[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Rules and Regulations]
[Pages 30711-30713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-12356]


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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: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is repealing 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). The Bureau Interim Final 
Rule substantially duplicates the Board's Regulation DD.
    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 rulemaking authority under section 1029 of 
the Dodd-Frank Act. Accordingly, the Board is repealing its Regulation 
DD.

DATES: The final rule is effective June 30, 2014.

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 Board of Governors of the Federal Reserve System (Board) 
historically implemented the Truth in Savings Act

[[Page 30712]]

(TISA), 12 U.S.C. 4301 et seq., in Regulation DD, published at 12 CFR 
part 230. The 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 National Credit Union Administration 
(NCUA) at 12 CFR part 707.
    Title X of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) \1\ transferred rulemaking authority 
for a number of consumer financial protection laws from the Board to 
the Bureau of Consumer Financial Protection (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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    \1\ Public Law 111-203, 124 Stat. 1376.
    \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\ However, 
that provision does not apply to any motor vehicle dealer to the extent 
the dealer 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.\4\ 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.\5\
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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).
    \4\ 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).
    \5\ 12 U.S.C. 5519(c).
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    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, provided that the consumer financial product or 
service is one that involves or is 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.
    In February 2014, the Board published a proposal to repeal its 
Regulation DD, 12 CFR part 230 (Proposed Rule) based on the Board's 
belief that there are no 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.\6\ The Board received five comments 
on the Proposed Rule.
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    \6\ 79 FR 9647 (Feb. 20, 2014).
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II. Legal Authority

    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, subject to the limitations in 
section 1029(b) of the Dodd-Frank Act.

III. Discussion

    As the Board discussed in the Proposed Rule, 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.
    The Board requested comment in the Proposed Rule 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. 
The commenters did not address that issue. Four commenters supported 
the Board's proposal to repeal its Regulation DD in order to avoid 
confusion and duplication. One commenter, however, suggested that the 
regulation should be retained in case there is new legislation and the 
law changes.
    Based on the lack of evidence that there are any motor vehicle 
dealers identified in section 1029(a) of the Dodd-Frank Act that are or 
could become depository institutions subject to the Board's rulemaking 
authority for purposes of TISA, the Board is repealing its Regulation 
DD, 12 CFR part 230.

IV. Final 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 final rule 
will not have a significant economic impact on a substantial number of 
small entities.
    1. Statement of the need for, and objectives of, the final rule. 
Title X of the Dodd-Frank Act transferred rulemaking authority for a 
number of

[[Page 30713]]

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 engaged in activities that would be subject to 
the Board's rulemaking authority under TISA. Consequently, the Board is 
repealing the Board's Regulation DD, 12 CFR part 230.
    2. Summary of issues raised by comments in response to the initial 
regulatory flexibility analysis. The Board did not receive any comments 
on the initial regulatory flexibility analysis.
    3. Small entities affected by the final 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 engaged 
in activities that would be subject to the Board's rulemaking authority 
under TISA. Therefore, the Board believes the final rule would not 
affect any entity, including any small entity.
    4. Recordkeeping, reporting, and compliance requirements. The final 
rule repeals the Board's Regulation DD, 12 CFR part 230, and would 
therefore not impose any recordkeeping, reporting, or compliance 
requirements on any entities.
    5. Significant alternatives to the final revisions. Because the 
repeal of the Board's Regulation DD (12 CFR part 230) will have no 
impact, there are no significant alternatives that would further 
minimize the economic impact of the final rule on small entities.

V. Paperwork Reduction Act

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

List of Subjects in 12 CFR Part 230

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

Authority and Issuance

    For the reasons set forth in the preamble, based on the transfer of 
authority under 12 U.S.C. 5581, the Board removes and reserves 
Regulation DD, 12 CFR part 230.

PART 230--[REMOVED AND RESERVED]

    By order of the Board of Governors of the Federal Reserve 
System, May 22, 2014.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2014-12356 Filed 5-28-14; 8:45 am]
BILLING CODE 6210-01-P