Notice2022-11095
Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 24, 2022
Issuing agencies
Federal Reserve System
Abstract
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, the Recordkeeping and Disclosure Requirements Associated with Regulation II (FR II; OMB No. 7100-0349).
Full Text
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<title>Federal Register, Volume 87 Issue 100 (Tuesday, May 24, 2022)</title>
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[Federal Register Volume 87, Number 100 (Tuesday, May 24, 2022)]
[Notices]
[Pages 31554-31555]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11095]
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FEDERAL RESERVE SYSTEM
Agency Information Collection Activities: Announcement of Board
Approval Under Delegated Authority and Submission to OMB
AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: The Board of Governors of the Federal Reserve System (Board)
is adopting a proposal to extend for three years, without revision, the
Recordkeeping and Disclosure Requirements Associated with Regulation II
(FR II; OMB No. 7100-0349).
FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance
Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, Board of
Governors of the Federal Reserve System, Washington, DC 20551, (202)
452-3829.
Office of Management and Budget (OMB) Desk Officer for the Federal
Reserve Board, Office of Information and Regulatory Affairs, Office of
Management and Budget, New Executive Office Building, Room 10235, 725
17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board
authority under the Paperwork Reduction Act (PRA) to approve and assign
OMB control numbers to collections of information conducted or
sponsored by the Board. Board-approved collections of information are
incorporated into the official OMB inventory of currently approved
collections of information. The OMB inventory, as well as copies of the
PRA Submission, supporting statements, and approved collection of
information instrument(s) are available at <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>. These documents are also available on the Federal
Reserve Board's public website at <a href="https://www.federalreserve.gov/apps/reportforms/review.aspx">https://www.federalreserve.gov/apps/reportforms/review.aspx</a> or may be requested from the agency clearance
officer, whose name appears above.
Final Approval Under OMB Delegated Authority of the Extension for Three
Years, Without Revision, of the Following Information Collection
Report title: Recordkeeping and Disclosure Requirements Associated
with Regulation II.
Agency form number: FR II.
OMB control number: 7100-0349.
Frequency: On occasion, annually.
Respondents: Debit card issuers and payment card networks.
Estimated number of respondents: Implement policies and procedures,
1; Review and update policies and procedures, 527; General
recordkeeping, 527; Annual notification and change in status, 527.
Estimated average hours per response: Implement policies and
procedures, 160; Review and update policies and procedures, 40; General
recordkeeping, 1; Annual notification and change in status, 1.
Estimated annual burden hours: Implement policies and procedures,
160; Review and update policies and procedures, 21,080; General
recordkeeping, 527; Annual notification and change in status, 527.
General description of report: Regulation II--Debit Card
Interchange Fees and Routing (12 CFR part 235) implements standards for
assessing whether interchange transaction fees for electronic debit
transactions are reasonable and proportional to the cost incurred by
the issuer with respect to the transaction, and establishes rules for
payment card transactions as required by section 920(a) of the
Electronic Fund Transfer Act (EFTA) (15 U.S.C. 1693o-2(a)).
Section 235.4(b)(1) requires that, in order to be eligible to
receive or charge the fraud-prevention adjustment, an issuer that is
subject to Regulation II's interchange fee standards (a ``covered
issuer'') must develop and implement policies and procedures reasonably
designed to take effective steps to reduce the occurrence of, and costs
to all parties from, fraudulent electronic debit transactions,
including through the development and implementation of cost-effective
fraud-prevention technology. Section 235.4(b)(2) describes the specific
requirements that a covered issuer's fraud-prevention policies and
procedures must address. Section 235.4(b)(3) requires that a covered
issuer must review its fraud-prevention policies and procedures, and
their implementation, at least annually, and update them as necessary.
Section 235.4(c) requires that, to be eligible to receive or charge a
fraud-prevention adjustment, a covered issuer must annually notify its
payment card networks that it complies with the standards under section
235.4(b). Section 235.4(d) requires that, no later than 10 days after a
covered issuer determines or receives a notification from the
appropriate agency under section 235.9 that the covered issuer is
substantially non-compliant with the standards set forth in section
235.4(b), a covered issuer must notify its payment card networks that
it is no longer eligible to receive or charge a fraud-prevention
adjustment. The covered issuer must stop receiving and charging the
fraud-prevention adjustment within 30 days after providing such
notification to its payment card networks.
Section 235.8(c)(1) requires that any debit card issuer subject to
Regulation II (i.e., not just covered issuers) shall retain evidence of
compliance with the requirements in Regulation II for a period of not
less than five years after the end of the calendar year in which the
electronic debit transaction occurred. In addition, section 235.8(c)(2)
requires that, where any person subject to Regulation II (e.g., an
issuer or payment card network) receives actual notice that it is
subject to an investigation by an enforcement agency, such person must
retain the records until final disposition of the matter. Compliance
with this general recordkeeping requirement involves retaining records
to demonstrate fulfillment of the other requirements in Regulation II.
Legal authorization and confidentiality: The Recordkeeping and
Disclosure Requirements Associated with Regulation II are authorized by
section 920(a)(3) of the EFTA.\1\ The fraud-prevention and disclosure
requirements are additionally
[[Page 31555]]
authorized by section 920(a)(5) of the EFTA.\2\ Regulation II's general
recordkeeping requirement for issuers is mandatory. Regulation II's
fraud-prevention recordkeeping requirements and disclosure requirements
are required to obtain a benefit.
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\1\ 15 U.S.C. 1693o-2(a)(3) (authorizing the Board to prescribe
regulations regarding interchange transaction fees and require
issuers or payment card networks to provide to the Board such
information as deemed necessary).
\2\ 15 U.S.C. 1693o-2(a)(5) (permitting the Board to allow for
the fraud-prevention adjustment and condition it upon compliance
with fraud-related standards promulgated by the Board).
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The Recordkeeping and Disclosure Requirements Associated with
Regulation II are generally not submitted to the Board or to any of the
federal financial regulatory agencies. In the event that the Board
obtains such information, it may be kept confidential under exemption 4
of the Freedom of Information Act (FOIA) to the extent that it contains
commercial or financial information both customarily and actually
treated as private.\3\ If such information is obtained through the
examination or enforcement process, it may be kept confidential under
exemption 8 of the FOIA.\4\
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\3\ 5 U.S.C. 552(b)(4).
\4\ 5 U.S.C. 552(b)(8).
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Current actions: On December 3, 2021, the Board published a notice
in the Federal Register (86 FR 68667) requesting public comment for 60
days on the extension, without revision, of the Recordkeeping and
Disclosure Requirements Associated with Regulation II. The comment
period for this notice expired on February 1, 2022. The Board received
two comments.
Detailed Discussion of Public Comments
The first comment letter was from trade associations representing
debit card issuers; these commenters supported the proposal to extend
for three years, without revision, the Recordkeeping and Disclosure
Requirements Associated with Regulation II. The second comment letter
was from trade associations representing merchants; these commenters
did not provide comments related to the Recordkeeping and Disclosure
Requirements Associated with Regulation II. Both comment letters
addressed substantive issues pertaining to Regulation II that were
unrelated to the regulation's information collections.
Board of Governors of the Federal Reserve System, May 17, 2022.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2022-11095 Filed 5-23-22; 8:45 am]
BILLING CODE 6210-01-P
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