[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71436-71437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29688]


-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities Proposed Information 
Collection; Submission for OMB Review

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

ACTION: Notice and request for comment.

-----------------------------------------------------------------------

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, without change, of an information collection titled ``Debt 
Cancellation Contracts and Debt Suspension Agreements--12 CFR 37.'' In 
addition, the OCC is giving notice that it has submitted the collection 
to OMB for review.

DATES: You should submit written comments by: December 19, 2011.

ADDRESSES: Communications Division, Office of the Comptroller of the 
Currency, Mail Stop 2-3, Attention: 1557-0224, 250 E Street SW., 
Washington, DC 20219. In addition, comments may be sent by fax to (202) 
874-5274, or by electronic mail to [email protected]. You may 
personally inspect and photocopy comments at the OCC, 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) 
874-4700. Upon arrival, visitors will be required to present valid 
government-issued photo identification and to submit to security 
screening in order to inspect and photocopy comments.
    Additionally, please 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 Ira L. Mills or Mary H. Gottlieb, OCC 
Clearance Officers, (202) 874-6055 or (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 Control No.: 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 
to reflect the current number of national banks.
    The regulation requires national banks to disclose information 
about a Debt Cancellation Contract (DCC) or Debt Suspension Agreement 
(DSA). The short form disclosure usually is made orally and is issued 
at the time the bank firsts solicits the purchase of a contract. The 
long form disclosure usually is made in writing and is issued before 
the customer completes the purchase of the contract. There are special 
rules for transactions by telephone, solicitations using written mail 
inserts or ``take one'' applications, and electronic transactions. Part 
37 provides two forms of disclosure that serve as models for satisfying 
the requirements of the rule. Use of the forms is not mandatory. A bank 
may adjust the form and wording of its disclosures so long as the 
requirements of the regulation are met.
    12 U.S.C. 24 (Seventh) authorizes national banks to enter into DCCs 
and DSAs. The requirements of part 37 enhance consumer protections for 
customers who buy DCCs and DSAs from national banks and ensure that 
national banks provide these products in a safe and sound manner by 
requiring them to effectively manage their risk exposure.

Section 37.6

    Section 37.6 and Appendices A and B to part 37 require a bank to 
provide the following disclosures, as appropriate:
     Anti-tying--A bank must inform the customer that purchase 
of the product is optional and neither its decision whether to approve 
the loan nor the terms and conditions of the loan are conditioned on 
the purchase of a DCC or DSA.
     Explanation of debt suspension agreement--A bank must 
disclose 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.
     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 disclose that the periodic fee is based on the 
account balance multiplied by a unit cost and provide the unit cost, or 
disclose the formula used to compute the fee.
     Lump sum payment of fee--A bank must disclose, where 
appropriate, that a customer has the option to pay the fee in a single 
payment or in periodic payments. This disclosure is not appropriate in 
the case of a DCC or DSA provided in connection with a home mortgage 
loan since the option to pay the fee in a single payment is not 
available in that case. Banks are also required to disclose that adding 
the fee to the amount borrowed will increase the cost of the contract.
     Lump sum payment of fee with no refund--A bank must 
disclose that the customer has the option to choose a contract with or 
without a refund

[[Page 71437]]

provision. This disclosure also states that prices of refund and no-
refund products are likely to differ.
     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 of the bank's refund policy, as 
applicable, i.e., that the DCC or DSA: (i) may be canceled at any time 
for a refund; (ii) may be cancelled within a specified number of days 
for a full refund; or (iii) may be cancelled at any time with no 
refund.
     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.
     Termination of a DCC or DSA-- If termination is permitted 
during the life of the loan, a bank must explain the circumstances 
under which a customer or the bank could terminate the contract.
     Additional disclosures--A bank must inform consumers that 
it will provide additional information before the customer is required 
to pay for the product.
     Eligibility requirements, conditions, and exclusions--A 
bank must describe any material limitations relating to the DCC or DSA.
    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.

Section 37.7

    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 and acknowledgment of receipt of the required short form 
may be made orally, provided the bank maintains sufficient 
documentation to show that the customer received the short form 
disclosures and then affirmatively elected to purchase the contract; 
mails the affirmative written election and written acknowledgment, 
together with the long form disclosures required by section 37.6, to 
the customer within 3 business days after the telephone solicitation, 
and maintains sufficient documentation to show it made reasonable 
efforts to obtain the documents from the customer; and permits the 
customer to cancel the purchase of the contract without penalty within 
30 days after it mailed the long form disclosures to the customer.
    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, maintains certain documentation, and permits the customer to 
cancel the purchase within 30 days after mailing the long form 
disclosures to the customer. The affirmative election and 
acknowledgment may also be made electronically.
    Type of Review: Regular.
    Affected Public: Businesses or other for-profit.
    Number of Respondents: 1,650.
    Total Annual Responses: 1,650.
    Frequency of Response: On occasion.
    Total Annual Burden Hours: 39,600.
    A 60-day Federal Register notice was issued on June 28, 2011 
regarding renewal of this collection. 76 FR 37889. One comment was 
received from a service provide, which supported the renewal of the 
information collection. 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 start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

    Dated: November 8, 2011.
Michele Meyer,
Assistant Director, Legislative & Regulatory Activities Division.
[FR Doc. 2011-29688 Filed 11-16-11; 8:45 am]
BILLING CODE 4810-33-P