Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations 43467

Naturalization Service and the

Executive Office for Immigration

Review, to be a ‘‘significant regulatory

action’’ under Executive Order 12866,

section 3(f), Regulatory Planning and

Review, and the Office of Management

and Budget has waived its review

process under section 6(a)(3)(A).

Executive Order 12612

The regulation adopted herein will

not have substantial direct effects on the

States, on the relationship between the

National Government and the States, or

on the distribution of power and

responsibilities among the various

levels of government. In accordance

with Executive Order 12612, it is

determined that this rule does not have

sufficient federalism implications to

warrant the preparation of a Federalism

Assessment.

Executive Order 12988

This final rule meets the applicable

standards set forth in sections 3(a) and

3(b)(2) of Executive Order 12988.

List of Subjects in 8 CFR Part 212

Administrative practice and

procedure, Aliens, Immigration,

Passports and visas, Reporting and

recordkeeping requirements.

Accordingly, the interim rule

amending 8 CFR part 212 which was

published at 61 FR 59824 on November

25, 1996, is adopted as a final rule

without change.

Dated: August 7, 1997.

Janet Reno,

Attorney General.

[FR Doc. 97–21458 Filed 8–13–97; 8:45 am]

BILLING CODE 4410–10–M

FEDERAL RESERVE SYSTEM

12 CFR Part 205

[Regulation E; Docket No. R–0959]

Electronic Fund Transfers

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Final rule.

SUMMARY: The Board is publishing

amendments to Regulation E (Electronic

Fund Transfers). The revisions

implement an amendment to the

Electronic Fund Transfer Act (EFTA),

contained in the Personal Responsibility

and Work Opportunity Reconciliation

Act of 1996, that exempts certain

electronic benefit transfer (EBT)

programs from the EFTA. Generally,

EBT programs involve the issuance of

access cards and personal identification

numbers to recipients of government

benefits so that they can obtain their

benefits through automated teller

machines and point-of-sale terminals.

The Board’s amendments to Regulation

E exempt needs-tested EBT programs

that are established or administered by

state or local government agencies.

Federally administered EBT programs

and state and local employment-related

EBT programs (such as state pension

programs) remain covered by Regulation

E subject to modified requirements.

EFFECTIVE DATE: September 15, 1997.

FOR FURTHER INFORMATION CONTACT: Jane

Jensen Gell, Senior Attorney, Division of

Consumer and Community Affairs, at

(202) 452–3667; for users of

Telecommunications Device for the Deaf

(TDD) only, contact Diane Jenkins at

(202) 452–3544.

SUPPLEMENTARY INFORMATION:

I. Background

EFT Act and Regulation E

Regulation E implements the

Electronic Fund Transfer Act (EFTA).

The act and regulation cover any

consumer electronic fund transfer (EFT)

initiated through an automated teller

machine (ATM), point-of-sale (POS)

terminal, automated clearinghouse,

telephone bill-payment system, or home

banking program. The act and

Regulation E establish rules that govern

these and other EFTs. The rules restrict

the unsolicited issuance of ATM cards

and other access devices; require

disclosure of terms and conditions of an

EFT service; document EFTs by means

of terminal receipts and periodic

account statements; limit consumer

liability for unauthorized transfers; and

establish procedures for error

resolution.

The EFTA is not limited to traditional

financial institutions holding

consumers’ accounts. For EFT services

made available by entities other than an

account-holding financial institution,

the act directs the Board to assure, by

regulation, that the provisions of the act

are made applicable. The regulation also

applies to entities that issue access

devices and enter into agreements with

consumers to provide EFT services.

Electronic Benefit Transfer Programs

Electronic benefit transfer (EBT)

programs are designed to deliver

government benefits such as food

stamps, supplemental security income

(SSI), and social security. These systems

function much like commercial systems

for EFT. Eligible recipients receive

magnetic-stripe cards and personal

identification numbers and they access

benefits through electronic terminals. In

the case of cash benefits such as SSI, the

terminals may include ATMs that are

part of existing commercial networks;

for food stamp benefits, POS terminals

in grocery stores are typically used.

EBT offers numerous advantages over

paper-based delivery systems, both for

recipients and for program agencies. For

recipients, these advantages include

faster access to benefits, greater

convenience in terms of times and

locations for obtaining benefits,

improved security because funds may

be accessed as needed, lower costs

because recipients avoid check-cashing

fees, and greater privacy and dignity.

For agencies, EBT programs offer a

system that can more efficiently deliver

benefits for both state and federal

programs by reducing the cost of benefit

delivery, facilitating the management of

program funds, and helping to reduce

fraud.

In March 1994, the Board amended

Regulation E to bring EBT programs

expressly within its coverage. 59 FR

10678 (March 7, 1994). The special

provisions, contained in § 205.15, apply

most of the requirements of the

regulation—including those relating to

liability for unauthorized transactions

and to error resolution—with some

modifications. The major exception

related to providing periodic statements

of account activity: EBT programs need

not provide periodic statements as long

as (1) account balance information is

made available to benefit recipients via

telephone and electronic terminals and

(2) a written account history is given

upon request.

The basic premise underlying the

Board’s 1994 amendments to Regulation

E was that all consumers using EFT

services should receive substantially the

same protection under the EFTA and

Regulation E. To enable states to test

and implement their EBT programs, the

Board delayed the date of mandatory

compliance to March 1, 1997.

II. Revised Regulatory Provisions

On August 22, 1996, the Congress

enacted amendments to the EFTA as

part of the Personal Responsibility and

Work Opportunity Reconciliation Act of

1996, a comprehensive welfare reform

law (Pub. L. 104–193, 110 Stat. 2105).

These amendments exempt ‘‘needstested’’ EBT programs established or

administered under state or local law.

(‘‘Needs-tested’’ EBT programs generally

take a recipient’s income or other

resources into account to determine the

appropriate level of benefits.) The

exemption was enacted by the Congress

at the urging of state and local officials,

who expressed concern about the costs

of compliance with the EFTA and
43468 Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations

Regulation E. In particular, these

officials believed that federal provisions

limiting a recipient’s liability for

unauthorized transfers could raise

serious budgetary problems at the state

and local level.

In January, the Board issued a

proposal to implement the exemption

(62 FR 3242, January 22, 1997). Fifteen

comments were received, generally in

support of the amendments. Some

commenters requested further

clarification on certain technical issues.

For example, clarification was requested

on the treatment of SSI, a needs-tested

benefit administered by the federal

government through the Social Security

Administration. Under the amendments

to the EFTA, SSI benefits remain

covered by the EFTA and Regulation E.

For cost efficiencies in the delivery of

benefits, EBT programs may offer both

federal and state benefits through the

use of a single card. An EBT service

provider requested clarification on how

Regulation E applies when a card

accesses benefits under multiple

programs, some covered by and others

exempt from Regulation E (for example,

the Benefit Security Card offered by

the Southern Alliance of States). In this

program, non-cash benefits (such as

food stamps) are held in one account

and cash benefits are held in a separate

account. In the cash account, federally

administered and state employmentrelated benefits (covered by Regulation

E) may be pooled with state

administered or established ‘‘needstested’’ benefits that are exempt from

the regulation. Program agencies may

allocate the withdrawal of a recipient’s

benefits from the pooled account in any

manner they choose.

All federally administered benefits

(and state employment-related benefits)

accessed by the card from the pooled

account must receive the protections

provided by Regulation E. Agencies

must ensure that the required

disclosures concerning account

balances, liability limits, error

resolution procedures, and account

histories clearly state how these

protections apply with regard to a single

card covering exempt and non-exempt

programs. With regard to liability for

unauthorized use, liability limits apply

to the extent that the loss is charged

against covered benefits. Similarly, error

resolution procedures apply to the

federally administered benefits (and

state employment-related benefits)

covered under Regulation E. This

interpretation will be incorporated in

the Official Staff Commentary to

Regulation E.

Based on the comments and further

analysis, the Board has adopted a final

rule exempting ‘‘needs-tested’’ EBT

programs established or administered by

state or local government agencies.

Federally administered EBT programs

and employment-related programs

established by federal, state, or local

governments (such as state pension

programs) remain covered by Regulation

E, subject to the modified rules

established by section 205.15.

III. Section-by-Section Analysis of

Amendments

Section 205.15—Electronic Fund

Transfers of Government Benefits

Section 205.15 contains the rules that

apply to EBT programs as defined by the

regulation. It provides modified rules on

the issuance of access devices, periodic

statements, initial disclosures, liability

for unauthorized use, and error

resolution notices. Employment-related

benefit programs established by federal,

state, or local governments (as well as

federally administered programs)

remain subject to these modified rules.

15(a) Government agency subject to

regulation

15(a)(1)

The act and regulation define

coverage in terms of financial

institution, a term that applies to

entities that provide EFT services to

consumers whether these entities are

banks, other depository institutions, or

other types of organizations entirely.

Paragraph (a)(1) specifies when a

government agency is a financial

institution for purposes of the act and

regulation. This provision has been

revised to exclude needs-tested benefits

in a program established under state or

local law or administered by a state or

local agency, consistent with the 1996

statutory amendments.

15(a)(2)

The term account is defined generally

in § 205.2(b). For purposes of EBT

programs, account is defined in

§ 205.15(a)(2) to mean an account

established by a government agency (or

agencies) for distributing benefits to a

consumer electronically, such as

through ATMs or POS terminals,

whether or not the account is directly

held by the agency or a bank or other

depository institution. For example, an

account under this section includes the

use of a database (containing the

consumer’s name and record of benefit

transfers) that is accessed for

verification purposes before a particular

transaction is approved. Under the

Board’s final rule, the definition is

revised to exclude needs-tested benefits

in a program established under state or

local law or administered by a state or

local agency, consistent with the 1996

amendments to the EFTA. Government

benefits that remain covered include

federally administered benefits such as

social security and SSI and state and

local benefits that are employmentrelated such as retirement and

unemployment benefits.

IV. Regulatory Flexibility Analysis

In accordance with section 3(a) of the

Regulatory Flexibility Act (5 U.S.C.

603), the Board’s Office of the Secretary

has reviewed the amendments to

Regulation E. The amendments, which

establish an exemption for certain EBT

programs established or administered by

a state or local agency, are not expected

to have a significant impact on small

entities.

V. Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. 3506;

5 CFR part 1320 Appendix A.1), the

Board reviewed the final rule under the

authority delegated to the Board by the

Office of Management and Budget. The

amendments provide an exemption for

state-administered or state-established

electronic benefit transfer programs; the

amendments are not expected to affect

the paperwork burden that the

regulation imposes on state member

banks or on other institutions.

An agency 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. The

Board has a continuing interest in the

public’s opinions of the Federal

Reserve’s collections of information. At

any time, comments regarding the

burden estimate, or any other aspect of

this collection of information, including

suggestions for reducing the burden,

may be sent to: Secretary, Board of

Governors of the Federal Reserve

System, 20th and C Streets, NW.,

Washington, DC 20551; and to the

Office of Management and Budget,

Paperwork Reduction Project (7100–

0200), Washington, DC 20503.

List of Subjects in 12 CFR Part 205

Consumer protection, Electronic fund

transfers, Federal Reserve System,

Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, the Board amends 12 CFR

Part 205 as set forth below:
Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations 43469

PART 205—ELECTRONIC FUND

TRANSFERS (REGULATION E)

1. The authority citation for Part 205

is revised to read as follows:

Authority: 15 U.S.C. 1693–1693r.

2. Section 205.15 is amended by

revising paragraph (a) to read as follows:

§ 205.15 Electronic fund transfer of

government benefits.

(a) Government agency subject to

regulation. (1) A government agency is

deemed to be a financial institution for

purposes of the act and this part if

directly or indirectly it issues an access

device to a consumer for use in

initiating an electronic fund transfer of

government benefits from an account,

other than needs-tested benefits in a

program established under state or local

law or administered by a state or local

agency. The agency shall comply with

all applicable requirements of the act

and this part, except as provided in this

section.

(2) For purposes of this section, the

term account means an account

established by a government agency for

distributing government benefits to a

consumer electronically, such as

through automated teller machines or

point-of-sale terminals, but does not

include an account for distributing

needs-tested benefits in a program

established under state or local law or

administered by a state or local agency.

* * * * *

By order of the Board of Governors of the

Federal Reserve System, August 11, 1997.

William W. Wiles,

Secretary of the Board.

[FR Doc. 97–21584 Filed 8–13–97; 8:45 am]

BILLING CODE 6210–01–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

15 CFR Part 902

50 CFR Part 648

[Docket No. 970508108–7108–01; I.D.

022597B]

RIN 0648–AJ62

Fisheries of the Northeastern United

States; Framework 9 to the Atlantic

Sea Scallop Fishery Management Plan

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Final rule.

SUMMARY: NMFS issues this final rule to

implement measures contained in

Framework Adjustment 9 to the Atlantic

Sea Scallop Fishery Management Plan

(FMP). These regulations exempt

limited access and general category

permit holders fishing exclusively

under the State Waters Exemption

Program (Exemption Program) from the

400 lb (181.44 kg) trip limit. This action

is intended to sustain the participation

of historic participants by allowing

Federal permit holders to compete in

the state waters fishery on a more

equitable basis where Federal and state

laws are inconsistent.

EFFECTIVE DATE: August 13, 1997.

ADDRESSES: Copies of Amendment 4 to

the FMP (Amendment 4), its regulatory

impact review and the initial regulatory

flexibility analysis, its final

supplemental environmental impact

statement, and the supporting

documents for Framework Adjustment 9

are available from Paul J. Howard,

Executive Director, New England

Fishery Management Council, 5

Broadway (Route 1), Saugus, MA

01906–1097.

Comments regarding burden-hour

estimates for the collection-ofinformation requirement contained in

this final rule should be sent to Dr.

Andrew A. Rosenberg, Regional

Administrator, Northeast Region,

NMFS, 1 Blackburn Drive, Gloucester,

MA 01930, and the Office of

Information and Regulatory Affairs,

Office of Management and Budget

(OMB), Washington, D.C. 20502

(Attention: NOAA Desk Officer).

FOR FURTHER INFORMATION CONTACT: Paul

H. Jones, Fishery Policy Analyst, 508–

281–9273.

SUPPLEMENTARY INFORMATION:

Background

Regulations implementing

Amendment 4 to the FMP (59 FR 2757,

January 19, 1994) added a framework

adjustment process that allows for the

adjustment of management measures, as

necessary to meet or achieve

consistency with the FMP’s goals and

objectives. The regulations authorize the

New England Fishery Management

Council (Council) to recommend

adjustments to any of the measures

currently in the FMP.

Framework Adjustment 2 to the FMP

(59 FR 59967, November 21, 1994)

implemented the Exemption Program

that exempts federally permitted limited

access and general category scallop

vessels from Federal gear and days-atsea effort restrictions while fishing in

the state waters of Maine, New

Hampshire, or Massachusetts. Vessels

fishing in this Exemption Program are

subject to a notification requirement

(limited access vessels), must fish under

the rules of the appropriate state, and

may land no more than the 400–lb

(181.44–kg) Federal limit. The basis for

the Exemption Program was to allow the

states to manage the scallop fisheries

predominating in their waters under

programs that were determined to be

consistent with goals of the FMP. The

state programs do not impose a landing

limit and, thus, vessels that do not hold

Federal permits and that are fishing in

state waters are not subject to the 400–

lb (181.44 kg) limit. This action was

developed and submitted by the Council

to provide more consistency with the

state programs by exempting federally

permitted vessels fishing under the

Exemption Program from the 400 lb

(181.44 kg) limit. This exemption

further requires general category vessel

operators to notify NMFS through the

established call-in system of their intent

to fish under the Exemption Program.

This modification to the Exemption

Program was developed to eliminate the

competitive disadvantage federally

permitted vessels experience relative to

non-federally permitted vessels fishing

in state waters, while ensuring that the

conservation goals of the FMP are met.

Approximately 80 percent of the Gulf of

Maine scallop fishery takes place in

state waters and its management is

predominately a state responsibility.

These scallop stocks are not specifically

included in the rebuilding program

established in the FMP for the major

stocks found on Georges Bank and in

the Mid-Atlantic area. Therefore, this

measure does not compromise the

fishing mortality/effort reduction

program for scallops in the EEZ.

Implementing this exemption eliminates

an inconsistency between Federal and

state waters fisheries and has the

positive effect of maintaining the

continuity of the vessel trip reporting

system for this sector by removing the

incentive for federally permitted vessels

to cancel their permits seasonally to

become exempt from the 400–lb

(181.44–kg) limit.

The Council requests publication of

the management measures as a final rule

after considering the required factors

stipulated in the regulations governing

the Atlantic sea scallop fishery and

providing supporting analysis for each

factor considered. The Regional

Administrator concurs with the

Council’s recommendation and has

determined that Framework Adjustment

9 should be published as a final rule.

NMFS is adjusting the scallop

regulations following the procedure for

framework adjustments established by