[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