[Federal Register Volume 84, Number 155 (Monday, August 12, 2019)]
[Notices]
[Pages 39847-39849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17186]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice, request for comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
invites comment on a proposal to extend for three years, with revision, 
the Interchange Transaction Fees Survey (FR 3064; OMB No. 7100-0344).

DATES: Comments must be submitted on or before October 11, 2019.

ADDRESSES: You may submit comments, identified by FR 3064, by any of 
the following methods:
     Agency Website: https://www.federalreserve.gov/. Follow 
the instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Email: [email protected]. Include the OMB 
number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.

[[Page 39848]]

     Mail: Ann E. Misback, 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 website at 
https://www.federalreserve.gov/apps/foia/proposedregs.aspx as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any identifying or 
contact information. Public comments may also be viewed electronically 
or in paper in Room 146, 1709 New York Avenue NW, Washington, DC 20006, 
between 9:00 a.m. and 5:00 p.m. on weekdays. For security reasons, the 
Board requires that visitors make an appointment to inspect comments. 
You may do so by calling (202) 452-3684. Upon arrival, visitors will be 
required to present valid government-issued photo identification and to 
submit to security screening in order to inspect and photocopy 
comments.
    Additionally, commenters may send a copy of their comments to the 
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.

FOR FURTHER INFORMATION CONTACT: 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, if approved. These documents will also be made 
available on the 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 below.
    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.

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. In 
exercising this delegated authority, the Board is directed to take 
every reasonable step to solicit comment. In determining whether to 
approve a collection of information, the Board will consider all 
comments received from the public and other agencies.

Request for Comment on Information Collection Proposal

    The Board invites public comment on the following information 
collection, which is being reviewed under authority delegated by the 
OMB under the PRA. Comments are invited on the following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Board's functions, including whether the 
information has practical utility;
    b. The accuracy of the Board's estimate of the burden of the 
proposed information collection, including the validity of the 
methodology and assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    d. Ways to minimize the burden of information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    e. Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the Board 
should modify the proposal.
    Proposal under OMB Delegated Authority to Extend for Three Years, 
With Revision, the Following Information Collection:
    Report title: Interchange Transaction Fees Survey.
    Agency form number: FR 3064.
    OMB control number: 7100-0344.
    Frequency: Annually.
    Respondents: Debit card issuers and payment card networks.
    Estimated number of respondents: FR 3064a, 541 respondents; and FR 
3064b, 15 respondents.
    Estimated average hours per response: FR 3064a, 160 hours; and FR 
3064b, 75 hours.
    Estimated annual burden hours: FR 3064a, 86,560 hours; and FR 
3064b, 1,125 hours.
    General description of report: The Dodd-Frank Wall Street Reform 
and Consumer Protection Act of 2010 (Dodd-Frank Act) requires the Board 
to disclose, at least every two years, such aggregate or summary 
information concerning the costs incurred for, and interchange 
transaction fees received by, issuers with respect to debit card 
transactions as the Board considers appropriate or in the public 
interest. The data from these surveys are used in fulfilling that 
disclosure requirement. In addition, the Board uses data from the 
payment card network survey (FR 3064b) to publicly report on an annual 
basis the extent to which networks have established separate 
interchange fees for exempt and covered issuers.\1\ Finally, the Board 
uses the data from these surveys in determining whether to propose 
revisions to the interchange fee standards in Debit Card Interchange 
Fees and Routing (Regulation II) (12 CFR part 235). The Dodd-Frank Act 
provides the Board with authority to require debit card issuers and 
payment card networks to submit information in order to carry out 
provisions of the Dodd-Frank Act regarding interchange fee standards.
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    \1\ Average debit card interchange fee by payment card network 
http://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm.
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    Proposed revisions: The Board proposes the following revisions to 
the FR 3064a:
    Remove breakout of interchange fees reimbursed to acquirers as a 
result of chargebacks or returns (Section II, III, IV, and V, Question 
6b.1 and 6b.2). Currently, debit card issuers are asked to break out 
separately the amount of interchange fees reimbursed to acquirers as a 
result of chargebacks and returns, as well as the total amount of 
interchange fees reimbursed to acquirers as a result of chargebacks or 
returns. Because only the total amount of interchange fees reimbursed 
to acquirers is needed to compute the net interchange fee revenue 
received by an issuer, the Board proposes deleting questions 6b.1 and 
6b.2.
    Add tokenization as an option for fraud prevention activity 
(Section II, III, IV, and V, Question 5c). The existing fraud 
prevention activities that an issuer has the option to select are 
transaction monitoring, merchant blocking, data security, and PIN 
customization. The Board views tokenization as an important emerging 
fraud prevention technique and proposes to add it the current list.
    Update Survey Instructions and Glossary of Terms. The Board is 
proposing to add language in the instructions to address the situation 
where a debit card issuer has become newly covered by the interchange 
fee standards in the year that the survey is being conducted, after not 
having been covered in the previous year. The new language clarifies 
that such an issuer does not need to file a report with information for 
the previous calendar year, when it was not covered by the interchange 
fee standards. The Board is

[[Page 39849]]

also proposing updates to definitions in the survey glossary to provide 
more clarity.
    The Board proposes the following revisions to the FR 3064b:
    Remove question about number of merchant establishments (Section I, 
Question 5). Because information about the number of locations at which 
merchants accept payments on the respondent's network is not used in 
the Board's analysis, the Board is proposing to delete the question.
    Remove question about offering an interchange fee schedules that 
differentiates between exempt and non-exempt issuers (Section I, 
Question 6). This question was originally included to enable the Board 
to establish whether payment card networks were offering interchange 
fee schedules that differentiate between issuers based on their status 
under Regulation II. The existence of such differential fee schedules 
has been established and can further be inferred from responses to 
subsequent questions in the survey. As a result, the Board is proposing 
to remove the question.
    Remove questions about refunds of interchange fees to acquirers for 
chargebacks and returns (Section II, Question 2b, 2b.1, 2b.2, 2c, 2c.1, 
2c.2, 2d, 2d.1, 2d.2, 2e, 2e.1, and 2e.2). Currently, the survey poses 
a series of yes/no questions asking payment card networks if they 
refund to acquirers the ad valorem component, fixed per-transaction 
component, or the entire interchange fee for returns and chargebacks 
that compose an entire purchase transaction or a portion of it. These 
questions were originally included to address a series of issues that 
now have been resolved, so the Board is proposing to remove them.
    Update Survey Instructions and Glossary of Terms. The Board is 
proposing additional language in the instructions to clarify reporting 
expectations for entities who own multiple networks. The Board is also 
proposing updates to definitions in the survey glossary to provide more 
clarity.
    Legal authorization and confidentiality: The FR 3064 is authorized 
by subsection 920(a) of the Electronic Fund Transfer Act, which was 
amended by section 1075(a) of the Dodd-Frank Act.\2\ This statutory 
provision requires the Board, at least once every two years,\3\ to 
disclose aggregate or summary information concerning the costs incurred 
and interchange transaction fees charged or received, by issuers or 
payment card networks in connection with the authorization, clearance 
or settlement of electronic debit transaction as the Board considers 
appropriate and in the public interest.\4\ It also provides the Board 
with authority to require issuers and payment card networks to provide 
information to enable the Board to carry out the provisions of the 
subsection.\5\ The FR 3064 is mandatory. In accordance with the 
statutory requirement, the Board releases aggregate or summary 
information from the survey responses. In addition, the Board releases, 
at the network level, the percentage of total number of transactions, 
the percentage of total value of transactions, and the average 
transaction value for exempt and not-exempt issuers obtained on the FR 
3064b. The Board has determined to release this information both 
because it can already be determined mathematically based on the 
information the Board currently releases on average interchange fees 
and because the Board believes the release of such information may be 
useful to issuers and merchants in choosing payment card networks in 
which to particulate and to policymakers in assessing the effect of 
Regulation II on the level of interchange fees received by issuers over 
time.
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    \2\ 15 U.S.C. 1693o-2.
    \3\ The subsection refers to bi-annual disclosures and the Board 
interprets this to mean once every two years. See 76 FR 43458.
    \4\ 15 U.S.C. 1693o-2(a)(3)(B).
    \5\ Id.
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    The remaining individual issuer and payment card information 
collected on these surveys is kept confidential under exemption (b)(4) 
of the Freedom of Information Act (FOIA) because, if released, this 
information would cause substantial harm to the competitive position of 
the survey respondents.\6\
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    \6\ 5 U.S.C. 552(b)(4) (exempting from disclosure ``trade 
secrets and commercial or financial information obtained from a 
person and privileged or confidential'').

    Board of Governors of the Federal Reserve System, August 7, 
2019.
Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2019-17186 Filed 8-9-19; 8:45 am]
BILLING CODE 6210-01-P