[Federal Register Volume 73, Number 216 (Thursday, November 6, 2008)]
[Notices]
[Pages 66100-66102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26419]


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DEPARTMENT OF THE TREASURY


Agency Information Collection Activities: Submission for OMB 
Review; Comment Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.

ACTION: Notice and request for comment.

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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to take this opportunity to comment on a continuing 
information collection, as required by the Paperwork Reduction Act of 
1995. Currently, the OCC is soliciting comment concerning its extension 
of an information collection titled ``Debt Cancellation Contracts and 
Debt Suspension Agreements--12 CFR 37.'' The OCC is also giving notice 
that it has submitted the collection to OMB for review.

DATES: You should submit written comments by: December 8, 2008.

ADDRESSES: Communications Division, Office of the Comptroller of the 
Currency, Public Information Room, Mail Stop 1-5, Attention: 1557-0224, 
250 E Street, SW., Washington, DC 20219. In addition, comments may be 
sent by fax to (202) 874-4448, or by electronic mail to 
[email protected]. You may personally inspect and photocopy 
comments at the OCC's Public

[[Page 66101]]

Information Room, 250 E Street, SW., Washington, DC. For security 
reasons, the OCC requires that visitors make an appointment to inspect 
comments. You may do so by calling (202) 874-5043. Upon arrival, 
visitors will be required to present valid government-issued photo 
identification and submit to security screening in order to inspect and 
photocopy comments.
    Additionally, you should send a copy of your comments to OCC Desk 
Officer, 1557-0224, by mail to U.S. Office of Management and Budget, 
725 17th Street, NW., 10235, Washington, DC 20503, or by fax 
to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: You can request additional information 
or a copy of the collection from Mary H. Gottlieb, (202) 874-5090, 
Legislative and Regulatory Activities Division (1557-0202), Office of 
the Comptroller of the Currency, 250 E Street, SW., Washington, DC 
20219.

SUPPLEMENTARY INFORMATION:
    The OCC is proposing to extend OMB approval of the following 
information collection:
    Title: Debt Cancellation Contracts and Debt Suspension Agreements.
    OMB Number: 1557-0224.
    Description: This submission covers an existing regulation and 
involves no change to the regulation or the information collection. The 
OCC requests that OMB approve its revised estimates and renew its 
approval of the information collection. The estimates have been revised 
only to reflect the current number of national banks.
    National banks are authorized under 12 U.S.C. 24 (Seventh) to enter 
into debt cancellation contracts (DCCs) and debt suspension agreements 
(DSAs) and to charge a fee in connection with these agreements. The 
purpose of part 37 is to set forth the standards that apply to a 
national bank's provision of DCCs and DSAs, enhance consumer 
protections for customers who buy DCCs and DSAs from national banks, 
and ensure that national banks providing DCCs or DSAs do so on a safe 
and sound basis. Part 37 requires banks to make certain disclosures to 
customers at the time of solicitation and prior to the purchase of DCCs 
and DSAs.
    The disclosures are located in Sec.  37.6. The disclosures are 
intended to establish standards to promote the protection of customers 
who buy DCCs and DSAs. The disclosures promote a customer's 
understanding of the costs, benefits, and limitations of the product, 
prevent abusive sales practices, and enable a customer to make an 
informed decision whether to purchase a DCC or DSA. The rule also 
addresses safety and soundness issues to ensure that banks offering 
DCCs and DSAs effectively manage their risk exposure.
    The documentation found in Sec.  37.7 is consistent with Federal 
Reserve Board's Regulation Z, which requires that a customer sign or 
initial an affirmative written request for debt cancellation coverage 
if fees for such coverage are to be excluded from the finance 
charge.\1\ This helps prevent coercion and customer confusion and 
enables customers to make informed decisions about whether to purchase 
a DCC or DSA.
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    \1\ 12 CFR 226.4(d)(3)(i)(C).
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Disclosure Requirements

    Section 37.6 requires a bank to provide the following disclosures, 
as appropriate:
     Anti-tying disclosure--A bank must inform the 
customer that purchase of the product is optional and neither its 
decision whether to approve a loan nor the terms and conditions of the 
loan are conditioned on the purchase of a DCC or DSA. This disclosure 
appears in both the short form and the long form.
     Explanation of debt suspension agreement--A bank must 
disclose, where applicable, that if a customer activates the agreement, 
the customer's duty to pay the loan principal and interest is only 
suspended and the customer must fully repay the loan after the period 
of suspension has expired. This disclosure appears in the long form.
     Disclosure of the amount of the fee--A bank must make 
disclosures regarding the amount of the fee. The disclosure must differ 
depending on whether the credit is open-end or closed-end. In the case 
of closed-end credit, the bank must disclose the total fee. In the case 
of open-end credit, the bank must either: (1) Disclose that the 
periodic fee is based on the account balance multiplied by a unit cost 
and provide the unit cost, or (2) disclose the formula used to compute 
the fee. This disclosure appears in the long form.
     Disclosure concerning lump sum payment of fee--A bank must 
disclose, where applicable, that a customer has the option to pay the 
fee in a single payment or in periodic payments. This disclosure is not 
appropriate for a DCC or DSA provided in connection with a residential 
mortgage loan because, under part 37, paying the fee in a single 
payment is prohibited in that case. A bank must disclose that adding 
the fee to the amount borrowed will increase the cost of the contract. 
This disclosure appears in the both the short form and long form.
     Disclosure concerning lump sum payment of fee with no 
refund--A bank must disclose, where applicable, that the customer has 
the option to choose a contract with or without a refund provision. 
This disclosure appears in both the short form and long form. This 
disclosure also requires a bank to inform a customer that prices of 
refund and no-refund products are likely to differ.
     Disclosure concerning refund of fee paid in lump sum--If a 
bank permits a customer to pay the fee in a single payment and to add 
the fee to the amount borrowed, the bank must disclose the bank's 
cancellation policy. The disclosure informs the customer that the DCC 
or DSA may be canceled at any time for a refund, within a specified 
number of days for a full refund, or with no refund. This disclosure 
appears in both the short form and long form.
     Disclosure concerning whether use of credit line is 
restricted--A bank must inform a customer if the customer's activation 
of the contract would prohibit the customer from incurring additional 
charges or using the credit line. This disclosure appears in the long 
form.
     Disclosure concerning termination of a DCC or DSA--A bank 
must explain the circumstances under which a customer or the bank could 
terminate the contract if termination is permitted during the life of 
the loan. This disclosure appears in the long form.
     Disclosure concerning additional disclosures--A bank must 
inform consumers that the bank will provide additional information 
before the customer is required to pay for the product. This disclosure 
appears in the short form.
     Disclosure pertaining to eligibility requirements, 
conditions, and exclusions--A bank must describe any material 
limitations relating to the DCC or DSA. This disclosure appears on both 
the short form and the long form. The content of the short and long 
form may vary, depending on whether a bank elects to provide a summary 
of the conditions and exclusions in the long form disclosures or refer 
the customer to the pertinent paragraphs in the contract. The short 
form requires a bank to instruct the customer to read carefully both 
the long form disclosures and the contract for a full explanation of 
the terms of the contract. The long form gives a bank the option of 
either separately summarizing the limitations or advising the customer 
that a complete explanation of the eligibility requirements, 
conditions, and exclusions is available in the contract and identifying 
the paragraphs where a customer may find that information.

[[Page 66102]]

Affirmative Election to Purchase and Acknowledgment of Receipt of 
Disclosures Required

    Section 37.7 requires a bank to obtain a customer's written 
affirmative election to purchase a contract and written acknowledgment 
of receipt of the disclosures required by Sec.  37.6.
    If the sale of the contract occurs by telephone, the customer's 
affirmative election to purchase may be made orally, and the 
requirement to obtain the customer's acknowledgment of receipt of the 
required long form disclosures may be waived, provided the bank takes 
certain steps and maintains certain documentation.
    If the contract is solicited through written materials such as mail 
inserts or ``take one'' applications and the bank provides only the 
short form disclosures in the written materials, then the bank shall 
mail the acknowledgment, together with the long form disclosures, to 
the customer. The bank may not obligate the customer to pay for the 
contract until after the bank has received the customer's written 
acknowledgment of receipt of disclosures unless the bank takes certain 
steps and maintains certain documentation.
    The affirmative election and acknowledgment may also be made 
electronically.
    Type of Review: Regular.
    Affected Public: Businesses or other for-profit.
    Number of Respondents: 1,800.
    Total Annual Responses: 1,800.
    Frequency of Response: On occasion.
    Total Annual Burden Hours: 43,200.
    An agency may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless the 
information collection displays a currently valid OMB control number.
    On August 26, 2008, the OCC published a notice in the Federal 
Register soliciting comments for 60 days on this information collection 
(73 FR 50400). One comment was received from an industry trade 
association. The commenter stated that obtaining a customer's written 
affirmative election to purchase a contract and written acknowledgement 
of receipt of the required disclosures is unnecessary and adds to the 
cost of the product. Addressing these issues would require amending the 
current rule. Comments continue to be invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information shall have practical utility;
    (b) The accuracy of the agency's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology; and
    (e) Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.

    Dated: October 30, 2008.
Michele Meyer,
Assistant Director, Legislative & Regulatory Activities Division.
 [FR Doc. E8-26419 Filed 11-5-08; 8:45 am]
BILLING CODE 4810-33-P