[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