010. The Gift Card Amendment does not specifically delay
the effective date of the disclosures required by Sec.
205.20(a)(4)(iii), and accordingly the effective date for loyalty,
award, and promotional cards was unchanged both in the interim final
rule and in this final rule.
[[Page 66646]]
20(h) Temporary Exemption
20(h)(1) Delayed Effective Date
As discussed above, the Gift Card Amendment delays the effective
date of certain disclosure requirements in EFTA Sections 915(b)(3) and
(c)(2)(B). Section 205.20(h)(1) implements the delayed effective date.
Specifically, Sec. 205.20(h)(1) provides that, for any gift
certificate, store gift card, or general-use prepaid card produced
prior to April 1, 2010, the effective date of the requirements of
paragraphs (c)(3), (d)(2), (e)(1), (e)(3), and (f) of this section is
January 31, 2011, provided that an issuer of such certificate or card
meets several specified conditions.
One commenter urged the Board to extend the delayed effective date
an additional 24 months. By its terms, the Gift Card Amendment permits
issuers to sell existing card stock until January 31, 2011, the end of
the 2010 holiday season. The Board believes that further extension of
the effective date would be inconsistent with the legislation.
Provisions of the Final Gift Card Rule Subject to the Delayed Effective
Date
Section 205.20(h)(1) delays the effective dates of Sec. Sec.
205.20(d)(2) and (e)(3)(i) of the final gift card rule. Section
205.20(d)(2), which implemented EFTA Section 915(b)(3)(A), prohibits
the imposition of any dormancy, inactivity, or service fee unless,
among other things, certain specified clear and conspicuous disclosures
about the fees are made on the certificate or card. Section
205.20(e)(3)(i), which implemented EFTA Section 915(c)(2)(B), requires
disclosure of the expiration date for the certificate or card's
underlying funds--or the fact that the underlying funds do not expire--
on the certificate or card. These disclosure requirements are subject
to the delayed effective date under the Gift Card Amendment for
certificates or cards produced prior to April 1, 2010.
In addition, Sec. 205.20(h)(1) delays the effective dates of
Sec. Sec. 205.20(e)(1), (e)(3)(ii), (e)(3)(iii), and (f). Section
205.20(e)(1) prohibits the issuance or sale of certificates or cards,
unless policies and procedures have been established to ensure that a
consumer will have a reasonable opportunity to purchase a certificate
or card with at least five years remaining until the certificate or
card expiration date. Section 205.20(e)(3)(ii) requires the disclosure
on the certificate or card of a toll-free telephone number, and, if one
is maintained, a Web site that a consumer may use to obtain a
replacement certificate or card after expiration if the underlying
funds may be available. Section 205.20(e)(3)(iii) requires certain
disclosures on the certificate or card about expiration and replacement
cards, except where a non-reloadable certificate or card bears an
expiration date that is at least seven years from the date of
manufacture. Section 205.20(f) requires additional fee disclosures on
or with the certificate or card, and, similar to Sec.
205.20(e)(3)(ii), disclosure on the certificate or card of a toll-free
telephone number, and, if one is maintained, a Web site that a consumer
may use to obtain fee information. As discussed in more detail in the
final gift card rule, these provisions were adopted pursuant to the
Board's authority under EFTA Sections 904(a) and 915(d)(2), as amended
by the Credit Card Act.
Although not mandated by the Gift Card Amendment, the Board
believes that the effective date of Sec. Sec. 205.20(e)(1),
(e)(3)(iii), and (f) should also be delayed in order to carry out the
intended purpose of the Gift Card Amendment. For example, some gift
cards produced before April 1, 2010 may bear expiration dates of less
than five years, which would not comply with Sec. 205.20(e)(1). If the
Board did not provide for a delayed effective date with respect to
Sec. 205.20(e)(1), issuers would not be permitted to sell this
existing card stock, even if issuers otherwise satisfied the statutory
prerequisites to qualify for relief under the Gift Card Amendment. Such
a result would undermine the purpose of the Gift Card Amendment.
Finally, Sec. 205.20(h)(1) delays the effective date of Sec.
205.20(c)(3). Section 205.20(c)(3) requires that the disclosures
required by Sec. Sec. 205.20(d)(2), (e)(3), and (f)(1) be made prior
to purchase. As discussed in more detail in the final gift card rule,
Sec. 205.20(c)(3) was adopted pursuant to both the statutory mandate
(in EFTA Section 915(c)(3)(B)) and the Board's authority under EFTA
Section 904(a). For the reasons discussed above, any disclosures that
are required to be provided prior to purchase under Sec. 205.20(c)(3)
are subject to the delayed effective date, provided that the issuer
complies with the conditions specified in Sec. 205.20(h)(1).
Conditions Imposed
To take advantage of the Gift Card Amendment's delayed effective
date, an issuer of the certificate or card must meet several specified
conditions. First, the issuer must comply with the other provisions of
Sec. 205.20, including the section's substantive restrictions on the
imposition of fees. Second, the issuer must not impose an expiration
date with respect to the funds underlying such a certificate or card.
Third, the issuer must, at the consumer's request and at no cost to the
consumer, replace such certificate or card if the certificate or card
has funds remaining. Finally, the issuer must satisfy the disclosure
requirements of new Sec. 205.20(h)(2), discussed in more detail below.
See Sec. Sec. 205.20(h)(1)(i)-(iv).
Comment 20(h)(1)-1 is adopted with minor, non-substantive edits for
clarity. Comment 20(h)(1)-1 explains that certificates or cards
produced prior to April 1, 2010 may be sold to a consumer for a limited
time without satisfying the requirements of Sec. 205.20(c)(3), (d)(2),
(e)(1), (e)(3), and (f), provided that issuers of such certificates or
cards comply with the additional substantive and disclosure
requirements of Sec. Sec. 205.20(h)(1)(i)-(iv). Issuers of
certificates or cards produced prior to April 1, 2010 need not satisfy
these additional requirements if the certificates or cards fully comply
with the final gift card rule. Thus, if on August 22, 2010 an issuer
sells gift cards produced prior to April 1, 2010 that do not have fees
and do not expire, and which otherwise comply with the final gift card
rule, that issuer would not then be required to make the in-store
signage and other disclosures required by Sec. 205.20(h)(2) with
respect to those gift cards because those cards satisfy the
requirements of the final gift card rule.
Comment 20(h)(1)-2 clarifies when the temporary relief afforded by
the Gift Card Amendment expires. This comment explains that
certificates or cards produced prior to April 1, 2010 that do not fully
comply with the final gift card rule may not be issued or sold to
consumers on or after January 31, 2011.
20(h)(2) Additional Disclosures
The Gift Card Amendment imposes certain additional disclosure
requirements in order for an issuer to take advantage of the delayed
effective date. Section 205.20(h)(2) of the final rule implements these
disclosure requirements, largely tracking the language of the statute,
and with minor non-substantive edits from the interim final rule for
clarity. Specifically, Sec. 205.20(h)(2) provides that issuers relying
on the delayed effective date in Sec. 205.20(h)(1) must disclose
through in-store signage, messages during customer service calls, Web
sites, and general advertising, that: (i) The underlying funds of such
certificate or card do not expire; (ii) consumers holding such
certificate or card have a right to a free replacement certificate or
card, which must be accompanied by the packaging and materials
typically associated with
[[Page 66647]]
such certificate or card; and (iii) any dormancy, inactivity, or
service fee for such certificate or card that might otherwise be
charged will not be charged if such fees do not comply with Section 915
of the Electronic Fund Transfer Act.
One commenter requested that the Board exercise its exception
authority to eliminate these additional disclosures where the
certificate or card meets the final gift card rule's fee limitations
and other substantive restrictions. If the Board were to take such an
action, consumers could be sold cards that, on their face, contain
disclosures that do not reflect the certificate or card's actual terms.
In particular, consumers may elect to discard an expired gift card
notwithstanding the fact that the underlying funds remain valid after
the card expiration, and thus be denied the Credit Card Act's
protections. Thus, the Board believes that the disclosures required by
the Gift Card Amendment are necessary to alert the consumer about the
protections afforded them by the Credit Card Act.
In some cases, issuers may not have direct control over in-store
signage and store advertisements. Accordingly, comment 20(h)(2)-1
explains that issuers may make the disclosures required by Sec.
205.20(h)(2) through a third party, such as a retailer or merchant. For
example, an issuer may have a merchant install in-store signage with
the disclosures required by Sec. 205.20(h)(2) on the issuer's behalf.
Comment 20(h)(2)-2 also clarifies that Sec. 205.20(h)(2) does not
impose an obligation on an issuer to advertise certificates or cards.
20(h)(3) Expiration of Disclosure Requirements
The Gift Card Amendment requires the additional disclosures to be
maintained until January 31, 2013. The Board believes that such a
requirement is appropriate with respect to Web sites that a certificate
or card recipient may visit and phone numbers that a recipient may call
for more information. For example, a gift card recipient may call a
customer service phone number printed on the card to obtain more
information about the card's fees or terms of expiration. See Sec.
205.20(h)(3)(ii).
However, certificates or cards sold on or after January 31, 2011
must comply with Sec. Sec. 205.20(a)-(f) of the final gift card rule.
Because consumers would only be able to purchase cards that are fully
compliant with the Credit Card Act from that date forward, consumers
purchasing certificates or cards might mistakenly believe that the
additional disclosures set forth in the Gift Card Amendment stated in
advertisements or in-store signage are applicable to their certificates
or cards. Thus, the Board believes that requiring issuers to maintain
Gift Card Amendment-related advertisements or in-store signage on or
after January 31, 2011 could be confusing and even misleading to
consumers because certificates or cards that do not comply with the
final gift card rule cannot be issued or sold after that date.
For this reason, the Board is exercising its exception authority in
EFTA Section 904(c) to provide that, with respect to in-store signage
and general advertising, the disclosure requirements of Sec.
205.20(h)(2) are not required to be provided on or after January 31,
2011. See Sec. 205.20(h)(3)(i). Section 904(c) of the EFTA provides
that regulations prescribed by the Board may contain any
classifications, differentiations, or other provisions, and may provide
for such adjustments or exceptions for any class of electronic fund
transfers that in the judgment of the Board are necessary or proper to
effectuate the purposes of the title, to prevent circumvention or
evasion, or to facilitate compliance.
IV. Legal Authority
General Rulemaking Authority
Section 401(d)(1) of the Credit Card Act directs the Board to
prescribe rules to carry out the gift card provisions of the Credit
Card Act. The Board is exercising its authority under Section 401(d)(1)
to implement the provisions of the Credit Card Act as superseded by the
Gift Card Amendment with respect to the delayed effective date of the
requirements in Sec. Sec. 205.20(d)(2) and (e)(1)(i), and part of
Sec. 205.20(c)(3).
Section 401(d)(2) of the Credit Card Act requires the Board to
determine the extent to which the individual definitions and provisions
of the EFTA and Regulation E should apply to gift certificates, store
gift cards, and general-use prepaid cards. See EFTA Section 915(d)(2);
15 U.S.C. 1693m(d)(2). Further, Section 904(a) of the EFTA authorizes
the Board to prescribe regulations necessary to carry out the purposes
of the title. The express purposes of the EFTA are to establish ``the
rights, liabilities, and responsibilities of participants in electronic
fund transfer systems'' and to provide ``individual consumer rights.''
See EFTA Section 902(b); 15 U.S.C. 1693. The Board is exercising its
authority under EFTA Sections 904(a) and 915(d)(2) for the reasons
discussed above to provide for the delayed effective date of the
disclosure requirements of Sec. Sec. 205.20(e)(1), 205.20(e)(3)(ii)-
(iii), and 205.20(f), and part of Sec. 205.20(c)(3).
Finally, as discussed above, the Board is exercising its authority
under EFTA Section 904(c) to implement Sec. 205.20(h)(3)(i), which
clarifies that, with respect to in-store signage and general
advertising, the disclosures required by Sec. 205.20(h)(2) are not
required to be provided on or after January 31, 2011.
V. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an
initial and final regulatory flexibility analysis only when 5 U.S.C.
553 requires publication of a notice of proposed rulemaking. See 5
U.S.C. 603(a), 604(a). As discussed in the interim final rule, the
Board found good cause under 5 U.S.C. 553(b)(3)(B) to conclude that
publication of a notice of proposed rulemaking was impracticable.
Accordingly, the Board is not required to perform an initial or final
regulatory flexibility analysis. Nonetheless, the Board is publishing a
final regulatory flexibility analysis. Based on its analysis and for
the reasons stated below, the Board believes that the final rule is not
likely to have a significant economic impact on a substantial number of
small entities.
1. Statement of the need for, and objectives of, the final rule.
This final rule implements the Gift Card Amendment by delaying the
effective date of certain disclosures required by the Credit Card Act.
This final rule also carries out the intended purpose of the Gift Card
Amendment by delaying the effective date of certain supplemental
requirements adopted in the final gift card rule. The Board believes
that these revisions to Regulation E are within Congress's broad grant
of authority to the Board to adopt provisions that carry out the
purposes of the Credit Card Act and to facilitate compliance with the
EFTA. These revisions facilitate compliance with the EFTA by permitting
gift certificates, store gift cards, and general-use prepaid cards
produced prior to April 1, 2010 to be sold through January 31, 2011,
even if they do not state the disclosures required under the final gift
card rule, so long as consumers continue to receive specified
substantive protections with respect to certificate or card fees and
expiration dates.
2. Small entities affected by the final rule. The number of small
entities affected by this final rule is unknown, as discussed in more
detail in the Regulatory Flexibility Analysis in the
[[Page 66648]]
final gift card rule. 75 FR 16610 (Apr. 1, 2010). The delayed effective
date of certain disclosures on certificates and cards will reduce the
burden and compliance costs for small institutions by providing relief
from the requirement to remove and destroy non-compliant certificates
and cards and to replace them with compliant certificates or cards, so
long as consumers are provided substantive rights under the rule and so
long as alternative specified disclosures are made.
3. Reporting, recordkeeping, and compliance requirements. The
compliance requirements of this final rule are described above in Part
III. Section-by-Section Analysis.
4. Steps taken to minimize economic impact on small entities. As
previously noted, the final rule implements the statutory mandate to
delay the effective date of certain gift card provisions of the Credit
Card Act. The final rule also delays the effective date of certain
additional requirements finalized in the April 2010 final gift card
rule. As such, the final rule minimizes the economic impact of the
final gift card rule on small entities.
5. Other federal rules. The Board has not identified any federal
rules that duplicate, overlap, or conflict with the final revisions to
Regulation E.
VI. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (PRA) of 1995 (44
U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the
final rule under the authority delegated to the Board by the Office of
Management and Budget (OMB). The collection of information that is
subject to the PRA by this final rule is found in 12 CFR part 205. The
Federal Reserve may not conduct or sponsor, and an organization is not
required to respond to, this information collection unless the
information collection displays a currently valid OMB control number.
The OMB control number is 7100-0200.
This information collection is required to provide benefits for
consumers and is mandatory. See 15 U.S.C. 1693 et seq. Since the Board
does not collect any information, no issue of confidentiality arises.
The respondents/recordkeepers are for-profit financial institutions,
including small businesses. Institutions are required to retain records
for 24 months, but this regulation does not specify types of records
that must be retained.
The Gift Card Amendment amends section 403 of the Credit Card Act
to delay the effective date of certain gift card disclosure provisions
of the Credit Card Act for certificates or cards produced prior to
April 1, 2010. The Gift Card Amendment provides an extended effective
date with respect to these provisions in order to permit the sale of
existing card stock until January 31, 2011. The final rule published
today revises the April 2010 final gift card rule in order to implement
the Gift Card Amendment.
While the final rule delays the implementation of several
disclosure requirements (Sec. Sec. 205.20(c)(3), (d)(2), (e)(1), and
(e)(3)), and temporarily implements several other requirements
(Sec. Sec. 205.20(h)), it does not change the overall burden
associated with Regulation E. The Federal Reserve believes that the
original burden estimates are more than sufficient to cover the
temporary requirements. The estimates and total burden (738,600 hours)
therefore will remain unchanged as published in the final rule. The
Federal Reserve continues to expect that the amount of time required to
implement each of the proposed changes for a given institution may vary
based on the size and complexity of the respondent.
The other federal financial agencies are responsible for estimating
and reporting to OMB the total paperwork burden for the institutions
for which they have administrative enforcement authority. They may, but
are not required to, use the Federal Reserve's burden estimation
methodology. Using the Federal Reserve's method, the total annual
burden for the respondents regulated by the federal financial agencies
is estimated to be 4,430,659 hours. This estimate also remains
unchanged.
The Federal Reserve has a continuing interest in the public's
opinions of our collections of information. At any time, comments
regarding the burden estimate, or any other aspect of this collection
of information, including suggestions for reducing the burden, may be
sent to: Secretary, Board of Governors of the Federal Reserve System,
Washington, DC 20551; and to the Office of Management and Budget,
Paperwork Reduction Project (7100-0200), Washington, DC 20503.
List of Subjects in 12 CFR Part 205
Consumer protection, Electronic fund transfers, Federal Reserve
System, Reporting and recordkeeping requirements.
0
For the reasons set forth in the preamble, the Board adopts as final
the interim final rule published at 75 FR 50683, August 17, 2010, with
the following changes:
PART 205--ELECTRONIC FUND TRANSFERS (REGULATION E)
0
1. The authority citation for part 205 continues to read as follows:
Authority: 15 U.S.C. 1693b.
0
2. In Sec. 205.20 paragraphs (c)(2) and (g)(1) are republished and
paragraph (h) is revised to read as follows:
Sec. 205.20 Requirements for gift cards and gift certificates.
* * * * *
(c) * * *
(2) Format. Disclosures made under this section generally must be
provided to the consumer in written or electronic form. Except for the
disclosures in paragraphs (c)(3) and (h)(2), written and electronic
disclosures made under this section must be in a retainable form. Only
disclosures provided under paragraphs (c)(3) and (h)(2) of this section
may be given orally.
* * * * *
(g) * * *
(1) Effective date for gift certificates, store gift cards, and
general-use prepaid cards. Except as provided in paragraph (h), the
requirements of this section apply to any gift certificate, store gift
card, or general-use prepaid card sold to a consumer on or after August
22, 2010, or provided to a consumer as a replacement for such
certificate or card.
* * * * *
(h) Temporary exemption. (1) Delayed effective date. For any gift
certificate, store gift card, or general-use prepaid card produced
prior to April 1, 2010, the effective date of the requirements of
paragraphs (c)(3), (d)(2), (e)(1), (e)(3), and (f) of this section is
January 31, 2011, provided that an issuer of such certificate or card:
(i) Complies with all other provisions of this section;
(ii) Does not impose an expiration date with respect to the funds
underlying such certificate or card;
(iii) At the consumer's request, replaces such certificate or card
if it has funds remaining at no cost to the consumer; and
(iv) Satisfies the requirements of paragraph (h)(2) of this
section.
(2) Additional disclosures. Issuers relying on the delayed
effective date in Sec. 205.20(h)(1) must disclose through in-store
signage, messages during customer service calls, Web sites, and general
advertising, that:
(i) The underlying funds of such certificate or card do not expire;
(ii) Consumers holding such certificate or card have a right to a
free replacement certificate or card, which must be accompanied by the
packaging
[[Page 66649]]
and materials typically associated with such certificate or card; and
(iii) Any dormancy, inactivity, or service fee for such certificate
or card that might otherwise be charged will not be charged if such
fees do not comply with Section 915 of the Electronic Fund Transfer
Act.
(3) Expiration of additional disclosure requirements. The
disclosures in paragraph (h)(2) of this section:
(i) Are not required to be provided on or after January 31, 2011,
with respect to in-store signage and general advertising.
(ii) Are not required to be provided on or after January 31, 2013,
with respect to messages during customer service calls and Web sites.
* * * * *
0
3. In Supplement I to part 205, new paragraph 20(h) is revised as
follows:
Supplement I to Part 205--Official Staff Interpretations
* * * * *
Section 205.20--Requirements for Gift Cards and Gift Certificates
* * * * *
20(h) Temporary Exemption
20(h)(1)--Delayed Effective Date
1. Application to certificates or cards produced prior to April
1, 2010. Certificates or cards produced prior to April 1, 2010 may
be sold to a consumer on or after August 22, 2010 without satisfying
the requirements of Sec. 205.20(c)(3), (d)(2), (e)(1), (e)(3), and
(f) through January 30, 2011, provided that issuers of such
certificates or cards comply with the additional substantive and
disclosure requirements of Sec. Sec. 205.20(h)(1)(i) through (iv).
Issuers of certificates or cards produced prior to April 1, 2010
need not satisfy these additional requirements if the certificates
or cards fully comply with the rule (Sec. Sec. 205.20(a) through
(f)). For example, the in-store signage and other disclosures
required by Sec. 205.20(h)(2) do not apply to gift cards produced
prior to April 1, 2010 that do not have fees and do not expire, and
which otherwise comply with the rule.
2. Expiration of temporary exemption. Certificates or cards
produced prior to April 1, 2010 that do not fully comply with
Sec. Sec. 205.20(a) through (f) may not be issued or sold to
consumers on or after January 31, 2011.
20(h)(2)--Additional Disclosures
1. Disclosures through third parties. Issuers may make the
disclosures required by Sec. 205.20(h)(2) through a third party,
such as a retailer or merchant. For example, an issuer may have a
merchant install in-store signage with the disclosures required by
Sec. 205.20(h)(2) on the issuer's behalf.
2. General advertising disclosures. Section 205.20(h)(2) does
not impose an obligation on the issuer to advertise gift
certificates, store gift cards, or general-use prepaid cards.
By order of the Board of Governors of the Federal Reserve
System, October 22, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010-27191 Filed 10-28-10; 8:45 am]
BILLING CODE 6210-01-P
