Definitions of Transmittal of Funds and Funds Transfer, 72813-72817 [2013-28951]

Download as PDF Federal Register / Vol. 78, No. 233 / Wednesday, December 4, 2013 / Rules and Regulations (f), and (g) and add new paragraph (c) to read as follows: § 380.15 Siting and maintenance requirements. * * * * * (c) Landowner notification. (1) No maintenance activity that involves ground disturbance is authorized unless a company makes a good faith effort to notify in writing each affected landowner, as noted in the most recent county/city tax records as receiving the tax notice, whose property will be crossed or used as a result of the proposed activity, at least five days prior to commencing any activity under this section. For an activity required to respond to an emergency, the five-day prior notice period does not apply. The notification shall include at least: (i) A brief description of the activity and the effect the activity may have on the landowner’s property; (ii) The name and phone number of a company representative who is knowledgeable about the project; and (iii) A description of the Commission’s Dispute Resolution Division Helpline, which an affected person may contact to seek an informal resolution of a dispute as explained in section 1b.21(g) of the Commission’s regulations (18 CFR 1b.21(g)) and the Dispute Resolution Division Helpline number. (2) ‘‘Affected landowners’’ include owners of property interests, as noted in the most recent county/city tax records as receiving tax notice, whose property is directly affected (i.e. crossed or used) by the proposed activity, including all rights-of-way, facility sites (including compressor stations, well sites, and all above-ground facilities), access roads, pipe and contractor yards, and temporary work space. * * * * * [FR Doc. 2013–28548 Filed 12–3–13; 8:45 am] BILLING CODE 6717–01–P DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network 31 CFR Part 1010 wreier-aviles on DSK5TPTVN1PROD with RULES RIN 1506–AB20 Definitions of Transmittal of Funds and Funds Transfer Financial Crimes Enforcement Network (‘‘FinCEN’’), Department of the Treasury; Board of Governors of the Federal Reserve System (‘‘Board’’). ACTION: Final rule. AGENCY: VerDate Mar<15>2010 13:12 Dec 03, 2013 Jkt 232001 The Financial Crimes Enforcement Network, a bureau of the Department of the Treasury, and the Board of Governors of the Federal Reserve System are issuing this Final Rule amending the regulatory definitions of ‘‘funds transfer’’ and ‘‘transmittal of funds’’ under the regulations implementing the Bank Secrecy Act (‘‘BSA’’). We are amending the definitions to maintain their current scope in light of changes to the Electronic Fund Transfer Act, which will avoid certain currently covered transactions being excluded from BSA requirements. DATES: Effective Date: This rule is effective January 3, 2014. FOR FURTHER INFORMATION CONTACT: FinCEN: The FinCEN Resource Center at (800) 949–2732. Board: Koko Ives, Manager, BSA/AML Compliance Section, (202) 973–6163, Division of Banking Supervision and Regulation, or Clinton Chen, Attorney, (202) 452–3952, Legal Division. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), (202) 263–4869. SUPPLEMENTARY INFORMATION: SUMMARY: I. Statutory Provisions The Currency and Foreign Transactions Reporting Act of 1970, as amended by the USA PATRIOT Act of 2001 and other legislation, which legislative framework is commonly referred to as the ‘‘BSA,’’ 1 authorizes the Secretary of the Treasury (‘‘Secretary’’) to require financial institutions to keep records and file reports that ‘‘have a high degree of usefulness in criminal, tax, or regulatory proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism.’’ 2 The Secretary has delegated to the Director of FinCEN the authority to implement, administer, and enforce compliance with the BSA and associated regulations.3 The BSA was amended by the Annunzio-Wylie Anti-Money Laundering Act of 1992 (Pub. L. 102– 550) (‘‘Annunzio-Wylie’’). AnnunzioWylie authorizes the Secretary and the Board to issue joint regulations requiring insured banks to maintain records of domestic funds transfers.4 In 1 The BSA is codified at 12 U.S.C. 1829b and 1951–1959, 18 U.S.C. 1956, 1957, and 1960, and 31 U.S.C. 5311–5314 and 5316–5332 and notes thereto, with implementing regulations at 31 CFR Chapter X. See 31 CFR 1010.100(e). 2 31 U.S.C. 5311. 3 Treasury Order 180–01 (Sept. 26, 2002). 4 12 U.S.C. 1829b(b)(2) (2006). Treasury has independent authority to issue regulations requiring PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 72813 addition, Annunzio-Wylie authorizes the Secretary and the Board to issue joint regulations requiring insured banks and certain nonbank financial institutions to maintain records of international funds transfers and transmittals of funds.5 Annunzio-Wylie requires the Secretary and the Board, in issuing regulations for international funds transfers and transmittals of funds, to consider the usefulness of the records in criminal, tax, or regulatory investigations or proceedings, and the effect of the regulations on the cost and efficiency of the payments system.6 The Electronic Fund Transfer Act (‘‘EFTA’’) 7 was enacted in 1978 to establish the rights and liabilities of consumers as well as the responsibilities of all participants in electronic fund transfer activities. The EFTA is implemented by Regulation E, which sets up the framework that establishes the rights, liabilities, and responsibilities of participants in electronic fund transfer systems.8 Section 1073 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (‘‘Dodd-Frank Act’’),9 added a new section 919 to the EFTA, creating a comprehensive new system of consumer protections for remittance transfers sent by consumers in the United States to individuals and businesses in foreign countries. Because the new section 919 of the EFTA defines ‘‘remittance transfers’’ broadly, most electronic transfers of funds sent by consumers in the United States to recipients in other countries will be subject to the new protections. II. Background Information A. Current Regulations Regarding Funds Transfers and Transmittals of Funds On January 3, 1995, FinCEN and the Board jointly issued a rule that requires banks and nonbank financial institutions to collect and retain information on certain funds transfers and transmittals of funds (‘‘recordkeeping rule’’).10 At the same nonbank financial institutions to maintain records of domestic transmittals of funds. 5 12 U.S.C.1829b(b)(3) (2006). 6 Id. As discussed later in this Federal Register notice, the final rule would have no effect on the current scope of or substantive requirements in BSA regulations and thus no effect on the cost or efficiency of the payment systems. 7 15 U.S.C. 1693 et seq. 8 12 CFR part 1005. 9 Public Law 111–203, 124 Stat. 1376, section 1073 (2010). 10 31 CFR 1020.410(a) (recordkeeping requirements for banks); 31 CFR 1010.410(e) (recordkeeping requirements for nonbank financial institutions). The Board revised its Regulation S (12 CFR part 219) to incorporate by reference the E:\FR\FM\04DER1.SGM Continued 04DER1 72814 Federal Register / Vol. 78, No. 233 / Wednesday, December 4, 2013 / Rules and Regulations wreier-aviles on DSK5TPTVN1PROD with RULES time, FinCEN issued the ‘‘travel rule,’’ which requires banks and nonbank financial institutions to include certain information on funds transfers and transmittals of funds sent to other banks or nonbank financial institutions.11 The recordkeeping and travel rules provide uniform recordkeeping and transmittal requirements for financial institutions and are intended to help law enforcement and regulatory authorities detect, investigate, and prosecute money laundering and other financial crimes by preserving an information trail about persons sending and receiving funds through the funds transfer system. In general, the recordkeeping rule requires financial institutions to retain information on transmittals of funds of $3,000 or more and requires banks to retain information on funds transfers of $3,000 or more. Under the recordkeeping rule, a financial institution must retain the following information for transmittals of funds of $3,000 or more: • If acting as a transmittor’s financial institution, either the original, microfilmed, copied, or electronic record of the following information: (a) The name and address of the transmittor; (b) the amount of the transmittal order; (c) the execution date of the transmittal order; (d) any payment instructions received from the transmittor with the transmittal order; (e) the identity of the recipient’s financial institution; (f) as many of the following items as are received with the transmittal order: the name and address of the recipient, the account number of the recipient, and any other specific identifier of the recipient; and (g) if the transmittor’s financial institution is a nonbank financial institution, any form relating to the transmittal of funds that is completed or signed by the person placing the transmittal order.12 • If acting as an intermediary financial institution, or a recipient financial institution, either the original, microfilmed, copied, or electronic record of the received transmittal order.13 Banks are required to maintain analogous information for funds transfers of $3,000 or more, but the rule uses different terminology to describe the parties.14 The recordkeeping rule recordkeeping rule codified in Title 31 of the CFR, as well as to impose a five-year record-retention requirement with respect to the recordkeeping and reporting requirements. 11 31 CFR 1010.410(f). 12 31 CFR 1010.410(e)(1)(i). 13 31 CFR 1010.410(e)(1)(ii) and (iii). 14 31 CFR 1020.410(a). VerDate Mar<15>2010 13:12 Dec 03, 2013 Jkt 232001 requires that the data be retrievable.15 Records required to be retained by the recordkeeping rule must be made available to Treasury or the Board upon request.16 Under the travel rule, a financial institution acting as the transmittor’s financial institution must obtain and include in the transmittal order the following information on transmittals of funds of $3,000 or more: (a) Name and, if the payment is ordered from an account, the account number of the transmittor; (b) the address of the transmittor; (c) the amount of the transmittal order; (d) the execution date of the transmittal order; (e) the identity of the recipient’s financial institution; (f) as many of the following items as are received with the transmittal order: The name and address of the recipient, the account number of the recipient, and any other specific identifier of the recipient; and (g) either the name and address or the numerical identifier of the transmittor’s financial institution. A financial institution acting as an intermediary financial institution must include in its respective transmittal order the same data points listed above, if received from the sender.17 The recordkeeping rule and the travel rule apply to transmittals of funds and funds transfers. A ‘‘transmittal of funds’’ is defined as a series of transactions beginning with the transmittor’s transmittal order, made for the purpose of making payment to the recipient of the order (31 CFR 1010.100(ddd)). The term includes any transmittal order issued by the transmittor’s financial institution or an intermediary financial institution intended to carry out the transmittor’s transmittal order. The term transmittal of funds includes a funds transfer. A ‘‘funds transfer’’ is a series of transactions beginning with the originator’s payment order, made for the purpose of making payment to the beneficiary of the order (31 CFR 1010.100(w)). The term includes any payment order issued by the originator’s bank or an intermediary bank intended to carry out the originator’s payment order. Under the current definitions, transmittals of funds and funds transfers governed by the EFTA, as well as any other funds transfers that are effected through an automated clearinghouse, an automated teller machine (‘‘ATM’’), or a point-of-sale system, are excluded from the definitions of ‘‘transmittal of funds’’ and ‘‘funds transfer’’ under the BSA. When the recordkeeping and travel rules were adopted, the EFTA governed 15 31 CFR 1010.410(e)(4) U.S.C. 1829b(b)(3)(C); 12 CFR 219.24. 17 31 CFR 1010.410(f)(1)–(2). 16 12 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 only electronic funds transfers as defined in section 903(a)(7) of that Act. The term ‘‘electronic fund transfer’’ includes any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer’s account (including a payroll card account). The term includes, but is not limited to, (a) point-of-sale transfers; (b) ATM transactions; (c) direct deposits or withdrawals of funds; (d) transfers initiated by phone as part of a billpayment plan; and (e) transfers resulting from debit card transactions, whether or not initiated through an electronic terminal. The term does not include certain transfers of funds, such as those originated by check, draft, or similar paper instrument; those issued as a means of guaranteeing the payment or authorizing the acceptance of a check, draft, or similar paper instrument; or those made in the context of a purchase or sale of certain securities or commodities.18 Wire or other similar transfers conducted through Fedwire® or similar wire transfer systems primarily used for transfers between financial institutions or between businesses are also specifically excluded from the definition of ‘‘electronic fund transfer.’’ B. Section 1073 of the Dodd-Frank Act and the EFTA Section 1073 of the Dodd-Frank Act, signed into law on July 21, 2010, added a new Section 919 to the EFTA, creating new protections for consumers who send remittance transfers. Authority to implement the EFTA (except for the interchange fee provisions in EFTA section 920) transferred from the Board to the Consumer Financial Protection Bureau (‘‘CFPB’’) effective July 21, 2011. On February 7, 2012, CFPB adopted a final rule to implement Section 919, with an original effective date of February 7, 2013, which was later postponed to October 28, 2013.19 The provisions of the final rule will apply to any ‘‘remittance transfer,’’ which is defined as the electronic transfer of funds requested by a sender to a designated recipient that is sent by a remittance transfer provider. The term 18 15 U.S.C. 1693a(7); 12 CFR 1005.3(b). FR 6193 (Feb. 7, 2012). On December 31, 2012, the CFPB requested comment on proposed revisions to its remittance amendments to Regulation E. 77 FR 77188 (Dec. 31, 2012). On January 22, 2013, the CFPB issued a final rule that temporarily delays the effective date of their revisions to Regulation E, 78 FR 6025 (Jan. 29, 2013). The CFPB finalized its December 31, 2012 proposal on April 30, 2013, with an effective date of October 28, 2013 (78 FR 30662, May 22, 2013). 19 77 E:\FR\FM\04DER1.SGM 04DER1 Federal Register / Vol. 78, No. 233 / Wednesday, December 4, 2013 / Rules and Regulations wreier-aviles on DSK5TPTVN1PROD with RULES applies regardless of whether the sender holds an account with the remittance transfer provider, and regardless of whether the transaction is also an electronic fund transfer. However, certain small dollar and securities- or commodities-related transfers are excluded from the definition of remittance transfer.20 A ‘‘sender’’ is a consumer in a State who, primarily for personal, family, or household purposes, requests a remittance transfer provider to send a remittance transfer to a designated recipient.21 A ‘‘designated recipient’’ is any person specified by the sender as the authorized recipient of a remittance transfer to be received at a location in a foreign country.22 A ‘‘remittance transfer provider’’ or ‘‘provider’’ is any person that provides remittance transfers for a consumer in the normal course of its business, regardless of whether the consumer holds an account with such person.23 Once effective, the provisions will extend the coverage of section 919 of the EFTA, as implemented by Regulation E, to transactions that were excluded from other portions of the EFTA and Regulation E, such as international wire transfers sent by consumers through banks, and cash-based transmittals of funds sent by a consumer through money transmitters. C. Effect of Changes to the EFTA and Regulation E on the Scope of the Definitions of ‘‘Transmittal of Funds’’ and ‘‘Funds Transfer’’ Under the Regulations Implementing the BSA Existing BSA regulations exclude certain types of transactions and payment systems that are used mostly for domestic retail transactions and payments from the definitions of funds transfer and transmittal of funds. This exclusion was implemented, not by listing the individual transaction types, but by referencing the law that protected the consumers engaged in such transactions, namely the EFTA, and the specific payment systems through which such transactions are conducted, namely ATM, point-of-sale, and automated clearinghouse transactions. This method of identifying excluded transactions created a link between the two statutes (and their implementing regulations) with very different goals. The BSA requires financial institutions to keep records and file reports on transmittals of funds and funds transfers (which could be either domestic or international, consumer- or business20 12 CFR 1005.30(e). CFR 1005.30(g). 22 12 CFR 1005.30(c). 23 12 CFR 1005.30(f). related, retail or wholesale, cash-based or account-based) that the Secretary and the Board determine have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in intelligence or counterintelligence matters to protect against domestic and international terrorism.24 The EFTA, as originally adopted, protects individual consumers engaging in certain movements of funds initiated through electronic means (e.g., electronic terminal, telephone, computer, online banking, magnetic tape, etc.) for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer’s account. In spite of the different statutory purposes, for many years this approach to identifying excluded transactions was satisfactory, as the types of transactions covered by the EFTA conformed to the profile of the types of transactions that were appropriate to exclude from the recordkeeping and travel requirements under the BSA. However, the recent amendments to the EFTA and the recently finalized revisions to Regulation E, which will become effective October 28, 2013, would result in an expanded scope of the transactions subject to the EFTA’s remittance provisions. Some of these transactions have, to date, been covered by the regulations implementing the BSA. When the changes to Regulation E become effective, these transactions, which include international funds transfers sent by consumers through banks and cash- or account-based transmittals of funds sent by consumers through money transmitters, would fall outside the BSA rules’ definitions of ‘‘funds transfer’’ and ‘‘transmittal of funds’’ (31 CFR 1010.100(w) and 1010.100(ddd)). III. Notice of Proposed Rulemaking, Analysis of Comments, and Final Rule To avoid the aforementioned reduction in the scope of transactions subject to the BSA, on December 6, 2012, the Board and FinCEN issued a Notice of Proposed Rulemaking (‘‘NPRM’’) to solicit comments on revising the regulations implementing the BSA by narrowing the exclusion from the definitions of ‘‘funds transfer’’ and ‘‘transmittal of funds.’’ 25 The proposed revision would replace the general reference to the EFTA contained in the exception to the definitions of ‘‘transmittal of funds’’ and ‘‘funds transfer,’’ by a more specific reference to section 903(7) of the EFTA, the section of the EFTA containing the definition of 21 12 VerDate Mar<15>2010 13:12 Dec 03, 2013 24 31 25 77 Jkt 232001 PO 00000 U.S.C. 5311; 12 U.S.C. 1829b and 1953(a). FR 72783 (Dec. 6, 2012). Frm 00025 Fmt 4700 Sfmt 4700 72815 ‘‘electronic fund transfers,’’ which are the transactions that are currently excluded from the recordkeeping and travel rules. Any remittance transfers that are covered by section 919 of the EFTA, but do not meet the definition of electronic fund transfer under section 903(7) of that statute, would continue to be covered by the travel and recordkeeping rules. The comment period ended on January 25, 2013. The Board and FinCEN received eight comment letters from individuals and representatives of various groups whose members had an interest in the amendment to the definitions. One letter contained observations regarding the implementation of CFPB’s remittance transfer rule and was therefore out of the scope of the comments requested by the NPRM. The remaining comments were uniformly supportive of the purpose of the amendment and generally supportive of the proposed approach to implementing it. Five commenters requested that the Board and FinCEN clearly state in the Final Rule that the proposed amendment does not change the current scope of the obligations of financial institutions under the recordkeeping and travel rules. As noted in the preamble to the proposal, the purpose of the Final Rule is to maintain the recordkeeping and reporting status quo existing before the EFTA amendments. Nothing in this Final Rule modifies the current scope of the obligation of any financial institution under the recordkeeping and travel rules. One commenter encouraged the Board and FinCEN to delay finalizing the proposed amendment until CFPB’s remittance transfer rule itself is finalized and effective, to ensure any further change to its provisions does not inadvertently cause additional changes to the current scope of transactions subject to the BSA. On April 30, 2013, CFPB finalized its remittance transfer rule with an effective date of October 28, 2013. The Board and FinCEN have concluded that the changes to the remittance transfer provisions in Regulation E under the CFPB’s final remittance rule will not have any impact on section 903(7) of the EFTA, and therefore there is no need to revise the proposed amendments to the recordkeeping and travel rule. Finally, another commenter suggested that the Board and FinCEN consider incorporating the statutory language of section 903(7) of the EFTA into the regulatory definitions, without crossreferencing the EFTA statute, to prevent the need for further amendments should Congress make changes to the EFTA E:\FR\FM\04DER1.SGM 04DER1 72816 Federal Register / Vol. 78, No. 233 / Wednesday, December 4, 2013 / Rules and Regulations statute in the future. The statutory definition of ‘‘electronic fund transfer’’ includes terms that are defined elsewhere in the EFTA, which also would have to be incorporated into the recordkeeping and travel rules. Moreover, future changes to the statutory definition of ‘‘electronic fund transfer’’ could be changes the Board and FinCEN would want to incorporate into the recordkeeping and travel rules. Accordingly, the Board and FinCEN are adopting the amendments to the definitions of ‘‘funds transfer’’ and ‘‘transmittal of funds’’ as proposed. IV. Executive Orders 12866 and 13563 Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. It has been determined that this final rule is neither an economically significant regulatory action nor a significant regulatory action for purposes of Executive Orders 12866 and13563. V. Unfunded Mandates Act of 1995 Statement wreier-aviles on DSK5TPTVN1PROD with RULES Section 202 of the Unfunded Mandates Reform Act of 1995 (‘‘Unfunded Mandates Act’’), Public Law 104–4 (March 22, 1995), requires that an agency prepare a budgetary impact statement before promulgating a rule that may result in expenditure by the State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 202 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. Since there is no change to the requirements imposed under existing regulations, FinCEN has determined that it is not required to prepare a written statement under section 202. VI. Regulatory Flexibility Act FinCEN The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that a regulation that has a significant economic impact on a substantial number of small entities, small VerDate Mar<15>2010 13:12 Dec 03, 2013 Jkt 232001 businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation’s impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities (5 U.S.C. 605(b)). These changes are not intended to alter any institution’s existing obligations. The sole purpose of these amendments is to maintain the current scope of transactions subject to the BSA funds transfer recordkeeping and travel rules, in light of changes to the EFTA. Accordingly, FinCEN hereby certifies that the amended regulation is not likely to have a significant economic impact on a substantial number of small business entities for purposes of the Regulatory Flexibility Act. Board An initial regulatory flexibility analysis (‘‘IRFA’’) was included in the proposal in accordance with Section 3(a) of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (‘‘RFA’’). In the IRFA, the Board requested comment on all aspects of the IRFA, and, in particular, whether any alternative approaches would reduce the burden on all entities, including small entities. The RFA requires an agency either to provide a final regulatory flexibility analysis or certify that the final rule will not have a significant impact on a substantial number of small entities. The final rule covers insured banks and certain nonbank financial institutions that are engaged in funds transfers and transmittals of funds. The Board believes it is unlikely that the final rule will have a significant economic impact on a substantial number of small entities. Nonetheless, the Board has prepared a final regulatory flexibility analysis pursuant to the RFA. 1. Statement of the need for and objectives of the final rule. The DoddFrank Act’s amendments to the EFTA expanded the types of transactions that are covered by the EFTA, thereby excluding them from the definition of funds transfer and transmittal of funds in 31 CFR 1010.100(w) and 31 CFR 1010.100(ddd), respectively. This final rule is necessary to retain the current scope of transactions subject to the recordkeeping rule. 2. Summary of significant issues raised by public comment on the Board’s initial analysis of issues, and a statement of any changes made as a result. The Board did not receive any comments on the proposed rule addressing matters relating to the PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 Board’s initial regulatory flexibility analysis. 3. Small entities affected by the final rule. The requirements of this final rule, like the existing requirements, apply to all financial institutions subject to the Bank Secrecy Act, regardless of size. Based on Call Report data as of December 31, 2012, approximately 3,660 insured depository institutions had total domestic assets of $175 million or less.26’’ In addition, the requirements of this final rule will affect financial institutions that are not ‘‘insured depository institutions’’ under the Federal Depository Insurance Act. For example, as of December 31, 2012, approximately 5,970 credit unions had total domestic assets of $175 million or less. 4. Compliance requirements. The final rule, like the current regulation, requires insured depository institutions and nonbank financial institutions to collect and retain information on funds transfers and transmittals of funds. The final rule does not change the scope of the information currently required to be collected or retained and does not change the funds transfers and transmittals of funds for which the information currently must be collected and maintained. 5. Other Federal rules. The Board has not identified any Federal rules that duplicate, overlap, or conflict with the final rule. 6. Significant alternatives to the proposed regulation. The Board did not receive any comments on any significant alternatives that would minimize the impact of the proposal on small entities. VII. Paperwork Reduction Act The collection of information requirements have been reviewed and approved by the Office of Management and Budget (‘‘OMB’’) under section 3507 of the Paperwork Reduction Act of 1995 (‘‘PRA’’) (44 U.S.C. 3507(d). (OMB Control No. 1506–0058 (recordkeeping requirements for financial institutions under § 1010.410(e) and (f)) and 1506– 0059 (recordkeeping requirements for banks under § 1020.410(a)). Under the PRA, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. These amendments maintain the same scope of transactions subject to the requirements of the recordkeeping and travel rules as 26 U.S. Small Business Administration. Table of Small Business Size Standards Matched to North American Industry Classification System Codes, available at https://www.sba.gov/idc/groups/public/ documents/sba_homepage/serv_sstd_tablepdf.pdf. E:\FR\FM\04DER1.SGM 04DER1 Federal Register / Vol. 78, No. 233 / Wednesday, December 4, 2013 / Rules and Regulations existed prior to this rulemaking. With no change to the types or scope of transactions covered under the regulations, there is no impact on the burden estimates already approved under the requirements of the PRA. DEPARTMENT OF HOMELAND SECURITY List of Subjects in 31 CFR Part 1010 [Docket No. USCG–2013–0922] Authority delegations (Government agencies), Banks and banking, Currency, Investigations, Law enforcement, Reporting and recordkeeping requirements. Drawbridge Operation Regulation; Gulf Intracoastal Waterway, Near Moss Lake, LA Coast Guard 33 CFR Part 117 Authority and Issuance For the reasons set forth in the preamble, 31 CFR part 1010 is amended as follows: PART 1010—GENERAL PROVISIONS 1. The authority citation for part 1010 continues to read as follows: ■ Authority: 12 U.S.C. 1829b and 1951– 1959; 31 U.S.C. 5311–5314, 5316–5332; title III, secs. 311, 312, 313, 314, 319, 326, 352, Pub. L. 107–56, 115 Stat. 307. 2. Section 1010.100 is amended by: a. Revising the last sentence of paragraph (w), and ■ b. Revising the last sentence of paragraph (ddd) to read as follows: ■ ■ § 1010.100 General definitions. * * * * (w) Funds transfer. * * * Electronic fund transfers as defined in section 903(7) of the Electronic Fund Transfer Act (15 U.S.C. 1693a(7)), as well as any other funds transfers that are made through an automated clearinghouse, an automated teller machine, or a point-ofsale system, are excluded from this definition. * * * * * (ddd) Transmittal of funds. * * * Electronic fund transfers as defined in section 903(7) of the Electronic Fund Transfer Act (15 U.S.C. 1693a(7)), as well as any other funds transfers that are made through an automated clearinghouse, an automated teller machine, or a point-of-sale system, are excluded from this definition. * * * * * wreier-aviles on DSK5TPTVN1PROD with RULES * In concurrence: By order of the Board of Governors of the Federal Reserve System, November 13, 2013. Margaret McCloskey Shanks, Deputy Secretary of the Board. Dated: November 14, 2013. Jennifer Shasky Calvery, Director, Financial Crimes Enforcement Network. [FR Doc. 2013–28951 Filed 12–3–13; 8:45 am] BILLING CODE 4810–2P–P; 6210–01–P VerDate Mar<15>2010 13:12 Dec 03, 2013 Jkt 232001 Coast Guard, DHS. Notice of deviation from drawbridge regulation. AGENCY: ACTION: The Coast Guard has issued a temporary deviation from the operating schedule that governs the Black Bayou pontoon bridge across the Gulf Intracoastal Waterway, mile 237.5, near Moss Lake, Louisiana. The deviation is necessary in order to drive piles for 2 sheave platforms, 2 winch platforms, a walkway, and a hydraulic unit housing platform. These repairs are essential for the continued safe operation of the bridge. This deviation allows the bridge to remain temporarily closed to navigation during daylight for ten consecutive hours, Monday through Thursday for three weeks. DATES: This deviation is effective without actual notice from December 4, 2013 until December 19, 2013. For the purposes of enforcement, actual notice will be used from the date the deviation was signed, November 14, 2013, until December 19, 2013. ADDRESSES: The docket for this deviation, [USCG–2013–0922] is available at https://www.regulations.gov. Type the docket number in the ‘‘SEARCH’’ box and click ‘‘SEARCH.’’ Click on Open Docket Folder on the line associated with this deviation. You may also visit the Docket Management Facility in Room W12–140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: If you have questions on this temporary deviation, call or email Donna Gagliano, Bridge Administration Branch, Coast Guard; telephone 504–671–2128, email Donna.Gagliano@uscg.mil. If you have questions on viewing the docket, call Barbara Hairston, Program Manager, Docket Operations, telephone 202–366– 9826. SUPPLEMENTARY INFORMATION: The Louisiana Department of Transportation and Development has requested a temporary deviation from the operating SUMMARY: PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 72817 schedule on the pontoon bridge across the Gulf Intracoastal Waterway at mile 237.5 near Moss Lake, Louisiana. In accordance with 33 CFR 117.5, except as otherwise authorized or required by this part, drawbridges must open promptly and fully for the passage of vessels when a request or signal to open is given in accordance with this subpart. The draw bridge must return to operation when the work has stopped for any reason. This temporary deviation allows the pontoon bridge to remain closed to navigation from 7 a.m. to 5 p.m., Monday through Thursday, during 3 weeks beginning December 2, 2013 through Thursday, December 19, 2013, for a total of 12 days. During this time, repairs will be performed, including driving piles for 2 sheave platforms, 2 winch platforms, a walkway and a hydraulic unit housing platform. The repairs are necessary to ensure the safety of the bridge. Notices will be published in the Eighth Coast Guard District Local Notice to Mariners and will be broadcast via the Coast Guard Broadcast Notice to Mariners System. Navigation on the waterway consists of commercial and recreational fishing vessels, small to medium crew boats, and small tugs with and without tows. No alternate routes are available for the passage of vessels; however, the closure was coordinated with waterway interests who have indicated that they will be able to adjust their operations around the proposed work schedule. The bridge will be able to open manually in the event of an emergency, but it will take about one hour to do so. In accordance with 33 CFR 117.5, the draw bridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.5 Dated: November 14, 2013. David M. Frank, Bridge Administrator. [FR Doc. 2013–29012 Filed 12–3–13; 8:45 am] BILLING CODE 9110–04–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [Docket No. USCG–2013–0968] Drawbridge Operation Regulation; Chef Menteur Pass, New Orleans, LA AGENCY: E:\FR\FM\04DER1.SGM Coast Guard, DHS. 04DER1

Agencies

[Federal Register Volume 78, Number 233 (Wednesday, December 4, 2013)]
[Rules and Regulations]
[Pages 72813-72817]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28951]

=======================================================================
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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB20

Definitions of Transmittal of Funds and Funds Transfer

AGENCY: Financial Crimes Enforcement Network (``FinCEN''), Department
of the Treasury; Board of Governors of the Federal Reserve System
(``Board'').

ACTION: Final rule.

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SUMMARY: The Financial Crimes Enforcement Network, a bureau of the
Department of the Treasury, and the Board of Governors of the Federal
Reserve System are issuing this Final Rule amending the regulatory
definitions of ``funds transfer'' and ``transmittal of funds'' under
the regulations implementing the Bank Secrecy Act (``BSA''). We are
amending the definitions to maintain their current scope in light of
changes to the Electronic Fund Transfer Act, which will avoid certain
currently covered transactions being excluded from BSA requirements.

DATES: Effective Date: This rule is effective January 3, 2014.

FOR FURTHER INFORMATION CONTACT:
FinCEN: The FinCEN Resource Center at (800) 949-2732.
Board: Koko Ives, Manager, BSA/AML Compliance Section, (202) 973-
6163, Division of Banking Supervision and Regulation, or Clinton Chen,
Attorney, (202) 452-3952, Legal Division. For the hearing impaired
only, Telecommunication Device for the Deaf (TDD), (202) 263-4869.

SUPPLEMENTARY INFORMATION:

I. Statutory Provisions

The Currency and Foreign Transactions Reporting Act of 1970, as
amended by the USA PATRIOT Act of 2001 and other legislation, which
legislative framework is commonly referred to as the ``BSA,'' \1\
authorizes the Secretary of the Treasury (``Secretary'') to require
financial institutions to keep records and file reports that ``have a
high degree of usefulness in criminal, tax, or regulatory proceedings,
or in the conduct of intelligence or counterintelligence activities,
including analysis, to protect against international terrorism.'' \2\
The Secretary has delegated to the Director of FinCEN the authority to
implement, administer, and enforce compliance with the BSA and
associated regulations.\3\
---------------------------------------------------------------------------

\1\ The BSA is codified at 12 U.S.C. 1829b and 1951-1959, 18
U.S.C. 1956, 1957, and 1960, and 31 U.S.C. 5311-5314 and 5316-5332
and notes thereto, with implementing regulations at 31 CFR Chapter
X. See 31 CFR 1010.100(e).
\2\ 31 U.S.C. 5311.
\3\ Treasury Order 180-01 (Sept. 26, 2002).
---------------------------------------------------------------------------

The BSA was amended by the Annunzio-Wylie Anti-Money Laundering Act
of 1992 (Pub. L. 102-550) (``Annunzio-Wylie''). Annunzio-Wylie
authorizes the Secretary and the Board to issue joint regulations
requiring insured banks to maintain records of domestic funds
transfers.\4\ In addition, Annunzio-Wylie authorizes the Secretary and
the Board to issue joint regulations requiring insured banks and
certain nonbank financial institutions to maintain records of
international funds transfers and transmittals of funds.\5\ Annunzio-
Wylie requires the Secretary and the Board, in issuing regulations for
international funds transfers and transmittals of funds, to consider
the usefulness of the records in criminal, tax, or regulatory
investigations or proceedings, and the effect of the regulations on the
cost and efficiency of the payments system.\6\
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\4\ 12 U.S.C. 1829b(b)(2) (2006). Treasury has independent
authority to issue regulations requiring nonbank financial
institutions to maintain records of domestic transmittals of funds.
\5\ 12 U.S.C.1829b(b)(3) (2006).
\6\ Id. As discussed later in this Federal Register notice, the
final rule would have no effect on the current scope of or
substantive requirements in BSA regulations and thus no effect on
the cost or efficiency of the payment systems.
---------------------------------------------------------------------------

The Electronic Fund Transfer Act (``EFTA'') \7\ was enacted in 1978
to establish the rights and liabilities of consumers as well as the
responsibilities of all participants in electronic fund transfer
activities. The EFTA is implemented by Regulation E, which sets up the
framework that establishes the rights, liabilities, and
responsibilities of participants in electronic fund transfer
systems.\8\ Section 1073 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (``Dodd-Frank Act''),\9\ added a new section
919 to the EFTA, creating a comprehensive new system of consumer
protections for remittance transfers sent by consumers in the United
States to individuals and businesses in foreign countries. Because the
new section 919 of the EFTA defines ``remittance transfers'' broadly,
most electronic transfers of funds sent by consumers in the United
States to recipients in other countries will be subject to the new
protections.
---------------------------------------------------------------------------

\7\ 15 U.S.C. 1693 et seq.
\8\ 12 CFR part 1005.
\9\ Public Law 111-203, 124 Stat. 1376, section 1073 (2010).
---------------------------------------------------------------------------

II. Background Information

A. Current Regulations Regarding Funds Transfers and Transmittals of
Funds

On January 3, 1995, FinCEN and the Board jointly issued a rule that
requires banks and nonbank financial institutions to collect and retain
information on certain funds transfers and transmittals of funds
(``recordkeeping rule'').\10\ At the same

[[Page 72814]]

time, FinCEN issued the ``travel rule,'' which requires banks and
nonbank financial institutions to include certain information on funds
transfers and transmittals of funds sent to other banks or nonbank
financial institutions.\11\
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\10\ 31 CFR 1020.410(a) (recordkeeping requirements for banks);
31 CFR 1010.410(e) (recordkeeping requirements for nonbank financial
institutions). The Board revised its Regulation S (12 CFR part 219)
to incorporate by reference the recordkeeping rule codified in Title
31 of the CFR, as well as to impose a five-year record-retention
requirement with respect to the recordkeeping and reporting
requirements.
\11\ 31 CFR 1010.410(f).
---------------------------------------------------------------------------

The recordkeeping and travel rules provide uniform recordkeeping
and transmittal requirements for financial institutions and are
intended to help law enforcement and regulatory authorities detect,
investigate, and prosecute money laundering and other financial crimes
by preserving an information trail about persons sending and receiving
funds through the funds transfer system.
In general, the recordkeeping rule requires financial institutions
to retain information on transmittals of funds of $3,000 or more and
requires banks to retain information on funds transfers of $3,000 or
more. Under the recordkeeping rule, a financial institution must retain
the following information for transmittals of funds of $3,000 or more:
If acting as a transmittor's financial institution, either
the original, microfilmed, copied, or electronic record of the
following information: (a) The name and address of the transmittor; (b)
the amount of the transmittal order; (c) the execution date of the
transmittal order; (d) any payment instructions received from the
transmittor with the transmittal order; (e) the identity of the
recipient's financial institution; (f) as many of the following items
as are received with the transmittal order: the name and address of the
recipient, the account number of the recipient, and any other specific
identifier of the recipient; and (g) if the transmittor's financial
institution is a nonbank financial institution, any form relating to
the transmittal of funds that is completed or signed by the person
placing the transmittal order.\12\
---------------------------------------------------------------------------

\12\ 31 CFR 1010.410(e)(1)(i).
---------------------------------------------------------------------------

If acting as an intermediary financial institution, or a
recipient financial institution, either the original, microfilmed,
copied, or electronic record of the received transmittal order.\13\
---------------------------------------------------------------------------

\13\ 31 CFR 1010.410(e)(1)(ii) and (iii).
---------------------------------------------------------------------------

Banks are required to maintain analogous information for funds
transfers of $3,000 or more, but the rule uses different terminology to
describe the parties.\14\ The recordkeeping rule requires that the data
be retrievable.\15\ Records required to be retained by the
recordkeeping rule must be made available to Treasury or the Board upon
request.\16\
---------------------------------------------------------------------------

\14\ 31 CFR 1020.410(a).
\15\ 31 CFR 1010.410(e)(4)
\16\ 12 U.S.C. 1829b(b)(3)(C); 12 CFR 219.24.
---------------------------------------------------------------------------

Under the travel rule, a financial institution acting as the
transmittor's financial institution must obtain and include in the
transmittal order the following information on transmittals of funds of
$3,000 or more: (a) Name and, if the payment is ordered from an
account, the account number of the transmittor; (b) the address of the
transmittor; (c) the amount of the transmittal order; (d) the execution
date of the transmittal order; (e) the identity of the recipient's
financial institution; (f) as many of the following items as are
received with the transmittal order: The name and address of the
recipient, the account number of the recipient, and any other specific
identifier of the recipient; and (g) either the name and address or the
numerical identifier of the transmittor's financial institution. A
financial institution acting as an intermediary financial institution
must include in its respective transmittal order the same data points
listed above, if received from the sender.\17\
---------------------------------------------------------------------------

\17\ 31 CFR 1010.410(f)(1)-(2).
---------------------------------------------------------------------------

The recordkeeping rule and the travel rule apply to transmittals of
funds and funds transfers. A ``transmittal of funds'' is defined as a
series of transactions beginning with the transmittor's transmittal
order, made for the purpose of making payment to the recipient of the
order (31 CFR 1010.100(ddd)). The term includes any transmittal order
issued by the transmittor's financial institution or an intermediary
financial institution intended to carry out the transmittor's
transmittal order. The term transmittal of funds includes a funds
transfer. A ``funds transfer'' is a series of transactions beginning
with the originator's payment order, made for the purpose of making
payment to the beneficiary of the order (31 CFR 1010.100(w)). The term
includes any payment order issued by the originator's bank or an
intermediary bank intended to carry out the originator's payment order.
Under the current definitions, transmittals of funds and funds
transfers governed by the EFTA, as well as any other funds transfers
that are effected through an automated clearinghouse, an automated
teller machine (``ATM''), or a point-of-sale system, are excluded from
the definitions of ``transmittal of funds'' and ``funds transfer''
under the BSA.
When the recordkeeping and travel rules were adopted, the EFTA
governed only electronic funds transfers as defined in section
903(a)(7) of that Act. The term ``electronic fund transfer'' includes
any transfer of funds that is initiated through an electronic terminal,
telephone, computer, or magnetic tape, for the purpose of ordering,
instructing, or authorizing a financial institution to debit or credit
a consumer's account (including a payroll card account). The term
includes, but is not limited to, (a) point-of-sale transfers; (b) ATM
transactions; (c) direct deposits or withdrawals of funds; (d)
transfers initiated by phone as part of a bill-payment plan; and (e)
transfers resulting from debit card transactions, whether or not
initiated through an electronic terminal. The term does not include
certain transfers of funds, such as those originated by check, draft,
or similar paper instrument; those issued as a means of guaranteeing
the payment or authorizing the acceptance of a check, draft, or similar
paper instrument; or those made in the context of a purchase or sale of
certain securities or commodities.\18\ Wire or other similar transfers
conducted through Fedwire[supreg] or similar wire transfer systems
primarily used for transfers between financial institutions or between
businesses are also specifically excluded from the definition of
``electronic fund transfer.''
---------------------------------------------------------------------------

\18\ 15 U.S.C. 1693a(7); 12 CFR 1005.3(b).
---------------------------------------------------------------------------

B. Section 1073 of the Dodd-Frank Act and the EFTA

Section 1073 of the Dodd-Frank Act, signed into law on July 21,
2010, added a new Section 919 to the EFTA, creating new protections for
consumers who send remittance transfers. Authority to implement the
EFTA (except for the interchange fee provisions in EFTA section 920)
transferred from the Board to the Consumer Financial Protection Bureau
(``CFPB'') effective July 21, 2011. On February 7, 2012, CFPB adopted a
final rule to implement Section 919, with an original effective date of
February 7, 2013, which was later postponed to October 28, 2013.\19\
The provisions of the final rule will apply to any ``remittance
transfer,'' which is defined as the electronic transfer of funds
requested by a sender to a designated recipient that is sent by a
remittance transfer provider. The term

[[Page 72815]]

applies regardless of whether the sender holds an account with the
remittance transfer provider, and regardless of whether the transaction
is also an electronic fund transfer. However, certain small dollar and
securities- or commodities-related transfers are excluded from the
definition of remittance transfer.\20\ A ``sender'' is a consumer in a
State who, primarily for personal, family, or household purposes,
requests a remittance transfer provider to send a remittance transfer
to a designated recipient.\21\ A ``designated recipient'' is any person
specified by the sender as the authorized recipient of a remittance
transfer to be received at a location in a foreign country.\22\ A
``remittance transfer provider'' or ``provider'' is any person that
provides remittance transfers for a consumer in the normal course of
its business, regardless of whether the consumer holds an account with
such person.\23\ Once effective, the provisions will extend the
coverage of section 919 of the EFTA, as implemented by Regulation E, to
transactions that were excluded from other portions of the EFTA and
Regulation E, such as international wire transfers sent by consumers
through banks, and cash-based transmittals of funds sent by a consumer
through money transmitters.
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\19\ 77 FR 6193 (Feb. 7, 2012). On December 31, 2012, the CFPB
requested comment on proposed revisions to its remittance amendments
to Regulation E. 77 FR 77188 (Dec. 31, 2012). On January 22, 2013,
the CFPB issued a final rule that temporarily delays the effective
date of their revisions to Regulation E, 78 FR 6025 (Jan. 29, 2013).
The CFPB finalized its December 31, 2012 proposal on April 30, 2013,
with an effective date of October 28, 2013 (78 FR 30662, May 22,
2013).
\20\ 12 CFR 1005.30(e).
\21\ 12 CFR 1005.30(g).
\22\ 12 CFR 1005.30(c).
\23\ 12 CFR 1005.30(f).
---------------------------------------------------------------------------

C. Effect of Changes to the EFTA and Regulation E on the Scope of the
Definitions of ``Transmittal of Funds'' and ``Funds Transfer'' Under
the Regulations Implementing the BSA

Existing BSA regulations exclude certain types of transactions and
payment systems that are used mostly for domestic retail transactions
and payments from the definitions of funds transfer and transmittal of
funds. This exclusion was implemented, not by listing the individual
transaction types, but by referencing the law that protected the
consumers engaged in such transactions, namely the EFTA, and the
specific payment systems through which such transactions are conducted,
namely ATM, point-of-sale, and automated clearinghouse transactions.
This method of identifying excluded transactions created a link between
the two statutes (and their implementing regulations) with very
different goals. The BSA requires financial institutions to keep
records and file reports on transmittals of funds and funds transfers
(which could be either domestic or international, consumer- or
business-related, retail or wholesale, cash-based or account-based)
that the Secretary and the Board determine have a high degree of
usefulness in criminal, tax, or regulatory investigations or
proceedings, or in intelligence or counterintelligence matters to
protect against domestic and international terrorism.\24\ The EFTA, as
originally adopted, protects individual consumers engaging in certain
movements of funds initiated through electronic means (e.g., electronic
terminal, telephone, computer, online banking, magnetic tape, etc.) for
the purpose of ordering, instructing, or authorizing a financial
institution to debit or credit a consumer's account. In spite of the
different statutory purposes, for many years this approach to
identifying excluded transactions was satisfactory, as the types of
transactions covered by the EFTA conformed to the profile of the types
of transactions that were appropriate to exclude from the recordkeeping
and travel requirements under the BSA.
---------------------------------------------------------------------------

\24\ 31 U.S.C. 5311; 12 U.S.C. 1829b and 1953(a).
---------------------------------------------------------------------------

However, the recent amendments to the EFTA and the recently
finalized revisions to Regulation E, which will become effective
October 28, 2013, would result in an expanded scope of the transactions
subject to the EFTA's remittance provisions. Some of these transactions
have, to date, been covered by the regulations implementing the BSA.
When the changes to Regulation E become effective, these transactions,
which include international funds transfers sent by consumers through
banks and cash- or account-based transmittals of funds sent by
consumers through money transmitters, would fall outside the BSA rules'
definitions of ``funds transfer'' and ``transmittal of funds'' (31 CFR
1010.100(w) and 1010.100(ddd)).

III. Notice of Proposed Rulemaking, Analysis of Comments, and Final
Rule

To avoid the aforementioned reduction in the scope of transactions
subject to the BSA, on December 6, 2012, the Board and FinCEN issued a
Notice of Proposed Rulemaking (``NPRM'') to solicit comments on
revising the regulations implementing the BSA by narrowing the
exclusion from the definitions of ``funds transfer'' and ``transmittal
of funds.'' \25\ The proposed revision would replace the general
reference to the EFTA contained in the exception to the definitions of
``transmittal of funds'' and ``funds transfer,'' by a more specific
reference to section 903(7) of the EFTA, the section of the EFTA
containing the definition of ``electronic fund transfers,'' which are
the transactions that are currently excluded from the recordkeeping and
travel rules. Any remittance transfers that are covered by section 919
of the EFTA, but do not meet the definition of electronic fund transfer
under section 903(7) of that statute, would continue to be covered by
the travel and recordkeeping rules.
---------------------------------------------------------------------------

\25\ 77 FR 72783 (Dec. 6, 2012).
---------------------------------------------------------------------------

The comment period ended on January 25, 2013. The Board and FinCEN
received eight comment letters from individuals and representatives of
various groups whose members had an interest in the amendment to the
definitions. One letter contained observations regarding the
implementation of CFPB's remittance transfer rule and was therefore out
of the scope of the comments requested by the NPRM. The remaining
comments were uniformly supportive of the purpose of the amendment and
generally supportive of the proposed approach to implementing it.
Five commenters requested that the Board and FinCEN clearly state
in the Final Rule that the proposed amendment does not change the
current scope of the obligations of financial institutions under the
recordkeeping and travel rules. As noted in the preamble to the
proposal, the purpose of the Final Rule is to maintain the
recordkeeping and reporting status quo existing before the EFTA
amendments. Nothing in this Final Rule modifies the current scope of
the obligation of any financial institution under the recordkeeping and
travel rules.
One commenter encouraged the Board and FinCEN to delay finalizing
the proposed amendment until CFPB's remittance transfer rule itself is
finalized and effective, to ensure any further change to its provisions
does not inadvertently cause additional changes to the current scope of
transactions subject to the BSA. On April 30, 2013, CFPB finalized its
remittance transfer rule with an effective date of October 28, 2013.
The Board and FinCEN have concluded that the changes to the remittance
transfer provisions in Regulation E under the CFPB's final remittance
rule will not have any impact on section 903(7) of the EFTA, and
therefore there is no need to revise the proposed amendments to the
recordkeeping and travel rule.
Finally, another commenter suggested that the Board and FinCEN
consider incorporating the statutory language of section 903(7) of the
EFTA into the regulatory definitions, without cross-referencing the
EFTA statute, to prevent the need for further amendments should
Congress make changes to the EFTA

[[Page 72816]]

statute in the future. The statutory definition of ``electronic fund
transfer'' includes terms that are defined elsewhere in the EFTA, which
also would have to be incorporated into the recordkeeping and travel
rules. Moreover, future changes to the statutory definition of
``electronic fund transfer'' could be changes the Board and FinCEN
would want to incorporate into the recordkeeping and travel rules.
Accordingly, the Board and FinCEN are adopting the amendments to the
definitions of ``funds transfer'' and ``transmittal of funds'' as
proposed.

IV. Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. It has been determined that this final rule is neither an
economically significant regulatory action nor a significant regulatory
action for purposes of Executive Orders 12866 and13563.

V. Unfunded Mandates Act of 1995 Statement

Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded
Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an
agency prepare a budgetary impact statement before promulgating a rule
that may result in expenditure by the State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, section 202 of the Unfunded Mandates Act also requires an
agency to identify and consider a reasonable number of regulatory
alternatives before promulgating a rule. Since there is no change to
the requirements imposed under existing regulations, FinCEN has
determined that it is not required to prepare a written statement under
section 202.

VI. Regulatory Flexibility Act

FinCEN

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a regulation that has a significant economic impact on a substantial
number of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
regulation's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the regulation will not
have a significant economic impact on a substantial number of small
entities (5 U.S.C. 605(b)). These changes are not intended to alter any
institution's existing obligations. The sole purpose of these
amendments is to maintain the current scope of transactions subject to
the BSA funds transfer recordkeeping and travel rules, in light of
changes to the EFTA. Accordingly, FinCEN hereby certifies that the
amended regulation is not likely to have a significant economic impact
on a substantial number of small business entities for purposes of the
Regulatory Flexibility Act.

Board

An initial regulatory flexibility analysis (``IRFA'') was included
in the proposal in accordance with Section 3(a) of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. (``RFA''). In the IRFA, the Board
requested comment on all aspects of the IRFA, and, in particular,
whether any alternative approaches would reduce the burden on all
entities, including small entities.
The RFA requires an agency either to provide a final regulatory
flexibility analysis or certify that the final rule will not have a
significant impact on a substantial number of small entities. The final
rule covers insured banks and certain nonbank financial institutions
that are engaged in funds transfers and transmittals of funds. The
Board believes it is unlikely that the final rule will have a
significant economic impact on a substantial number of small entities.
Nonetheless, the Board has prepared a final regulatory flexibility
analysis pursuant to the RFA.
1. Statement of the need for and objectives of the final rule. The
Dodd-Frank Act's amendments to the EFTA expanded the types of
transactions that are covered by the EFTA, thereby excluding them from
the definition of funds transfer and transmittal of funds in 31 CFR
1010.100(w) and 31 CFR 1010.100(ddd), respectively. This final rule is
necessary to retain the current scope of transactions subject to the
recordkeeping rule.
2. Summary of significant issues raised by public comment on the
Board's initial analysis of issues, and a statement of any changes made
as a result. The Board did not receive any comments on the proposed
rule addressing matters relating to the Board's initial regulatory
flexibility analysis.
3. Small entities affected by the final rule. The requirements of
this final rule, like the existing requirements, apply to all financial
institutions subject to the Bank Secrecy Act, regardless of size. Based
on Call Report data as of December 31, 2012, approximately 3,660
insured depository institutions had total domestic assets of $175
million or less.\26\'' In addition, the requirements of this final rule
will affect financial institutions that are not ``insured depository
institutions'' under the Federal Depository Insurance Act. For example,
as of December 31, 2012, approximately 5,970 credit unions had total
domestic assets of $175 million or less.
---------------------------------------------------------------------------

\26\ U.S. Small Business Administration. Table of Small Business
Size Standards Matched to North American Industry Classification
System Codes, available at https://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
---------------------------------------------------------------------------

4. Compliance requirements. The final rule, like the current
regulation, requires insured depository institutions and nonbank
financial institutions to collect and retain information on funds
transfers and transmittals of funds. The final rule does not change the
scope of the information currently required to be collected or retained
and does not change the funds transfers and transmittals of funds for
which the information currently must be collected and maintained.
5. Other Federal rules. The Board has not identified any Federal
rules that duplicate, overlap, or conflict with the final rule.
6. Significant alternatives to the proposed regulation. The Board
did not receive any comments on any significant alternatives that would
minimize the impact of the proposal on small entities.

VII. Paperwork Reduction Act

The collection of information requirements have been reviewed and
approved by the Office of Management and Budget (``OMB'') under section
3507 of the Paperwork Reduction Act of 1995 (``PRA'') (44 U.S.C.
3507(d). (OMB Control No. 1506-0058 (recordkeeping requirements for
financial institutions under Sec. 1010.410(e) and (f)) and 1506-0059
(recordkeeping requirements for banks under Sec. 1020.410(a)). Under
the PRA, an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number. These amendments maintain the
same scope of transactions subject to the requirements of the
recordkeeping and travel rules as

[[Page 72817]]

existed prior to this rulemaking. With no change to the types or scope
of transactions covered under the regulations, there is no impact on
the burden estimates already approved under the requirements of the
PRA.

List of Subjects in 31 CFR Part 1010

Authority delegations (Government agencies), Banks and banking,
Currency, Investigations, Law enforcement, Reporting and recordkeeping
requirements.

Authority and Issuance

For the reasons set forth in the preamble, 31 CFR part 1010 is
amended as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 continues to read as follows:

Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314,
5316-5332; title III, secs. 311, 312, 313, 314, 319, 326, 352, Pub.
L. 107-56, 115 Stat. 307.

0
2. Section 1010.100 is amended by:
0
a. Revising the last sentence of paragraph (w), and
0
b. Revising the last sentence of paragraph (ddd) to read as follows:

Sec. 1010.100 General definitions.

* * * * *
(w) Funds transfer. * * * Electronic fund transfers as defined in
section 903(7) of the Electronic Fund Transfer Act (15 U.S.C.
1693a(7)), as well as any other funds transfers that are made through
an automated clearinghouse, an automated teller machine, or a point-of-
sale system, are excluded from this definition.
* * * * *
(ddd) Transmittal of funds. * * * Electronic fund transfers as
defined in section 903(7) of the Electronic Fund Transfer Act (15
U.S.C. 1693a(7)), as well as any other funds transfers that are made
through an automated clearinghouse, an automated teller machine, or a
point-of-sale system, are excluded from this definition.
* * * * *

In concurrence:

By order of the Board of Governors of the Federal Reserve
System, November 13, 2013.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
Dated: November 14, 2013.
Jennifer Shasky Calvery,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2013-28951 Filed 12-3-13; 8:45 am]
BILLING CODE 4810-2P-P; 6210-01-P

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