24386 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices 

1 15 U.S.C. 1693q; 12 CFR 1005.12(b). 

2 15 U.S.C. 1693q. 

3 Id. 

4 12 CFR 1005.12(b) (emphasis added). 

5The requests relating to New Jersey’s and 

Tennessee’s laws came from payment card industry 

representatives. Maine’s Office of the State 

Treasurer submitted a request relating to Maine’s 

law to the Board of Governors of the Federal 

Reserve System. The Board did not respond to 

Maine’s request before the Board’s powers and 

duties relating to consumer financial protection 

functions transferred to the Bureau on July 21, 

2011. The Bureau thus inherited responsibility for 

responding to Maine’s pending request. The Maine, 

Tennessee, and New Jersey requests are available 

for public inspection and copying, consistent with 

the Bureau’s rules on disclosure of records and 

information. See 12 CFR part 1070. 

COMMODITY FUTURES TRADING 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 10:00 a.m., Friday, May 

17, 2013. 

PLACE: 1155 21st St. NW., Washington, 

DC, 9th Floor Commission Conference 

Room. 

STATUS: Closed. 

MATTERS TO BE CONSIDERED: Surveillance 

and Enforcement Matters. In the event 

that the times or dates of this or any 

future meetings change, an 

announcement of the change, along with 

the new time and place of the meeting 

will be posted on the Commission’s 

Web site at http://www.cftc.gov. 

CONTACT PERSON FOR MORE INFORMATION: 

Melissa D. Jurgens, 202–418–5516. 

Natise Stowe, 

Executive Assistant. 

[FR Doc. 2013–09849 Filed 4–23–13; 11:15 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 10:00 a.m., Friday, May 

31, 2013. 

PLACE: 1155 21st St. NW., Washington, 

DC, 9th Floor Commission Conference 

Room. 

STATUS: Closed. 

MATTERS TO BE CONSIDERED: Surveillance 

and Enforcement Matters. In the event 

that the times or dates of this or any 

future meetings change, an 

announcement of the change, along with 

the new time and place of the meeting 

will be posted on the Commission’s 

Web site at http://www.cftc.gov. 

CONTACT PERSON FOR MORE INFORMATION: 

Melissa D. Jurgens, 202–418–5516. 

Natise Stowe, 

Executive Assistant. 

[FR Doc. 2013–09851 Filed 4–23–13; 11:15 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 10:00 a.m., Friday, May 

24, 2013. 

PLACE: 1155 21st St. NW., Washington, 

DC, 9th Floor Commission Conference 

Room. 

STATUS: Closed. 

MATTERS TO BE CONSIDERED: Surveillance 

and Enforcement Matters. In the event 

that the times or dates of this or any 

future meetings change, an 

announcement of the change, along with 

the new time and place of the meeting 

will be posted on the Commission’s 

Web site at http://www.cftc.gov. 

CONTACT PERSON FOR MORE INFORMATION: 

Melissa D. Jurgens, 202–418–5516. 

Natise Stowe, 

Executive Assistant. 

[FR Doc. 2013–09850 Filed 4–23–13; 11:15 am] 

BILLING CODE 6351–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 10:00 a.m., Friday, May 

10, 2013. 

PLACE: 1155 21st St. NW., Washington, 

DC, 9th Floor Commission Conference 

Room. 

STATUS: Closed. 

MATTERS TO BE CONSIDERED: Surveillance 

and Enforcement Matters. In the event 

that the times or dates of this or any 

future meetings change, an 

announcement of the change, along with 

the new time and place of the meeting 

will be posted on the Commission’s 

Web site at http://www.cftc.gov. 

CONTACT PERSON FOR MORE INFORMATION: 

Melissa D. Jurgens, 202–418–5516. 

Natise Stowe, 

Executive Assistant. 

[FR Doc. 2013–09848 Filed 4–23–13; 11:15 am] 

BILLING CODE 6351–01–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

[Docket No. CFPB–2012–0036] 

Electronic Fund Transfers; 

Determination of Effect on State Laws 

(Maine and Tennessee) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Notice of preemption 

determination. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

publishing a final determination as to 

whether certain laws of Maine and 

Tennessee relating to unclaimed gift 

cards are inconsistent with and 

preempted by the Electronic Fund 

Transfer Act and Regulation E. The 

Bureau has determined that it has no 

basis for concluding that the provisions 

at issue in Maine’s unclaimed property 

law relating to gift cards are inconsistent 

with, or therefore preempted by, Federal 

law. As discussed below, however, the 

Bureau has determined that one 

provision in Tennessee’s unclaimed 

property law relating to gift cards is 

inconsistent with, and therefore 

preempted by, Federal law. 

DATES: The determination is effective 

April 25, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Courtney Jean or Terry Randall, Office 

of Regulations, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Electronic Fund Transfer Act 

(EFTA), as amended by the Credit Card 

Accountability and Responsibility and 

Disclosure Act of 2009, and as 

implemented by the Bureau’s 

Regulation E, provides that the Bureau 

shall make a preemption determination 

upon its own motion, or upon the 

request of any State, financial 

institution, or other interested party, as 

to whether any inconsistency exists 

between the EFTA and State law 

‘‘relating to,’’ among other things, 

‘‘expiration dates of gift certificates, 

store gift cards, or general-use prepaid 

cards.’’ 1 The EFTA preempts such a 

State law only to the extent of any 

inconsistency.2 Furthermore, a State law 

is not considered inconsistent with the 

EFTA if the State law affords consumers 

greater protection than the EFTA.3

Regulation E specifies that State law is 

inconsistent with the requirements of 

the EFTA and Regulation E if, among 

other things, the State law ‘‘requires or 

permits a practice or act prohibited by 

the federal law.’’ 4

The Bureau received three requests 

for determinations as to whether 

provisions in the EFTA and Regulation 

E (referred to hereinafter simply as 

‘‘Federal law’’) relating to gift card 

expiration dates preempt certain 

unclaimed property law provisions in 

Maine, Tennessee, and New Jersey 

relating to gift cards.5 The Bureau 

published a notice of intent to make a 


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Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices 24387 

6 77 FR 50404. 

7The New Jersey request sought a determination 

as to whether Federal law preempted the 

application to gift cards of New Jersey’s unclaimed 

property law, which deemed gift cards abandoned 

after two years of nonuse. On June 29, 2012, 

however, New Jersey amended its unclaimed 

property law to lengthen the period of nonuse after 

which a gift card would be presumed abandoned 

from two years to five years. In response to the 

Notice, certain commenters urged the Bureau to 

issue a determination with respect to New Jersey 

notwithstanding the intervening amendment to 

State law. However, the Bureau continues to view 

the original request as moot and therefore is not 

issuing a response. 

8 15 U.S.C. 1693l–1(c); 12 CFR 1005.20(e). 

9 12 CFR 1005.20(e)(1). 

10 12 CFR 1005.20(e)(2). 

11 12 CFR 1005.20(e)(3). 

12 12 CFR 1005.20(e)(4). Thus, for example, a 

consumer may not be charged a fee to replace an 

expired card if the funds underlying that card have 

not yet expired. 

13 15 U.S.C. 1693l–1(a)(2); 12 CFR 1005.20(a). 

Specifically, gift certificates and store gift cards are 

redeemable upon presentation at a single merchant 

or an affiliated group of merchants for goods or 

services. 15 U.S.C. 1693l–1(a)(2)(B)–(C); 12 CFR 

1005.20(a)(1)–(2). General-use prepaid cards are 

redeemable upon presentation at multiple, 

unaffiliated merchants or may be used at automated 

teller machines. 15 U.S.C. 1693l–1(a)(2)(A); 12 CFR 

1005.20(a)(3). 

14 15 U.S.C. 1693l–1(a)(2); 12 CFR 1005.20(a). 

15See 15 U.S.C. 1693l–1(a)(2)(D); 12 CFR 

1005.20(b). The other categories of excluded 

devices are those useable solely for telephone 

services; loyalty, award, or promotional gift cards; 

cards not marketed to the general public; and cards 

redeemable solely for admissions to events or 

venues. See id. 

16Unclaimed property laws refer to the person or 

entity that transfers unclaimed property to the State 

as the ‘‘holder.’’ In general, the ‘‘holder’’ is the 

person that is in possession of the property, or that 

is indebted or required to make payment to the 

owner of the property. See, e.g., 33 M.R.S. § 1952.6 

(2011); Tenn. Code Ann. § 47–18–127(e) (2012). 

17States’ unclaimed property laws generally 

provide that the abandoned property is the gift card 

itself. However, the physical gift card is not 

transferred to the State because, at the time of 

abandonment, the gift card is not in the issuer’s 

possession. Instead, the unused value on the card 

is transferred. Some states require transfer of the 

entire unused value, while others require transfer 

of only a portion (e.g., 60 percent) of the unused 

value. For ease of reference, the Bureau herein 

characterizes the property that is being transferred 

to the State as the ‘‘unused gift card value.’’ 

18See Delaware v. New York, 507 U.S. 490 (1993). 

19 In some circumstances, some other entity might 

be the ‘‘holder’’ of a gift card for purposes of State 

unclaimed property law; however, for ease of 

reference herein the Bureau refers to the gift card 

issuer as the holder. The Bureau’s determinations 

with respect to the Maine and Tennessee Acts do 

not depend on what entity is the holder of a gift 

card. 

preemption determination (the Notice) 

seeking public comment on the Maine 

and Tennessee requests on August 21, 

2012.6 As stated in the Notice, the 

Bureau’s view is that the New Jersey 

request has been rendered moot by a 

subsequent change in State law, and the 

Bureau therefore is not issuing a 

response.7 The Bureau has reviewed the 

public comments received concerning 

Maine’s and Tennessee’s laws in 

response to the Notice and has 

conducted additional outreach to inform 

its analysis. The Bureau is now 

publishing a final determination that it 

has no basis for concluding that the 

provisions at issue in Maine’s Uniform 

Unclaimed Property Act (the Maine Act) 

relating to gift cards are inconsistent 

with, or therefore preempted by, the 

EFTA or Regulation E. As discussed 

below, however, the Bureau finds that 

one provision in Tennessee’s unclaimed 

property law, § 66–29–116 of 

Tennessee’s Uniform Disposition of 

Unclaimed (Personal) Property Act (the 

Tennessee Act), when applied to gift 

cards, is inconsistent with the EFTA 

and Regulation E and therefore is 

preempted. 

II. The EFTA and Regulation E 

Regulation E, which implements the 

EFTA, generally prohibits any person 

from selling or issuing a gift certificate, 

store gift card, or general-use prepaid 

card with an expiration date unless 

certain conditions are met.8 First, the 

person must have established policies 

and procedures to ensure that 

consumers have a reasonable 

opportunity to purchase a certificate or 

card with at least five years remaining 

until the certificate or card expires.9

Second, the expiration date for the 

underlying funds must be at least the 

later of (i) five years after the date the 

certificate or card was issued (or, in the 

case of a reloadable card, five years after 

the date that funds were last loaded 

onto the card) or (ii) the card’s 

expiration date, if any.10 Third, the 

terms of expiration (including whether, 

and if so when, the underlying funds 

expire) must be disclosed on the card, 

along with certain other information.11

Finally, no fee or charge may be 

imposed on the cardholder for replacing 

the gift certificate or card prior to the 

funds’ expiration date, unless the 

certificate or card has been lost or 

stolen.12

The EFTA and Regulation E generally 

define a gift certificate, store gift card, 

and general-use prepaid card to mean a 

card, code, or other device that, in 

exchange for payment, is issued to a 

consumer in a specified amount 

primarily for personal, family, or 

household purposes, and that is 

redeemable upon presentation for goods 

or services.13 In some cases, the amount 

on store gift cards or general-use 

prepaid cards (but not on gift 

certificates) may be increased or 

reloaded.14 Certain categories of 

devices—notably gift certificates that are 

issued in paper form only and 

reloadable cards that are not marketed 

or labeled as gift cards or gift 

certificates—are not treated as gift 

certificates, store gift cards, or generaluse prepaid cards for purposes of the 

EFTA or Regulation E.15 For ease of 

reference, the gift certificates, store gift 

cards, and general-use prepaid cards 

covered by the expiration date 

provisions of the EFTA and Regulation 

E are referred to herein as ‘‘gift cards.’’ 

III. Overview of States’ Unclaimed 

Property Laws as Applied to Gift Cards 

States’ unclaimed property laws set 

forth specific periods of time after 

which particular categories of 

unclaimed personal property are 

deemed ‘‘abandoned’’ and custody of 

such property must be transferred from 

the entity holding the property to the 

State.16 In some States, gift certificates 

or cards (‘‘gift cards’’) are one such 

category of property. The categories of 

gift cards covered by States’ unclaimed 

property laws vary depending on the 

State, as does the length of time that a 

gift card must remain unclaimed before 

being deemed abandoned. As discussed 

in detail in Part V of this determination, 

both the Maine and Tennessee Acts 

deem certain categories of gift cards that 

are subject to the expiration-date 

provisions of the EFTA and Regulation 

E to be abandoned property as early as 

two years after purchase. Once a gift 

card has been deemed abandoned, some 

or all of the unused value on the card 

then must be transferred to the State, 

pursuant to procedures that, once again, 

vary by State.17

According to rules of priority 

articulated by the Supreme Court, 

unclaimed intangible property (i.e., 

including the unused value on gift 

cards) is presumptively subject to being 

transferred to the State of the last known 

address of the property owner. If that 

State does not provide for the transfer of 

the category of property at issue, or if 

the property owner’s address is 

unknown, then custody is due to be 

transferred to the State of incorporation 

of the entity that is obligated to make 

payment on the property.18 The Bureau 

understands that for gift cards, the 

address of the owner (i.e., the recipient) 

typically is unknown, and the entity 

obligated to make payment on the 

property typically is the entity that 

issued the gift card.19

When unused gift card value transfers 

to a State, the State takes custody of the 

property on behalf of the gift card 

owner. If the gift card owner thereafter 

seeks to use the card, State law typically 


tkelley on DSK3SPTVN1PROD with NOTICES
24388 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices 

20All but two of the commenters interpreted the 

Maine Act, as the Bureau did in its Notice, to 

permit issuers to decline to honor abandoned gift 

cards. Thus, the bulk of the comments did not 

factor into their analysis of Maine law a provision 

of the Maine Act that requires an issuer to continue 

to honor gift cards even after the issuer has 

transferred their unused value to the State. See Part 

V. 

21As noted above, most commenters appeared not 

to realize that the Maine Act itself requires issuers 

to honor gift cards even after transferring their 

unused value to the State. 22 15 U.S.C. 1693q. 

permits—but does not necessarily 

require—the gift card issuer to honor the 

card and to seek reimbursement from 

the State. If the gift card issuer opts not 

to honor the card, the gift card owner 

can contact the State to attempt to 

reclaim the property. 

The Bureau believed at the time that 

it issued the Notice that both the Maine 

and Tennessee Acts fit the general 

model described above. The Bureau 

subsequently received information 

indicating that the Maine Act in fact 

requires gift card issuers to honor gift 

cards indefinitely, even after the unused 

gift card value is transferred to the State. 

Details concerning the Maine and 

Tennessee Acts as applied to gift cards, 

including where they differ from the 

general approach set forth above, are 

discussed in Part V. 

IV. Summary of Comments 

The Bureau solicited public comment 

on all aspects of its Notice, including on 

the application of the Maine and 

Tennessee Acts to gift cards, on the 

nature of any inconsistency between 

those laws and the expiration date 

provisions of the EFTA and Regulation 

E, and in particular on whether either of 

the Acts affords consumers greater 

protection than Federal law. The Bureau 

received 20 comments in response to 

the Notice, including two comments 

from consumer advocacy groups and 18 

comments from gift card issuers and 

trade associations. All of the 

commenters stated that the Maine and 

Tennessee Acts as applied to gift cards 

conflict with Federal law, that they are 

not more protective of consumers, and 

that the Bureau should determine that 

they are preempted.20 In general, 

commenters did not distinguish 

between the specifics of the Maine and 

Tennessee Acts. The comments thus are 

summarized in a general manner below. 

A. Whether State Law Conflicts With 

Federal Law 

In general, industry commenters 

stated that the Maine and Tennessee 

Acts as applied to gift cards conflict 

with the expiration date provisions of 

the EFTA and Regulation E. They also 

discussed the burdens of complying 

with both State and Federal law. 

Most industry commenters stated that 

any requirement to transfer the unused 

value on a gift card to a State as soon 

as two years after card issuance conflicts 

with Federal law because it imposes 

inconsistent requirements on card 

issuers. The commenters noted that 

Federal law prohibits a person from 

selling or issuing a gift card with an 

expiration date unless the card and its 

underlying funds will not expire for a 

minimum of five years. However, 

pursuant to both the Maine and 

Tennessee Acts, issuers must transfer 

unused gift cards’ value (i.e., the 

underlying funds) to the State as soon 

as two years after issuance. The 

commenters stated that the Maine and 

Tennessee Acts and Federal law thus 

impose conflicting obligations on 

issuers to continue to honor gift cards 

when they have already transferred the 

gift card value to the State. 

Other industry commenters noted that 

the States’ gift card abandonment 

periods can act as de facto expiration 

dates, because consumers are unlikely 

to recover their property if the issuer 

opts not to honor the gift cards after 

transferring their unused value to the 

State. Similarly, several industry 

commenters noted that Maine’s and 

Tennessee’s abandonment periods 

conflict with Federal disclosure 

requirements for gift cards, which 

provide that any expiration date must 

printed on the card (i.e., if no expiration 

date is printed, then the card cannot 

expire). The commenters stated that, 

because the Maine and Tennessee Acts 

require gift card issuers to transfer 

unused gift cards’ value to the State 

before any disclosed expiration date, the 

Acts have the potential to create an 

undisclosed, de facto expiration date 

that conflicts with what is printed on 

the card. 

In light of these arguments, industry 

commenters urged the Bureau to 

determine that the EFTA and Regulation 

E preempt the Maine and Tennessee 

Acts insofar as those Acts require 

transfer of unused gift cards’ value 

sooner than the expiration date that 

Federal law would permit (i.e., a 

minimum of five years or a card’s 

expiration date, if any). Some industry 

commenters stated that compelling 

issuers to comply with both the Federal 

expiration date provisions and the 

Maine and Tennessee Acts subjects 

issuers to conflicting claims from States 

and consumers. These commenters 

stated that requiring issuers to honor 

cards and then seek reimbursement 

from the State raises constitutional due 

process concerns. Other commenters 

stated that it is impossible for issuers 

subject to the Maine or Tennessee Acts 

to comply with both Federal and State 

law as they currently exist, or that 

complying with both laws imposes a 

significant and unfair burden on issuers 

and could cause issuers to charge higher 

fees or offer fewer card types.21 A few 

commenters noted that compelling 

issuers to comply with both Federal and 

State laws could lead to inappropriate 

windfalls to States. One trade 

association, on the other hand, stated 

that requiring issuers to honor 

abandoned cards would not 

significantly increase the burden on 

issuers, because the majority of issuers 

currently honor gift cards to preserve 

customer relationships, even if the 

cards’ unused value has been turned 

over to a State. 

One commenter, a consumer group, 

identified a different kind of conflict 

between Federal and State law. This 

commenter stated that an inconsistency 

arises from the issuer’s option to decline 

to honor the card before the card may 

expire under Federal law. The 

commenter thus urged the Bureau to 

determine that the EFTA and Regulation 

E preempt State law, but only insofar as 

State law purports to allow issuers to 

decline to honor cards sooner than the 

cards are permitted to expire under 

Federal law. The commenter noted that, 

under this approach, consumers would 

receive both the full protection of 

Federal law and whatever benefits 

might flow from having their unused 

gift cards’ value transfer to the State. 

The commenter further stated that it 

would be less burdensome for issuers to 

request reimbursement from the State 

after transferring the unused value than 

it would be for consumers to retrieve 

their unclaimed property directly from 

the State. The commenter reasoned that 

issuers could request reimbursement at 

regular intervals, e.g. annually, and that 

issuers would have little difficulty 

establishing their right to 

reimbursement. 

B. Whether State Law Is More Protective 

of Consumers 

Under the EFTA, even if there is a 

conflict between State law and the 

EFTA and Regulation E, State law is not 

inconsistent with the Federal law for 

purposes of a preemption analysis if it 

offers greater protections to consumers 

than the EFTA.22 However, no 

commenters argued that the Maine and 

Tennessee Acts are more protective of 

consumers than Federal law. Most 

commenters argued that Federal law is 

more protective of consumers than the 

Maine and Tennessee Acts, and two 

commenters stated that Maine law is 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices 24389 

23As noted, all but two commenters interpreted 

the Maine Act, as the Bureau did in its Notice, to 

permit issuers to decline to honor gift cards after 

transferring the cards’ unused value to the State. 

24 33 M.R.S. § 1953.G(2) (2011). The terms ‘‘gift 

obligation’’ and ‘‘stored value card’’ are defined in 

detail in the Maine Act and may differ in some 

respects from the terms ‘‘gift certificates, store gift 

cards, or general-use prepaid cards’’ as used in the 

EFTA. Id. § 1952.5–A (gift obligation); § 1952.15–A 

(stored-value card). Under the Maine Act, 

‘‘prefunded bank cards,’’ which generally include 

cards issued by a financial organization and that are 

usable at multiple merchants, are deemed 

abandoned after three years of non-use. Id. 

§ 1952.12–A; § 1953.G–1. 

25 Id. § 1953.G(3) (‘‘A period of limitation may not 

be imposed on the owner’s right to redeem the gift 

obligation or stored-value card.’’). 

26 Id. § 1958. Under the Maine Act, only 60 

percent of a gift card’s face value is reportable as 

unclaimed property. Id. § 1953.G(1). In addition, a 

gift card sold on or after December 31, 2011, is not 

presumed abandoned if it was among those sold by 

an issuer that sold no more than $250,000 in gift 

cards during the preceding calendar year. Id. 

§ 1953.G(2). 

27 Id. § 1961.2. 

28 Id. 

equally protective of consumers as 

Federal law. 

Those commenters who stated that 

Federal law is more protective of 

consumers cited the fact that, under 

Federal law, consumers are guaranteed 

the ability to redeem their gift cards at 

the point-of-sale for at least three years 

longer than under State law.23 Both 

consumer group commenters, however, 

stated that whether Federal law is more 

protective depends on whether State 

law requires issuers to honor cards for 

the entire period required by Federal 

law. Similarly, the two commenters, 

both trade associations, who stated that 

Maine law is equally protective of 

consumers, reached that conclusion 

because, they said, Maine law prohibits 

expiration dates for gift cards. Thus, 

according to these commenters, under 

Maine law, gift cards must be honored 

by the retailer whenever presented, even 

if their unused value has already 

transferred to the State. 

Commenters unanimously agreed that 

a State law that would force consumers 

to retrieve their unused gift cards’ value 

from the State, rather than from the 

issuers, would be less protective than 

Federal law. The commenters believed 

that consumers would not often succeed 

in reclaiming their property (or would 

not even try), due to the lengthy and 

confusing process that they would need 

to navigate. For example, commenters 

stated that a consumer would need to 

(1) know that a card had been deemed 

abandoned and that the issuer had 

transferred the unused card value to a 

State, (2) identify the State that is 

holding the property, which is based on 

information not usually known to 

consumers (e.g., information reported to 

the State by the issuer and the issuer’s 

State of incorporation), and (3) establish 

ownership of the property, which could 

be difficult because gift card owners 

typically are unknown to the issuer and 

thus not reported to the State. 

The Notice solicited comment on 

whether gift cards’ unused value would 

be better protected in the custody of the 

State where, for example, the unused 

value potentially could be protected 

from inactivity fees, issuer bankruptcy, 

and expiration, or could be converted to 

cash for the consumer. No commenters 

believed that any such benefits (even 

assuming they occurred) would 

outweigh the protections provided to 

consumers by Federal law. Certain 

industry commenters noted that the 

potential for harm to consumers from 

inactivity fees or issuer bankruptcy is 

low because inactivity fees are rare, the 

risk of bankruptcy is remote, and 

consumers have other protections 

against such harms. Other commenters 

disputed that a two-year abandonment 

period benefits consumers by providing 

them the indefinite ability to retrieve 

their gift cards’ unused value from the 

State. These commenters noted the 

procedural challenges discussed above. 

They also stated that consumers would 

receive the same benefit (if any) if the 

cards’ value transferred to the State after 

five years of dormancy. Two issuers 

commented that the right to receive cash 

is not more protective of consumers 

because consumers expect to obtain 

merchandise, not cash, from the 

purchase of gift cards. 

A handful of commenters urged the 

Bureau to determine that the EFTA and 

Regulation E preempt any State 

unclaimed property law pursuant to 

which a gift card is presumed 

abandoned any earlier than the earliest 

possible expiration permissible under 

Federal law. These commenters cited 

the benefits of a uniform, national 

approach. For example, one issuer 

stated that uniform, national standards 

promote stability in the financial system 

and protect consumers and industry 

from the compliance costs associated 

with State-by-State regulation. One 

trade association added that uniform, 

national standards reduce confusion, 

especially because many issuers may 

also be subject to other Federal 

regulations. 

V. Final Determinations 

Maine. The Office of the State 

Treasurer of the State of Maine 

requested a determination as to whether 

and how the EFTA and Regulation E’s 

provisions relating to gift card 

expiration dates preempt the Maine Act 

as applied to gift cards. After 

considering the relevant provisions of 

the EFTA and Regulation E, the Maine 

Act, public comments received, and 

further analysis, the Bureau has 

determined that it has no basis for 

concluding that the Maine Act as 

applied to gift cards is inconsistent with 

the EFTA and Regulation E or, therefore, 

that it is preempted. 

Several provisions of the Maine Act 

are relevant to understanding the 

treatment of gift cards as abandoned 

property in Maine. First, § 1953 of the 

Maine Act provides that a gift obligation 

or stored-value card is presumed 

abandoned two years after the later of 

December 31 of the year in which the 

obligation arose or the most recent 

transaction involving the obligation or 

stored-value card occurred, including 

the initial issuance and any subsequent 

addition of value to the obligation or 

stored-value card.24 (For ease of 

reference, the gift obligations covered by 

the Maine Act are referred to herein as 

‘‘gift cards.’’) Section 1953 of the Maine 

Act further provides that a period of 

limitation may not be imposed on an 

owner’s right to redeem a gift card.25

Under § 1958, holders of property that 

Maine presumes to be abandoned as of 

the end of a calendar year must report 

and transfer the property to Maine by 

May 1 of the following year.26 Finally, 

§ 1961 provides that Maine thereafter 

assumes custody of and responsibility 

for the property, and a business that has 

transferred such property to the State is 

relieved of all liability arising thereafter 

with respect it.27 Section 1961 further 

states that if a business chooses to make 

payment to the owner of the property, 

it may request reimbursement by filing 

a request with the State.28

The Bureau’s determination with 

respect to the Maine Act relies on the 

Bureau’s communications with the 

Office of the State Treasurer for the 

State of Maine, which interprets and 

administers Maine’s unclaimed property 

law. Maine’s Office of the State 

Treasurer has advised the Bureau that, 

properly interpreted, the Maine Act 

requires a holder to continue to honor 

a gift card that has been presumed 

abandoned pursuant to the Act. The 

Treasurer similarly has explained that 

Maine does not fulfill consumers’ direct 

requests to claim their property. Instead, 

if a consumer is directed to the State, 

the State re-directs the consumer to the 

gift card issuer and informs the issuer of 

its obligation to honor the card. There 

is some apparent tension between an 

issuer’s continuing obligation under 

§ 1953 of the Maine Act to honor 

abandoned gift cards whose unused 


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24390 Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices 

29As noted, the Bureau’s determination with 

respect to the Maine Act reflects the Bureau’s 

understanding of how the Maine Act currently 

operates and is based on communications with 

Maine’s Office of the State Treasurer. If legislative, 

judicial, or other official action effected a relevant 

change in how Maine law applied to gift cards, the 

Bureau could revisit its determination. 

30 Id. § 66–29–135(a)(1)–(2). Because, pursuant to 

the EFTA and Regulation E, gift cards sold since 

August 2010 may not expire sooner than five years 

after they are issued, the Bureau understands that 

§ 66–29–135 of the Tennessee Act effectively 

provides for a two-year abandonment period for 

such categories of cards. 

31Pursuant to Tennessee’s Consumer Protection 

Act, the term ‘‘gift certificate’’ also excludes prepaid 

telephone calling cards and certain other categories 

of cards not distributed to the general public. Tenn. 

Code Ann. § 47–18–127(d)–(e) (2012). Aside from 

the exclusion for ‘‘open-loop’’ gift cards and 

prepaid telephone calling cards, the Bureau 

believes that ‘‘gift certificate’’ for purposes of 

Tennessee law generally includes gift cards and 

other similar electronic devices. However, the scope 

of Tennessee’s definition of ‘‘gift certificate’’ may 

differ in some respects from that of ‘‘gift card’’ as 

used elsewhere in this determination. 

32 Id. § 66–29–135(c). 

33 Id. § 66–29–113(e). The value presumed 

abandoned is the price paid by the purchaser, 

except that for gift certificates issued after 

December 31, 1996, and redeemable in merchandise 

only, the value presumed abandoned is 60 percent 

of the purchase price. Id. § 66–29–135(b). The 

Bureau notes that a Tennessee trial court held in 

2001 that Tennessee law requires transfer only of 

the right to claim merchandise by using the gift card 

(i.e., not a transfer of the unused value). Service 

Merchandise Co. v. Adams, No. 97–2782–III, 2001 

WL 34384462 (Tenn. Ch. Ct. June 29, 2001). 

However, the Tennessee Department of Treasury’s 

Unclaimed Property Division has informed the 

Bureau that Tennessee requires the transfer of the 

unused value. 

34See Tennessee Department of Treasury 

Unclaimed Property, Frequently Asked Questions, 

http://treasury.tn.gov/unlcaim/faq/html. 

value has transferred to the State, and 

the more general provision in § 1961 

that provides abandoned property 

holders the option of whether to make 

payment to property owners after the 

property has transferred to the State. 

However, the Bureau’s determination 

with regard to the Maine Act is based on 

the interpretation of Maine law that the 

Treasurer has presented. 

Thus, under the Maine Act, as 

explained by the State’s Treasurer, an 

issuer that has transferred the unused 

value on an abandoned gift card to the 

State must honor the gift card on 

presentation indefinitely, and may then 

request reimbursement from the State. 

Because the Maine Act does not 

interfere with consumers’ ability to use 

their gift cards at the point-of-sale for at 

least as long as they are guaranteed that 

right by the EFTA and Regulation E, the 

Bureau has determined that it has no 

basis for concluding that the provisions 

in Maine’s unclaimed property law 

relating to gift cards are inconsistent 

with, or therefore preempted by, Federal 

law.29

In reaching its determination, the 

Bureau considered commenters’ 

concerns about the burden of being 

required to comply both with the 

expiration date provision of the EFTA 

and the abandonment provisions of the 

Maine Act. The Bureau notes, however, 

that the Maine Act itself requires 

abandoned gift cards to be honored 

indefinitely, a fact that these 

commenters generally did not recognize. 

The Bureau also considered certain 

commenters’ concerns that requiring an 

issuer to honor abandoned gift cards 

and then seek reimbursement, as the 

Maine Act does, would raise 

constitutional due process issues. The 

Bureau expresses no view on these 

comments, because the Bureau’s role is 

limited to determining whether any 

provisions of the Maine Act as applied 

to gift cards are inconsistent with the 

EFTA, not whether Maine’s law is 

constitutional. 

Tennessee. Payment card industry 

representatives requested that the 

Bureau issue a preemption 

determination as to whether the 

Tennessee Act is inconsistent with the 

requirement under the EFTA and 

Regulation E that gift cards and their 

underlying funds not expire sooner than 

five years after the date on which funds 

are last loaded onto the card. After 

considering the relevant provisions of 

the EFTA and Regulation E, the 

Tennessee Act, public comments 

received, and further analysis, the 

Bureau has determined that one 

provision in Tennessee’s unclaimed 

property law, § 66–29–116 of the 

Tennessee Act, as applied to gift cards, 

is inconsistent with the EFTA and 

Regulation E and therefore is 

preempted. 

As with Maine, several provisions of 

the Tennessee Act are relevant to 

understanding the treatment of gift 

cards as abandoned property in 

Tennessee. First, the Tennessee Act 

provides that a ‘‘gift certificate’’ issued 

in the ordinary course of an issuer’s 

business is presumed abandoned if it 

remains unclaimed by the owner upon 

the earlier of: (1) The expiration date of 

the certificate; or (2) two years from the 

date the certificate was issued.30

Pursuant to Tennessee’s Consumer 

Protection Act, the term ‘‘gift 

certificate’’ excludes prepaid cards 

usable at multiple, unaffiliated 

merchants or at automated teller 

machines (i.e., ‘‘open-loop’’ gift cards).31

In addition, a gift certificate is exempt 

from the Tennessee Act if the issuer of 

the certificate does not impose a 

dormancy charge and the gift certificate 

(1) conspicuously states that the gift 

certificate does not expire; (2) bears no 

expiration date; or (3) states that any 

expiration date is not applicable in 

Tennessee.32 In short, the Bureau 

understands that the Tennessee Act 

requires issuers to transfer to the State 

the unused value on most closed-loop 

gift certificates that carry dormancy 

charges and may expire. The Bureau’s 

determination applies to the Tennessee 

Act only to the extent that the gift 

certificates covered by the Act overlap 

with the categories of gift cards for 

which the EFTA and Regulation E 

restrict expiration dates. For ease of 

reference, such products are referred to 

herein as ‘‘gift cards.’’ 

An issuer of gift cards that Tennessee 

presumes to be abandoned as of the end 

of a calendar year must report and 

transfer the unused cards’ value to 

Tennessee by May 1 of the following 

year.33 Under § 66–29–116 of the 

Tennessee Act, Tennessee thereafter 

assumes custody and responsibility for 

the property, and the person that 

transferred the unused gift card value to 

the State is relieved of all liability to the 

extent of the value transferred for any 

claim that may later arise with respect 

to the property. Section 66–29–116 

further provides that a person that has 

transferred gift cards’ unused value to 

Tennessee may elect to honor the cards 

and may request reimbursement by 

filing a request with the State. 

Thus, unlike the Maine Act, the 

Tennessee Act does not require issuers 

to honor abandoned gift cards after 

issuers have transferred the cards’ 

unused value to Tennessee. The Bureau 

thus understands that, if an issuer were 

to decline to honor the gift cards, as 

permitted by § 66–29–116, consumers 

could attempt to reclaim their property 

by submitting an unclaimed property 

claim form to Tennessee’s Department 

of Treasury. To properly submit an 

effective claim, consumers would need 

to determine that Tennessee is the 

appropriate State to contact and would 

need to establish ownership of the 

property by supplying sufficient 

documentation to the State. Consumers 

then most likely would need to wait at 

least several weeks to receive their 

property.34

The Bureau finds that § 66–29–116 of 

the Tennessee Act as applied to gift 

cards is inconsistent with the EFTA and 

Regulation E and therefore is 

preempted. Specifically, the Bureau 

finds that § 66–29–116 of the Tennessee 

Act is inconsistent with Federal law 

because, by permitting issuers to decline 

to honor gift cards as soon as two years 

after issuance and relieving them of 


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Federal Register / Vol. 78, No. 80 / Thursday, April 25, 2013 / Notices 24391 

35Similarly, the Bureau concludes that its 

determination that § 66–29–116 of the Tennessee 

Act is not more protective of consumers than the 

EFTA and Regulation is not inconsistent with the 

judicial decision discussed in the Bureau’s Notice. 

That case, in which the U.S. Court of Appeals for 

the Third Circuit upheld a decision by the U.S. 

District Court for the District of New Jersey that 

declined to preliminarily enjoin the application to 

gift cards of New Jersey’s unclaimed property law, 

weighed the benefits to consumers of New Jersey’s 

unclaimed property scheme for gift cards. In finding 

that the plaintiffs were unlikely to prove that 

Federal law preempted New Jersey’s unclaimed gift 

card law, the court emphasized several possible 

benefits to consumers of having their unused gift 

card value transfer to the State that, in the court’s 

view, weighed in favor of a conclusion that New 

Jersey law was more protective of consumers than 

the EFTA and Regulation E. See N.J. Retail 

Merchants Ass’n v. Sidamon-Eristoff, 669 F.3d 374 

(3d Cir. 2012), reh’g denied (3d Cir. Feb. 24, 2012). 

Because the Bureau’s preemption determination 

with respect to Tennessee law applies to the 

provision of Tennessee law that permits issuers to 

decline to honor abandoned gift cards at the pointof-sale, rather than to the provision that requires 

unused gift card value to be transferred to the State, 

the purported benefits of any such transfer are not 

germane to the Bureau’s decision. 

36The Bureau’s determination with respect to the 

Tennessee Act reflects the Bureau’s understanding 

of how the Tennessee Act currently operates and is 

based in part on communications with the 

Tennessee Department of Treasury’s Unclaimed 

Property Division. If legislative, judicial, or other 

official action effected a relevant change in how 

Tennessee law applied to gift cards, the Bureau 

could revisit its determination. 

liability to consumers for the property, 

the effect of this provision is to permit 

cards and their underlying funds to 

expire sooner than is permitted under 

the EFTA and Regulation E. Section 66– 

29–116 of the Tennessee Act thus 

permits an act or practice that is 

prohibited by the Federal law. 

In reaching this conclusion, the 

Bureau has considered whether § 66– 

29–116 of the Tennessee Act, as applied 

to gift cards, is more protective of 

consumers than Federal law. The 

Bureau has concluded that it is not, 

because the Bureau has not identified 

any consumer benefit flowing from an 

issuer’s ability to decline a gift card at 

the point-of-sale sooner than the card 

and its underlying funds are permitted 

to expire under Federal law. The Bureau 

notes that any benefits a consumer 

might experience from having a gift card 

treated as abandoned property would 

result from the transfer of the unused 

gift card value to the State, not from an 

issuer’s declining to honor the card.35

For the reasons stated above, the 

Bureau finds that the Tennessee Act is 

inconsistent with the EFTA and 

Regulation E and therefore is preempted 

to the extent that it permits issuers to 

refuse to honor gift cards sooner than 

the gift cards and their underlying funds 

are permitted to expire under Federal 

law.36 In reaching this determination, 

the Bureau acknowledges commenters’ 

concerns that the requirement both to 

transfer the unused value from 

abandoned gift cards to the State while 

at the same time complying with the 

EFTA and Regulation E imposes 

possibly burdensome obligations on gift 

card issuers. However, the primary 

concern of the relevant provision of the 

EFTA is to ensure that consumers will 

be able to use their gift cards for the 

prescribed periods of time. So long as 

consumers can continue to use their 

cards at the point-of-sale for as long as 

Federal law guarantees, the fact that 

issuers may face an increased burden or 

cost to comply with both Federal law 

and the Tennessee Act—at least to the 

degree of burden the commenters 

discussed—does not change the 

Bureau’s conclusion. Also, as with 

Maine, the Bureau expresses no opinion 

on the constitutional due process 

concerns raised by certain commenters, 

because the Bureau’s role is solely to 

determine whether State law 

inconsistent with the requirements of 

the EFTA and Regulation E, not to 

determine whether State law is 

constitutional. In this regard, the Bureau 

notes that its determination is limited to 

the conclusion that § 66–29–116 of the 

Tennessee Act, as applied to gift cards, 

is preempted, and the Bureau does not 

otherwise opine on how the Tennessee 

Act should apply to gift cards in light 

of this determination. 

This is an official staff interpretation 

of Regulation E, issued pursuant to 

§ 1005.12(b) of Regulation E. The 

Bureau believes that the nuances of 

States’ unclaimed property laws warrant 

independent consideration of whether a 

particular State’s unclaimed property 

law as applied to gift cards is 

inconsistent with and preempted by the 

EFTA and Regulation E. Thus, 

notwithstanding certain commenters’ 

requests that the Bureau set forth a 

uniform, national standard, this 

determination is limited to the facts and 

issues discussed above and does not 

constitute a determination with respect 

to the laws of any other States. 

List of Subjects 

12 CFR Part 1005 

Banking, Banks, Consumer protection, 

Credit unions, Electronic fund transfers, 

National banks, Remittance transfers, 

Reporting and recordkeeping 

requirements, Savings associations. 

Preemption Determination 

The following order sets forth the 

preemption determination, which also 

will be reflected in Supplement I to Part 

1005—Official Interpretations. 

Order 

Pursuant to § 1639q of the Electronic 

Fund Transfers Act (EFTA) and 

§ 1005.12(b) of Regulation E, the Bureau 

has determined that § 66–29–116 of 

Tennessee’s Uniform Disposition of 

Unclaimed (Personal) Property Act (the 

Tennessee Act) is preempted by the 

EFTA and Regulation E to the extent 

that the Tennessee Act permits gift 

certificates to be declined at the pointof-sale sooner than the gift certificates 

and their underlying funds are 

permitted to expire under § 1005.20(e) 

of Regulation E. The Bureau’s 

determination applies only with respect 

to those devices that are gift certificates, 

store gift cards, and stored-value cards, 

as defined in 12 CFR 1005.20(a), and are 

also covered by the Tennessee Act. 

Dated: April 19, 2013. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–09751 Filed 4–24–13; 8:45 am] 

BILLING CODE 4810–AM–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

Sunshine Act Meeting Notice 

TIME AND DATE: Wednesday, May 1, 

2013, 10:00 a.m.–11:00 a.m. 

PLACE: Room 420, Bethesda Towers, 

4330 East West Highway, Bethesda, 

Maryland. 

STATUS: Commission Meeting—Open to 

the Public. 

MATTERS TO BE CONSIDERED: Decisional 

Matter: Section 1110 Certificates of 

Compliance—Notice of Proposed 

Rulemaking. 

A live webcast of the Meeting can be 

viewed at www.cpsc.gov/live. 

For a recorded message containing the 

latest agenda information, call (301) 

504–7948. 

CONTACT PERSON FOR MORE INFORMATION: 

Todd A. Stevenson, Office of the 

Secretary, U.S. Consumer Product 

Safety Commission, 4330 East West 

Highway, Bethesda, MD 20814, (301) 

504–7923. 

Dated: April 23, 2013. 

Todd A. Stevenson, 

Secretary. 

[FR Doc. 2013–09925 Filed 4–23–13; 4:15 pm] 

BILLING CODE 6355–01–P 


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