Final Format and Summary of Responses to Request for Information Regarding Disclosures for Student Financial Accounts; Announcement of Applicable Dates, 32762-32766 [2017-15077]
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evening hours over the course of the
winter, during which time vessel traffic
is infrequent.
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B. Impact on Small Entities
The Regulatory Flexibility Act of 1980
(RFA), 5 U.S.C. 601–612, as amended,
requires federal agencies to consider the
potential impact of regulations on small
entities during rulemaking. The term
‘‘small entities’’ comprises small
businesses, not-for-profit organizations
that are independently owned and
operated and are not dominant in their
fields, and governmental jurisdictions
with populations of less than 50,000.
The Coast Guard received no comments
from the Small Business Administration
on this rule. The Coast Guard certifies
under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact
on a substantial number of small
entities.
While some owners or operators of
vessels intending to transit the bridge
may be small entities, for the reasons
stated in section V.A above, this rule
will not have a significant economic
impact on any vessel owner or operator.
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121),
we want to assist small entities in
understanding this rule. If the rule
would affect your small business,
organization, or governmental
jurisdiction and you have questions
concerning its provisions or options for
compliance, please contact the person
listed in the FOR FURTHER INFORMATION
CONTACT, above.
Small businesses may send comments
on the actions of Federal employees
who enforce, or otherwise determine
compliance with, Federal regulations to
the Small Business and Agriculture
Regulatory Enforcement Ombudsman
and the Regional Small Business
Regulatory Fairness Boards. The
Ombudsman evaluates these actions
annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247). The
Coast Guard will not retaliate against
small entities that question or complain
about this rule or any policy or action
of the Coast Guard.
C. Collection of Information
This rule calls for no new collection
of information under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3520).
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D. Federalism and Indian Tribal
Government
A rule has implications for federalism
under Executive Order 13132,
Federalism, if it has a substantial direct
effect on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government. We have
analyzed this rule under that Order and
have determined that it is consistent
with the fundamental federalism
principles and preemption requirements
described in Executive Order 13132.
Also, this rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes.
E. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100,000,000 (adjusted for inflation) or
more in any one year. Though this rule
will not result in such expenditure, we
do discuss the effects of this rule
elsewhere in this preamble.
F. Environment
We have analyzed this rule under
Department of Homeland Security
Management Directive 023–01 and
Commandant Instruction M16475.l
(series), which guides the Coast Guard
in complying with the National
Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321–4370f), and
have made a preliminary determination
that this action is one of a category of
actions which do not individually or
cumulatively have a significant effect on
the human environment. This rule
simply promulgates the operating
regulations or procedures for
drawbridges. Normally such actions are
categorically excluded from further
review, under figure 2–1, paragraph
(32)(e), of the Instruction. A preliminary
Record of Environmental Consideration
and a Memorandum for the Record are
not required for this rule. We seek any
comments or information that may lead
to the discovery of a significant
environmental impact from this rule.
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G. Protest Activities
The Coast Guard respects the First
Amendment rights of protesters.
Protesters are asked to contact the
person listed in the FOR FURTHER
INFORMATION CONTACT section to
coordinate protest activities so that your
message can be received without
jeopardizing the safety or security of
people, places or vessels.
List of Subjects in 33 CFR Part 117
Bridges.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 117 as follows:
PART 117—DRAWBRIDGE
OPERATION REGULATIONS
1. The authority citation for part 117
continues to read as follows:
■
Authority: 33 U.S.C. 499; 33 CFR 1.05–1;
Department of Homeland Security Delegation
No. 0170.1.
2. Amend § 117.205 by revising
paragraph (c) to read as follows:
■
§ 117.205
Connecticut River.
*
*
*
*
*
(c) The draw of the Route 82 Bridge,
mile 16.8, at East Haddam, shall operate
as follows:
(1) From May 1 through October 31:
The draw shall open on signal for
commercial vessels. For recreational
vessels, the draw shall open on signal,
except that from 6 a.m. to 8 p.m., the
draw need open for recreational vessels
on the hour only.
(2) From November 1 through April
30: The draw shall open on signal for all
vessels, except that from 8 p.m. to 4
a.m., the draw shall open on signal if at
least six-hours notice is given by calling
the number posted at the bridge.
Dated: June 30, 2017.
S.D. Poulin,
Rear Admiral, U.S. Coast Guard, Commander,
First Coast Guard District.
[FR Doc. 2017–15055 Filed 7–17–17; 8:45 am]
BILLING CODE 9110–04–P
DEPARTMENT OF EDUCATION
34 CFR Part 668
RIN 1840–AD14
[Docket ID ED–2015–OPE–0020]
Final Format and Summary of
Responses to Request for Information
Regarding Disclosures for Student
Financial Accounts; Announcement of
Applicable Dates
Office of Postsecondary
Education, Department of Education.
AGENCY:
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Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Rules and Regulations
Responses to request for
information.
ACTION:
On May 9, 2017, the
Department of Education (Department)
published in the Federal Register a
Request for Information (RFI) to solicit
ideas and information related to the
major features and types of commonly
assessed fees that postsecondary
institutions (institutions) must disclose
under Department regulations with
regard to each of the institution’s Tier 1
(T1) or Tier 2 (T2) arrangements. The
Department announces the final format
for these disclosures. To allow
institutions sufficient time to adopt the
final format, if they elect to do so, the
Department is allowing additional
time—until January 1, 2018—for
institutions to comply with the
applicable disclosure requirements.
DATES: The Department is allowing
additional time—until January 1, 2018—
for institutions to comply with the
requirements in 34 CFR
668.164(d)(4)(i)(B)(2).
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Ashley Higgins, U.S. Department of
Education, 400 Maryland Avenue SW.,
Room 6W234, Washington, DC 20202.
Telephone: (202) 453–6097 or by email:
Ashley.Higgins@ed.gov.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll free, at 1–800–877–
8339.
The
Secretary received 10 written responses
to the RFI and is using this feedback to
announce the final format, content, and
update requirements that institutions
may choose to follow to satisfy the
requirements of § 668.164(d)(4)(i)(B)(2)
with respect to the major features and
assessed fees associated with their T1
and T2 arrangements. The Secretary
thanks the commenters for their
suggestions to improve the information
presented to students. Furthermore, due
to the delay in releasing the final format
and update requirements, we are
allowing institutions additional time—
until January 1, 2018—to comply with
the requirements in
§ 668.164(d)(4)(i)(B)(2).
We also remind institutions that the
Consumer Financial Protection Bureau’s
(CFPB’s) short-form template was not
drafted to implement the Department’s
cash management regulations;
accordingly, institutions using that
template should not regard it as
authorizing T1 or T2 arrangements that
impose any fees otherwise prohibited
under § 668.164(e) or (f), as applicable.
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SUPPLEMENTARY INFORMATION:
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Analysis of Comments and Changes:
An analysis of the comments and of any
changes to the format, content, and
update requirements since publication
of the RFI follows.
General Comments
Comments: Several commenters
suggested that the disclosure should
read ‘‘ask your school (or school’s
business office) about other ways to
receive federal student aid’’ instead of
‘‘ask the financial aid office about other
ways to receive your money.’’ The
commenters indicated that this is
because the financial aid office is not
responsible for disbursing aid.
Discussion: We thank the commenters
for noting this distinction. While we do
not intend to change the wording of the
message on the example disclosure, we
note that an institution is free to replace
the wording ‘‘the financial aid office’’
with more appropriate contact
information, as long as the contact
information provided corresponds to
someone directly employed by the
school.
Changes: None.
Comments: One commenter indicated
that simply stating that students have
other ways to receive their money at the
top of the form is insufficient and that
the examples of a paper check and
direct deposit should also be included
in the example disclosure. The
commenter also suggested that more
specific contact information for the
institution be included in the statement
and that the language be bolded.
Discussion: We note that, under
§ 668.164(d)(4)(i)(B)(2), the institution is
required to list the major features and
commonly assessed fees associated with
each T1 and T2 account as part of the
selection menu. Section
668.164(d)(4)(i)(A)(2) requires that the
student’s options for receiving direct
payments are described and presented
in a clear, fact-based, and neutral
manner. Section 668.164(d)(4)(i)(B)(1)
requires that institutions must present
prominently as the first option, the
ability to receive student aid funds via
direct deposit to a preexisting financial
account belonging to the student.
Because all of these items are required
to be a part of the selection menu, we
believe it is unnecessary to add them to
the disclosures. We do not believe that
more specific contact information for an
institution is necessary, since it is
highly likely that the student will be
able to find such information on their
own once they understand which office
they need to speak to within their
institution. We also do not believe it is
necessary to bold the message at the top
of the disclosures because the format
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makes the relevant information
sufficiently clear.
Changes: None.
Comments: Several commenters
expressed concerns that having
institutions maintain the account
disclosures in their selection menus will
be administratively burdensome and
instead suggested that it would be less
burdensome to simply include a link to
the disclosures in the selection menu.
One commenter noted that there is a
risk that schools will lack the capacity
to update their disclosures in a timely
manner should the fee schedule change.
That same commenter also pointed out
that, should students choose to open a
bank account through the selection
process, they will be directed to a
disclosure page during the accountopening process.
Discussion: We disagree with the
commenter. Under
§ 668.164(d)(4)(i)(B)(2), an institution
must list the major features and
commonly assessed fees associated with
each T1 and T2 account as part of the
selection menu (80 FR 67125, 67160).
We believe that this approach is a more
effective way of delivering important
consumer information at the time a
choice is being made, rather than simply
including a link to a set of disclosures.
Therefore, we require the disclosures to
be visible within the selection menu.
Changes: None.
Comments: One commenter took issue
with the phrase ‘‘[y]our funds are/are
not eligible for Federal Deposit
Insurance Corporation/National Credit
Union Administration (FDIC or NCUA)
insurance,’’ included on the disclosure.
The commenter indicated that such a
statement is incomplete, and could put
institutions and financial account
providers at risk since there are limits
to FDIC and NCUA coverage, using the
example that funds are only insured up
to a certain amount and there are certain
other limitations.
Discussion: We disagree that
including a binary indicator of whether
an account carries FDIC or NCUA
insurance creates risk for either an
institution or its partner financial
account provider. The extent to which
such coverage insures an
accountholder’s funds is immaterial to
whether such coverage exists. In the
RFI, we proposed that this statement be
included because some types of
accounts, especially prepaid accounts,
do not have any FDIC or NCUA
insurance. We continue to believe that
this information is critical for students
prior to opening an account and believe
its inclusion will not create confusion
for students or risk to institutions and
financial account providers. However,
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we are clarifying the disclosure
language by replacing the phrase ‘‘funds
are/are not’’ and with ‘‘account is/is
not.’’
Changes: We are removing the phrase
‘‘funds are/are not’’ from the section of
the disclosures addressing FDIC and
NCUA insurance and replacing it with
‘‘account is/is not.’’
Comments: Several commenters
suggested that the Department place
more emphasis on overdraft fees, with
some asking that overdraft fees be
included in the top-line disclosure
items. Some commenters also suggested
the use of bold font for a proposed topline overdraft disclosure. One
commenter argued that this will help
students who may be comparing fees
between two programs if a campus
offers both T1 and T2 accounts. One
commenter also argued that giving more
prominence to overdraft fees is
important, since data show that students
remain particularly vulnerable to
incurring overdraft fees. Another
commenter suggested that the statement
on overdrafts be more expansive,
arguing that a more prominent display
of these fees will help institutions to
compare financial programs in
connection with their contracting
decisions. Another commenter
suggested that the disclosures include a
statement that overdraft features are
optional on T2 accounts, stating that
accountholders who choose overdraft
features are more likely to incur high
fees.
Discussion: In the process of drafting
the RFI, we considered including
overdraft fees as a top-line disclosure
item. However, we determined that it
would be unnecessary to include
overdraft fees in such a manner because
financial account providers under T1
arrangements are unable to charge such
fees and because, in the event that they
are charged by T2 providers, they would
almost certainly be included in the
additional two fees listed in the
disclosures. However, after reviewing
the comments, we are concerned that
this approach may result in a disclosure
that unintentionally downplays a fee
that is not only typically expensive
compared to other fees that students
may be charged, but can quickly
compound itself when an account is in
a negative balance. We are persuaded by
the comments arguing that overdraft
fees should result in a more prominent
display on the disclosures. We also
agree that such a placement may help
students who are comparing two
different types of accounts, even if the
fee is not charged. However, we decline
to add a statement that overdraft
features are optional as we believe it
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may confuse students. We also believe
that bold font for the top-line item is
unnecessary, given its already
prominent placement in the revised
disclosure template.
Changes: We have added ‘‘overdraft’’
fees as a top-line disclosure item.
Financial account providers operating
under T1 arrangements (and any other
account providers that do not charge an
overdraft fee) can simply place an ‘‘N/
A’’ in that box. As a result of this
change, we have also removed the
language that states ‘‘[y]ou may be
offered overdraft features. Fees could
apply. *OR* No overdraft/credit
feature’’ from the disclosures.
Comments: A few commenters stated
that institutions should also disclose the
number and location of surcharge-free
ATMs.
Discussion: While we thank the
commenters for their interest in making
sure that students are well informed
about their account options, we
disagree. The short-form disclosures are
meant to be easily understandable by
students, and adding the number and
locations of each networked ATM is
likely to greatly increase the length and
complexity of the disclosures. We are
also concerned that adding this feature
may increase the burden on institutions
and financial account providers without
a commensurate benefit to students.
Changes: None.
Comments: One commenter suggested
including money transfer or account
closing fees associated with a student
account, stating that this could
disproportionally impact students who
are dissatisfied with their accounts.
Discussion: The disclosures cannot
capture every fee charged by a financial
institution, and the fees specifically
identified by the commenter have not
been a significant source of complaint
during or since the rulemaking.
However, should any money transfer or
account closing fee result in a
significant share of revenue for a
financial institution, this will be
captured in the section listing
additional fees. Because of this, we
believe that it is unnecessary to add
these types of fees to the disclosures.
Changes: None.
Comments: One commenter suggested
removing some of the top-line
disclosure items and replacing them
with the high-revenue fees listed later in
the disclosures, arguing that because
some of these fees have been disallowed
through regulation, they should not be
included in the short-form disclosures.
Discussion: We disagree. Leaving fees
that have been disallowed by regulation,
such as overdraft fees for T1 accounts,
in the short-form disclosures allows
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students to more easily compare T1 and
T2 accounts with other bank accounts.
Changes: None.
Comments: In the RFI, we asked
commenters to tell us whether there is
a preferred start date for the requirement
to include the two additional fee types
that generated the highest revenue from
account holders during the previous 24
months. One commenter responded that
there is no need to delay the disclosure
of the high-revenue fees and that
financial account providers can furnish
this information as soon as they begin
using the disclosure template.
Discussion: We agree with the
commenter. If an institution chooses to
use this format, it must include all
required elements no later than January
1, 2018 (or earlier at the institution’s
discretion). Because this was a
requirement already proposed as part of
the RFI, we are not making any changes
as a result of this comment.
Changes: None.
Comments: One commenter suggested
that account providers include the
average or median annual cost for
students who choose a particular
financial account in the disclosures.
Discussion: Sections
668.164(e)(2)(vii)(B) and (f)(4)(iv)(B)
already provide for the release of the
average and median costs incurred by
students who choose to use an account
offered under a T1 or T2 arrangement.
We do not believe that the value of
adding this item to the template
outweighs the costs of requiring
institutions to meet duplicative
requirements and of making the
template more complicated.
Changes: None.
Comments: One commenter suggested
that the form should include the
relationship between the institution and
financial account provider.
Discussion: Sections 668.164(e)(2)(vi),
(e)(2)(vii)(A), (f)(4)(iii)(A), and
(f)(4)(iv)(A) already provide for the
release of the complete contract between
the parties and information regarding
the total consideration for the most
recently completed award year,
monetary and nonmonetary, paid or
received by the parties under the terms
of the contract. We do not believe that
the value of adding this item to the
template outweighs the costs of
requiring institutions to meet
duplicative requirements and of making
the template more complicated.
Changes: None.
Comments: One commenter suggested
that we add a statement to the
disclosures to clarify that the fee
schedule only applies as long as the
account holders are enrolled students at
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appropriate format to use within the
student choice menu. Nothing in the
format set forth in this document
prevents institutions from using these
types of disclosures if they wish.
However, institutions that choose to use
Pew’s format must ensure that they
comply with the additional specific
requirements for accounts offered under
T1 and T2 arrangements. For example,
under § 668.164(d)(4)(i)(A)(1) schools
must include a written statement that
students do not have to accept the
account and may recommend that
students ask about other ways to receive
their Federal student aid. Another
example is the requirement that, for
accounts offered under T1
arrangements, the institution must also
state that a student accountholder may
access his or her title IV, HEA program
funds in whole or in part up to the
account balance via domestic
withdrawals and transfers free of charge,
during the student’s entire period of
enrollment following the date that such
title IV, HEA program funds are
deposited or transferred to the financial
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account, as required under
§ 668.164(e)(2)(v)(C).
Changes: None.
Comments: Several commenters
requested a delay of the deadline for
compliance. Suggested dates included
December 31, 2017, and January 1, 2018.
Discussion: We agree with the
commenters that July 1, 2017, is
impracticable for institutions to adapt
their selection menu to include this
format. As a result, the Secretary is
allowing additional time—until January
1, 2018—for institutions to comply with
the requirements in
§ 668.164(d)(4)(i)(B)(2) regarding
disclosures of an account’s fees and
major features.
Changes: Institutions now have until
January 1, 2018, to include in their
selection menu the disclosures
regarding major features and fees
required by § 668.164(d)(4)(i)(B)(2),
whether through use of the disclosure
template described in this document or
in another manner.
Final Format of the Disclosures: The
final suggested format of the disclosures
is as follows:
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the institution at which they initially
opened the financial account.
Discussion: We thank the commenter
for the suggestion. However, the
disclosure describes only fees and other
information for enrolled students, so we
do not believe this additional statement
provides necessary information.
Changes: None.
Comments: Several commenters
suggested using the format developed by
the Pew Charitable Trusts for bank
accounts, while using the proposed
format only for prepaid accounts.
Commenters argued that since this
format has already been widely adopted
by banks, it would be easy for
institutions to comply with the
regulations. Commenters also expressed
their belief that the proposed disclosure
format is more appropriate for standard
checking accounts. One commenter
stated that it may be confusing for
students if the disclosures use terms
common to prepaid cards to describe
checking accounts.
Discussion: We agree with the
commenter that the format developed by
the Pew Charitable Trusts may be an
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Description
• The institution’s disclosures must
list the following fees: Periodic fees, per
purchase fees (including point-of-sale
fees), ATM withdrawal fees, cash reload
fees, overdraft fees, ATM balance
inquiry fees, customer service fees, and
inactivity fees. These fees are referred to
as ‘‘static fees’’ because all institutions
using the Secretary’s format must list
these fees in the disclosures, even if the
amount of the fee is zero or the fee
relates to a feature that is not offered as
part of the specific account. In cases
where the amount of any fee could vary,
the disclosures must show the highest
amount the account provider may
charge for that fee, followed by a
symbol, such as an asterisk, linked to a
statement explaining that the fee could
be lower depending on how and where
the account is used. The asterisk would
be included, for example, if point-ofsale fees differ depending on whether
the cardholder is required to provide a
PIN or signature. In cases where a static
fee is not imposed, the institution may
demonstrate that the fee is not
applicable by placing ‘‘N/A’’ or an
equivalent designation in the
appropriate field.
• The disclosures must include the
number of fee types the accountholder
may be charged under the specific
account program, excluding those fees
that are either disclosed on the form or
in close proximity as described below.
• The disclosures must also list the
two additional fee types, if any, that
generated the highest revenue from
account holders during the previous 24
months excluding static fees, any
purchase price, any activation fees and
any fee types that generated less than
five percent of the total revenue from
accountholders, as well as the amounts
of such additional fees. The two
additional fee types would be
determined for the specific financial
account program or across programs
with the same fee schedule. Institutions
must ensure that the financial account
provider reviews their fee revenue
periodically and that they assist the
institution in updating the disclosures if
needed.
• The disclosures must include
statements regarding FDIC/NCUA
insurance and a link to the terms and
conditions of the account.
• The disclosures must include a
written statement that students do not
have to accept the account offered under
a T1 or T2 arrangement and may
recommend that students ask about
other ways to receive their Federal
student aid.
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• In close proximity to the
disclosures, though not necessarily
within the disclosures, the institution
must disclose the financial account
provider’s name; the name of the
account; for T2 accounts, any purchase
price for the account (such as a fee for
acquiring an access device or a
replacement for an access device); and
any fee for activating the account. If the
financial account is a T1 account, the
institution must also use this space to
disclose that a student account holder
may access his or her title IV, HEA
program funds in part and in full up to
the account balance via domestic
withdrawals and transfers free of charge,
during the student’s entire period of
enrollment following the date that such
title IV, HEA program funds are
deposited or transferred to the financial
account, as required under
§ 668.164(e)(2)(v)(C). We also remind
institutions that T1 accounts may not
charge fees for opening or activating the
financial account or initially receiving
or activating an access device, nor for
overdrafts or fees assessed on point-ofsale transactions.
Accessible Format: Individuals with
disabilities can obtain this document in
an accessible format (e.g., braille, large
print, audiotape, or compact disc) on
request to the program contact person
listed under FOR FURTHER INFORMATION
CONTACT.
Electronic Access to This Document:
The official version of this document is
the document published in the Federal
Register. Free internet access to the
official edition of the Federal Register
and the Code of Federal Regulations is
available via the Federal Digital System
at: www.gpo.gov/fdsys. At this site you
can view this document, as well as all
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Dated: July 13, 2017.
Betsy DeVos,
Secretary of Education.
Fmt 4700
Production or Disclosure of Material or
Information; Adding the Definition of a
Record and Clarifying Language
Concerning the Timing of Responses
to Requests and Specific Categories of
Records
Postal ServiceTM.
ACTION: Final rule.
AGENCY:
The Postal Service is adding
the definition of a record to its
regulations concerning the Freedom of
Information Act. The Postal Service is
deleting language in order to clarify the
timing of responses to requests. The
Postal Service is also adding two words
to two provisions in its Freedom of
Information Act regulations concerning
special categories of records, for
clarification purposes.
DATES: Effective date: July 18, 2017.
FOR FURTHER INFORMATION CONTACT:
Natalie A. Bonanno, Chief Counsel,
Federal Compliance,
natalie.a.bonanno@usps.gov, 202–268–
2944.
SUPPLEMENTARY INFORMATION: On
November 30, 2016 (81 FR 86270), the
Postal Service published its revised
Freedom of Information Act (FOIA)
regulations to comply with the FOIA
Improvement Act of 2016 (FOIAIA),
effective December 27, 2016. In
response to public comments, the Postal
Service published an additional change
to these regulations on January 10, 2017
(82 FR 2896). After further review, the
Postal Service published miscellaneous
technical corrections to its regulations
on March 8, 2017 (82 FR 12921). The
Postal Service is now adding a record
definition, deleting language from the
timing of responses to requests, and
adding two words to two provisions in
its Freedom of Information Act
regulations concerning records relating
to specifically identified customers, for
clarification purposes.
SUMMARY:
List of Subjects in 39 CFR Part 265
Administrative practice and
procedure, Courts, Freedom of
information, Government employees.
For the reasons stated in the
preamble, the Postal Service amends 39
CFR chapter I as follows:
PART 265—[AMENDED]
1. The authority citation for 39 CFR
part 265 continues to read as follows:
BILLING CODE 4000–01–P
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39 CFR Part 265
■
[FR Doc. 2017–15077 Filed 7–17–17; 8:45 am]
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POSTAL SERVICE
Sfmt 4700
Authority: 5 U.S.C. 552; 5 U.S.C. App. 3;
39 U.S.C. 401, 403, 410, 1001, 2601; Pub. L.
114–185.
E:\FR\FM\18JYR1.SGM
18JYR1
]]>Agencies
[Federal Register Volume 82, Number 136 (Tuesday, July 18, 2017)]
[Rules and Regulations]
[Pages 32762-32766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15077]
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DEPARTMENT OF EDUCATION
34 CFR Part 668
RIN 1840-AD14
[Docket ID ED-2015-OPE-0020]
Final Format and Summary of Responses to Request for Information
Regarding Disclosures for Student Financial Accounts; Announcement of
Applicable Dates
AGENCY: Office of Postsecondary Education, Department of Education.
[[Page 32763]]
ACTION: Responses to request for information.
-----------------------------------------------------------------------
SUMMARY: On May 9, 2017, the Department of Education (Department)
published in the Federal Register a Request for Information (RFI) to
solicit ideas and information related to the major features and types
of commonly assessed fees that postsecondary institutions
(institutions) must disclose under Department regulations with regard
to each of the institution's Tier 1 (T1) or Tier 2 (T2) arrangements.
The Department announces the final format for these disclosures. To
allow institutions sufficient time to adopt the final format, if they
elect to do so, the Department is allowing additional time--until
January 1, 2018--for institutions to comply with the applicable
disclosure requirements.
DATES: The Department is allowing additional time--until January 1,
2018--for institutions to comply with the requirements in 34 CFR
668.164(d)(4)(i)(B)(2).
FOR FURTHER INFORMATION CONTACT: Ashley Higgins, U.S. Department of
Education, 400 Maryland Avenue SW., Room 6W234, Washington, DC 20202.
Telephone: (202) 453-6097 or by email: Ashley.Higgins@ed.gov.
If you use a telecommunications device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
SUPPLEMENTARY INFORMATION: The Secretary received 10 written responses
to the RFI and is using this feedback to announce the final format,
content, and update requirements that institutions may choose to follow
to satisfy the requirements of Sec. 668.164(d)(4)(i)(B)(2) with
respect to the major features and assessed fees associated with their
T1 and T2 arrangements. The Secretary thanks the commenters for their
suggestions to improve the information presented to students.
Furthermore, due to the delay in releasing the final format and update
requirements, we are allowing institutions additional time--until
January 1, 2018--to comply with the requirements in Sec.
668.164(d)(4)(i)(B)(2).
We also remind institutions that the Consumer Financial Protection
Bureau's (CFPB's) short-form template was not drafted to implement the
Department's cash management regulations; accordingly, institutions
using that template should not regard it as authorizing T1 or T2
arrangements that impose any fees otherwise prohibited under Sec.
[thinsp]668.164(e) or (f), as applicable.
Analysis of Comments and Changes: An analysis of the comments and
of any changes to the format, content, and update requirements since
publication of the RFI follows.
General Comments
Comments: Several commenters suggested that the disclosure should
read ``ask your school (or school's business office) about other ways
to receive federal student aid'' instead of ``ask the financial aid
office about other ways to receive your money.'' The commenters
indicated that this is because the financial aid office is not
responsible for disbursing aid.
Discussion: We thank the commenters for noting this distinction.
While we do not intend to change the wording of the message on the
example disclosure, we note that an institution is free to replace the
wording ``the financial aid office'' with more appropriate contact
information, as long as the contact information provided corresponds to
someone directly employed by the school.
Changes: None.
Comments: One commenter indicated that simply stating that students
have other ways to receive their money at the top of the form is
insufficient and that the examples of a paper check and direct deposit
should also be included in the example disclosure. The commenter also
suggested that more specific contact information for the institution be
included in the statement and that the language be bolded.
Discussion: We note that, under Sec. 668.164(d)(4)(i)(B)(2), the
institution is required to list the major features and commonly
assessed fees associated with each T1 and T2 account as part of the
selection menu. Section 668.164(d)(4)(i)(A)(2) requires that the
student's options for receiving direct payments are described and
presented in a clear, fact-based, and neutral manner. Section
668.164(d)(4)(i)(B)(1) requires that institutions must present
prominently as the first option, the ability to receive student aid
funds via direct deposit to a preexisting financial account belonging
to the student. Because all of these items are required to be a part of
the selection menu, we believe it is unnecessary to add them to the
disclosures. We do not believe that more specific contact information
for an institution is necessary, since it is highly likely that the
student will be able to find such information on their own once they
understand which office they need to speak to within their institution.
We also do not believe it is necessary to bold the message at the top
of the disclosures because the format makes the relevant information
sufficiently clear.
Changes: None.
Comments: Several commenters expressed concerns that having
institutions maintain the account disclosures in their selection menus
will be administratively burdensome and instead suggested that it would
be less burdensome to simply include a link to the disclosures in the
selection menu. One commenter noted that there is a risk that schools
will lack the capacity to update their disclosures in a timely manner
should the fee schedule change. That same commenter also pointed out
that, should students choose to open a bank account through the
selection process, they will be directed to a disclosure page during
the account-opening process.
Discussion: We disagree with the commenter. Under Sec.
668.164(d)(4)(i)(B)(2), an institution must list the major features and
commonly assessed fees associated with each T1 and T2 account as part
of the selection menu (80 FR 67125, 67160). We believe that this
approach is a more effective way of delivering important consumer
information at the time a choice is being made, rather than simply
including a link to a set of disclosures. Therefore, we require the
disclosures to be visible within the selection menu.
Changes: None.
Comments: One commenter took issue with the phrase ``[y]our funds
are/are not eligible for Federal Deposit Insurance Corporation/National
Credit Union Administration (FDIC or NCUA) insurance,'' included on the
disclosure. The commenter indicated that such a statement is
incomplete, and could put institutions and financial account providers
at risk since there are limits to FDIC and NCUA coverage, using the
example that funds are only insured up to a certain amount and there
are certain other limitations.
Discussion: We disagree that including a binary indicator of
whether an account carries FDIC or NCUA insurance creates risk for
either an institution or its partner financial account provider. The
extent to which such coverage insures an accountholder's funds is
immaterial to whether such coverage exists. In the RFI, we proposed
that this statement be included because some types of accounts,
especially prepaid accounts, do not have any FDIC or NCUA insurance. We
continue to believe that this information is critical for students
prior to opening an account and believe its inclusion will not create
confusion for students or risk to institutions and financial account
providers. However,
[[Page 32764]]
we are clarifying the disclosure language by replacing the phrase
``funds are/are not'' and with ``account is/is not.''
Changes: We are removing the phrase ``funds are/are not'' from the
section of the disclosures addressing FDIC and NCUA insurance and
replacing it with ``account is/is not.''
Comments: Several commenters suggested that the Department place
more emphasis on overdraft fees, with some asking that overdraft fees
be included in the top-line disclosure items. Some commenters also
suggested the use of bold font for a proposed top-line overdraft
disclosure. One commenter argued that this will help students who may
be comparing fees between two programs if a campus offers both T1 and
T2 accounts. One commenter also argued that giving more prominence to
overdraft fees is important, since data show that students remain
particularly vulnerable to incurring overdraft fees. Another commenter
suggested that the statement on overdrafts be more expansive, arguing
that a more prominent display of these fees will help institutions to
compare financial programs in connection with their contracting
decisions. Another commenter suggested that the disclosures include a
statement that overdraft features are optional on T2 accounts, stating
that accountholders who choose overdraft features are more likely to
incur high fees.
Discussion: In the process of drafting the RFI, we considered
including overdraft fees as a top-line disclosure item. However, we
determined that it would be unnecessary to include overdraft fees in
such a manner because financial account providers under T1 arrangements
are unable to charge such fees and because, in the event that they are
charged by T2 providers, they would almost certainly be included in the
additional two fees listed in the disclosures. However, after reviewing
the comments, we are concerned that this approach may result in a
disclosure that unintentionally downplays a fee that is not only
typically expensive compared to other fees that students may be
charged, but can quickly compound itself when an account is in a
negative balance. We are persuaded by the comments arguing that
overdraft fees should result in a more prominent display on the
disclosures. We also agree that such a placement may help students who
are comparing two different types of accounts, even if the fee is not
charged. However, we decline to add a statement that overdraft features
are optional as we believe it may confuse students. We also believe
that bold font for the top-line item is unnecessary, given its already
prominent placement in the revised disclosure template.
Changes: We have added ``overdraft'' fees as a top-line disclosure
item. Financial account providers operating under T1 arrangements (and
any other account providers that do not charge an overdraft fee) can
simply place an ``N/A'' in that box. As a result of this change, we
have also removed the language that states ``[y]ou may be offered
overdraft features. Fees could apply. *OR* No overdraft/credit
feature'' from the disclosures.
Comments: A few commenters stated that institutions should also
disclose the number and location of surcharge-free ATMs.
Discussion: While we thank the commenters for their interest in
making sure that students are well informed about their account
options, we disagree. The short-form disclosures are meant to be easily
understandable by students, and adding the number and locations of each
networked ATM is likely to greatly increase the length and complexity
of the disclosures. We are also concerned that adding this feature may
increase the burden on institutions and financial account providers
without a commensurate benefit to students.
Changes: None.
Comments: One commenter suggested including money transfer or
account closing fees associated with a student account, stating that
this could disproportionally impact students who are dissatisfied with
their accounts.
Discussion: The disclosures cannot capture every fee charged by a
financial institution, and the fees specifically identified by the
commenter have not been a significant source of complaint during or
since the rulemaking. However, should any money transfer or account
closing fee result in a significant share of revenue for a financial
institution, this will be captured in the section listing additional
fees. Because of this, we believe that it is unnecessary to add these
types of fees to the disclosures.
Changes: None.
Comments: One commenter suggested removing some of the top-line
disclosure items and replacing them with the high-revenue fees listed
later in the disclosures, arguing that because some of these fees have
been disallowed through regulation, they should not be included in the
short-form disclosures.
Discussion: We disagree. Leaving fees that have been disallowed by
regulation, such as overdraft fees for T1 accounts, in the short-form
disclosures allows students to more easily compare T1 and T2 accounts
with other bank accounts.
Changes: None.
Comments: In the RFI, we asked commenters to tell us whether there
is a preferred start date for the requirement to include the two
additional fee types that generated the highest revenue from account
holders during the previous 24 months. One commenter responded that
there is no need to delay the disclosure of the high-revenue fees and
that financial account providers can furnish this information as soon
as they begin using the disclosure template.
Discussion: We agree with the commenter. If an institution chooses
to use this format, it must include all required elements no later than
January 1, 2018 (or earlier at the institution's discretion). Because
this was a requirement already proposed as part of the RFI, we are not
making any changes as a result of this comment.
Changes: None.
Comments: One commenter suggested that account providers include
the average or median annual cost for students who choose a particular
financial account in the disclosures.
Discussion: Sections 668.164(e)(2)(vii)(B) and (f)(4)(iv)(B)
already provide for the release of the average and median costs
incurred by students who choose to use an account offered under a T1 or
T2 arrangement. We do not believe that the value of adding this item to
the template outweighs the costs of requiring institutions to meet
duplicative requirements and of making the template more complicated.
Changes: None.
Comments: One commenter suggested that the form should include the
relationship between the institution and financial account provider.
Discussion: Sections 668.164(e)(2)(vi), (e)(2)(vii)(A),
(f)(4)(iii)(A), and (f)(4)(iv)(A) already provide for the release of
the complete contract between the parties and information regarding the
total consideration for the most recently completed award year,
monetary and nonmonetary, paid or received by the parties under the
terms of the contract. We do not believe that the value of adding this
item to the template outweighs the costs of requiring institutions to
meet duplicative requirements and of making the template more
complicated.
Changes: None.
Comments: One commenter suggested that we add a statement to the
disclosures to clarify that the fee schedule only applies as long as
the account holders are enrolled students at
[[Page 32765]]
the institution at which they initially opened the financial account.
Discussion: We thank the commenter for the suggestion. However, the
disclosure describes only fees and other information for enrolled
students, so we do not believe this additional statement provides
necessary information.
Changes: None.
Comments: Several commenters suggested using the format developed
by the Pew Charitable Trusts for bank accounts, while using the
proposed format only for prepaid accounts. Commenters argued that since
this format has already been widely adopted by banks, it would be easy
for institutions to comply with the regulations. Commenters also
expressed their belief that the proposed disclosure format is more
appropriate for standard checking accounts. One commenter stated that
it may be confusing for students if the disclosures use terms common to
prepaid cards to describe checking accounts.
Discussion: We agree with the commenter that the format developed
by the Pew Charitable Trusts may be an appropriate format to use within
the student choice menu. Nothing in the format set forth in this
document prevents institutions from using these types of disclosures if
they wish. However, institutions that choose to use Pew's format must
ensure that they comply with the additional specific requirements for
accounts offered under T1 and T2 arrangements. For example, under Sec.
668.164(d)(4)(i)(A)(1) schools must include a written statement that
students do not have to accept the account and may recommend that
students ask about other ways to receive their Federal student aid.
Another example is the requirement that, for accounts offered under T1
arrangements, the institution must also state that a student
accountholder may access his or her title IV, HEA program funds in
whole or in part up to the account balance via domestic withdrawals and
transfers free of charge, during the student's entire period of
enrollment following the date that such title IV, HEA program funds are
deposited or transferred to the financial account, as required under
Sec. [thinsp]668.164(e)(2)(v)(C).
Changes: None.
Comments: Several commenters requested a delay of the deadline for
compliance. Suggested dates included December 31, 2017, and January 1,
2018.
Discussion: We agree with the commenters that July 1, 2017, is
impracticable for institutions to adapt their selection menu to include
this format. As a result, the Secretary is allowing additional time--
until January 1, 2018--for institutions to comply with the requirements
in Sec. 668.164(d)(4)(i)(B)(2) regarding disclosures of an account's
fees and major features.
Changes: Institutions now have until January 1, 2018, to include in
their selection menu the disclosures regarding major features and fees
required by Sec. 668.164(d)(4)(i)(B)(2), whether through use of the
disclosure template described in this document or in another manner.
Final Format of the Disclosures: The final suggested format of the
disclosures is as follows:
[GRAPHIC] [TIFF OMITTED] TR18JY17.005
[[Page 32766]]
Description
The institution's disclosures must list the following
fees: Periodic fees, per purchase fees (including point-of-sale fees),
ATM withdrawal fees, cash reload fees, overdraft fees, ATM balance
inquiry fees, customer service fees, and inactivity fees. These fees
are referred to as ``static fees'' because all institutions using the
Secretary's format must list these fees in the disclosures, even if the
amount of the fee is zero or the fee relates to a feature that is not
offered as part of the specific account. In cases where the amount of
any fee could vary, the disclosures must show the highest amount the
account provider may charge for that fee, followed by a symbol, such as
an asterisk, linked to a statement explaining that the fee could be
lower depending on how and where the account is used. The asterisk
would be included, for example, if point-of-sale fees differ depending
on whether the cardholder is required to provide a PIN or signature. In
cases where a static fee is not imposed, the institution may
demonstrate that the fee is not applicable by placing ``N/A'' or an
equivalent designation in the appropriate field.
The disclosures must include the number of fee types the
accountholder may be charged under the specific account program,
excluding those fees that are either disclosed on the form or in close
proximity as described below.
The disclosures must also list the two additional fee
types, if any, that generated the highest revenue from account holders
during the previous 24 months excluding static fees, any purchase
price, any activation fees and any fee types that generated less than
five percent of the total revenue from accountholders, as well as the
amounts of such additional fees. The two additional fee types would be
determined for the specific financial account program or across
programs with the same fee schedule. Institutions must ensure that the
financial account provider reviews their fee revenue periodically and
that they assist the institution in updating the disclosures if needed.
The disclosures must include statements regarding FDIC/
NCUA insurance and a link to the terms and conditions of the account.
The disclosures must include a written statement that
students do not have to accept the account offered under a T1 or T2
arrangement and may recommend that students ask about other ways to
receive their Federal student aid.
In close proximity to the disclosures, though not
necessarily within the disclosures, the institution must disclose the
financial account provider's name; the name of the account; for T2
accounts, any purchase price for the account (such as a fee for
acquiring an access device or a replacement for an access device); and
any fee for activating the account. If the financial account is a T1
account, the institution must also use this space to disclose that a
student account holder may access his or her title IV, HEA program
funds in part and in full up to the account balance via domestic
withdrawals and transfers free of charge, during the student's entire
period of enrollment following the date that such title IV, HEA program
funds are deposited or transferred to the financial account, as
required under Sec. [thinsp]668.164(e)(2)(v)(C). We also remind
institutions that T1 accounts may not charge fees for opening or
activating the financial account or initially receiving or activating
an access device, nor for overdrafts or fees assessed on point-of-sale
transactions.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the program contact person
listed under FOR FURTHER INFORMATION CONTACT.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. Free
internet access to the official edition of the Federal Register and the
Code of Federal Regulations is available via the Federal Digital System
at: www.gpo.gov/fdsys. At this site you can view this document, as well
as all other documents of this Department published in the Federal
Register, in text or Portable Document Format (PDF). To use PDF you
must have Adobe Acrobat Reader, which is available free at the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at:
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
Dated: July 13, 2017.
Betsy DeVos,
Secretary of Education.
[FR Doc. 2017-15077 Filed 7-17-17; 8:45 am]
BILLING CODE 4000-01-P
