[Federal Register Volume 84, Number 138 (Thursday, July 18, 2019)]
[Notices]
[Pages 34393-34394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15313]


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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: The Board of Governors of the Federal Reserve System (Board) 
is adopting a proposal to extend for three years, without revision, the 
Recordkeeping and Disclosure Requirements Associated with Regulation II 
(Debit Card Interchange Fees and Routing) (FR II OMB No. 7100-0349).

FOR FURTHER INFORMATION CONTACT: 
    Federal Reserve Board Clearance Officer--Nuha Elmaghrabi--Office of 
the Chief Data Officer, Board of Governors of the Federal Reserve 
System, Washington, DC 20551, (202) 452-3829.
    Office of Management and Budget (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, or by fax to (202) 395-6974.
    A copy of the Paperwork Reduction Act (PRA) OMB submission, 
including the reporting form and instructions, supporting statement, 
and other documentation will be placed into OMB's public docket files. 
These documents also are available on the Federal Reserve Board's 
public website at https://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested from the agency clearance officer, 
whose name appears above.

SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board 
authority under the PRA to approve and assign OMB control numbers to 
collections of information conducted or sponsored by the Board. Board-
approved collections of information are incorporated into the official 
OMB inventory of currently approved collections of information. Copies 
of the PRA submission, supporting statements, and approved collection 
of information instrument(s) are placed into OMB's public docket files.

Final Approval Under OMB Delegated Authority of the Extension for Three 
Years, Without Revision, of the Following Information Collection

    Report title: Recordkeeping and Disclosure Requirements Associated 
with Regulation II (Debit Card Interchange Fees and Routing).
    Agency form number: FR II.
    OMB control number: 7100-0319.
    Frequency: On occasion.
    Respondents: State member banks, national banks, insured nonmember 
banks, savings associations, and federally-chartered credit unions.
    Estimated number of respondents: Implement policies and procedures, 
1 respondent; Review and update policies and procedures, 541 
respondents; Annual notification and change in status, 541 respondents.
    Estimated average hours per response: Implement policies and 
procedures, 160 hours; Review and update policies and procedures, 40 
hours; Annual notification and change in status, 1 hour.
    Estimated annual burden hours: Implement policies and procedures, 
160 hours; Review and update policies and procedures, 21,640 hours; 
Annual notification and change in status, 541 hours.
    General description of report: Regulation II, Debit Card 
Interchange Fees and Routing (12 CFR part 235), implements, among other 
things, standards for assessing whether interchange transaction fees 
for electronic debit transactions are reasonable and proportional to 
the cost incurred by the issuer with respect to the transaction, as 
required by section 920(a) of the Electronic Fund Transfer Act (EFTA) 
(15 U.S.C. 1693o-2(a)). Regulation II limits the interchange 
transaction fee that covered issuers can charge for debit card 
transactions. Under the rule a covered debit card issuer is allowed to 
receive or charge an amount of no more than 1 cent per transaction for 
the costs associated with preventing fraudulent electronic debit 
transactions (``fraud-prevention adjustment''), if the issuer complies 
with the standards and requirements set forth in the rule. In addition, 
issuers must retain records demonstrating their compliance with the 
requirements in Regulation II for at least five years after the end of 
the calendar year in which the electronic debit transaction occurred. 
Any person or issuer subject to an investigation or enforcement 
proceeding involving Regulation II must retain records pertaining to 
the matter until the final disposition of the matter, unless an earlier 
time is allowed by court or agency order.
    Legal authorization and confidentiality: Section 920(a)(3) of the 
EFTA (15 U.S.C. 1693o-2(a)(3)), as added by section 1075 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, authorizes the 
Board to (1) prescribe regulations regarding interchange transaction 
fees that an issuer may charge with respect to electronic debit 
transactions, and to establish standards to assess whether the amount 
of any such fee is reasonable and proportional; and (2) require any 
issuer or payment card network to provide the Board such information as 
deemed necessary. Section 920(a)(5) of the EFTA (15 U.S.C. 1693o-
2(a)(5)) further provides that the Board may allow for an adjustment to 
the interchange transaction fee amount received or charged by an issuer 
if ``(1) such adjustment is reasonably necessary to make allowance for 
costs incurred by the issuer in preventing fraud in relation to 
electronic debit card transactions involving that issuer; and (2) the 
issuer complies with the fraud-related standards established by the 
Board.'' Section 920(a)(5) also provides detailed requirements 
pertaining to the fraud-related standards to be established by the 
Board and authorizes the Board to promulgate such standards by rule. In 
addition, the EFTA (15 U.S.C. 1693o(a) and 1693o-2(d)) authorizes 
enforcement of compliance with the requirements implemented under the 
EFTA by the Board for entities that the Board has enforcement authority 
over under section 8 of the Federal Deposit Insurance Act (12 U.S.C. 
1818), which covers member banks (other than national banks), branches 
and agencies

[[Page 34394]]

of foreign banks (other than federal branches, federal agencies, and 
insured state branches of foreign banks), commercial lending companies 
owned or controlled by foreign banks, and organizations operating under 
section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq. and 
611 et seq.).
    Regulation II's fraud-prevention recordkeeping requirements (12 CFR 
235.4(b)) and disclosure requirements (12 CFR 235.4(c) and (d)) are 
required in order for an issuer to obtain a benefit (i.e., to be 
eligible to receive or charge the fraud-prevention adjustment). 
Regulation II's general recordkeeping requirements for issuers (12 CFR 
235.8(c)) are mandatory. The records and notifications required under 
sections 235.4(b)-(d) and 235.8(c) of Regulation II are generally not 
submitted to the Board or the other federal financial regulatory 
agencies. Accordingly, normally no confidentiality issues arise under 
the Freedom of Information Act (FOIA) (5 U.S.C. 552). In the event such 
records or notifications are obtained by the Board through the 
examination or enforcement process, such information may be kept 
confidential under exemption 8 of the FOIA, which protects information 
contained in or related to the examination or supervision of a 
financial institution (5 U.S.C. 552(b)(8)).
    Current actions: On April 8, 2019, the Board published a notice in 
the Federal Register (84 FR 13919) requesting public comment for 60 
days on the extension, without revision, of the FR II. The comment 
period for this notice expired on June 7, 2019. The Board received two 
comments. After considering the comments received on the proposal, the 
Board will proceed with the extension, without revision, of the FR II.

Detailed Discussion of Public Comments

    Comments were received from an individual and from a group of 
banking associations. The comment from the individual expressed support 
of the Dodd-Frank Act, and generally expressed opposition to any 
relaxation of rules implementing the Dodd-Frank Act. The comment from 
the group of banking associations supported the Board's proposal to 
maintain certain current recordkeeping processes while urging the Board 
to resist requests to reopen Regulation II to avoid further regulatory 
burden associated with the Durbin Amendment to the Dodd-Frank Act (if 
any such requests were received). The Board's recommended renewal, 
without revision, of the existing recordkeeping requirements is 
consistent with the views expressed in these comments.

    Board of Governors of the Federal Reserve System, July 15, 2019.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2019-15313 Filed 7-17-19; 8:45 am]
 BILLING CODE 6210-01-P