Federal Government Participation in the Automated Clearing House, 73841-73842 [2014-29198]

Agencies

• Fiscal Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 79, Number 239 (Friday, December 12, 2014)]
[Rules and Regulations]
[Pages 73841-73842]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29198]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 210

RIN 1510-AB24


Federal Government Participation in the Automated Clearing House

AGENCY: Bureau of the Fiscal Service, Treasury.

ACTION: Final rule; technical correction.

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SUMMARY: This document corrects a technical error that appeared in the 
July 24, 2014 amendments to our regulation governing the use of the 
Automated Clearing House (ACH) network by Federal agencies.

DATES: This technical correction is effective December 12, 2014.

FOR FURTHER INFORMATION CONTACT: Ian Macoy, Director, Settlement 
Services Division, at (202) 874-6835 or ian.macoy@fiscal.treasury.gov 
or Natalie H. Diana, Senior Counsel, at (202) 874-6680 or 
natalie.diana@fiscal.treasury.gov.

SUPPLEMENTARY INFORMATION: 

Background

    On July 24, 2014, the Bureau of the Fiscal Service (Service) 
published a final rule in the Federal Register (79 FR 42974) to amend 
our regulation at 31 CFR part 210 (Part 210) governing the use of the 
ACH network by Federal agencies. Among the revisions to Part 210 that 
were published in the final rule were several non-substantive changes 
to Sec.  210.8(b) to reflect the re-numbering of the NACHA Rules and 
the updated citation to the Consumer Financial Protection Bureau's 
Regulation E. In revising Sec.  210.8(b), subparagraphs (1) and (2) of 
paragraph (b) were inadvertently omitted due to a drafting error.

Description of Correction

    This action corrects the omission of paragraphs (b)(1) and (2) from 
Sec.  210.8(b). In the section-by-section analysis of the final rule 
preamble published on July 24, 2014, the Service stated that the 
changes to Sec.  210.8 consisted of the replacement of specific ACH 
Rules references to reflect re-numbering of the ACH Rules and the 
updating of the regulatory citation to Regulation E to reflect its re-
codification at 12 CFR part 1005. There was no indication in the 
section-by-section analysis or discussion elsewhere in the preamble of 
the deletion of subparagraphs (1) and (2), which have no relation to 
the reasons for the technical revisions to Sec.  210.8, i.e., the re-
numbering of the ACH Rules and the re-codification of Regulation E. 
Similarly, there was no proposal to make any substantive change to 
Sec.  210.8 in the preamble or section-by-section analysis of the 
Service's notice of proposed rulemaking to amend Part 210, which was 
published on December 12, 2013 (78 FR 75528). Subparagraphs (1) and (2) 
were omitted by error from the final rule purely due to a drafting 
error in which the text of the subparagraphs was not included in the 
amendatory instructions to Sec.  210.8(b).

Procedural Matters

    Section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 
553(b)(3)(B)) provides that, when an agency for good cause finds that 
notice and public procedure are impracticable, unnecessary or contrary 
to the public interest, and provides a statement of the reasons for 
that finding, the agency may issue a final rule without providing 
notice and an opportunity for public comment. The APA also generally 
requires that a final rule be effective no sooner than 30 days after 
the date of publication in the Federal Register. This 30-day delay in 
effective date can be waived, however, if an agency finds good cause 
why the effective date should not be delayed, and the agency 
incorporates a statement of the findings and its reasons in the rule 
issued.
    The Service finds that there is good cause, and that it would be 
contrary to the public interest and unnecessary, to undertake notice 
and comment procedures to make this technical correction. As discussed 
above, the preamble and the section-by-section analysis to both the 
notice of proposed rulemaking and the final rule amendments correctly 
refer to and discuss the substance of the section affected by this 
technical correction. The Service is also waiving the 30-day delay in 
effective date for this correction. We believe that it is in the public 
interest to ensure that the correction be made as expeditiously as 
possible to avoid confusion. Therefore, we find that delaying the 
effective date of this correction would be contrary to the public 
interest and we find good cause to waive the 30-day delay in the 
effective date.
    This document is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866, entitled Regulatory Planning and Review.
    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements under the Administrative Procedure Act or any other 
statute unless the agency certifies that the rule will not have a 
significant impact on a substantial number of small entities. Because 
no notice of proposed rulemaking is required, the provisions of the 
Regulatory Flexibility Act do not apply.

List of Subjects in 31 CFR Part 210

    Automated Clearing House, Electronic funds transfer, Financial 
institutions, Fraud, and Incorporation by reference.

Words of Issuance

    Accordingly, 31 CFR part 210 is corrected by making the following 
correcting amendments:

 PART 210--FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED 
CLEARING HOUSE

0
1. The authority citation for part 210 continues to read as follows:

    Authority:  5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 
3302, 3321, 3332, 3335, and 3720.


0
2. Amend Sec.  210.8 by revising paragraph (b) to read as follows:


Sec.  210.8  Financial institutions.

* * * * *
    (b) Liability. Notwithstanding ACH Rules Subsections 2.4.4, 2.8.4, 
4.8.5, 2.9.2, 3.2.2, and 3.13.3, if the Federal Government sustains a 
loss as a result of a financial institution's failure to handle an 
entry in accordance with this part, the financial institution shall be 
liable to the Federal Government for the loss, up to the amount of the 
entry, except as otherwise provided in this section. A financial 
institution shall not be liable to any third party for any loss or 
damage resulting directly or indirectly from an agency's error or 
omission in originating an entry. Nothing in this section shall affect 
any obligation or liability of a financial institution under Regulation 
E, 12 CFR part 1005, or the Electronic Funds Transfer Act, 12 U.S.C. 
1693 et seq.
    (1) An ODFI that transmits a debit entry to an agency without the 
prior written or similarly authenticated

[[Page 73842]]

authorization of the agency, shall be liable to the Federal Government 
for the amount of the transaction, plus interest. The Service may 
collect such funds using procedures established in the applicable ACH 
Rules or by instructing a Federal Reserve Bank to debit the ODFI's 
account at the Federal Reserve Bank of the account of its designated 
correspondent. The interest charge shall be at a rate equal to the 
Federal funds rate plus two percent, and shall be assessed for each 
calendar day, from the day the Treasury General Account (TGA) was 
debited to the day the TGA is recredited with the full amount due.
    (2) An RDFI that accepts an authorization in violation of Sec.  
210.4(a) shall be liable to the Federal Government for all credits or 
debits made in reliance on the authorization. An RDFI that transmits to 
an agency an authorization containing an incorrect account number shall 
be liable to the Federal Government for any resulting loss, up to the 
amount of the payment(s) made on the basis of the incorrect number. If 
an agency determines, after appropriate investigation, that a loss has 
occurred because an RDFI transmitted an authorization or notification 
of change containing an incorrect account number, the agency may 
instruct the Service to direct a Federal Reserve Bank to debit the 
RDFI's account for the amount of the payment(s) made on the basis of 
the incorrect number. The agency shall notify the RDFI of the results 
of its investigation and provide the RDFI with a reasonable opportunity 
to respond before initiating such a debit.
* * * * *

    Dated: December 9, 2014.
Margaret Marquette,
Chief Counsel, Bureau of the Fiscal Service.
[FR Doc. 2014-29198 Filed 12-11-14; 8:45 am]
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