Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 21131 

practical utility; b. the accuracy of the 

Federal Reserve’s estimate of the burden 

of the information collection, including 

the cost of compliance; c. ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

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. Comments on 

the collections of information should be 

sent to Secretary, Board of Governors of 

the Federal Reserve System, 

Washington, DC 20551, with copies of 

such comments to be sent to the Office 

of Management and Budget, Paperwork 

Reduction Project (7100–0201), 

Washington, DC 20503. 

List of Subjects in 12 CFR Part 202 

Aged, Banks, banking, Civil rights, 

Credit, Federal Reserve System, Marital 

status discrimination, Penalties, 

Religious discrimination, Reporting and 

recordkeeping requirements, Sex 

discrimination. 

Text of Proposed Revisions 

Certain conventions have been used 

to highlight the proposed changes to 

Regulation B. New language is shown 

inside bold-faced arrows, while 

language that would be removed is set 

off with bold-faced brackets. 

For the reasons set forth in the 

preamble, the Board proposes to amend 

Regulation B, 12 CFR part 202, as set 

forth below: 

PART 202—EQUAL CREDIT 

OPPORTUNITY (REGULATION B) 

1. The authority citation for part 202 

continues to read as follows: 

Authority: 15 U.S.C. 1691–1691f. 

2. Section 202.4 would be amended 

by revising paragraph (d) to read as 

follows: 

§ 202.4 General rules. 

* * * * * 

(d) Form of disclosures[.]fl—(1) 

General rule.fi A creditor that provides 

in writing any disclosures or 

information required by this regulation 

must provide the disclosures in a clear 

and conspicuous manner and, except for 

the disclosures required by §§ 202.5 and 

202.13, in a form the applicant may 

retain. 

fl(2) Disclosures in electronic form. 

The disclosures required by this part 

that are required to be given in writing 

may be provided to the applicant in 

electronic form, subject to compliance 

with the consumer consent and other 

applicable provisions of the Electronic 

Signatures in Global and National 

Commerce Act (E-Sign Act) (15 U.S.C. 

7001 et seq.). Where the disclosures 

under §§ 202.5(b)(1), 202.5(b)(2), 

202.5(d)(1), 202.5(d)(2), 202.13, and 

202.14(a)(2)(i) accompany an 

application accessed by the applicant in 

electronic form, these disclosures must 

be provided to the applicant in 

electronic form on or with the 

application form. These disclosures may 

be made in electronic form without 

regard to the consumer consent or other 

provisions of the E-Sign Act.fi 

* * * * * 

3. Section 202.9 would be amended 

by removing paragraph (h), to read as 

follows: 

§ 202.9 Notifications. 

* * * * * 

[(h) Duties of third parties. A third 

party may use electronic 

communication in accordance with the 

requirements of § 202.16, as applicable, 

to comply with the requirements of 

paragraph (g) of this section on behalf of 

a creditor.] 

4. Section 202.16 would be removed. 

5. Section 202.17 would be 

redesignated as § 202.16. 

6. In Supplement I to Part 202, the 

following amendments would be made: 

a. In Section 202.4—General Rules, 

under (4)(d) Form of Disclosures, new 

paragraph 2. would be added. 

b. Section 202.16 would be removed; 

c. Section 202.17 would be 

redesignated as § 202.16. 

The amendments to read as follows: 

* * * * * 

Supplement I to Part 202—Official Staff 

Interpretations 

* * * * * 

Section 202.4—General Rules 

* * * * * 

(4)(d) Form of Disclosures 

* * * * * 

fl2. Electronic form of disclosures. If a 

consumer accesses an application in 

electronic form, the disclosures required to 

accompany the application must be provided 

to the consumer in electronic form on or with 

the application; providing the disclosures at 

a different time or place, or in paper form, 

would not comply. Conversely, if a consumer 

is provided with a paper application, the 

disclosures must be provided in paper form 

on or with the application. For example, if 

a consumer receives an application in the 

mail, the creditor would not satisfy its 

obligation to provide the disclosures at that 

time by including a reference in the 

application to the web site where the 

disclosures are located.fi 

* * * * * 

Section 202.[17]fl16fi—Enforcement, 

Penalties, and Liabilities 

[17]fl16fi(c) Failure of compliance. 

1. Inadvertent errors. Inadvertent errors 

include, but are not limited to, clerical 

mistake, calculation error, computer 

malfunction, and printing error. An error of 

legal judgment is not an inadvertent error 

under the regulation. 

2. Correction of error. For inadvertent 

errors that occur under §§ 202.12 and 202.13, 

this section requires that they be corrected 

prospectively. 

By order of the Board of Governors of the 

Federal Reserve System. 

Dated: April 20, 2007. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. E7–7875 Filed 4–27–07; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 205 

[Regulation E; Docket No. R–1282] 

Electronic Fund Transfer 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: The Board is proposing to 

amend Regulation E, which implements 

the Electronic Fund Transfer Act, to 

withdraw the interim final rules for the 

electronic delivery of disclosures issued 

March 30, 2001. The interim final rules 

address the timing and delivery of 

electronic disclosures, consistent with 

the requirements of the Electronic 

Signatures in Global and National 

Commerce Act. Compliance with the 

2001 interim final rules is not 

mandatory. Thus, removing the interim 

rules from the Code of Federal 

Regulations would reduce confusion 

about the status of the provisions and 

simplify the regulation. Similar rules are 

being proposed under other consumer 

fair lending and financial services 

regulations administered by the Board. 

DATES: Comments must be received on 

or before June 29, 2007. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1282, by any 

of the following methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include the docket number in the 

subject line of the message. 

• FAX: (202) 452–3819 or (202) 452–

3102. 


jlentini on PROD1PC65 with PROPOSAL
21132 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 

• Mail: Jennifer J. Johnson, 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 Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper in Room MP–500 of the Board’s 

Martin Building (20th and C Streets, 

NW.) between 9 a.m. and 5 p.m. on 

weekdays. 

FOR FURTHER INFORMATION CONTACT: John 

C. Wood or David A. Stein, Counsels, 

Division of Consumer and Community 

Affairs, at (202) 452–2412 or (202) 452–

3667. For users of Telecommunications 

Device for the Deaf (TDD) only, contact 

(202) 263–4869. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The purpose of the Electronic Fund 

Transfer Act (EFTA), 15 U.S.C. 1693 et 

seq., is to provide a basic framework 

establishing the rights, liabilities, and 

responsibilities of participants in 

electronic fund transfer (EFT) systems, 

and to provide individual consumer 

rights. The Board’s Regulation E (12 

CFR part 205) implements the EFTA. 

Examples of types of transfers covered 

by the EFTA and Regulation E include 

transfers initiated through an automated 

teller machine (ATM), point-of-sale 

(POS) terminal, automated 

clearinghouse (ACH), telephone billpayment plan, or remote banking 

service. The EFTA and Regulation E 

require financial institutions to provide 

certain disclosures to consumers in 

writing, including but not limited to 

initial disclosures of terms and 

conditions of an EFT service, 

documentation of EFTs by means of 

terminal receipts and periodic account 

activity statements, and change in terms 

notices. Certain persons other than 

financial institutions are also required 

to comply with specific disclosure 

provisions of Regulation E. 

Board Proposals Regarding Electronic 

Disclosures 

On May 2, 1996, the Board proposed 

to amend Regulation E (Electronic Fund 

Transfers) to permit financial 

institutions to provide disclosures by 

sending them electronically (61 FR 

19696). Based on comments received, in 

1998 the Board published an interim 

rule permitting the electronic delivery 

of disclosures under Regulation E (63 

FR 14528, March 25, 1998) and similar 

proposals under Regulations B (Equal 

Credit Opportunity), M (Consumer 

Leasing), Z (Truth in Lending), and DD 

(Truth in Savings) (63 FR 14552, 14538, 

14548, and 14533, respectively, March 

25, 1998). 

Based on comments received on the 

1998 proposals, in September 1999 the 

Board published revised proposals 

under Regulations B, E, M, Z, and DD 

(64 FR 49688, 49699, 49713, 49722 and 

49740, respectively, September 14, 

1999). At the same time, the Board 

published an interim rule under 

Regulation DD allowing depository 

institutions to deliver disclosures on 

periodic statements in electronic form if 

the consumer agreed (64 FR 49846, 

September 14, 1999). While these 

rulemakings were pending, Federal 

legislation was enacted addressing the 

use of electronic documents and 

records, including consumer 

disclosures. 

Federal Legislation Addressing 

Electronic Commerce 

On June 30, 2000, the President 

signed into law the Electronic 

Signatures in Global and National 

Commerce Act (the E-Sign Act) (15 

U.S.C. 7001 et seq.). The E-Sign Act 

provides that electronic documents and 

electronic signatures have the same 

validity as paper documents and 

handwritten signatures. The E-Sign Act 

contains special rules for the use of 

electronic disclosures in consumer 

transactions. Under the E-Sign Act, 

consumer disclosures required by other 

laws or regulations to be provided or 

made available in writing may be 

provided or made available, as 

applicable, in electronic form if the 

consumer affirmatively consents after 

receiving a notice that contains certain 

information specified in the statute, and 

if certain other conditions are met. 

The E-Sign Act, including the special 

consumer notice provisions, became 

effective October 1, 2000, and did not 

require implementing regulations. Thus, 

financial institutions are currently 

permitted to provide in electronic form 

any disclosures that are required to be 

provided or made available to the 

consumer in writing under Regulations 

B, E, M, Z and DD if the consumer 

affirmatively consents to receipt of 

electronic disclosures in the manner 

required by section 101(c) of the E-Sign 

Act. 

The Interim Final Rules 

On April 4, 2001, the Board published 

for comment interim final rules to 

establish uniform standards for the 

electronic delivery of disclosures 

required under Regulation E (66 FR 

17,786). Similar interim final rules for 

Regulations B, M, Z, and DD were 

published on March 30, 2001 (66 FR 

17322 (M) and 17329 (Z)), and April 4, 

2001 (66 FR 17779 (B) and 17795 (DD)). 

The interim final rules incorporated 

most of the provisions that were part of 

the 1999 proposals. 

Each of the interim final rules 

incorporated, but did not interpret, the 

requirements of the E-Sign Act. 

Financial institutions and other persons, 

as applicable, generally were required to 

obtain consumers’ affirmative consent to 

provide disclosures electronically, 

consistent with the requirements of the 

E-Sign Act. 

The 2001 interim final rule for 

Regulation E established uniform 

requirements for the timing and delivery 

of electronic disclosures. Under the 

interim rule, disclosures could be sent 

to an e-mail address designated by the 

consumer, or could be made available at 

another location, such as an Internet 

Web site. If the disclosures were not 

sent by e-mail, financial institutions 

would have to provide a notice to 

consumers alerting them to the 

availability of the disclosures. 

Disclosures posted on a Web site would 

have to be available for at least 90 days 

to allow consumers adequate time to 

access and retain the information. 

Financial institutions also would be 

required to make a good faith attempt to 

redeliver electronic disclosures that 

were returned undelivered, using the 

address information available in their 

files. Similar provisions were included 

in the interim final rules adopted under 

Regulations B, M, Z, and DD. 

Commenters on the interim final rules 

identified significant operational and 

security concerns with respect to the 

requirement to send the disclosure or an 

alert notice to an e-mail address 

designated by the consumer. For 

example, commenters stated that some 

consumers do not have e-mail addresses 

or may not want personal financial 

information sent to them by e-mail. The 

commenters also opposed the 

requirement for redelivery in the event 

a disclosure was returned undelivered. 

In addition, many commenters asserted 

that making the disclosures available for 

at least 90 days, as required by the 

interim final rule, would increase costs 

and would not be necessary for 

consumer protection. 

In August 2001, in response to 

comments received, the Board lifted the 

previously established October 1, 2001 

mandatory compliance date for all of the 

interim final rules. (66 FR 41439, 

August 8, 2001.) Thus, institutions are 


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Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 21133 

not required to comply with the interim 

final rules. Since that time, the Board 

has not taken further action with respect 

to the interim final rules on electronic 

disclosures in order to allow electronic 

commerce, including electronic 

disclosure practices, to continue to 

develop without regulatory intervention 

and to allow the Board to gather further 

information about such practices. 

II. The Proposed Rules 

The Board is proposing to amend 

Regulation E and the official staff 

commentary by (1) withdrawing 

portions of the 2001 interim final rule 

on electronic disclosures that restate or 

cross-reference provisions of the E-Sign 

Act and accordingly are unnecessary; (2) 

withdrawing other portions of the 

interim final rule that the Board now 

believes may impose undue burdens on 

electronic banking and commerce and 

may be unnecessary for consumer 

protection; and (3) adding certain 

provisions to provide guidance 

regarding electronic disclosures. 

(Similar amendments are also being 

proposed by the Board, in today’s issue 

of the Federal Register, under 

Regulations B, M, Z, and DD.) 

Because compliance with the 2001 

interim final rules is not mandatory, 

removing this material from the Code of 

Federal Regulations would reduce 

confusion about the status of the 

electronic disclosure provisions and 

simplify the regulation. Certain 

provisions in the interim final rules, 

including provisions addressing foreign 

language disclosures, were not affected 

by the lifting of the mandatory 

compliance date and accordingly are 

now in final form; these provisions 

would not be deleted. 

Since 2001, industry and consumers 

have gained experience with electronic 

disclosures. During that period, the 

Board has received no indication that 

consumers have been harmed by the fact 

that compliance with the interim final 

rules is not mandatory. The Board has 

also reconsidered certain aspects of the 

interim final rules, such as sending 

disclosures by e-mail, in light of 

concerns about data security, identity 

theft, and ‘‘phishing’’ (i.e., prompting 

consumers to reveal confidential 

personal or financial information 

through fraudulent e-mail requests that 

appear to originate from a financial 

institution, government agency, or other 

trusted entity) that have become more 

pronounced since 2001. The Board is 

proposing to eliminate certain aspects of 

the 2001 interim final rule, such as 

provisions regarding the availability and 

retention of electronic disclosures, as 

unnecessary in light of current industry 

practices. 

Finally, the Board is proposing to 

delete, as unnecessary, certain 

provisions that restate or cross-reference 

the E-Sign Act’s general rules regarding 

electronic disclosures (including the 

consumer consent provisions) and 

electronic signatures because the E-Sign 

Act is a self-effectuating statute. The 

Board is issuing the proposed rules 

pursuant to its authority under section 

904 of the EFTA to prescribe rules to 

carry out the purposes of the Act. The 

proposed revisions to Regulation E and 

the official staff commentary are 

described more fully below in the 

Section-by-Section Analysis. 

The Board solicits comment on all 

aspects of this proposal. Specifically, 

the Board seeks comment on the 

appropriateness of eliminating certain 

provisions contained in the 2001 

interim final rule. 

III. Section-by-Section Analysis 

12 CFR Part 205 (Regulation E) 

Section 205.4 General Disclosure 

Requirements; Jointly Offered Services 

Section 205.4 contains the general 

disclosure requirements under 

Regulation E, including provisions 

relating to the form of disclosure. 

Section 205.4(a)(1) generally requires 

financial institutions to provide 

disclosures in writing and in a form that 

the consumer may keep. The Board 

proposes to revise § 205.4(a)(1) to clarify 

that institutions may provide 

disclosures to consumers in electronic 

form, subject to compliance with the 

consumer consent and other applicable 

provisions of the E-Sign Act. Some 

institutions may provide disclosures to 

consumers both in paper and electronic 

form and rely on the paper form of the 

disclosures to satisfy their compliance 

obligations. For those institutions, the 

duplicate electronic form of the 

disclosures may be provided to 

consumers without regard to the 

consumer consent or other provisions of 

the E-Sign Act because the electronic 

form of the disclosure is not used to 

satisfy the regulation’s disclosure 

requirements. 

Section 205.4(c) in the 2001 interim 

final rule refers to § 205.17, the section 

of the interim final rule setting forth 

general rules for electronic disclosures. 

Because the Board is proposing to delete 

§ 205.17, as discussed further below, the 

Board also proposes to delete § 205.4(c). 

Sections 205.4(d) (multiple accounts 

and account holders) and (e) (services 

offered jointly) would be renumbered as 

§§ 205.4(c) and (d) respectively. 

Section 205.17 Requirements for 

Electronic Communication 

Section 205.17 was added by the 2001 

interim final rule to address the general 

requirements for electronic 

communications. The Board proposes to 

delete § 205.17 from Regulation E and 

the accompanying sections of the staff 

commentary, reserving that section for 

future use. 

In the interim rule, § 205.17(a) defines 

the term ‘‘electronic communication’’ to 

mean a message transmitted 

electronically that can be displayed on 

equipment as visual text, such as a 

message displayed on a personal 

computer monitor screen. The deletion 

of § 205.17(a) would not change 

applicable legal requirements under the 

E-Sign Act. 

Section 205.17(b) incorporates by 

reference the provisions of the E-Sign 

Act, such as the provision allowing 

disclosures to be provided in electronic 

form. The deletion of this provision 

would have no impact on the general 

applicability of the E-Sign Act to 

Regulation E disclosures. Section 

205.17(e) was added in the 2001 interim 

final rule to clarify that persons, other 

than financial institutions, that are 

required to comply with the regulation 

may use electronic disclosures. The 

Board is proposing to delete this 

provision as unnecessary because the ESign Act is a self-effectuating statute 

and permits any person to use electronic 

records subject to the conditions set 

forth in the Act. 

Sections 205.17(c) and (d) address 

specific timing and delivery 

requirements for electronic disclosures 

under Regulation E, such as the 

requirement to send disclosures to a 

consumer’s e-mail address (or post the 

disclosures on a website and send a 

notice alerting the consumer to the 

disclosures). The Board no longer 

believes that these additional provisions 

are necessary or appropriate. Electronic 

disclosures have evolved since 2001, as 

industry and consumers have gained 

experience with them. Although many 

institutions offer e-mail alert notices to 

consumers in connection with online 

services, some consumers may choose 

not to receive notifications by e-mail 

and the Board sees no reason to require 

e-mail alert notices in all cases. In 

addition, the Board has reconsidered 

certain aspects of the interim final rules, 

such as sending disclosures by e-mail, 

in light of concerns about data security, 

identity theft, and phishing that have 

become more pronounced since 2001. 

With regard to the requirement to 

attempt to redeliver returned electronic 

disclosures, as the commenters noted, 


jlentini on PROD1PC65 with PROPOSAL
21134 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 

institutions would be required to search 

their files for an additional e-mail 

address to use, and might be required to 

use a postal mail address for redelivery 

if no additional e-mail address was 

available. The Board believes that both 

requirements would likely be unduly 

burdensome. In addition, the concerns 

that have been raised about the 

requirement to use e-mail for the initial 

delivery of a disclosure or notice apply 

equally to the use of e-mail for an 

attempted redelivery. 

Under the proposed rule, the Board 

would not require institutions to 

maintain disclosures posted on a web 

site for at least 90 days as provided in 

the 2001 interim final rule for several 

reasons. First, based on a review of 

industry practices, it appears that many 

institutions maintain disclosures posted 

on an Internet Web site for several 

months, and, in a number of cases, for 

more than a year. For example, it 

appears that institutions that offer 

online periodic statements to consumers 

typically make those statements 

available without charge for six months 

or longer in electronic form. This 

practice has developed even though 

Regulation E does not currently require 

institutions to maintain disclosures for 

any specific period of time. Second, the 

Board believes that an appropriate time 

period consumers may want electronic 

disclosures to be available may vary 

depending upon the type of disclosure, 

and is reluctant to establish specific 

time periods depending on the 

disclosures. Nevertheless, while the 

Board is not proposing to require 

disclosures to be maintained on an 

Internet Web site for any specific time 

period, the general requirements of 

Regulation E continue to apply to 

electronic disclosures, such as the 

requirement to provide disclosures to 

consumers at certain specified times 

and in a form that the consumer may 

keep. Although these general 

requirements apply to electronic 

disclosures, the Board does not believe 

that the 90-day time period set out in 

§ 205.17(c) of the 2001 interim final rule 

is needed to ensure that institutions 

satisfy these requirements when they 

provide electronic disclosures. The 

Board, however, will monitor 

institutions’ electronic disclosure 

practices with regard to the ability of 

consumers to retain Regulation E 

disclosures and will consider further 

regulatory action if it appears necessary. 

The official staff commentary to 

§ 205.17 of the interim final rule 

provides guidance on the provisions set 

forth in § 205.17 such as delivery of 

disclosures or alert notices by e-mail, 

redelivery if disclosures or a notice is 

returned undelivered, and retention of 

disclosures on a Web site for 90 days. 

As noted above, because the Board is 

proposing to delete § 205.17 of the 

regulation, the Board also proposes to 

delete the accompanying provisions of 

the official staff commentary. 

IV. Solicitation of Comments Regarding 

the Use of ‘‘Plain Language’’

Section 722 of the Gramm-LeachBliley Act of 1999 requires the Board to 

use ‘‘plain language’’ in all proposed 

and final rules published after January 

1, 2000. The Board invites comments on 

whether the proposed rules are clearly 

stated and effectively organized, and 

how the Board might make the proposed 

text easier to understand. 

V. Initial Regulatory Flexibility 

Analysis 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (RFA) generally 

requires an agency to perform an 

assessment of the impact a rule is 

expected to have on small entities. 

However, under section 605(b) of the 

RFA, 5 U.S.C. 605(b), the regulatory 

flexibility analysis otherwise required 

under section 604 of the RFA is not 

required if an agency certifies, along 

with a statement providing the factual 

basis for such certification, that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Based on its analysis and for 

the reasons stated below, the Board 

believes that this proposed rule will not 

have a significant economic impact on 

a substantial number of small entities. A 

final regulatory flexibility analysis will 

be conducted after consideration of 

comments received during the public 

comment period. 

1. Statement of the objectives of the 

proposal. The Board is proposing 

revisions to Regulation E to withdraw 

the 2001 interim final rule on electronic 

communication. The Board is also 

proposing to clarify that Regulation E 

disclosures may be provided to 

consumers in electronic form in 

accordance with the consumer consent 

and other applicable provisions of the ESign Act. 

The EFTA was enacted to provide a 

basic framework establishing the rights, 

liabilities, and responsibilities of 

participants in electronic fund transfer 

(EFT) systems. The primary purpose of 

the act is the provision of individual 

consumer rights. 15 U.S.C. 1593. The 

EFTA authorizes the Board to prescribe 

regulations to carry out the purposes of 

the statute. 15 U.S.C. 1693b. The Act 

expressly states that the Board’s 

regulations may contain ‘‘such 

classifications, differentiations, or other 

provisions, * * * as, in the judgment of 

the Board, are necessary or proper to 

carry out the purposes of [the Act], to 

prevent circumvention or evasion [of 

the act], or to facilitate compliance [with 

the Act].’’ 15 U.S.C. 1693b(c). The Board 

believes that the revisions to Regulation 

E discussed above are within the 

Congress’ broad grant of authority to the 

Board to adopt provisions that carry out 

the purposes of the statute. 

2. Small entities affected by the 

proposal. The proposed revisions would 

delete provisions of Regulation E that 

are not in effect on a mandatory basis 

and, accordingly, the proposed revisions 

would not change the legal 

requirements applicable to any financial 

institutions, regardless of their size. 

Therefore, the proposed revisions would 

not have a significant economic impact 

on small entities. The number of small 

entities affected by this proposal is 

unknown. 

3. Other federal rules. The Board 

believes no federal rules duplicate, 

overlap, or conflict with the proposed 

revisions to Regulation E. 

4. Significant alternatives to the 

proposed revisions. The Board solicits 

comment on any significant alternatives 

that may provide additional ways to 

reduce regulatory burden associated 

with this proposed rule. 

VI. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. Ch. 

3506; 5 CFR part 1320 Appendix A.1), 

the Board reviewed the rule under the 

authority delegated to the Board by the 

Office of Management and Budget 

(OMB). The collection of information 

that is required by this proposed rule is 

found in 12 CFR part 205. The Federal 

Reserve may not conduct or sponsor, 

and an organization is not required to 

respond to, this information collection 

unless it displays a currently valid OMB 

control number. The OMB control 

number is 7100–0200. 

Section 904 of the Electronic Fund 

Transfer Act (EFTA) (15 U.S.C. § 1693b) 

authorizes the Board to issue regulations 

to carry out the purposes of the Act. 

This information collection is 

mandatory. Since the Federal Reserve 

does not collect any information, no 

issue of confidentiality normally arises. 

However, the information, if made 

available to the Federal Reserve, may be 

protected from disclosure under 

exemptions (b)(4), (6), and (8) of the 

Freedom of Information Act (5 U.S.C. 

552 (b)(4), (6), and (8)). The disclosures 

required by the rule and information 

about error allegations and their 

resolution are confidential between the 

institution and the consumer. 


jlentini on PROD1PC65 with PROPOSAL
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The EFTA and Regulation E are 

designed to ensure adequate disclosure 

of basic terms, costs, and rights relating 

to electronic fund transfer (EFT) 

services provided to consumers. 

Institutions offering EFT services must 

disclose to consumers certain 

information, including: initial and 

updated EFT terms, transaction 

information, periodic statements of 

activity, the consumer’s potential 

liability for unauthorized transfers, and 

error resolution rights and procedures. 

These disclosures are triggered by 

certain events specified in the EFTA 

and Regulation E. Institutions are 

required to retain evidence of 

compliance for not less than two years 

from the date that disclosures are 

required to be made or action is 

required to be taken; however, the 

regulation does not specify the types of 

records that must be retained. To ease 

institutions’ burden and cost of 

complying with the disclosure 

requirements of Regulation E 

(particularly for small entities), the 

Federal Reserve publishes model forms 

and disclosure clauses. Regulation E 

applies to all financial institutions and 

merchants and payees that engage in 

ECK transactions. The Board has 

determined that no new requirements or 

revisions to existing requirements are 

contained in this proposed rule. 

Comments are invited on: a. Whether 

the collection of information is 

necessary for the proper performance of 

the Federal Reserve’s functions; 

including whether the information has 

practical utility; b. the accuracy of the 

Federal Reserve’s estimate of the burden 

of the information collection, including 

the cost of compliance; c. ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

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. Comments on 

the collections of information should be 

sent to Secretary, Board of Governors of 

the Federal Reserve System, 

Washington, DC 20551, with copies of 

such comments to be sent to the Office 

of Management and Budget, Paperwork 

Reduction Project (7100–0202), 

Washington, DC 20503. 

List of Subjects in 12 CFR Part 205 

Consumer protection, Electronic fund 

transfers, Federal Reserve System, 

Reporting and recordkeeping 

requirements. 

Text of Proposed Revisions 

Certain conventions have been used 

to highlight the proposed changes to 

Regulation E. New language is shown 

inside bold-faced arrows, while 

language that would be removed is set 

off with bold-faced brackets. 

For the reasons set forth in the 

preamble, the Board proposes to amend 

Regulation E, 12 CFR part 205, as set 

forth below: 

PART 205—ELECTRONIC FUND 

TRANSFERS (REGULATION E) 

1. The authority citation for part 205 

continues to read as follows: 

Authority: 15 U.S.C. 1693b. 

2. Section 205.4 would be amended 

by revising paragraph (a)(1), removing 

paragraph (c), and redesignating 

paragraph (d) as paragraph (c), and 

paragraph (e) as paragraph (d), 

respectively, as follows: 

§ 205.4 General disclosure requirements; 

jointly offered services. 

(a)(1) Form of disclosures. Disclosures 

required under this part shall be clear 

and readily understandable, in writing, 

and in a form the consumer may keep. 

flThe disclosures required by this part 

may be provided to the consumer in 

electronic form, subject to compliance 

with the consumer consent and other 

applicable provisions of the Electronic 

Signatures in Global and National 

Commerce Act (E-Sign Act)(15 U.S.C. 

7001 et seq.).fi A financial institution 

may use commonly accepted or readily 

understandable abbreviations in 

complying with the disclosure 

requirements of this part. 

* * * * * 

ø(c) Electronic communication. For 

rules governing the electronic delivery 

of disclosures, including the definition 

of electronic communication, see 

§ 205.17.¿ 

ø(d)¿ fl(c)fi Multiple accounts and 

account holders—(1) Multiple accounts. 

A financial institution may combine the 

required disclosures into a single 

statement for a consumer who holds 

more than one account at the 

institution. 

(2) Multiple account holders. For joint 

accounts held by two or more 

consumers, a financial institution need 

provide only one set of required 

disclosures and may provide them to 

any of the account holders. 

ø(e)¿ fl(d)fi Services offered jointly. 

Financial institutions that provide 

electronic fund transfer services jointly 

may contract among themselves to 

comply with the requirements that this 

part imposes on any or all of them. An 

institution need make only the 

disclosures required by §§ 205.7 and 

205.8 that are within its knowledge and 

within the purview of its relationship 

with the consumer for whom it holds an 

account. 

§ 205.17 [Removed and Reserved] 

3. Section 205.17 would be removed 

and reserved. 

4. In Supplement I to Part 205, 

Section 205.17 would be removed and 

reserved. 

By order of the Board of Governors of the 

Federal Reserve System, April 20, 2007. 

Jennifer J. Johnson, 

Secretary of the Board 

[FR Doc. E7–7876 Filed 4–27–07; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 213 

[Regulation M; Docket No. R–1283] 

Consumer Leasing 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: The Board is proposing to 

amend Regulation M, which 

implements the Consumer Leasing Act, 

to withdraw portions of the interim final 

rules for the electronic delivery of 

disclosures issued March 30, 2001. The 

interim final rules address the timing 

and delivery of electronic disclosures, 

consistent with the requirements of the 

Electronic Signatures in Global and 

National Commerce Act (E-Sign Act). 

Compliance with the 2001 interim final 

rules is not mandatory. Thus, removing 

the interim rules from the Code of 

Federal Regulations would reduce 

confusion about the status of the 

provisions and simplify the regulation. 

The Board is also proposing to amend 

Regulation M to provide that when an 

advertisement is accessed by a 

consumer in electronic form, certain 

disclosures must be provided to the 

consumer in electronic form on or with 

the advertisement, and that in these 

circumstances the consumer consent 

and other provisions of the E-Sign Act 

do not apply. Similar rules are being 

proposed under other consumer fair 

lending and financial services 

regulations administered by the Board. 

DATES: Comments must be received on 

or before June 29, 2007. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1283, by any 

of the following methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 


jlentini on PROD1PC65 with PROPOSAL