Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 21155 

disclosures and each must designate an 

electronic address for receiving the 

disclosure.¿ 

* * * * * 

Section 226.24—Advertising 

* * * * * 

24(b) Advertisement of rate of finance 

charge. 

* * * * * 

ø6. Electronic communication. A simple 

annual rate or periodic rate that is applied to 

an unpaid balance may be stated only if it is 

provided in conjunction with an annual 

percentage rate. In an advertisement using 

electronic communication, the consumer 

must be able to view both rates 

simultaneously. This requirement is not 

satisfied if the consumer can view annual 

percentage rate only by use of a link that 

takes the consumer to information appearing 

at another location.¿ 

* * * * * 

24(d) Catalogs or other multiple-page 

advertisements; electronic advertisements. 

* * * * * 

2. General. Section 226.24(d) permits 

creditors to put credit information together in 

one place in a catalog or other multiple-page 

advertisement, or in an electronic 

advertisement fl(such as an advertisement 

appearing on an Internet Web site)fi. The 

rule applies only if the advertisement 

contains one or more of the triggering terms 

from § 226.24(c)(1). A list of different annual 

percentage rates applicable to different 

balances, for example, does not trigger 

further disclosures under § 226.24(c)(2) and 

so is not covered by § 226.24(d). 

* * * * * 

4. Electronic fl advertisementfi 

øcommunication¿. If an flelectronic 

advertisement (such as an advertisement 

appearing on an Internet Web site)fi 

øadvertisement using electronic 

communication¿ contains the table or 

schedule permitted under § 226.24(d)(1), any 

statement of terms set forth in § 226.24(c)(1) 

appearing anywhere else in the 

advertisement must clearly direct the 

consumer to the location where the table or 

schedule begins. For example, a term 

triggering additional disclosures may be 

accompanied by a link that directly takes the 

consumer to the additional information ø(but 

see comment 24(b)–6)¿. 

fl5. Form of disclosures. If a consumer 

accesses an advertisement in electronic form, 

the required disclosures must be provided to 

the consumer in electronic form on or with 

the advertisement; providing the disclosures 

at a different time or place, or in paper form, 

would not comply. Conversely, if a consumer 

views a paper advertisement, the required 

disclosures must be provided in paper form 

on or with the advertisement. For example, 

if a consumer receives an advertisement in 

the mail, the creditor would not satisfy its 

obligation to provide § 226.16 disclosures at 

that time by including a reference in the 

advertisement to the Web site where the 

disclosures are located.fi 

By order of the Board of Governors of the 

Federal Reserve System, April 20, 2007. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. E7–7878 Filed 4–27–07; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 230 

[Regulation DD; Docket No. R–1285] 

Truth in Savings 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: The Board is proposing to 

amend Regulation DD, which 

implements the Truth in Savings 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 DD to provide that certain 

disclosures may be provided to a 

consumer in electronic form without 

regard to the consumer consent and 

other provisions of the E-Sign Act; and 

that, when an advertisement is accessed 

by the consumer in electronic form, the 

disclosures must be provided in 

electronic form on or with the 

advertisement. 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–1285, 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. 

• 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 form 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 Truth in Savings 

Act (TISA), 12 U.S.C. 4301 et seq., is to 

enable consumers to make informed 

decisions about accounts at depository 

institutions. The act requires depository 

institutions to disclose yields, fees, and 

other terms concerning deposit accounts 

to consumers at account opening, upon 

request, when changes in terms occur, 

and in periodic statements. It also 

includes rules about advertising for 

deposit accounts. The Board’s 

Regulation DD (12 CFR part 230) 

implements the act. Credit unions are 

governed by a substantially similar 

regulation issued by the National Credit 

Union Administration. TISA and 

Regulation DD require a number of 

disclosures to be provided in writing. 

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 

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). 


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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 March 30, 2001, the Board 

published for comment interim final 

rules to establish uniform standards for 

the electronic delivery of disclosures 

required under Regulation DD (66 FR 

17795). Similar interim final rules for 

Regulations B, E, M, and Z were 

published on March 30, 2001 (66 FR 

17322 (M)) and April 4, 2001 (66 FR 

17779 (B), 66 FR 17786 (E), and 66 FR 

17329 (Z)). 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. 

Depository institutions, creditors, 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 DD 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, 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. 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, E, M, and Z. 

Commenters on the interim final rules 

identified significant operational and 

information 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 email. Commenters also noted that e-mail 

is not a secure medium for delivering 

confidential information and that 

consumers’ e-mail addresses frequently 

change. 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 

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 DD 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) retaining the 

substance of certain provisions of the 

interim final rule that provide 

regulatory relief or guidance regarding 

electronic disclosures. (Similar 

amendments are also being proposed by 

the Board, in today’s issue of the 

Federal Register, under Regulations B, 

E, M, and Z.) 

Because compliance with the 2001 

interim final rules is not mandatory, 

removing most portions of the interim 

rules from the Code of Federal 

Regulations, while finalizing other 

provisions, would reduce confusion 

about the status of the electronic 

disclosure provisions and simplify the 

regulation. The Board is proposing to 

adopt certain provisions that are 

identical or similar to provisions in the 

2001 interim final rules in order to 

enhance the ability of consumers to 

shop for deposit account products 

online, minimize the informationgathering burdens on consumers, and 

provide guidance or eliminate a 

substantial burden on the use of 

electronic disclosures, as discussed 

further below. 

Since 2001, industry and consumers 

have gained considerable 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 also 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’’ (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. 

Finally, the Board is proposing to 

eliminate certain aspects of the 2001 


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1Section 269 of TISA provides that regulations 

prescribed by the Board under TISA ‘‘may provide 

for such adjustments and exceptions * * * as, in 

the judgment of the Board, are necessary or proper 

to carry out the purposes of [TISA], * * * or to 

facilitate compliance with the requirements of 

[TISA].’’ Section 104(d) of the E-Sign Act authorizes 

federal agencies to adopt exemptions for specified 

categories of disclosures from the E-Sign notice and 

consent requirements, ‘‘if such exemption is 

necessary to eliminate a substantial burden on 

electronic commerce and will not increase the 

material risk of harm to consumers.’’ For the 

reasons stated in this Federal Register notice, the 

Board believes that these criteria are met in the case 

of the advertising disclosures and the disclosures 

provided to a consumer upon request. In addition, 

the Board believes TISA section 269 authorizes the 

Board to permit institutions to provide disclosures 

electronically, rather than in paper form, 

independent of the E-Sign Act. 

interim final rule, such as provisions 

regarding the availability and retention 

of electronic disclosures, as unnecessary 

in light of current industry practices. 

The 2001 interim final rule allowed 

depository institutions to provide 

certain disclosures to consumers 

electronically without regard to the 

consumer consent or other provisions of 

the E-Sign Act. These included 

disclosures in connection with 

advertisements and disclosures about 

deposit accounts that are provided upon 

request. The Board reasoned that these 

disclosures, which would be available 

to the general public while shopping for 

deposit products, did not ‘‘relate to a 

transaction,’’ which is a prerequisite for 

triggering the E-Sign consumer consent 

provisions, and thus were not subject to 

those provisions. Some commenters on 

the interim final rules did not agree 

with the Board’s rationale. Upon further 

consideration, the Board does not 

believe it is necessary to determine 

whether or not these disclosures are 

related to a transaction. This proposal 

does not make such determinations. 

Instead, pursuant to the Board’s 

authority under section 269 of TISA, as 

well as under section 104(d) of the ESign Act,1 the Board is proposing to 

specify the circumstances under which 

certain disclosures may be provided to 

a consumer in electronic form, rather 

than in writing as generally required by 

Regulation DD, without obtaining the 

consumer’s consent under section 

101(c) of the E-Sign Act. The proposed 

rule would also clarify, as discussed in 

detail below, that certain disclosures 

must be provided to the consumer in 

electronic form on or with an 

advertisement that is accessed by the 

consumer in electronic form. 

The Board continues to believe that 

depository institutions should not be 

required to obtain the consumer’s 

consent in order to provide advertising 

disclosures to the consumer in 

electronic form if the consumer accesses 

the advertisement containing those 

disclosures in electronic form, such as 

at an Internet Web site. Similarly, the 

Board continues to believe that 

institutions should not be required to 

follow the E-Sign consent requirements 

in order to provide account disclosures 

upon request to consumers 

electronically (although under the 

proposal, the institution could provide 

the disclosures in electronic form only 

if the consumer agrees). 

The Board believes that consumers 

would not be harmed, and in fact would 

benefit, by having timely access to 

disclosures in electronic form when 

they are shopping for deposit account 

products online or viewing online 

deposit account advertising. The Board 

also believes that consumers’ ability to 

shop for deposit accounts online and 

compare the terms of various offers 

could be substantially diminished if 

consumers had to consent in accordance 

with the E-Sign Act in order to access 

advertisements or obtain account 

disclosures. Applying the consumer 

consent provisions of the E-Sign Act to 

these disclosures could impose 

substantial burdens on electronic 

commerce and make it more difficult for 

consumers to gather information and 

shop for deposit accounts. 

At the same time, the Board 

recognizes that consumers who shop or 

apply for deposit accounts online may 

not want to receive other disclosures 

electronically. Therefore, with respect 

to, for example, account-opening 

disclosures, periodic statements, and 

change-in-terms notices, depository 

institutions would be required to 

provide written disclosures or obtain 

the consumer’s consent in accordance 

with the E-Sign Act to provide such 

disclosures in electronic form. 

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 

proposed revisions to Regulation DD 

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 and retaining other 

provisions contained in the 2001 

interim final rule. 

III. Section-by-Section Analysis 

12 CFR Part 230 (Regulation DD) 

Section 230.3 General Disclosure 

Requirements 

Section 230.3(a) prescribes the form of 

disclosures required for deposit 

accounts, and generally requires 

depository institutions to provide the 

disclosures in writing and in a form that 

the consumer may keep. The Board 

proposes to revise § 230.3(a) 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 230.3(a) would also be revised 

to provide that the disclosures required 

by §§ 230.4(a)(2) (disclosures provided 

upon request) and 230.8 (advertising) 

may be provided to the consumer in 

electronic form, under the 

circumstances set forth in those 

sections, without regard to the 

consumer consent or other provisions of 

the E-Sign Act. 

Section 230.8 requires that if certain 

information is stated in a deposit 

account advertisement, or if an 

advertisement promotes the payment of 

overdrafts, the advertisement must also 

include specified disclosures. The 

Board believes that, for a deposit 

account advertisement accessed by the 

consumer in electronic form, permitting 

institutions to provide the required 

disclosures in electronic form without 

regard to the consumer consent and 

other provisions of the E-Sign Act will 

eliminate a potential significant burden 

on electronic commerce without 

increasing the risk of harm to 

consumers. This approach will facilitate 

shopping for deposit products by 

enabling consumers to receive 

important disclosures at the same time 

they access an advertisement without 

first having to provide consent in 

accordance with the requirements of the 

E-Sign Act. Requiring consumers to 

follow the consent procedures set forth 

in the E-Sign Act in order to access an 

online advertisement is potentially 

burdensome and could discourage 


jlentini on PROD1PC65 with PROPOSAL
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consumers from shopping for deposit 

products online. Moreover, because 

these consumers are viewing the 

advertisement online, there appears to 

be little, if any, risk that the consumer 

will be unable to view the disclosures 

online as well. 

Similarly, § 230.4(a)(2) requires that 

depository institutions provide account 

disclosures, containing account terms, 

to consumers upon request. If a 

consumer is not present at the 

depository institution and requests the 

account disclosures, it would appear 

unnecessary and burdensome to require 

the consumer to go through the E-Sign 

consent procedures before the request 

could be satisfied, as long as the 

consumer requests that the disclosures 

be provided electronically. Applying the 

E-Sign consent procedures in this 

context could discourage consumers 

from requesting account disclosures. 

Section 230.3(g) in the 2001 interim 

final rule refers to § 230.10, the section 

of the interim final rule setting forth 

general rules for electronic disclosures. 

Because the Board is proposing to delete 

§ 230.10, as discussed further below, the 

Board also proposes to delete § 230.3(g). 

Section 230.4 Account Disclosures 

Depository institutions generally must 

provide account-opening disclosures to 

consumers before an account is opened 

or a service is provided. Depository 

institutions may delay delivering the 

disclosures if the consumer is not 

present at the institution when the 

account is opened (or service is 

provided). Section 230.4(a)(1) provides 

that in such cases, account-opening 

disclosures must be mailed or delivered 

within ten business days. The rationale 

underlying the ten-day delay is that the 

institution cannot provide written 

disclosures when, for example, an 

account is opened by telephone. The 

2001 interim final rule provided that 

depository institutions opening 

accounts by electronic communication 

(for example, on the Internet) may not 

delay providing disclosures under 

§ 230.4(a)(1). The difficulties in 

providing disclosures for accounts 

opened by mail or telephone are not 

present for requests to open accounts 

received by electronic communication 

using visual text. Thus, specific 

disclosures must be provided before 

accounts are opened using electronic 

communication. The interim final rule 

added new paragraph (ii) to § 230.4(a)(1) 

to effectuate this requirement. The 

Board continues to believe that the 

rationale underlying § 230.4(a)(1)(ii) is 

valid; accordingly, the Board proposes 

to retain the provision as added by the 

interim final rule, with minor wording 

changes. 

Depository institutions must also 

provide account disclosures to a 

consumer upon request. Section 

230.4(a)(2)(i) provides that if a 

consumer is not present at the 

institution when a request for account 

disclosures is made, the institution must 

mail or deliver the disclosures within a 

reasonable time after the institution 

receives the request; ten days is deemed 

to be a reasonable time. The 2001 

interim final rule extended these 

provisions to requests for disclosures 

made by electronic communication. 

Specifically, the interim final rule 

revised § 230.4(a)(2)(i) to allow 

institutions to mail or deliver 

disclosures in either paper form or 

electronically to consumers who are not 

present at the institution when they 

make their request. Under the interim 

final rule, to provide the requested 

disclosures electronically, the 

institution must send the disclosures to 

the consumer’s e-mail address, or send 

a notice alerting the consumer to the 

location of the disclosures, such as on 

the institution’s Internet web site. 

Comment 4(a)(2)(i)–3 was revised and 

comment 4(a)(2)(i)–4 was added to 

provide guidance. 

The Board continues to believe that it 

is appropriate to allow institutions to 

respond by paper mail, or by electronic 

means provided the consumer agrees, if 

the consumer is not present at the 

institution when the request is made, 

without following the E-Sign consent 

provisions. Accordingly, the Board 

proposes to retain the changes made to 

§ 230.4(a)(2)(i) and the accompanying 

commentary by the interim final rule, 

with some revisions for clarification and 

to provide greater flexibility for both 

institutions and consumers. 

Section 230.8 Advertising 

Section 230.8 contains requirements 

for advertisements for deposit accounts, 

including the requirement that if an 

advertisement includes certain ‘‘trigger 

terms’’ (such as a bonus or the annual 

percentage yield), the advertisement 

must also include certain disclosures. 

The Board proposes to add new 

comment 8(a)–11, to clarify that if a 

consumer accesses an advertisement for 

deposit accounts in electronic form, the 

disclosures required on or with the 

advertisement must be provided to the 

consumer in electronic form on or with 

the advertisement. A consumer accesses 

an advertisement in electronic form 

when, for example, the consumer views 

the advertisement on his or her home 

computer. On the other hand, if a 

consumer receives a written 

advertisement in the mail, the 

institution would not satisfy its 

obligation to provide § 230.8 disclosures 

at that time by including a reference in 

the advertisement to the Web site where 

the disclosures are located. 

Comment 8(a)–9, as added by the 

interim final rule, provides that in an 

electronic advertisement, the required 

disclosures need not be shown on each 

page where a ‘‘trigger term’’ appears, as 

long as each such page includes a crossreference to the page where the required 

disclosures appear. For example, if a 

‘‘trigger term’’ appears on a particular 

web page, the additional disclosures 

may appear in a table or schedule on 

another web page if there is a clear 

reference to the page or location where 

the table or schedule begins (which may 

be accomplished, for example, by 

including a link). The Board proposes to 

retain comment 8(a)–9, allowing the use 

of links or other cross-references in 

electronic deposit account 

advertisements, with minor wording 

changes. 

The Board proposes to add new 

comment 8(a)–12 to clarify that the rules 

regarding advertising disclosures 

provided in electronic form also apply 

to the disclosures described in 

§ 230.11(b), which are incorporated by 

reference in § 230.8(f). 

Section 230.8(b) permits institutions 

to state an interest rate in addition to the 

APY, as long as the rate is stated in 

conjunction with, but not more 

conspicuously than, the APY. In the 

2001 interim final rule, comment 8(b)–

4 was added to state that in an 

advertisement using electronic 

communication, the consumer must be 

able to view both rates simultaneously, 

and that this requirement is not satisfied 

if the consumer can view the APY only 

by use of a link that takes the consumer 

to another web location. The Board 

proposes to delete comment 8(b)–4 as 

unnecessary. The requirement to state 

the simple annual rate or periodic rate 

in conjunction with, and not more 

conspicuously than, the APY, continues 

to apply to electronic advertisements no 

less than to advertisements in other 

media. Requiring the consumer to scroll 

to another part of the page, or access a 

link, in order to view the APY would 

likely not satisfy this requirement. 

Section 230.8(e) exempts from some 

disclosure requirements advertisements 

made through broadcast or electronic 

media, such as television and radio or 

outdoor billboards. The interim final 

rule added comment 8(e)(1)(i)–1 to 

provide that this exemption would not 

apply to advertisements using electronic 

communication, such as Internet 

advertisements, which do not have the 


jlentini on PROD1PC65 with PROPOSAL
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same time and space constraints as 

radio or television advertisements. The 

Board continues to believe that space 

constraints for advertisements on 

Internet web sites are not significantly 

different than those for a print 

advertisement (a newspaper, for 

example). Thus, requiring 

advertisements provided by electronic 

means to comply with the regulation’s 

advertising requirements is not overly 

burdensome. Accordingly, the Board 

proposes to retain comment 8(e)(1)(i)–1 

with minor wording changes. 

Section 230.10 Electronic 

Communication 

Section 230.10 was added by the 2001 

interim final rule to address the general 

requirements for electronic 

communications. The Board proposes to 

delete § 230.10 from Regulation DD and 

the accompanying sections of the staff 

commentary. 

In the interim rule, § 230.10(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 § 230.10(a) would not change 

applicable legal requirements under the 

E-Sign Act. 

Sections 230.10(b) and (c) incorporate 

by reference provisions of the E-Sign 

Act, such as the provision allowing 

disclosures to be provided in electronic 

form and the requirement to obtain the 

consumer’s affirmative consent before 

providing disclosures in electronic 

form. The deletion of these provisions 

will have no impact on the general 

applicability of the E-Sign Act to 

Regulation DD disclosures. Section 

230.10(f) was added in the interim final 

rule to clarify that persons, other than 

depository institutions, that are required 

to comply with Regulation DD may use 

electronic disclosures. This provision is 

unnecessary because the E-Sign Act is a 

self-effectuating statute and permits any 

person to use electronic records subject 

to the conditions set forth in the Act. 

Sections 230.10(d) and (e) address 

specific timing and delivery 

requirements for electronic disclosures 

under Regulation DD, such as the 

requirement to send disclosures to a 

consumer’s e-mail address (or post the 

disclosures on a Web site and send a 

notice alerting the consumer to the 

disclosures), and to make a good faith 

attempt to redeliver an e-mailed 

disclosure or notice returned 

undelivered. 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, 

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 depository 

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 DD 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 DD 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 

§ 230.10(d) 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 

consumer to retain Regulation DD 

disclosures and will consider further 

regulatory action if it appears necessary. 

The official staff commentary to 

§ 230.10 of the interim final rule 

provides guidance on the provisions set 

forth in § 230.10 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 § 230.10 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 DD to withdraw 

the 2001 interim final rule on electronic 

communication and to allow depository 

institutions to provide certain 


jlentini on PROD1PC65 with PROPOSAL
21160 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 

disclosures to consumers in electronic 

form on or with an advertisement that 

is accessed by the consumer in 

electronic form, or if the consumer 

requests the disclosure, without regard 

to the consumer consent and other 

provisions of the E-Sign Act. The Board 

is also proposing to clarify that other 

Regulation DD disclosures may be 

provided to consumers in electronic 

form in accordance with the consumer 

consent and other applicable provisions 

of the E-Sign Act. 

TISA was enacted to enhance 

economic stabilization, improve 

competition between depository 

institutions, and strengthen the ability 

of consumers to make informed 

decisions regarding deposit accounts. 12 

U.S.C. 4301. It is the purpose of TISA 

to require the clear and uniform 

disclosure of rates of interest payable on 

deposit accounts and the fees that are 

assessable against deposit accounts, so 

that consumers can make a meaningful 

comparison between the competing 

claims of institutions. TISA authorizes 

the Board to prescribe regulations to 

carry out the purposes of the statute. 12 

U.S.C. 4308. 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].’’ 12 U.S.C. 

4308(a). The Board believes that the 

revisions to Regulation DD discussed 

above are within Congress’s broad grant 

of authority to the Board to adopt 

provisions that carry out the purposes of 

the statute. These revisions facilitate 

informed decisions about deposit 

accounts by consumers in 

circumstances where a consumer 

accesses a deposit account 

advertisement, or requests deposit 

account disclosures, in electronic form. 

2. Small entities affected by the 

proposal. The ability to provide 

advertising disclosures in electronic 

form on or with an advertisement that 

is accessed by the consumer in 

electronic form, or to provide 

disclosures in electronic form if 

requested to do so by the consumer, 

applies to all depository institutions, 

regardless of their size. Accordingly, the 

proposed revisions would reduce 

burden and compliance costs for small 

entities by providing relief, to the extent 

the E-Sign Act applies in these 

circumstances. 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 DD. 

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 (PRA) (44 U.S.C. 

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 230. 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 7100–0271. 

Section 269 of the Truth in Savings 

Act (TISA)(12 U.S.C. 4308) authorizes 

the Board to issue regulations to carry 

out the provisions of TISA. TISA and 

Regulation DD require depository 

institutions to disclose yields, fees, and 

other terms concerning deposit accounts 

to consumers at account opening, upon 

request, and when changes in terms 

occur. Depository institutions that 

provide periodic statements are required 

to include information about fees 

imposed, interest earned, and the 

annual percentage yield earned during 

those statement periods. The act and 

regulation mandate the methods by 

which institutions determine the 

account balance on which interest is 

calculated. They also contain rules 

about advertising deposit accounts. To 

ease the compliance cost (particularly 

for small entities), model clauses and 

sample forms are appended to the 

regulation. Depository institutions are 

required to retain evidence of 

compliance for twenty-four months, but 

the regulation does not specify types of 

records that must be retained. This 

information collection is mandatory. 

Since the Federal Reserve does not 

collect any information, no issue of 

confidentiality arises. 

Regulation DD applies to all 

depository institutions except credit 

unions. Credit unions are covered by a 

substantially similar rule issued by the 

National Credit Union Administration. 

The Federal Reserve accounts for the 

paperwork burden associated with 

Regulation DD only for Federal Reserveregulated institutions. Federal Reserveregulated institutions are defined by 

Regulation DD as: State member banks, 

branches and agencies of foreign banks 

(other than Federal branches, Federal 

agencies, and insured state branches of 

foreign banks), commercial lending 

companies owned or controlled by 

foreign banks, and organizations 

operating under section 25 or 25A of the 

Federal Reserve Act. Other Federal 

agencies account for the paperwork 

burden imposed on the depository 

institutions for which they have 

administrative enforcement authority. 

The annual burden is estimated to be 

232,443 hours for 1,172 Federal 

Reserve-regulated institutions that are 

deemed respondents for purposes of the 

PRA. 

As mentioned in the Preamble, 

§§ 230.4 and 230.8 would be revised to 

clarify the disclosure requirements. The 

Federal Reserve estimates that 1,172 

respondents would take approximately 

1.5 minutes per transaction to comply 

with the existing disclosure 

requirements in § 230.4 and estimates 

the annual burden to be 14,650 hours. 

The Federal Reserve estimates that 

1,172 respondents would take 

approximately 30 minutes per month to 

comply with the existing disclosure 

requirements in § 230.8 and estimates 

the annual burden to be 7,032 hours. 

The Federal Reserve requests specific 

comment on whether the revisions in 

this proposed rule would change the 

burden on respondents. 

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 (7100–0271), 

Washington, DC 20503. 

List of Subjects in 12 CFR Part 230 

Advertising, Banks, banking, 

Consumer protection, Federal Reserve 

System, Reporting and recordkeeping 

requirements, Truth in Savings. 

Text of Proposed Revisions 

Certain conventions have been used 

to highlight the proposed changes to 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 21161 

Regulation DD. 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 DD, 12 CFR part 230, as set 

forth below: 

PART 230—TRUTH IN SAVINGS 

(REGULATION DD) 

1. The authority citation for part 230 

continues to read as follows: 

Authority: 12 U.S.C. 4301 et seq. 

2. Section 230.3 would be amended 

by revising paragraph (a) and removing 

paragraph (g), to read as follows: 

§ 230.3 General disclosure requirements. 

(a) Form. Depository institutions shall 

make the disclosures required by 

§§ 230.4 through 230.6 and § 230.10 of 

this part, as applicable, clearly and 

conspicuously, 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.). 

The disclosures required by 

§§ 230.4(a)(2) and 230.8 may be 

provided to the consumer in electronic 

form without regard to the consumer 

consent or other provisions of the ESign Act in the circumstances set forth 

in those sections.fi Disclosures for each 

account offered by an institution may be 

presented separately or combined with 

disclosures for the institution’s other 

accounts, as long as it is clear which 

disclosures are applicable to the 

consumer’s account. 

* * * * * 

[(g) Electronic communication. For 

rules governing the electronic delivery 

of disclosures, including the definition 

of electronic communication, see 

§ 230.10.] 

3. Section 230.4 would be amended 

by revising paragraphs (a)(1)(ii) and 

(a)(2)(i), to read as follows: 

§ 230.4 Account disclosures. 

(a) * * * 

(1) * * * 

(ii) flTiming of disclosures where 

electronic means are usedfi[Electronic 

communication]. If a consumer who is 

not present at the institution uses 

flelectronic means (for example, an 

Internet Web site)fi[electronic 

communication (as defined in § 230.10)] 

to open an account or request a service, 

the disclosures required under 

paragraph (a)(1) of this section must be 

provided before flthefi [an] account is 

opened or flthefi [a] service is 

provided. 

(2) Requests. (i) A depository 

institution shall provide account 

disclosures to a consumer upon request. 

If a consumer who is not present at the 

institution makes a request, the 

institution shall mail or deliver the 

disclosures within a reasonable time 

after it receives the request and may 

provide the disclosures in paper form, 

or electronically if the consumer 

flagreesfi [provides an electronic mail 

address]. 

* * * * * 

§ 230.10 [Removed and Reserved] 

4. Section 230.10 would be removed 

and reserved. 

5. In Supplement I to Part 230, the 

following amendments would be made: 

a. In Section 230.4—Account 

disclosures, under (a)(2)(i), paragraphs 

3. and 4. would be revised. 

b. In Section 230.8—Advertising, 

under (a) Misleading or inaccurate 

advertisements, paragraph 9. would be 

revised and new paragraphs 11. and 12. 

would be added. 

c. In Section 230.8—Advertising, 

under (b) Permissible rates, paragraph 4. 

would be removed. 

d. In Section 230.8—Advertising, 

under (e)(1)(i), paragraph 1. would be 

revised. 

e. Section 230.10 would be removed 

and reserved. 

The amendments read as follows: 

Supplement I to Part 230—Official Staff 

Interpretations 

* * * * * 

Section 230.4—Account Disclosures 

(a) Delivery of Account Disclosures 

* * * * * 

(a)(2) Requests 

(a)(2)(i) 

* * * * * 

3. Timing for response. Ten business days 

is a reasonable time for responding to 

requests for account information that 

consumers do not make in person, including 

requests made by electronic 

[communication]flmeans (such as by 

electronic mail)fi. 

4. [Requests by electronic communication] 

flUse of electronic meansfi. 

[Posting disclosures on a depository 

institution’s Web site generally does not 

relieve the institution’s duty to provide 

disclosures upon request. If the consumer 

provides an e-mail address, the institution 

may provide the disclosures electronically, 

but the institution must either send the 

disclosures by e-mail or send a notice to the 

consumer’s e-mail address pursuant to 

§ 230.10(d)(2)(i) to inform the consumer 

where the disclosures are posted.] 

flIf a consumer who is not present at the 

institution makes a request for account 

disclosures, including a request made by 

telephone, e-mail, or via the institution’s web 

site, the institution may send the disclosures 

in paper form or, if the consumer agrees, may 

provide the disclosures electronically, such 

as to an e-mail address that the consumer 

provides for that purpose, or on the 

institution’s Web site, without regard to the 

consumer consent or other provisions of the 

E-Sign Act. The regulation does not require 

an institution to provide, nor a consumer to 

agree to receive, disclosures in electronic 

form.fi 

* * * * * 

Section 230.8—Advertising 

(a) Misleading or Inaccurate Advertisements 

* * * * * 

9. Electronic advertising. If an flelectronic 

advertisement (such as an advertisement 

appearing on an Internet Web site)fi 

[advertisement using electronic 

communication] displays a triggering term 

(such as a bonus or annual percentage yield) 

the advertisement must clearly refer the 

consumer to the location where the 

additional required information begins. For 

example, an advertisement that includes a 

bonus or annual percentage yield may be 

accompanied by a link that directly takes the 

consumer to the additional information. 

* * * * * 

fl11. Electronic form of disclosures. For an 

advertisement that is accessed by the 

consumer in electronic form, the disclosures 

required under this section must be provided 

to the consumer in electronic form on or with 

the advertisement. Providing the disclosures 

at a different time or place, or in paper form, 

would not comply. Conversely, if a consumer 

views a paper advertisement, the required 

disclosures must be provided in paper form 

on or with the advertisement. For example, 

if a consumer receives an advertisement in 

the mail, the creditor would not satisfy its 

obligation to provide the disclosures at that 

time by including a reference in the 

advertisement to the web site where the 

disclosures are located. 

12. Additional disclosures in connection 

with the payment of overdrafts. The rule in 

§ 230.3(a), providing that disclosures 

required by § 230.8 may be provided to the 

consumer in electronic form without regard 

to E-Sign Act requirements, applies to the 

disclosures described in § 230.11(b), which 

are incorporated by reference in § 230.8(f).fi 

(b) Permissible rates 

* * * * * 

[4. Electronic communication. An interest 

rate may be stated only if it is provided in 

conjunction with, but not more 

conspicuously than, the annual percentage 

yield to which it relates. In an advertisement 

using electronic communication, the 

consumer must be able to view both rates 

simultaneously. This requirement is not 

satisfied if the consumer can view the annual 

percentage yield only by use of a link that 

connects the consumer to information 

appearing at another location.] 

* * * * * 


jlentini on PROD1PC65 with PROPOSAL
21162 Federal Register / Vol. 72, No. 82 / Monday, April 30, 2007 / Proposed Rules 

(e)(1) Certain Media 

(e)(1)(i) 

1. Internet advertisements. The exemption 

for advertisements made through broadcast 

or electronic media does not extend to 

[advertisements made by electronic 

communication, such as] advertisements 

posted on the Internet or sent by e-mail. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, April 20, 2007. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. E7–7873 Filed 4–27–07; 8:45 am] 

BILLING CODE 6210–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 25 

[Docket No. NM375 Special Conditions No. 

25–07–10–SC] 

Special Conditions: Boeing Model 787–

8 Airplane; Lithium Ion Battery 

Installation 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed special 

conditions. 

SUMMARY: This notice proposes special 

conditions for the Boeing Model 787–8 

airplane. This airplane will have novel 

or unusual design features when 

compared to the state of technology 

envisioned in the airworthiness 

standards for transport category 

airplanes. The Boeing Model 787–8 

airplanes will use high capacity lithium 

ion battery technology in on-board 

systems. For this design feature, the 

applicable airworthiness regulations do 

not contain adequate or appropriate 

safety standards. These proposed 

special conditions contain the 

additional safety standards that the 

Administrator considers necessary to 

establish a level of safety equivalent to 

that established by the existing 

airworthiness standards. Additional 

special conditions will be issued for 

other novel or unusual design features 

of the Boeing Model 787–8 airplanes. 

DATES: Comments must be received on 

or before June 14, 2007. 

ADDRESSES: Comments on this proposal 

may be mailed in duplicate to: Federal 

Aviation Administration, Transport 

Airplane Directorate, Attention: Rules 

Docket (ANM–113), Docket No. NM375, 

1601 Lind Avenue, SW., Renton, 

Washington 98057–3356; or delivered in 

duplicate to the Transport Airplane 

Directorate at the above address. All 

comments must be marked Docket No. 

NM375. Comments may be inspected in 

the Rules Docket weekdays, except 

Federal holidays, between 7:30 a.m. and 

4 p.m. 

FOR FURTHER INFORMATION CONTACT: 

Nazih Khaouly, FAA, Airplane & Flight 

Crew Interface Branch, ANM–111, 

Transport Airplane Directorate, Aircraft 

Certification Service, 1601 Lind 

Avenue, SW., Renton, Washington 

98057–3356; telephone (425) 227–2432; 

facsimile (425) 227–1149. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

The FAA invites interested persons to 

participate in this rulemaking by 

submitting written comments, data, or 

views. The most helpful comments 

reference a specific portion of the 

special conditions, explain the reason 

for any recommended change, and 

include supporting data. We ask that 

you send us two copies of written 

comments. 

We will file in the docket all 

comments we receive as well as a report 

summarizing each substantive public 

contact with FAA personnel concerning 

these proposed special conditions. The 

docket is available for public inspection 

before and after the comment closing 

date. If you wish to review the docket 

in person, go to the address in the 

ADDRESSES section of this notice 

between 7:30 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

We will consider all comments we 

receive on or before the closing date for 

comments. We will consider comments 

filed late if it is possible to do so 

without incurring expense or delay. We 

may change the proposed special 

conditions based on comments we 

receive. 

If you want the FAA to acknowledge 

receipt of your comments on this 

proposal, include with your comments 

a pre-addressed, stamped postcard on 

which the docket number appears. We 

will stamp the date on the postcard and 

mail it back to you. 

Background 

On March 28, 2003, Boeing applied 

for an FAA type certificate for its new 

Boeing Model 787–8 passenger airplane. 

The Boeing Model 787–8 airplane will 

be an all-new, two-engine jet transport 

airplane with a two-aisle cabin. The 

maximum takeoff weight will be 

476,000 pounds, with a maximum 

passenger count of 381 passengers. 

Type Certification Basis 

Under provisions of 14 CFR 21.17, 

Boeing must show that Boeing Model 

787–8 airplanes (hereafter referred to as 

‘‘the 787’’) meet the applicable 

provisions of 14 CFR part 25, as 

amended by Amendments 25–1 through 

25–117, except §§ 25.809(a) and 25.812, 

which will remain at Amendment 25–

115. If the Administrator finds that the 

applicable airworthiness regulations do 

not contain adequate or appropriate 

safety standards for the 787 because of 

a novel or unusual design feature, 

special conditions are prescribed under 

provisions of 14 CFR 21.16. 

In addition to the applicable 

airworthiness regulations and special 

conditions, the 787 must comply with 

the fuel vent and exhaust emission 

requirements of 14 CFR part 34 and the 

noise certification requirements of part 

36. In addition, the FAA must issue a 

finding of regulatory adequacy pursuant 

to section 611 of Public Law 92–574, the 

‘‘Noise Control Act of 1972.’’

Special conditions, as defined in 

§ 11.19, are issued in accordance with 

§ 11.38 and become part of the type 

certification basis in accordance with 

§ 21.17(a)(2). 

Special conditions are initially 

applicable to the model for which they 

are issued. Should the type certificate 

for that model be amended later to 

include any other model that 

incorporates the same or similar novel 

or unusual design feature, the special 

conditions would also apply to the other 

model under the provisions of § 21.101. 

Novel or Unusual Design Features 

The 787 will incorporate a number of 

novel or unusual design features. 

Because of rapid improvements in 

airplane technology, the applicable 

airworthiness regulations do not contain 

adequate or appropriate safety standards 

for these design features. These 

proposed special conditions for the 787 

contain the additional safety standards 

that the Administrator considers 

necessary to establish a level of safety 

equivalent to that established by the 

existing airworthiness standards. 

The 787 design includes planned use 

of lithium ion batteries for the following 

applications: 

• Main and Auxiliary Power Unit 

(APU) Battery/Battery Charger System 

• Flight Control Electronics 

• Emergency Lighting System 

• Recorder Independent Power 

Supply 

Large, high capacity, rechargeable 

lithium ion batteries are a novel or 

unusual design feature in transport 

category airplanes. This type of battery 

has certain failure, operational, and 

maintenance characteristics that differ 

significantly from those of the nickelcadmium and lead-acid rechargeable 

batteries currently approved for 


jlentini on PROD1PC65 with PROPOSAL