[Federal Register Volume 87, Number 133 (Wednesday, July 13, 2022)]
[Notices]
[Pages 41718-41721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14870]
=======================================================================
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
Proposed Agency Information Collection Activities; Comment
Request
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice, request for comment.
-----------------------------------------------------------------------
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 September 12, 2022.
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 or FR number in the subject line of the message.
FAX: (202) 452-3819 or (202) 452-3102.
Mail: Federal Reserve Board of Governors, Attn: Ann E.
Misback, Secretary of the Board, Mailstop M-4775, 2001 C St. 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
[[Page 41719]]
modified for technical reasons or to remove personally identifiable
information at the commenter's request. Accordingly, comments will not
be edited to remove any confidential business information, identifying
information, or contact information. Public comments may also be viewed
electronically or in paper in Room M-4365A, 2001 C St. NW, Washington,
DC 20551, 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 for the Federal
Reserve Board, 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: 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 Paperwork Reduction Act (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.
During the comment period for this proposal, a copy of the proposed
PRA OMB submission, including the draft reporting form and
instructions, supporting statement, and other documentation, will 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 above. Final
versions of these documents will be made available at https://www.reginfo.gov/public/do/PRAMain, if approved.
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
Collection title: Interchange Transaction Fees Survey.
Collection identifier: FR 3064.
OMB control number: 7100-0344.
Frequency: Annual.
Respondents: Debit card issuers and payment card networks.
Estimated number of respondents: FR 3064a, 527; FR 3064b, 15.
Estimated average hours per response: FR 3064a, 160; FR 3064b, 75.
Estimated annual burden hours: FR 3064a, 84,320; FR 3064b, 1,125.
General description of collection: The Debit Card Issuer Survey (FR
3064a) collects data from issuers of debit cards (including general-use
prepaid cards) that, together with their affiliates, have assets of $10
billion or more. The 3064a collects information regarding the volume
and value of debit card transactions; chargebacks and returns; costs of
authorization, clearance, and settlement of debit card transactions;
other costs incurred in connection with particular debit card
transactions; fraud prevention costs and fraud losses; and interchange
fee revenue.\1\
---------------------------------------------------------------------------
\1\ See 12 CFR 235.2(k) for the definition of ``Issuer.''
---------------------------------------------------------------------------
The Payment Card Network Survey (FR 3064b) collects data from
payment card networks. The survey includes the volume and value of
debit card transactions; interchange fees; network fees; and payments
and incentives paid by networks to acquirers, merchants, and
issuers.\2\
---------------------------------------------------------------------------
\2\ See 12 CFR 235.2(m) for the definition of ``Payment card
network.''
---------------------------------------------------------------------------
The data from the FR 3064a and FR 3064b are used to fulfill a
statutory requirement that the Board disclose certain information
regarding debit card transactions on a biennial basis.\3\ 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.\4\
---------------------------------------------------------------------------
\3\ See 12 U.S.C. 1693o-2(a)(3)(B). The Board's biennial reports
are available at https://www.federalreserve.gov/paymentsystems/regii-data-collections.htm.
\4\ See Average Debit Card Interchange Fee by Payment Card
Network https://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm.
---------------------------------------------------------------------------
Proposed Revisions
Debit Card Issuer Survey (FR 3064a)
The Board is proposing the following changes in the Debit Card
Issuer Survey instructions to include guidance that the Board has
previously provided in response to questions from respondents:
Adding ``Credit-push transactions (other than, where
appropriate, returns), sometimes referred to as original credit
transactions (OCTs)'' to the General Instructions, Section II (All
Debit Card Transactions), ``Do Not Include'' list to indicate that
credit-push transactions should not be included in the response.
Modifying the General Instructions, Frequently Asked
Questions, Q9.A to read: ``A debit card transaction is the use of a
debit card (including a general-use prepaid card) by a person as a form
of payment in the United States to initiate a debit to an account. Such
transactions include those conducted with both business and consumer
debit cards. Debit card transactions include charitable contributions,
payments made to satisfy an obligation (e.g., tax liability), or
payments made for other purposes, such as to fund another account
(sometimes referred to as account funding transactions. Debit card
transactions do not include credit card transactions, transactions
initiated at an ATM, or credit-push transactions, sometimes referred to
as original credit transactions (OCTs).''
[[Page 41720]]
The Board proposes to implement these revisions starting with the
next iteration of the Debit Card Issuer Survey.
Payment Card Network Survey (FR 3064b)
The Board proposes to modify the instructions for the Payment Card
Network Survey to clarify guidance for survey respondents. The proposed
revisions provide instructions for reporting when multiple networks are
involved in the processing of transactions. The Board is also proposing
to modify the instructions for the Payment Card Network Survey to
include guidance that the Board has previously provided in response to
questions from respondents. The Board proposes to implement the
revisions starting with the next iteration of the Payment Card Network
Survey.
Through recent communications with survey respondents, the Board
has become aware that for debit card transactions where multiple
networks are involved in the processing of the transactions, the
involved payment card networks may be interpreting the existing survey
instructions differently from one another. Such differing
interpretations could potentially lead to overcounting of transactions,
if all involved networks report such transactions in their survey
responses, or undercounting, if none of them do.\5\ The changes to the
survey instructions outlined below clarify which network should report
such transactions, looking to ensure consistent reporting across
respondents and eliminate the possibility of under- or overcounting of
transactions in the survey responses.
---------------------------------------------------------------------------
\5\ To illustrate, consider an example of two networks, A and B,
that enter a reciprocal arrangement in which Network B provides
services that allow Network A's debit cards (i.e., debit cards that
have been issued by depository institutions under agreement with
Network A) to be used at a merchant that accepts Network B but does
not directly accept Network A. Network B may perform some or all of
the processing functions for transactions performed with Network A's
debit cards at such a merchant. For its part, Network A may perform
certain processing functions for such transactions, particularly
with respect to issuers of Network A's debit cards. Network A may
also establish fees for issuers, including network fees and the
interchange fees that issuers pay and receive, respectively. In this
situation, the current survey instructions do not specify whether
Network A, Network B, or both should report transactions when both
networks are involved in the processing of the transactions.
---------------------------------------------------------------------------
The Board is proposing to clarify the survey instructions to
specify that a network should report values associated with debit card
transactions for which that network establishes the interchange fee
received by issuers, even if that network outsources some or all
processing functions to another payment card network. Conversely, a
network should not report values associated with debit card
transactions for which another network establishes the interchange fee
received by issuers, even if the former network performs some or all
processing functions for these transactions on behalf of the other
payment card network. The proposed clarification would be implemented
through the following changes:
Modifying the text under General Instructions, Section II
(Debit Card Transactions) to read: ``Please enter totals for
transactions related to debit cards, including general-use prepaid
cards, linked to U.S.-domiciled accounts involving a merchant located
in the United States during the calendar year (CY) 20XX. Important: In
some cases, transactions may be processed by multiple networks due to
the outsourcing of some or all processing functions. Please note the
special instructions below to ensure proper treatment of such
transactions.''
Removing ``All debit card transactions (including general-
use prepaid card transactions).'' from General Instructions, Section II
(Debit Card Transactions), ``Include'' list.
Adding ``Transactions for which your network establishes
the interchange fee received by issuers, even if your network
outsources some or all processing functions for these transactions to
one or more payment card networks.'' to General Instructions, Section
II (Debit Card Transactions), ``Include'' list.
Modifying the General Instructions, Section II (Debit Card
Transactions), ``Do Not Include'' list to indicate that none of the
following should be included in the response: (a) ``Credit card
transactions,'' (b) ``Transactions initiated at an ATM,'' (c) ``Credit-
push transactions (other than, where appropriate, returns), sometimes
referred to as original credit transactions (OCTs),'' and (d)
``Transactions for which another network establishes the interchange
fee received by issuers, even if your network performs some or all
processing functions for these transactions on behalf of the other
payment card network.''
To ensure that the revised survey instructions clearly and
adequately clarify responses for debit card transactions when multiple
networks are involved in the processing of the transactions, the Board
is seeking comment on the following questions:
Are the proposed revisions to the survey instructions
clear on which network would be responsible for reporting transactions
when multiple payment card networks are involved in the processing of
the transactions?
Are there potential challenges to reporting transactions
based on the revised instructions? If so, are there further changes
that the Board should consider to alleviate such challenges?
Are there other situations, similar to those described but
involving different facts and circumstances, for which reporting would
not be clarified by the proposed revisions? If so, are there further
changes that the Board should consider to provide clarity in these
situations?
In addition, the Board is proposing to further clarify the survey
instructions by including guidance that the Board has previously
provided in response to questions from respondents and removing
glossary items no longer relevant to the survey:
Modifying the General Instructions, Glossary of Terms,
``Debit card transaction'' definition to read: ``Debit card
transaction: Use of a debit card (including a general-use prepaid card)
by a person as a form of payment in the United States to initiate a
debit to an account. It does not include transactions initiated at an
ATM, including cash withdrawals and balance transfers initiated at an
ATM. For more details, see General Instructions, Frequently Asked
Questions, Q8,'' to (a) harmonize definitions across FR 3064a and FR
3064b and (b) align the definition to the language in 12 CFR 235.2(h).
Modifying the General Instructions, Frequently Asked
Questions, Q8.A to read: ``A debit card transaction is the use of a
debit card (including a general-use prepaid card) by a person as a form
of payment in the United States to initiate a debit to an account. Such
transactions include those conducted with both business and consumer
debit cards. Debit card transactions include charitable contributions,
payments made to satisfy an obligation (e.g., tax liability), or
payments made for other purposes, such as to fund another account
(sometimes referred to as account funding transactions. Debit card
transactions do not include credit card transactions, transactions
initiated at an ATM, or credit-push transactions, sometimes referred to
as original credit transactions (OCTs).''
Removing General Instructions, Glossary of Terms, ``Number
of merchant establishments'' definition because the Payment Card
Network Survey no longer collects such information.
Legal authorization and confidentiality: The FR 3064 surveys are
authorized by section 920(a) of the Electronic Fund Transfer Act, as
[[Page 41721]]
amended by section 1075(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act.\6\ This provision requires the Board, at least
once every two years,\7\ 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
transactions as the Board considers appropriate and in the public
interest.\8\ 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.\9\ The FR 3064
surveys are mandatory.
---------------------------------------------------------------------------
\6\ 12 U.S.C. 1693o-2.
\7\ The subsection refers to bi-annual disclosures and the Board
interprets this to mean once every two years. See 76 FR 43458.
\8\ 15 U.S.C. 1693o-2(a)(3)(B).
\9\ Id.
---------------------------------------------------------------------------
The Board is required to release aggregate information from
responses to the FR 3064 surveys.\10\ The Board additionally 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 non-exempt issuers obtained on the FR
3064b because it can be calculated based on information the Board
already releases and may be useful to issuers, merchants, and
policymakers in choosing payment card networks and assessing the
effects of interchange regulations. The information contained in
individual responses to the FR 3064 surveys is nonpublic commercial or
financial information, which is both customarily and actually treated
as private by the respondent. The Board therefore keeps such
information confidential pursuant to exemption 4 of the Freedom of
Information Act (FOIA).\11\
---------------------------------------------------------------------------
\10\ Id.
\11\ 5 U.S.C. 552(b)(4).
Board of Governors of the Federal Reserve System, July 7, 2022.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2022-14870 Filed 7-12-22; 8:45 am]
BILLING CODE 6210-01-P