[Federal Register Volume 79, Number 34 (Thursday, February 20, 2014)]
[Proposed Rules]
[Pages 9647-9649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03266]


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FEDERAL RESERVE SYSTEM

12 CFR Part 230

[Docket No. R-1482]
RIN 7100 AE12


Truth in Savings (Regulation DD)

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice of proposed rulemaking; request for public comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is proposing to repeal its Regulation DD, 12 CFR part 230, which was 
issued to implement the Truth in Saving Act (TISA). Title X of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act) transferred rulemaking authority for a number of consumer 
financial protection laws, including TISA, from the Board to the Bureau 
of Consumer Financial Protection (Bureau). In December 2011, the Bureau 
published an interim final rule establishing its own Regulation DD to 
implement TISA (Bureau Interim Final Rule).\1\ The Bureau Interim Final 
Rule substantially duplicates the Board's Regulation DD. Credit unions 
are not subject to either the Board's or Bureau's Regulation DD, and 
are covered instead by a substantially identical regulation issued by 
the National Credit Union Administration (NCUA) pursuant to 12 U.S.C. 
4311.
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    \1\ 12 CFR part 1030. See 76 FR 79276 (Dec. 21, 2011).
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    Under section 1029 of the Dodd-Frank Act, the Board retains 
authority to issue rules for certain motor vehicle dealers that offer 
consumer financial services and are not subject to the Bureau's 
regulatory authority. The Board is not aware of any entities that are 
motor vehicle dealers engaging in activities subject to TISA that would 
be subject to the Board's authority under section 1029 of the Dodd-
Frank Act. Accordingly, the Board is proposing to repeal its Regulation 
DD.

DATES: Comments must be received on or before April 21, 2014.

ADDRESSES: You may submit comments, identified by Docket No. R-1482, by 
any of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include the 
docket number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Robert deV. Frierson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue NW., 
Washington, DC 20551.

All public comments are available from the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper form in Room MP-
500 of the Board's Martin Building (20th and C Streets NW.) between 
9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Vivian W. Wong, Counsel, Division of 
Consumer and Community Affairs, at (202) 452-3667, Board of Governors 
of the Federal Reserve System, 20th and C Streets NW., Washington, DC 
20551. For users of Telecommunications Device for the Deaf (TDD) only, 
contact (202) 263-4869.

SUPPLEMENTARY INFORMATION:

I. Background

    The Truth in Savings Act (TISA), 12 U.S.C. 4301 et seq., 
historically has been implemented by the Board's Regulation DD, 
published at 12 CFR part 230. The

[[Page 9648]]

purpose of the act and regulation is to assist consumers in comparing 
deposit accounts offered by depository institutions, principally 
through the disclosure of fees, the annual percentage yield, the 
interest rate, and other account terms. An official staff commentary 
interprets the requirements of the Board's Regulation DD (12 CFR part 
230 (Supp. I)). Credit unions are governed by a substantially similar 
regulation issued by the NCUA at 12 CFR part 707.
    Title X of the Dodd-Frank Act transferred rulemaking authority for 
a number of consumer financial protection laws from the Board to the 
Bureau, effective July 21, 2011. In connection with the transfer of the 
Board's rulemaking authority for TISA, the Bureau published an interim 
final rule to establish its own Regulation DD, 12 CFR part 1030, to 
implement TISA (Bureau Interim Final Rule).\2\ The Bureau Interim Final 
Rule substantially duplicated the Board's Regulation DD and made only 
certain non-substantive, technical, formatting, and stylistic changes. 
The Bureau Interim Final Rule did not impose any new substantive 
obligations on regulated entities.
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    \2\ 76 FR 79276 (Dec. 21, 2011). Section 1100B of the Dodd-Frank 
Act did not grant the Bureau TISA rulemaking authority over credit 
unions or repeal the NCUA's TISA rulemaking authority over credit 
unions under 12 U.S.C. 4311.
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    Under section 1029(a) of the Dodd-Frank Act, the Bureau may not 
exercise any rulemaking, supervisory, enforcement or any other 
authority over a motor vehicle dealer that is predominantly engaged in 
the sale and servicing of motor vehicles, the leasing and servicing of 
motor vehicles, or both, subject to certain exceptions.\3\ Section 
1029(c) of the Dodd-Frank Act further provides that nothing in the 
Dodd-Frank Act should be construed to modify, limit, or supersede the 
authority of the Board with respect to a motor vehicle dealer described 
in section 1029(a) of the Dodd-Frank Act.\4\ Accordingly, to the extent 
that a motor vehicle dealer described in section 1029(a) of the Dodd-
Frank Act was subject to one of the Board's consumer financial service 
regulations, the Board's regulation would continue to apply.
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    \3\ Section 1029(a) of the Dodd-Frank Act states: ``Except as 
permitted in subsection (b), the Bureau may not exercise any 
rulemaking, supervisory, enforcement, or any other authority . . . 
over a motor vehicle dealer that is predominantly engaged in the 
sale and servicing of motor vehicles, the leasing and servicing of 
motor vehicles, or both.'' 12 U.S.C. 5519(a). Section 1029(b) of the 
Dodd-Frank Act states: ``Subsection (a) shall not apply to any 
person, to the extent such person (1) provides consumers with any 
services related to residential or commercial mortgages or self-
financing transaction involving real property; (2) operates a line 
of business (A) that involves the extension of retail credit or 
retail leases involving motor vehicles; and (B) in which (i) the 
extension of retail credit or retail leases are provided directly to 
consumers and (ii) the contract governing such extension of retail 
credit or retail leases is not routinely assigned to an unaffiliated 
third party finance or leasing source; or (3) offers or provides a 
consumer financial product or service not involving or related to 
the sale, financing, leasing, rental, repair, refurbishment, 
maintenance, or other servicing of motor vehicles, motor vehicle 
parts, or any related or ancillary product or service.'' 12 U.S.C. 
5519(b).
    \4\ 12 U.S.C. 5519(c).
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II. Statutory Authority

    As noted above, Title X of the Dodd-Frank Act transferred 
rulemaking authority for TISA from the Board to the Bureau, effective 
July 21, 2011. Pursuant to Section 1029 of the Dodd-Frank Act, however, 
the Board retains rulemaking authority for consumer financial 
protection laws to the extent that such laws could cover motor vehicle 
dealers identified in Section 1029(a) of the Dodd-Frank Act.

III. Discussion

    TISA and the Board's Regulation DD apply only to depository 
institutions. See 12 U.S.C. 4301; 12 CFR 230.1(c). For this purpose, 
the term ``depository institution'' includes ``an institution defined 
in Section 19(b)(1)(A)(i) through (vi) of the Federal Reserve Act (12 
U.S.C. 461), except credit unions defined in Section 19(b)(1)(A)(iv).'' 
12 U.S.C. 4313(6); 12 CFR 230.2(j). Depository institutions are 
generally subject to restrictions on the types of activities in which 
they may engage as principal. See e.g., 12 U.S.C. 24 (Seventh) and 12 
U.S.C. 1831a. These activities are restricted to those that are 
necessary to carry on the business of banking and other limited 
financial activities. Based on these restrictions, the Board believes 
that motor vehicle dealers, as defined in Section 1029(a) of the Dodd-
Frank Act, that are predominantly engaged in the sale and servicing of 
motor vehicles, the leasing and servicing of motor vehicles, or both, 
could not also be depository institutions subject to TISA. 
Consequently, the Board is publishing a proposed rule for public 
comment to repeal the Board's Regulation DD, 12 CFR part 230. The 
Board, requests comment, however, on whether any motor vehicle dealers 
identified in Section 1029(a) of the Dodd-Frank Act are or could become 
depository institutions for purposes of TISA.

IV. Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
generally requires an agency to perform an assessment of the impact a 
rule is expected to have on small entities. Based on its analysis, and 
for the reasons stated below, the Board believes that this proposed 
rule will not have a significant economic impact on a substantial 
number of small entities. A final regulatory flexibility analysis will 
be conducted after consideration of comments received during the public 
comment period.
    1. Statement of the need for, and objectives of, the proposed rule. 
Title X of the Dodd-Frank Act transferred rulemaking authority for a 
number of consumer financial protection laws from the Board to the 
Bureau, effective July 21, 2011, including TISA. The Bureau issued the 
Bureau Interim Final Rule to implement TISA in connection with the 
transfer of TISA rulemaking authority to the Bureau. Pursuant to 
Section 1029 of the Dodd-Frank Act, however, the Board retains 
rulemaking authority for consumer financial protection laws to the 
extent that such laws could cover motor vehicle dealers identified in 
Section 1029(a) of the Dodd-Frank Act. The Board does not believe that 
any motor vehicle dealers identified in Section 1029(a) of the Dodd-
Frank Act are or could become depository institutions subject to TISA. 
Consequently, the Board is proposing to repeal the Board's Regulation 
DD, 12 CFR part 230.
    2. Small entities affected by the proposed rule. The Board does not 
believe that any motor vehicle dealers identified in Section 1029(a) of 
the Dodd-Frank Act are or could become depository institutions subject 
to TISA. Therefore, the Board believes the proposed rule would not 
affect any entity, including any small entity.
    3. Recordkeeping, reporting, and compliance requirements. The 
proposed rule would repeal the Board's Regulation DD, 12 CFR part 230, 
and would therefore not impose any recordkeeping, reporting, or 
compliance requirements on any entities.
    4. Other federal rules. The Board has not identified any federal 
rules that duplicate, overlap, or conflict with the proposed repeal of 
the Board's Regulation DD, 12 CFR part 230.
    5. Significant alternatives to the proposed revisions. The Board is 
not aware of any significant alternatives that would further minimize 
any significant economic impact of the proposed rule on small entities, 
but solicits comment on this approach.

V. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C.

[[Page 9649]]

3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the rule under 
the authority delegated to the Federal Reserve by the Office of 
Management and Budget (OMB). The proposed rule contains no collections 
of information under the PRA. See 44 U.S.C. 3502(3). Accordingly, there 
is no paperwork burden associated with the proposed rule.

List of Subjects in 12 CFR Part 230

    Advertising, Banks, Banking, Consumer protection, Reporting and 
recordkeeping requirements, Truth in savings.

Authority and Issuance

PART 230--[REMOVED AND RESERVED]

    For the reasons set forth in the preamble, under the authority of 
12 U.S.C. 5581, the Board proposes to remove and reserve Regulation DD, 
12 CFR part 230.

    By order of the Board of Governors of the Federal Reserve 
System, February 10, 2014.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2014-03266 Filed 2-19-14; 8:45 am]
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