[Federal Register Volume 59, Number 201 (Wednesday, October 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25706]


[[Page Unknown]]

[Federal Register: October 19, 1994]


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FEDERAL RESERVE SYSTEM

12 CFR Part 230

[Regulation DD; Docket No. R-850]

 

Truth in Savings; Regulatory Amendments

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board is publishing amendments to Regulation DD (Truth in 
Savings) and the official staff commentary to implement recent changes 
made to the Truth in Savings Act by the Riegle Community Development 
and Regulatory Improvement Act of 1994. The law narrows the scope of 
accounts covered by the Truth in Savings Act to accounts held by 
individuals for a personal, family or household purpose. Accounts held 
by unincorporated nonbusiness associations of individuals are no longer 
subject to Truth in Savings requirements. The amendments to Regulation 
DD would merely implement this change by deleting references to 
``unincorporated nonbusiness associations of individuals.'' The Board 
has made a finding that publishing a proposed amendment for comment is 
unnecessary and contrary to the public interest; therefore, the 
amendment is adopted in final form.

EFFECTIVE DATE: September 23, 1994.

FOR FURTHER INFORMATION CONTACT: Jane Ahrens, Senior Attorney, or Kyung 
Cho-Miller, Staff Attorney, Division of Consumer and Community Affairs, 
Board of Governors of the Federal Reserve System, at (202) 452-3667 or 
452-2412; for the hearing impaired only contact Dorothea Thompson, 
Telecommunications Device for the Deaf, at (202) 452-3544.

SUPPLEMENTARY INFORMATION:

I. Background

    The purpose of the Truth in Savings Act (12 U.S.C. 4301 et seq.) is 
to assist consumers in comparing deposit accounts offered by depository 
institutions. Institutions must disclose fees, the interest rate, the 
annual percentage yield (APY), and other account terms whenever a 
consumer requests the information and before an account is opened. Fees 
and other information also must be provided on any periodic statement 
sent to the consumer. Deposit account advertisements and advance 
notices to account holders of adverse changes in terms are also 
covered. The act restricts how institutions determine the account 
balance on which interest is calculated. The act is implemented by the 
Board's Regulation DD (12 CFR part 230). (See final rule published on 
September 21, 1992 (57 FR 43337), correction notice published on 
October 9, 1992 (57 FR 46480), and amendments published on March 19, 
1993 (58 FR 15077).) An official staff commentary was published on 
August 8, 1994 (59 FR 40217).

II. Regulatory Amendment

    The Riegle Community Development and Regulatory Improvement Act of 
1994 was enacted September 23, 1994 (Pub. L. 103-325, 108 Stat. 2160). 
Section 332 of the act amends the Truth in Savings Act. The amendment 
narrows the scope of covered accounts to those held by individuals 
primarily for personal, family or household purposes. Accounts held by 
unincorporated nonbusiness associations of individuals are no longer 
covered by Truth in Savings, effective on the law's date of enactment.
    The Board is adopting amendments to the regulation and commentary 
to implement this change. The Administrative Procedure Act provides 
that notice and opportunity for public comment are not required if the 
Board finds that notice and public comment are unnecessary or would be 
contrary to the public interest. 5 U.S.C. 553(b)(B). The Board believes 
such a finding is appropriate in this case. The Congress has eliminated 
a class of accounts from Truth in Savings coverage, and the amendments 
merely effect that change. These amendments--which only delete 
references to accounts held by unincorporated nonbusiness associations 
of individuals--are technical and not subject to interpretation. In 
light of the Congress' action, the Board has no discretion with regard 
to this regulatory change. It is essentially ministerial. The Board is 
required by law to amend Regulation DD in the manner proposed. This 
amendment to 12 CFR part 230 relieves depository institutions from the 
requirement that they treat ``unincorporated nonbusiness associations 
of individuals'' as ``consumers'' under Regulation DD. Because this 
regulatory amendment eliminates requirements, it is effective 
September, 23, 1994--the effective date of the statutory amendment.
    For these reasons, the Board has determined that publishing a 
notice of proposed rulemaking and providing opportunity for public 
comment for the following amendments is unnecessary and would be 
contrary to the public interest.

Section 230.2--Definitions

(a) Account
    The reference to existing accounts held by an unincorporated 
nonbusiness association of natural persons prior to June 21, 1993 is 
deleted.
(h) Consumer
    The reference to accounts held by unincorporated nonbusiness 
associations of natural persons is deleted.

Supplement I to Part 230--Official Staff Interpretations

Section 230.2--Definitions

(h) Consumer
    Comment 2(h) -5, which provides guidance for determining whether an 
account held by an unincorporated association of individuals is for a 
business or nonbusiness purpose, is deleted.

III. Economic Impact Statement

    The amendment has no significant impact on institutions' costs, 
including those of small institutions.

List of Subjects in 12 CFR Part 230

    Advertising, Banks, banking, Consumer protection, Federal Reserve 
System, Record and recordkeeping requirements, Truth in savings.

    For the reasons set forth in the preamble, 12 CFR part 230 is 
amended as follows:

PART 230--TRUTH IN SAVINGS (REGULATION DD)

    1. The authority citation for part 230 continues to read as 
follows:

    Authority: 12 U.S.C. 4301 et seq.


Sec. 230.2  [Amended]

    2. In Sec. 230.2, the last sentence of paragraph (a) and the second 
sentence of paragraph (h) are removed.

Supplement I to Part 230--[Amended]

    3. In Supplement I to Part 230 under the heading Section 230.2--
Definitions., paragraph (h)5. Unincorporated associations. is removed.

    By order of the Board of Governors of the Federal Reserve 
System, October 13, 1994.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 94-25706 Filed 10-18-94; 8:45 am]
BILLING CODE 6210-01-P