[Federal Register Volume 77, Number 240 (Thursday, December 13, 2012)]
[Notices]
[Pages 74187-74191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30094]


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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: Notice is hereby given of the final approval of a proposed 
information collection by the Board of Governors of the Federal Reserve 
System under OMB delegated authority, as per 5 CFR 1320.16 (OMB 
Regulations on Controlling Paperwork Burdens on the Public). Board-
approved collections of information are incorporated into the official 
OMB inventory of currently approved collections of information. Copies 
of the Paperwork Reduction Act Submission, supporting statements and 
approved collection of information instrument(s) are placed into OMB's 
public docket files. The Federal Reserve may not conduct or sponsor, 
and the respondent is not required to respond to, an information 
collection that has been extended, revised, or implemented on or after 
October 1, 1995, unless it displays a currently valid OMB control 
number.

FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance 
Officer--Cynthia Ayouch--Division of Research and Statistics, Board of 
Governors of the Federal Reserve System, Washington, DC 20551 (202) 
452-3829. Telecommunications Device for the Deaf (TDD) users may 
contact (202) 263-4869, Board of Governors of the Federal Reserve 
System, Washington, DC 20551.
    OMB Desk Officer--Shagufta Ahmed--Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503.
    Final approval under OMB delegated authority the implementation of 
the following information collection:
    Report title: Retail Payments Surveys.
    Agency form number: FR 3066a, b, c, and d.
    OMB control number: 7100-0351.
    Frequency: FR 3066a, b, and c: triennial (once every three years) 
and FR 3066d: annual and on occasion.
    Reporters: Depository and financial institutions, payment networks, 
payment processors, and payment instrument issuers.
    Estimated reporting hours: FR 3066a: 49,000 hours; FR 3066b: 1,040 
hours; FR 3066c: 450 hours; FR 3066d: 400 hours.
    Estimated average hours per response: FR 3066a: 35 hours; FR 3066b: 
8 hours; FR 3066c: 3 hours; FR 3066d: 8 hours.
    Estimated number of respondents: FR 3066a: 1,400; FR 3066b: 130; FR 
3066c: 150; FR 3066d: 50.
    General description of report: The Federal Reserve is generally 
authorized to collect the information called for by the FR 3066 series 
pursuant to sections

[[Page 74188]]

2A and 12A of the Federal Reserve Act. In addition, survey questions in 
the FR 3066 are authorized pursuant to the Board's authority under one 
or more of the following statutes:
     Expedited Funds Availability Act Sec.  609 (12 U.S.C. 
4008).
     Electronic Fund Transfer Act Sec.  904 (15 U.S.C. 1693b) 
and Sec.  920 (15 U.S.C. 1693o-2).
     Truth in Lending Act Sec.  105 (15 U.S.C. 1604).
     The Check Clearing for the 21st Century Act Sec.  15 (12 
U.S.C. 5014).
     Federal Reserve Act Sec.  11 (Examinations and reports, 
Supervision over Reserve Banks, and Federal Reserve Note provisions, 12 
U.S.C. 248); Sec.  11A (Pricing of Services, 12 U.S.C. 248a); Sec.  13 
(FRB deposits and collections, 12 U.S.C. 342); and Sec.  16 (Issuance 
of Federal Reserve Notes, par clearance, and FRB clearinghouse, 12 
U.S.C. 248-1, 360, and 411).
    Additionally, depending upon the survey respondent, the information 
collection may be authorized under a more specific statute. 
Specifically, the Board is authorized to collect information from state 
member banks under section 9 of the Federal Reserve Act (12 U.S.C. 
324); from bank holding companies (and their subsidiaries) under 
section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844(c)); from 
savings and loan holding companies under (12 U.S.C. 1467a(b)(3) and 
5412), from Edge Act and agreement corporations under sections 25 and 
25A of the Federal Reserve Act (12 U.S.C. 602 and 625); and from U.S. 
branches and agencies of foreign banks under section 7(c)(2) of the 
International Banking Act of 1978 (12 U.S.C. 3105(c)(2)), and under 
section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)).
    Obligation to Respond: Voluntary.
    Confidentiality: Respondents to the various surveys are requested 
to report confidential business information, such as information 
requested in the FR 3066a (for depository and financial institutions) 
about the number and value of deposits in various customer account 
types, image check deposits, paper check deposits, ACH entries, wire 
transfers, debit and prepaid card transactions, credit card 
transactions, mobile payments, and transactions involving third-party 
fraud. The other surveys request similar types of confidential ``number 
and value'' information appropriate to the surveyed entities. For 
example, the Network, Processor, and Issuer Payments Surveys (FR 3066b) 
request the number, value, and type of transactions involving credit 
cards (both general-purpose and private-label), debit cards, and 
prepaid cards from respondents (card networks, card processors, and 
retail merchants). Only aggregate totals from the surveys, such as 
estimated national volumes and trends in different types and categories 
of payments, check distribution, and established and emerging payment 
instruments, are proposed to be publicly released.
    Under exemption 4 of the Freedom of Information Act (``FOIA''), 5 
U.S.C. 552(b)(4), ``trade secrets and commercial or financial 
information obtained from a person and privileged or confidential'' may 
be excluded from disclosure. The confidential business information 
collected voluntarily from individual respondents may be withheld, as 
release of such information would impair the Board's ability to collect 
such information in the future. Moreover, disclosure of such 
confidential business information could cause substantial competitive 
harm to the survey respondents. See National Parks & Conservation Ass'n 
v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).
    Abstract: The voluntary Retail Payments Surveys are designed to 
collect information needed to support the Federal Reserve System's role 
in the retail payments system.\1\ The FR 3066a and the FR 3066b collect 
information on the national volume (number and value) of major 
categories and subcategories of established and emerging methods of 
noncash payment from a nationally representative, stratified random 
sample of depository institutions and from a census of payments 
networks, processors, and issuers, respectively. These two surveys also 
collect information on trends in different business arrangements and 
technologies connected with the initiation, authorization, collection, 
and processing of payments. In addition, the FR 3066a collects the 
volumes of bank customers' cash withdrawals and deposits at retail 
branches, wholesale vaults, and automated teller machines (ATMs). The 
FR 3066b collects information on cash substitution, such as the 
distribution of low-value purchases made with noncash instruments and 
the loading of cash onto other payment instruments.
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    \1\ While the Federal Reserve is involved with both retail and 
wholesale payments, these surveys are designed to collect 
information on retail payments and the systems or networks that are 
primarily used to make retail payments. Retail payments are 
generally for relatively small dollar amounts and often involve a 
depository institution's retail clients--individuals, businesses, 
and governments. Wholesale payments are generally for relatively 
large dollar amounts, and often involve a depository institution's 
large corporate customers or counterparties, including other 
financial institutions. Wholesale payments are not the main focus of 
the surveys, but may be included in cases where there is a need.
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    The FR 3066c collects data from samples of individual checks 
obtained from a sample of depository institutions.\2\ The FR 3066d 
collects payment volumes similar to those collected in the FR 3066a or 
the FR 3066b from a subset of respondents to obtain information about 
changes in volumes that may occur in the two years between triennial 
surveys.
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    \2\ This survey is similar to the Check Sample Studies, part of 
the Federal Reserve Payments Study (FRPS), conducted by the Retail 
Payment Office (RPO) in 2001, 2007, and 2010. As with past studies, 
copies of checks or any information that would identify payers or 
payees on the checks would not be retained or used for any purpose 
other than estimating the aggregate proportions of different types 
of checks.
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    In general, the FR3066a, b, and c surveys will be distributed in 
the first quarter of2013, and data collection will primarily take place 
during the second quarter 2013.
    Current Actions: On September 6, 2012, the Federal Reserve 
published a notice in the Federal Register (77 FR 54912) requesting 
public comment for 60 days on the implementation of the FR 3066a, b, c, 
and d. The comment period for this notice expired on November 5, 2012. 
The Federal Reserve received four comment letters addressing the 
proposed implementation of this information collection, which are 
summarized and addressed below.

Summary Discussion of Public Comments and Responses

    The Federal Reserve received written comments from one financial 
institution, one merchant trade association, one payment card network, 
and one payment industry association. All commenters supported the data 
collection effort, and noted that the information is widely used by 
payment system participants as a benchmark and to gain insights into 
payment system trends. Commenters believed that providing the data 
requested in the surveys would generally not be burdensome to 
respondents.
    At the Federal Reserve's request, contractors assisting with the 
survey design conducted industry outreach calls to obtain additional 
insights into the clarity of the survey forms and the feasibility of 
providing the requested data items. Institutions represented in the 
calls included financial institutions, networks, and processors of 
several types and sizes.
    The detailed discussion in this notice addresses the specific 
substantive issues that arose from the written comments

[[Page 74189]]

and the industry outreach calls, and modifications to the surveys in 
response to the comments. In addition to the modifications discussed 
below, minor clarifications will be made to the surveys in response to 
the comments.

Detailed Discussion of Public Comments and Response

Depository and Financial Institution Payments Survey (FR 3066a)

General Comments
    The Federal Reserve specifically requested comment on whether 
reporting data for March 2013 was more feasible and/or useful than 
reporting data for another period such as March and April 2013 
combined. One commenter specifically noted that reducing the number of 
months of data from two consecutive months to one (as compared with the 
2010 version of the survey) would simplify the response process, but 
have no substantial effect on the quality or validity of the data 
provided. If, as proposed, only March data were collected, another 
commenter urged the Federal Reserve to maintain comparability with 
previous surveys by accounting for the seasonality in card data when 
annualizing estimates from the survey. The Federal Reserve believes 
that the reduction in the complexity provided by reporting one month 
rather than two months of data will help maintain high response rates, 
and offset the increased complexity of the survey compared with the 
2010 version, and will use the available information to ensure 
comparability with previous studies.
    The Federal Reserve plans to help respondents prepare for data 
submission by engaging a contractor to assist with several voluntary 
interactive survey training sessions where respondents will be invited 
to ask clarifying questions or discuss their own data-reporting 
circumstances. Based on these sessions, the FR 3066 information 
collection will continue to be clarified and a frequently asked 
questions document will be developed.
Section-by-Section Analysis of Substantive Comments

Customer Accounts

    This section contains questions about the number and value of 
transaction deposit accounts, prepaid card program accounts, and credit 
card accounts, as well as the number of debit, prepaid and credit cards 
outstanding. Some commenters noted that various sections of the survey 
would be distributed to several different business lines within their 
institution and, in order to more readily associate the account and 
card data to the related transaction data, suggested that these 
questions be moved to account specific sections of the survey. The 
Federal Reserve will implement this suggestion.
    The Federal Reserve specifically requested comment on how 
institutions refer to ``full service'' transaction deposit accounts 
(e.g. checking accounts, debit card accounts, etc.) to distinguish them 
from prepaid card accounts. One commenter noted that the main 
distinguishing factor for prepaid versus full service is unlimited 
check writing ability on a full service account. Based on this comment 
and others, the Federal Reserve will clarify the definition of prepaid 
card accounts compared with other types of accounts.
    The Federal Reserve also specifically asked for comment on whether 
it is more feasible and/or useful to ask for the number of active cards 
outstanding or the number of accounts with recent card activity for 
credit card, debit card, and prepaid card accounts. Several commenters 
generally believed that it was most relevant to request the number of 
eligible and active cards outstanding rather than the number of 
accounts with cards outstanding. The Federal Reserve will modify the 
survey to request the number of ``cards in force'' and active cards for 
credit cards, debit cards, and prepaid cards.
    One commenter requested that information on the total number of 
cards in force with embedded chip technology would be valuable to the 
industry. The Federal Reserve will modify the survey to collect a count 
of the number of cards outstanding that have chip technology for credit 
cards, debit cards, and prepaid cards.
    The Federal Reserve specifically asked for comment on the most 
feasible and/or useful time period over which a payment card account 
should have payment or transaction activity to be considered active as 
well as what kinds of transactions, if any, should not be counted 
toward activity. One commenter suggested that the definition of an 
active card for debit and prepaid cards--which would include purchases, 
but not cash withdrawals--should be 30 days, while the credit card 
activity definition--which potentially would include purchases and 
balance transfers--should be 90 days due to the lower activity, in 
general, of credit cards. The Federal Reserve notes that the definition 
of an active card for debit, prepaid, and credit cards in this survey 
should be based on whether the card was used for a payment transaction 
(as defined in the survey form) during the 31-day survey period of 
March 2013. This approach allows for consistency of definition across 
cards, and also allows for the calculation of the number of payments 
per active card during the survey period.

Check Deposits

    Some commenters expressed interest in understanding the number and 
value of consumer checks deposited remotely via a mobile device and 
believed it was feasible to do so. The Federal Reserve will add 
``checks deposited via mobile device'' and ``other'' as subsets of data 
under item 7a.1.1 ``consumer client image capture'' to allow the 
reporting of this item. However, similar additional subsets will not be 
requested for business/government or correspondent checks.

ACH

    The Federal Reserve specifically requested comment on whether 
including a breakout of ACH volumes (number and value) into 
subcategories needed to identify interbank ACH payments would help to 
avoid double-counting correspondent ACH volumes. Based on comments 
received, the Federal Reserve will add a check box question on whether 
the responding institution processes ACH payments for another 
institution.
    Outreach discussions raised a number of issues concerning the 
measurement of total ACH payments in the presence of several different 
practices involving the use of offset entries. In response, the Federal 
Reserve will add three check box questions to help account for and 
identify the prevalence of these different practices.

Wire Transfers

    The Federal Reserve specifically requested comment on whether 
institutions can separate wire transfer origination volumes (number and 
value) by consumer and business/government customers. Some commenters 
stated that settlement transfers (including some ``bank business'' 
wires) would be included in the business wire category and should be 
listed in a separate subcategory. The Federal Reserve will include the 
subsets of ``settlement'' and ``other'' under business wire transfers.
    Some commenters noted that allocating wire transfers to consumer 
and business categories would be a manual process and subject to error 
(e.g., some financial institutions might categorize some small-business 
wires as consumer wires and others as business/government wires). The 
Federal Reserve realizes that respondents' ability to separate wires by 
type vary across institutions and will instruct

[[Page 74190]]

respondents answer items they cannot measure as ``not reportable'' 
(``NR''). While some wires may be difficult for respondents to 
categorize, the responses in aggregate should provide a clearer measure 
of wire usage than what is currently available.
    The Federal Reserve also specifically requested comment on whether 
institutions can separate wire transfer origination volumes (number and 
value) between domestic and foreign wire transfers. No commenters 
suggested that such a separation would be infeasible or burdensome. In 
addition, some outreach discussions identified an interest in measuring 
consumer cross-border payments. To address this interest, the Federal 
Reserve will create subsets of ``consumer'' and ``other'' transactions 
under ``foreign wire transfers.''

Debit and Prepaid Cards

    One commenter stated that it could report cash back transactions 
for debit cards overall, but was not able to identify cash back from 
prepaid card transactions from other debit card transactions. The 
Federal Reserve will modify the survey so that respondents report cash 
back transactions for debit cards in the aggregate and enter NR in 
cases where data are unavailable.

Cash

    Industry outreach discussions identified an interest in the number 
of remote currency management terminals (``smart safes'') and the 
number and value of deposit transactions that are associated with them. 
The Federal Reserve will include a section on Currency Management 
Terminals with six quantitative data items to accommodate reporting of 
this information. These terminals are relatively rare but are becoming 
more prevalent in the currency management industry. Most respondents 
likely will not be involved with these new terminals, and will be able 
to just enter ``0'' for these new data items.

Unauthorized Transactions (Third-party Fraud)

    The Federal Reserve specifically requested comment on whether 
institutions can report information on unauthorized transactions, as 
defined, or whether another definition of third-party fraud would be 
more feasible and/or useful to report. One commenter was interested in 
the collection of more details on the types of fraud, suggesting a 
collection of stratified fraud categories. In weighing the inclusion of 
a fraud category, the Federal Reserve tried to balance the value of 
detailed information against the burden and feasibility of obtaining 
details on fraud. There are many ways to categorize fraud, and 
institutions follow differing methods of tracking it. While recognizing 
the importance of the other types of fraud (such as first-party fraud) 
which the survey does not measure, the Federal Reserve will not make 
any changes to this section, which quantifies one broad and important 
type of payment fraud.
    One commenter was concerned that the definition of ``unauthorized 
payments'' may not capture chargebacks, often initiated by the 
cardholder, and which may require payees or their agents to spend 
significant time and resources to validate the charge. While the 
Federal Reserve recognizes that the burden imposed by non-fraudulent 
chargebacks can be a significant concern for particular merchants, they 
do not necessarily constitute third-party fraud and should not be 
reported in this survey unless linked to an unauthorized transaction 
determined to be third-party fraud. Other surveys are designed to 
address some of these issues more fully and the Federal Reserve 
believes that this particular survey is not the proper forum to address 
chargebacks.

Network, Processor, & Issuer Payments Surveys (FR 3066b)

General Comments
    Based on an evaluation of written comments and information gathered 
from industry outreach calls, the Federal Reserve will modify the 
survey forms with several minor definitional and reorganizational 
changes. One change designed to ease the burden for certain items that 
may be unavailable are check boxes to allow respondents to indicate 
that the item is not tracked by the organization. Other general changes 
include revisions to create better consistency across forms.
    One commenter suggested using the definition of a ``general-use 
prepaid card'' of Regulation II to define a prepaid card account for 
the network surveys. The Federal Reserve will keep the surveys 
consistent with this basic definition where applicable. In addition, 
for private label prepaid cards which are not for general use or for 
other cards that may not be covered by Regulation II, the definitions 
will be adapted as appropriate to maintain consistency.
    One commenter requested that information be collected on the number 
and value of chargebacks and the number of cards outstanding that 
include chip technology. The Federal Reserve will add a field for the 
number and value of chargebacks as a subset of ``adjustments and 
returns'' for the relevant card networks. In addition, the Federal 
Reserve will request a count of the number of cards outstanding that 
have chip technology in the appropriate surveys.
    The Federal Reserve specifically requested comment on whether card 
networks can report cash advances received in physical cash form as a 
subset of total cash advances. (Total cash advances include not only 
physical cash advances but also other funds transfers such as an 
electronic transfer to a transaction deposit account or a payment made 
with credit account funds using a special check issued to the 
cardholder). One commenter noted that a particular network could report 
physical cash back from a bank teller or ATM, but could not report 
other types of cash advances. Industry outreach discussions with other 
networks reflected a similar position. Because it is the most feasible 
category, the Federal Reserve will revise the forms to ensure that 
physical cash back from ATMs and bank tellers may be reported as a 
separate line item for the relevant payment types.
    The Federal Reserve specifically requested comment on the most 
feasible and/or useful time period over which various payment 
instruments should have payment or transaction activity to be 
considered active, as well as what kinds of transactions, if any, 
should not be counted toward activity. The Federal Reserve will use the 
definition of active as cards with any transaction activity during the 
survey reference period (calendar year 2012) as proposed, for 
consistency with previous surveys.
    The Federal Reserve specifically requested comment on 
categorizations of payments that would be the most useful or feasible 
for respondents to report. Based on industry outreach discussions, the 
Federal Reserve will add one or two categorizations of payments (such 
as procurement and fleet card accounts under private-label credit card) 
to increase the clarity of the survey forms. In addition, the Federal 
Reserve would, in a few cases, adjust volume subcategories to ensure 
that the most relevant categories are included for each of the specific 
types of payments. In some cases this would mean the addition of a line 
item, and in others it would mean the removal of a line item. For 
example, in the case of the signature debit survey, a line item for 
``PINless debit (i.e., bill pay to a utility)'' may be added. In 
another example, the line item for ``cash back'' may be removed from 
the general purpose credit card survey. In a further example, ``direct 
send/consolidator (i.e., Fiserv/CheckFree)

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may be added to the online bill payment survey.

    Board of Governors of the Federal Reserve System, December 10, 
2012.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2012-30094 Filed 12-12-12; 8:45 am]
BILLING CODE 6210-01-P