Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 27239 

need for the Bloodborne Pathogens 

Standard (29 CFR 1910.1030), its impact 

on small businesses, its effectiveness in 

protecting workers, and all other issues 

raised by Section 610 of the Regulatory 

Flexibility Act and Section 5 of 

Executive Order 12866. It would be 

particularly helpful for commenters to 

suggest how the Standard could be 

modified to reduce the burden on 

employers while maintaining or 

improving employee protection. 

Furthermore, comments would be 

appreciated on the following topics: 

• Exposures in non-hospital settings; 

• Recent technological advances in 

needlestick prevention; 

• Effectiveness of needlestick 

prevention programs; 

• New, emerging health risks from 

bloodborne pathogens; and 

• Any other experiences related to 

compliance with the standard. 

Public comments will assist the Agency 

in determining whether to retain the 

Standard unchanged, to initiate 

rulemaking to revise or rescind it, or to 

develop improved compliance 

assistance. 

Comments must be submitted by 

August 12, 2010. Comments should be 

submitted to the addresses and in the 

manner specified at the beginning of the 

notice. 

Authority: This document was prepared 

under the direction of David Michaels, PhD, 

MPH, Assistant Secretary of Labor for 

Occupational Safety and Health, 200 

Constitution Avenue, NW., Washington, DC 

20210. It is issued under Section 610 of the 

Regulatory Flexibility Act (5 U.S.C. 610) and 

Section 5 of Executive Order 12866 (58 FR 

51735, October 4, 1993). 

Signed at Washington, DC on May 11, 

2010. 

David Michaels, 

Assistant Secretary of Labor for Occupational 

Safety and Health. 

[FR Doc. 2010–11579 Filed 5–13–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Occupational Safety and Health 

Administration 

29 CFR Parts 1910, 1915, and 1926 

[Docket No. OSHA–H054a-2006–0064] 

RIN 1218–AC43 

Revising the Notification Requirements 

in the Exposure Determination 

Provisions of the Hexavalent 

Chromium Standards 

AGENCY: Occupational Safety and Health 

Administration (OSHA): Department of 

Labor. 

ACTION: Proposed rule; withdrawal. 

SUMMARY: With this notice, OSHA is 

withdrawing the proposed rule that 

accompanied its direct final rule (DFR) 

amending the employee notification 

requirements in the exposure 

determination provisions of the 

Hexavalent Chromium (Cr(VI)) 

standards. 

DATES: Effective May 14, 2010, the 

proposed rule published March 16, 2010 

(75 FR 12485), is withdrawn. 

FOR FURTHER INFORMATION CONTACT: For 

general information and press inquiries 

contact Ms. Jennifer Ashley, Director, 

OSHA Office of Communications, Room 

N–3647, U.S. Department of Labor, 200 

Constitution Avenue, NW., Washington, 

DC 20210; telephone: (202) 693–1999. 

For technical inquiries, contact Maureen 

Ruskin, Office of Chemical Hazards— 

Metals, Directorate of Standards and 

Guidance, Room N–3718, OSHA, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210; 

telephone: (202) 693–1950; fax: (202) 

693–1678. 

Copies of this Federal Register notice 

are available from the OSHA Office of 

Publications, Room N–3101, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210; 

telephone (202) 693–1888. Electronic 

copies of this Federal Register notice 

and other relevant documents are 

available at OSHA’s Web page at http:// 

www.osha.gov. 

SUPPLEMENTARY INFORMATION: On March 

17, 2010, OSHA published a DFR 

amending the employee notification 

requirements in the exposure 

determination provisions of the Cr(VI) 

standards at 29 CFR 1910.1026, 29 CFR 

1915.1026, and 29 CFR 1926.1126 (75 

FR 12681). OSHA also published a 

companion proposed rule proposing the 

same changes to the Cr(VI) standards. 

(75 FR 12485, March 16, 2010). In the 

DFR, OSHA stated that it would 

withdraw the companion proposed rule 

and confirm the effective date of the 

DFR if no significant adverse comments 

were submitted on the DFR by April 16, 

2010. 

OSHA received eight comments on 

the DFR, which the Agency has 

determined were not significant adverse 

comments. OSHA is publishing a notice 

announcing and explaining this 

determination and confirming the 

effective date of the DFR as June 15, 

2010. Accordingly, OSHA is not 

proceeding with the proposed rule and 

is withdrawing it from the rulemaking 

process. 

List of Subjects 

29 CFR Part 1910 

Exposure determination, General 

industry employment, Health, 

Hexavalent chromium (Cr(VI)), 

Notification of determination results to 

employees, Occupational safety and 

health. 

29 CFR Part 1915 

Exposure determination, Health, 

Hexavalent chromium (Cr(VI)), 

Notification of determination results to 

employees, Occupational safety and 

health, Shipyard employment. 

29 CFR Part 1926 

Construction employment, Exposure 

determination, Health, Hexavalent 

chromium (Cr(VI)), Notification of 

determination results to employees, 

Occupational safety and health. 

Authority and Signature 

David Michaels, PhD, MPH, Assistant 

Secretary of Labor for Occupational 

Safety and Health, U.S. Department of 

Labor, 200 Constitution Avenue, NW., 

Washington, DC 20210, directed the 

preparation of this notice under the 

following authorities: Sections 4, 6, and 

8 of the Occupational Safety and Health 

Act of 1970 (29 U.S.C. 653, 655, 657), 

Secretary of Labor’s Order 5–2007 (72 

FR 31159), and 29 CFR part 1911. 

Signed at Washington, DC, on May 11, 

2010. 

David Michaels, 

Assistant Secretary of Labor for Occupational 

Safety and Health. 

[FR Doc. 2010–11583 Filed 5–13–10; 8:45 am] 

BILLING CODE 4510–9–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 210 

RIN 1510–AB24 

Federal Government Participation in 

the Automated Clearing House 

AGENCY: Financial Management Service, 

Fiscal Service, Treasury. 

ACTION: Notice of proposed rulemaking 

with request for comment. 

SUMMARY: The Department of the 

Treasury, Financial Management 

Service (Service) is proposing to amend 

our regulation governing the use of the 

Automated Clearing House (ACH) 

system by Federal agencies. Our 

regulation adopts, with some 

exceptions, the ACH Rules developed 

by NACHA—The Electronic Payments 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
27240 Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 

Association (NACHA) as the rules 

governing the use of the ACH Network 

by Federal agencies. We are issuing this 

proposed rule to address changes that 

NACHA has made to the ACH Rules 

since the publication of NACHA’s 2007 

ACH Rules book. These changes include 

new requirements to identify all 

international payment transactions 

using a new Standard Entry Class Code 

and to include certain information in 

the ACH record sufficient to allow the 

receiving financial institution to 

identify the parties to the transaction 

and to allow Office of Foreign Assets 

Control (OFAC) screening. 

In addition, we are proposing to 

streamline the process for reclaiming 

post-death benefit payments from 

financial institutions; to require 

financial institutions to provide limited 

account-related customer information 

related to the reclamation of post-death 

benefit payments as permitted under the 

Payment Transactions Integrity Act of 

2008; to allow Federal payments to be 

delivered to pooled or master accounts 

established by nursing facilities for 

residents or held by religious orders 

whose members have taken vows of 

poverty; and to allow Federal payments 

to be delivered to stored value card, 

prepaid card or similar card accounts 

meeting certain consumer protection 

requirements. 

DATES: Comments on the proposed rule 

must be received by July 13, 2010. 

ADDRESSES: You can download this 

proposed rule at the following Web site: 

http://www.fms.treas.gov/ach. You may 

also inspect and copy this proposed rule 

at: Treasury Department Library, 

Freedom of Information Act (FOIA) 

Collection, Room 1428, Main Treasury 

Building, 1500 Pennsylvania Avenue, 

NW., Washington, DC 20220. Before 

visiting, you must call (202) 622–0990 

for an appointment. 

In accordance with the U.S. 

government’s eRulemaking Initiative, 

the Service publishes rulemaking 

information on http:// 

www.regulations.gov. Regulations.gov 

offers the public the ability to comment 

on, search, and view publicly available 

rulemaking materials, including 

comments received on rules. 

Comments on this rule, identified by 

docket FISCAL–FMS–2009–0001, 

should only be submitted using the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions on the Web site for 

submitting comments. 

• Mail: Bill Brushwood, Financial 

Management Service, 401 14th Street, 

SW., Room 400A, Washington, DC 

20227. 

The fax and e-mail methods of 

submitting comments on rules to the 

Service have been decommissioned. 

Instructions: All submissions received 

must include the agency name 

(‘‘Financial Management Service’’) and 

docket number FISCAL–FMS–2009– 

0001 for this rulemaking. In general, 

comments received will be published on 

Regulations.gov without change, 

including any business or personal 

information provided. Comments 

received, including attachments and 

other supporting materials, are part of 

the public record and subject to public 

disclosure. Do not disclose any 

information in your comment or 

supporting materials that you consider 

confidential or inappropriate for public 

disclosure. 

FOR FURTHER INFORMATION CONTACT: Bill 

Brushwood, Director of the Settlement 

Services Division, at (202) 874–1251 or 

bill.brushwood@fms.treas.gov; or 

Natalie H. Diana, Senior Counsel, at 

(202) 874–6680 or 

natalie.diana@fms.treas.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Title 31 CFR part 210 (Part 210) 

governs the use of the ACH Network by 

Federal agencies. The ACH Network is 

a nationwide electronic fund transfer 

(EFT) system that provides for the interbank clearing of electronic credit and 

debit transactions and for the exchange 

of payment-related information among 

participating financial institutions. Part 

210 incorporates the ACH Rules 

adopted by NACHA, with certain 

exceptions. From time to time we 

amend Part 210 in order to address 

changes that NACHA periodically 

makes to the ACH Rules or to revise the 

regulation as otherwise appropriate. 

NACHA has adopted a number of 

changes to the ACH Rules since the 

publication of the 2007 ACH Rules 

book. We are proposing to incorporate 

in Part 210 some, but not all, of the 

changes to the ACH Rules. The changes 

to the ACH Rules include new 

requirements to identify all 

international payment transactions 

using a new Standard Entry Class Code 

and to include in the ACH record 

certain information sufficient to allow 

the receiving financial institution to 

identify the parties to the transaction 

and the path of the transaction. In 

addition, NACHA amended the ACH 

Rules to allow NACHA to request data 

from Originating Depository Financial 

Institutions (ODFIs) for an Originator or 

Third-Party Sender that exceeds a rate 

of 1 percent for debit entries returned as 

unauthorized. 

In addition to addressing NACHA 

Rule changes, we are proposing to 

amend Part 210, effective January 1, 

2012, to streamline the reclamation 

process for post-death benefit payments. 

Currently, the reclamation process is a 

manual, paper-based process in which 

Treasury sends out a Notice of 

Reclamation (FMS Form 133) that the 

financial institution must complete, 

certify and return. Under Part 210, a 

financial institution generally is liable 

for the total amount of payments sent 

within 45 days of the recipient’s death 

even if the financial institution was not 

aware of the death. In light of the fact 

that the great majority of reclamations 

are limited to just this ‘‘45-day Amount,’’ 

consisting of one or two post-death 

payments for which the financial 

institution will ultimately be liable, we 

are requesting comment on an approach 

in which Treasury would proceed with 

an automatic debit to the financial 

institution’s reserve account, following 

advance notice to the financial 

institution of the debit with a right to 

challenge. This process would apply 

only to situations in which a notice of 

reclamation is limited to payments 

received within 45 days after the 

recipient’s death. As discussed in 

Section II below, we believe this change 

would result in operational efficiencies 

for both Treasury and financial 

institutions. 

For reclamations limited to the 45-day 

Amount, financial institutions would no 

longer be required to provide customer 

account-related information related to 

the disposition of the post-death 

payments. For reclamations of payments 

received more than 45 days after the 

recipient’s death, we are proposing to 

require financial institutions to provide 

the last-known telephone number of 

account holders and withdrawers, in 

addition to name and address. Also, as 

now permitted pursuant to the Payment 

Transactions Integrity Act of 2008, 

financial institutions would be required 

to provide withdrawer information for 

all types of benefit payments being 

reclaimed. Prior to the enactment of the 

Payment Transactions Integrity Act, 

account-related information could be 

shared only for certain types of benefit 

payments. 

Finally, we are proposing to amend 

our long-standing requirement in Part 

210 that non-vendor payments be 

delivered to a deposit account at a 

financial institution in the name of the 

recipient. The proposed amendment 

would allow the delivery of Federal 

payments to resident trust or patient 

fund accounts held by nursing homes, 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 27241 

to accounts held by religious orders for 

members who have taken a vow of 

poverty, and to prepaid and stored value 

card accounts provided that the 

cardholder’s balance is FDIC insured 

and covered by the consumer 

protections of the Federal Reserve’s 

Regulation E. 

We are requesting public comment on 

all the foregoing proposed amendments 

to Part 210. 

II. Summary of Rule Changes 

International ACH Transactions 

Effective September 18, 2009, the 

NACHA Rules require ODFIs and 

Gateway Operators to identify all 

international payment transactions 

transmitted via the ACH Network for 

any portion of the money trail as 

International ACH Transactions using a 

new Standard Entry Class Code (IAT). 

IAT transactions must include the 

specific data elements defined within 

the Bank Secrecy Act’s (BSA) ‘‘Travel 

Rule’’ so that all parties to the 

transaction have the information 

necessary to comply with U.S. law, 

including the laws administered by 

OFAC. 

OFAC has stated that financial 

institutions need to safeguard the U.S. 

financial system from terrorist and other 

sanctions abuses involving international 

ACH payments processed through the 

domestic U.S. ACH Network. In the 

domestic payment environment, ODFIs 

and Receiving Depository Financial 

Institutions (RDFIs) can rely on each 

other to ensure compliance with OFAC 

obligations with regard to their own 

customers. For international payments, 

however, Depository Financial 

Institutions (DFIs) cannot rely on 

international counterparts for 

compliance with U.S. law. 

Previously, many payments that are 

international in nature were being 

introduced as domestic transactions into 

the U.S. ACH Network through 

correspondent banking relationships, 

making it difficult for processing DFIs to 

identify them for purposes of complying 

with U.S. law. NACHA’s new IAT 

Standard Entry Class Code classifies 

international payments based on the 

geographical location of the financial 

institutions or money transmitting 

businesses involved in the transaction, 

instead of the location of the originator 

or receiver. Each IAT entry is 

accompanied by mandatory Addenda 

Records conveying the following 

information: 

• Name and physical address of the 

Originator. 

• Name and physical address of the 

Receiver. 

• Account number of the Receiver. 

• Identity of the Receiver’s bank. 

• Foreign Correspondent Bank name, 

Foreign Correspondent Bank ID number, 

and Foreign Correspondent Bank 

Branch Country Code. 

As defined in the 2009 ACH Rules, an 

International ACH Transaction (IAT) 

entry is: 

A debit or credit Entry that is part of a 

payment transaction involving a financial 

agency’s office that is not located in the 

territorial jurisdiction of the United States. 

For purposes of this definition, a financial 

agency means an entity that is authorized by 

applicable law to accept deposits or is in the 

business of issuing money orders or 

transferring funds. An office of a financial 

agency is involved in the payment 

transaction if it (1) holds an account that is 

credited or debited as part of the payment 

transaction; (2) receives payment directly 

from a Person or makes payment directly to 

a Person as part of the payment transaction; 

or (3) serves as an intermediary in the 

settlement of any part of the payment 

transaction. 

See 2009 ACH Rules, Subsection 

14.1.36. The term ‘‘Person’’ means a 

natural person or an organization. 2009 

ACH Rules, Subsection 14.1.52. The 

term ‘‘payment transaction’’ is not 

defined within the ACH Rules, but the 

2009 Operating Guidelines state that 

within the IAT definition, payment 

transaction refers to: ‘‘An instruction of 

a sender to a bank to pay, or to obtain 

payment of, or to cause another bank to 

pay or obtain payment of, a fixed or 

determinate amount of money that is to 

be paid to, or obtained from, a receiver, 

and any and all settlements, accounting 

entries, or disbursements that are 

necessary or appropriate to carry out the 

instruction.’’ 2009 Operating Guidelines, 

Section IV, Chapter XI, p. 202. 

The 2009 Operating Guidelines 

provide various examples of 

transactions that would be classified as 

IAT entries. One example deals with 

pension or Social Security benefit 

payments delivered to the U.S. bank 

accounts of retirees residing offshore. If 

the U.S. bank to which such a payment 

is delivered further credits the payment 

to an offshore bank with which it has a 

correspondent relationship, the entry is 

to be classified by the ODFI as IAT. In 

other words, despite being destined to 

U.S. bank accounts, the transactions 

would be IATs because the ultimate 

destinations of the payments are 

accounts held with offshore banks or 

financial agencies. The 2009 Operating 

Guidelines indicate that it is the 

Originator’s obligation to understand 

the legal domicile of its retirees and 

inquire whether they hold accounts in 

U.S. banks or with offshore financial 

institutions. See 2009 Operating 

Guidelines, Section IV, Chapter XI, 

Scenario F, p. 209. As applied to 

Federal payments, this would mean that 

an agency certifying a payment to a 

recipient residing overseas must inquire 

whether the payment, although directed 

to a domestic bank, will be further 

credited to a foreign correspondent 

bank. If so, the agency must classify the 

payment as IAT. 

We are proposing to accept the IAT 

rule for Federal payments. For Federal 

benefit payments delivered to overseas 

recipients in Mexico, Canada and 

Panama through the FedGlobalSM ACH 

Payment Services, we do not foresee any 

difficulty in implementing the IAT rule. 

For other payments, however, we 

anticipate that it may take until January 

1, 2012 to make the system and 

operational changes necessary to 

implement the IAT, due in part to the 

dedication of operational resources to 

the delivery of Economic Recovery Act 

payments in 2009. We plan to phase in 

IAT requirements in stages, based on the 

type of payment and the agency issuing 

the payment, as expediently as 

operationally possible, and we have 

already ceased originating Consumer 

Cross Border (PBR) and Corporate Cross 

Border (CBR) entries. Accordingly, we 

are proposing to adopt the IAT rule for 

Federal benefit payments delivered to 

Mexico, Canada and Panama through 

the FedGlobalSM ACH Payment Service. 

For all other Federal payments, we are 

proposing an effective date of January 1, 

2012. 

The proposed January 1, 2012 

effective date does not affect agencies’ 

existing and ongoing obligation to 

perform OFAC screening of all 

payments that they certify to Treasury 

for disbursement, and in fact 

presupposes that agencies are screening 

all payments prior to certification. As 

set forth in the Treasury Financial 

Manual, agencies must not make or 

certify payments, or draw checks or 

warrants, payable to an individual or 

organization listed on the Specially 

Designated National and Blocked Person 

list, and agencies must consult the list 

before making payments. See Treasury 

Financial Manual, Vol. I, Part 4, Chapter 

1000, sec. 1020. 

Lastly, in implementing the IAT 

requirements, we anticipate that some 

agencies will format as an IAT 

transaction any payment to an 

individual or entity with an address 

outside the territorial jurisdiction of the 

U.S. This may result in the 

identification of some transactions as 

IAT even though funds do not 

ultimately leave the United States. 

However, taking an ‘‘over-inclusive’’ 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
27242 Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 

approach to implementing IAT greatly 

eases the administrative burden that 

Federal agencies would otherwise be 

faced with. We do not believe this overinclusive approach would create any 

compliance issues, but we request 

comment from agencies and financial 

institutions on this approach. 

B. NACHA Rules Enforcement 

Effective December 21, 2007, NACHA 

modified its rules to broaden the scope 

of Appendix Eleven (The National 

System of Fines). The Appendix was 

revised to (1) allow NACHA to request 

data from ODFIs for an Originator or 

Third-Party Sender that appears to 

exceed a rate of one percent for debit 

entries returned as unauthorized; and 

(2) define the circumstances under 

which NACHA may submit violations 

related to the ODFI reporting 

requirement to the National System of 

Fines. Several other provisions of the 

National System of Fines were also 

modified. 

Part 210 does not incorporate 

Appendix 11 of the NACHA Rules. See 

31 CFR 210.2(d)(3). The Federal 

government is constrained from entering 

into arrangements that may result in 

unfunded liabilities. Moreover, we do 

not believe that subjecting Federal 

agencies to the System of Fines is 

necessary or appropriate in light of its 

underlying purpose. Accordingly, we 

are proposing not to adopt the 

modifications to Appendix 11. In the 

event that a Federal agency were to 

experience a high rate of debit entries 

returned as unauthorized, we would 

work with the agency and coordinate 

with NACHA to address the situation. 

C. ODFI Reporting Requirements 

Effective March 20, 2009, NACHA 

amended its rules to incorporate new 

reporting requirements for ODFIs within 

Article Two (Origination of Entries). 

These reporting requirements require 

ODFIs to provide, when requested by 

NACHA, certain information about 

specific Originators or Third-Party 

Senders believed to have a return rate 

for unauthorized debit entries in excess 

of 1 percent. The rule also requires 

ODFIs to reduce the return rate for any 

such Originator or Third-Party Sender to 

a rate below 1 percent within 60 days. 

The amendment replaced a reporting 

requirement for Telephone-Initiated 

(TEL) entries that was previously in the 

ACH Rules. 

We are proposing not to adopt the 

new reporting requirements. When 

NACHA adopted the TEL reporting 

requirement in 2003, we did not adopt 

it, in part because we did not believe 

that agencies were likely to experience 

excessive rates of returned entries, 

which has proved to be true. Similarly, 

we do not believe that it is necessary or 

appropriate to subject Federal agencies 

to a formal reporting process for 

unauthorized entries. However, in the 

event that NACHA were to bring to our 

attention an excessive return rate at any 

agency, we would work with the agency 

and coordinate with NACHA to address 

the situation. 

D. Reclamations 

Currently, based on instructions from 

the Social Security Administration 

(SSA) and other Federal agencies that 

pay recurring benefit payments, 

Treasury sends paper Notices of 

Reclamation to RDFIs in order to 

reclaim post-death benefit payments. 

RDFIs must respond to these notices by 

providing information on the notices 

and returning them to Treasury within 

a specific time frame. Depending on the 

circumstances of a reclamation, the 

RDFI would be liable for either the full 

amount or a partial amount of the postdeath payments that were issued. In 

general, an RDFI is liable to Treasury for 

the total amount of all benefit payments 

received after the death or legal 

incapacity of a recipient or death of a 

beneficiary unless the RDFI can limit its 

liability. An RDFI can limit its liability 

to the total amount of payments sent 

within 45 days after the recipient’s 

death if it: (1) Certifies that it did not 

have actual or constructive knowledge 

of the recipient’s death or incapacity at 

the time the RDFI received one or more 

benefit payments; (2) returns all postdeath benefit payments it receives after 

it learns of the death; and (3) responds 

to the FMS–133, Notice of Reclamation, 

within 60 days from the date of the 

Notice. Since most benefit payments are 

issued on a monthly basis, the ‘‘45-day 

Amount’’ consists of either one or two 

payments. 

Currently, after receiving the 

completed Notice of Reclamation from 

the RDFI, Treasury debits the RDFI for 

the 45-day Amount less any amount the 

RDFI has returned with the completed 

Notice of Reclamation. In some cases, 

the Federal agency that issued the 

payment(s) (e.g., SSA) may be able to 

collect an amount from whoever 

withdrew the funds after they were 

deposited, thereby reducing the 45-day 

Amount. In such cases, the amount of 

the reclamation debit against the RDFI’s 

reserve account is sometimes less than 

the 45-day Amount. 

Approximately 85 percent of all 

reclamation notices sent to RDFIs are for 

payments disbursed within 45 days after 

death or legal incapacity of the 

recipient. Of this 85 percent figure, 

RDFIs return the full 45-day Amount 

approximately 89 percent of the time. 

For the other 11 percent of reclamation 

notices, in many cases the RDFIs 

eventually remit any remaining portion 

of the 45-day Amount. 

Example: To illustrate, assume that for a 

given month the Service sends 100 

reclamation notices to RDFIs. Of those 100 

notices, approximately 85 notices will 

request reclamation of only payments 

disbursed within 45 days after death or legal 

incapacity. Of those 85 notices, RDFIs will 

return the 45-day Amount in response to 76 

notices. The RDFIs will eventually return the 

45-day Amount for most of the other 9 

notices. 

As the example illustrates, in the vast 

majority of cases, the amount of the 

reclamation is the 45-day Amount, 

which represents one or two post-death 

payments, and the vast majority of 

RDFIs return that amount with their 

response to the Notice of Reclamation. 

To achieve cost savings and 

efficiencies for both the Federal 

government and RDFIs, we are 

proposing to automatically debit RDFIs 

for the 45-day Amount, following a 30- 

day advance notice of the debit. RDFIs 

could choose to return the 45-day 

Amount after receiving the notice, or 

could elect to let the debit proceed. By 

automatically originating a debit for the 

45-day Amount (less any amount 

collected by the paying agency), rather 

than issuing forms that must be 

manually processed, the Service would 

create a more streamlined process with 

reduced processing, paperwork, and 

postage. The Service would not need to 

expend resources manually processing 

reclamation notices and RDFIs would 

not be required to expend resources 

processing notices and returning funds 

to Treasury. The proposed change, 

which would take effect on January 1, 

2012, would affect only the procedure 

used to process a reclamation, and not 

the amount of an RDFI’s liability. In 

order to provide RDFIs with a process 

for challenging any debit for a 45-day 

Amount, we are proposing to adopt a 

formal procedure for protesting such 

debits. An RDFI that believes that a 

debit was or would be improper, either 

entirely or in part, would be able to 

submit a notice that it is disputing the 

reclamation either before the debit is 

carried out or within 90 days after the 

debit to its reserve account. The Service 

would be required to make a 

determination within 60 days of receipt 

of the dispute notice, subject to a 60- 

day extension if necessary. If the RDFI 

files a dispute notice before the debit is 

carried out, the Service would not 

proceed with the debit until a final 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 27243 

1 Identical requirements appear in 31 CFR 208.6. 

In the event that we finalize the proposed 

amendment to § 210.5, we will amend 31 CFR 208.6 

to create an identical exception. 

determination is made that the debit is 

proper. 

Only reclamations limited to the 45- 

day Amount would be subject to this 

process. As discussed above, 15 percent 

of all reclamation actions are for an 

amount that exceeds the 45-day 

Amount. For these reclamations, the 

current paper-based manual process 

would be continued, meaning that 

RDFIs would receive and need to 

respond to a Notice of Reclamation as 

they currently do. 

E. Payment Transactions Integrity Act of 

2008 Changes 

Last year Congress enacted the 

Payment Transactions Integrity Act of 

2008. The Payment Transactions 

Integrity Act amended the Right to 

Financial Privacy Act of 1978, which 

had prohibited Treasury and other 

Federal agencies from obtaining from 

banks information contained within the 

financial records of any customer, with 

limited exceptions. Under the Payment 

Transactions Integrity Act, Treasury and 

other agencies are now permitted to 

obtain customer information in 

connection with the investigation or 

recovery of an improper Federal 

payment. We are proposing to amend 

§ 210.11(b)(3)(i) in order to require 

RDFIs to provide the name and lastknown address and phone number for 

account owners and others who have 

withdrawn, or were authorized to 

withdraw, funds subject to a 

reclamation. Currently, Part 210 

requires banks to provide only the name 

and address (not the phone number) of 

account owners and withdrawers, and 

only in connection with the reclamation 

of Social Security Federal Old-Age, 

survivors, and Disability Insurance 

benefit payments or benefit payments 

certified by the Railroad Retirement 

Board or the Department of Veterans’ 

Affairs. The proposed change would 

require financial institutions to provide 

information for other types of benefit 

payments, such as Civil Service benefit 

payments and Supplemental Security 

Income payments, as now permitted 

under the Payment Transactions 

Integrity Act. As discussed above, the 

Service is proposing to discontinue the 

collection of such information for all 

reclamations that do not exceed the 45- 

day Amount. Accordingly, information 

would be collected in connection with 

reclamations only for the approximately 

15 percent of total reclamations 

involving more than the 45-day 

Amount. 

F. ‘‘In The Name Of The Recipient’’ 

Requirements 

Title 31 CFR § 210.5(a) provides that, 

notwithstanding ACH rules 2.1.2, 4.1.3, 

and Appendix Two, section 2.2 (listing 

general ledger and loan accounts as 

permissible transaction codes), an ACH 

credit entry representing a Federal 

payment other than a vendor payment 

shall be deposited into a deposit 

account at a financial institution. For all 

payments other than vendor payments, 

the account at the financial institution 

must be in the name of the recipient, 

subject to certain exceptions.1 As we 

indicated in the preamble of the Federal 

Register notice promulgating § 210.5, 

our long-standing interpretation of the 

words ‘‘in the name of the recipient,’’ 

has been that the payment recipient’s 

name must appear in the account title. 

See, e.g., 64 FR 17480, referring to 

discussion at 63 FR 51490, 51499. From 

time to time financial institutions and 

other payment service providers have 

urged Treasury to opine that the ‘‘in the 

name of the recipient’’ requirement is 

met if the recipient has an ownership 

interest in a pooled account and that 

individual’s interest is reflected in a 

subacccount record, even if the 

recipient’s name is not included in the 

title of the account. To date we have 

declined to adopt this interpretation. 

The ‘‘in the name of the recipient’’ 

requirement is, in essence, a consumer 

protection policy. The requirement that 

an account be in the name of the 

recipient is designed to ensure that a 

payment reaches the intended recipient. 

See discussion at 63 FR 51490, 51499. 

We have had concerns in the past that 

Federal benefit payment recipients 

could enter into master/sub account 

relationships in which they have little 

control over the account to which their 

benefit payments are directed. 

The Service’s ‘‘in the name of the 

recipient’’ requirement was last opened 

for public comment in the late 1990’s 

during the rulemaking process for 31 

CFR part 208. It was at this time that 

Treasury reaffirmed that the policy 

applies not only to benefit payments, 

but also to wage, salary and retirement 

payments, and that the account must be 

at a financial institution, with specific 

exceptions provided for authorized 

payment agents and investment 

accounts. The exclusion of vendor 

payments was a result of the comments 

received during the comment period 

and accepted in the final rule. 

Currently, there are four exceptions to 

the ‘‘in the name of the recipient’’ 

requirement of § 210.5(a), which are set 

forth in paragraphs (b)(1), (b)(2), (b)(3), 

and (b)(4). Paragraph 210.5(b)(1) allows 

deposits into an account held by an 

‘‘authorized payment agent’’ and titled 

in accordance with the regulations 

governing the authorized payment 

agent. An authorized payment agent is 

defined as a representative payee or 

fiduciary appointed to act on behalf of 

an individual under agency regulations. 

31 CFR 210.2(e). Section 210.5(b)(2) 

allows deposits into investment 

accounts established through a 

registered securities broker or dealer. 

Section 210.5(b)(3) allows Federal 

agency employee travel reimbursement 

payments to be credited to the account 

of the travel card issuing bank for credit 

to the employee’s travel card account. 

Section 210.5(b)(4) allows deposits to an 

account held by a fiscal or financial 

agent designated by the Service for card 

programs established by the Service and 

provides that the account title, access 

terms and other account provisions may 

be specified by the Service. We are 

proposing to add three additional 

exceptions to the ‘‘in the name of the 

recipient’’ requirements: (1) An 

exception for payments to individuals 

residing in nursing facilities; (2) an 

exception for payments to members of 

religious orders who have taken a vow 

of poverty; and (3) an exception for 

payments to prepaid debit and stored 

value card accounts meeting certain 

consumer protection requirements. 

1. Accounts Held by Nursing Facilities 

On April 21, 2008, SSA published a 

Federal Register notice requesting 

comments on arrangements in which 

Social Security benefit payments are 

deposited into a third-party’s ‘‘master’’ 

account when the third party maintains 

separate ‘‘sub’’ accounts for individual 

beneficiaries. 73 FR 21403. The issue of 

master/sub accounts had come to SSA’s 

attention in the context of concerns 

regarding the use of master/sub 

accounts by ‘‘payday lenders’’ who 

solicit Social Security beneficiaries to 

take out high-interest loans. SSA 

requested comments on the use of 

master/sub accounts not only by 

beneficiaries, lenders, advocates, and 

other members of the public, but also 

specifically asked if nursing homes 

would be able to receive and manage 

benefits for their residents without the 

use of master/sub accounts. The 

comments received by SSA indicated 

that the use of master/sub account 

arrangements by residents of nursing 

facilities is widespread, and that these 

arrangements are beneficial for residents 


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(particularly for the elderly population 

needing assistance with banking or for 

whom it can be difficult to make trips 

to the bank). None of the commenters 

noted any abuses associated with these 

arrangements. Based on the comments 

received, SSA’s view is that master/sub 

accounts held by nursing facilities serve 

useful purposes and do not present the 

concerns raised by payday lender 

account arrangements. 

Nursing facilities are highly regulated 

entities, and resident trust or patient 

fund accounts held by nursing facilities 

are fiduciary accounts subject to specific 

requirements and protections under 

Federal statute and regulation. The 

Federal Nursing Home Reform Act, 

which was part of the Omnibus Budget 

Reconciliation Act of 1987 (OBRA ’87), 

revised Federal standards for nursing 

home care established in the 1965 

creation of both Medicare and Medicaid. 

42 U.S.C. 1395i–3, 42 U.S.C. 1396r. 

OBRA ’87 created a set of national 

minimum standards of care and rights 

for people living in nursing facilities. 

Detailed regulations at 42 CFR part 483 

implement the statute. The Centers for 

Medicare and Medicaid Services (CMS) 

provides additional detailed guidance as 

part of its oversight and compliance 

enforcement. See http:// 

www.cms.hhs.gov/GuidanceforLawsand 

Regulations/12_NHs.asp. 

One element of the revised standards 

was to mandate that nursing facilities 

manage and account for the personal 

funds residents often deposit with the 

facility. Residents have the right to 

manage their financial affairs, and 

nursing facilities are prohibited from 

requiring residents to deposit their 

personal funds with the facility. 42 

U.S.C. 1396r(c)(6); 42 CFR 483.10(c)(1). 

At the same time, upon written 

authorization of a resident, facilities 

must ‘‘hold, safeguard, manage and 

account for’’ the personal funds of the 

resident deposited with the facility. 42 

U.S.C. 1396r(c)(1)(B); 42 CFR 

483.10(c)(2). The statute requires that 

residents be provided a written 

description of their legal rights that 

includes a description of the protection 

of personal funds and a statement that 

a resident may file a complaint with a 

state survey and certification agency 

respecting resident abuse and neglect 

and misappropriation of resident 

property in the facility. 42 U.S.C. 

1396r(c)(1)(B); 42 CFR 483.10(b)(7)(i). 

Other statutory provisions address the 

management of personal funds, as 

follows: 

• The facility must deposit any 

amount of personal funds in excess of 

$50 with respect to a resident in an 

interest bearing account that is separate 

from any of the facility’s operating 

accounts and all interest earned on that 

separate account must be credited to 

resident’s account balance. With respect 

to any other personal funds, the facility 

must maintain such funds in a noninterest bearing account or petty cash 

fund. 42 U.S.C. 1396r(c)(6)(B)(i). 

• The facility must assure a full and 

complete separate accounting of each 

resident’s personal funds, maintain a 

written record of all financial 

transactions involving the personal 

funds of a resident deposited with the 

facility, and afford the resident (or a 

legal representative of the resident) 

reasonable access to such record. 42 

U.S.C. 1396r(c)(6)(B)(ii). 

• The facility must notify each 

resident receiving medical assistance 

under the state plan when the amount 

in the resident’s account reaches $200 

less than the dollar amount determined 

under 42 U.S.C. 1382(a)(3)(B) and of the 

fact that, if the amount in the account 

(in addition to the value of the 

resident’s other nonexempt resources) 

reaches the amount determined under 

such section, the resident may lose 

eligibility for such medical assistance or 

for certain other benefits. 42 U.S.C. 

1396r(c)(6)(B)(iii). 

To protect personal funds of residents 

deposited with a nursing facility, the 

nursing facility must purchase a 

security bond to assure the security of 

all personal funds. 42 U.S.C. 

1396r(c)(6)(C). Lastly, nursing facilities 

cannot charge anything for these 

services. A facility may not impose a 

charge against the personal funds of a 

resident for any item or service for 

which payment is made under Medicare 

or Medicaid. 42 U.S.C. 1396r(c)(6)(D). It 

can only offset the bank service fee on 

the patient fund account against the 

interest earned. 

In light of the extensive protections 

provided to residents of nursing 

facilities whose funds are maintained in 

resident trust or patient fund accounts, 

we believe it is appropriate to permit 

the delivery of Federal benefit payments 

to these accounts, which are typically 

master/sub accounts. We are therefore 

requesting comment on a proposed 

amendment to the existing ‘‘in the name 

of the recipient’’ requirement in order to 

permit payments to be deposited into 

resident trust or patient fund accounts 

established by nursing facilities. 

2. Accounts for Members of Religious 

Orders Who Have Taken Vows of 

Poverty 

SSA’s Federal Register notice 

regarding master/sub accounts 

specifically requested comment on 

accounts established by religious orders 

for members of such orders who have 

taken vows of poverty. The comments 

received did not indicate that there are 

any problems associated with these 

accounts, and commenters 

recommended that they be permitted. 

Accordingly, we are proposing to allow 

payments disbursed to a member of a 

religious order who has taken a vow of 

poverty to be deposited to an account 

established by the religious order. 

For purposes of defining who is a 

‘‘member of a religious order who has 

taken a vow of poverty,’’ we are 

proposing to utilize existing guidance 

issued by the Internal Revenue Service 

(IRS). The treatment for Federal tax 

purposes of services performed by a 

member of a religious order who has 

taken a vow of poverty is addressed in 

IRS Publication 517 (2008). For 

example, IRS Publication 517 states that 

a member of a religious order who has 

taken a vow of poverty is exempt from 

Self-Employment (SE) tax on earnings 

for services performed for the member’s 

church or its agencies. For purposes of 

Federal income tax withholding and 

employment tax (FICA), a member of a 

religious order who has taken a vow of 

poverty may be entitled to receive 

Social Security benefits if the order (or 

an autonomous subdivision of the order) 

has elected coverage for its current and 

future vow-of-poverty members. In that 

case, the religious order pays all FICA 

taxes, including the employee’s share. 

See IRS Publication 517 (2008). 

Organizations and individuals may 

request rulings from IRS on whether 

they are religious orders, or members of 

a religious order, respectively, for FICA, 

SE tax and Federal income tax 

withholding purposes. We request 

comment on whether it is appropriate to 

define the phrase ‘‘member of a religious 

order who has taken a vow of poverty’’ 

in the same way that the phrase would 

be defined by IRS for Federal tax 

purposes. 

3. Prepaid Debit and Stored Value Card 

Accounts 

The utilization of prepaid debit cards 

and stored value cards has expanded 

substantially over the last decade, and 

cards have become a vital payment 

delivery mechanism for the underbanked. Typically, prepaid card 

programs are set up so that cardholders’ 

funds are pooled in a master account 

with each individual cardholder having 

a subaccount established in the 

underlying records maintained by the 

financial institution. Thus, in most 

cases the individual cardholder’s name 

is not on the title of the deposit account 

in which the funds are held, even 

though the cardholder’s name may be 


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embossed on the card itself. We believe 

that the ‘‘in the name of the recipient’’ 

requirement may be impeding the use of 

prepaid card programs that may be 

beneficial to the unbanked and 

underbanked populations. In view of 

developments in the prepaid and stored 

value card industry during the past ten 

years, we are proposing to add an 

exception to the ‘‘in the name of the 

recipient’’ requirement of § 210.5 to 

adjust to the changing payment 

environment and the financial products 

that support the private sector. As part 

of this proposal, we are seeking 

comment on whether the ‘‘in the name 

of the recipient’’ requirement unduly 

hampers account options for Federal 

payment recipients. We request 

comment from consumers and 

consumer groups, industry associations, 

Federal agencies, financial institutions 

and payment services providers on this 

issue. 

The ‘‘in the name of the recipient’’ 

requirement was put in place to ensure 

that the payment reaches the intended 

recipient through a deposit account, and 

that the recipient has the usual 

consumer control and protections 

associated with a deposit account. We 

believe that account structures 

underlying prepaid and stored value 

cards can be set up to ensure that the 

recipient receives and has control of 

payments, even if the cardholder’s name 

is not on the account title in which the 

funds are held. In this regard, we have 

taken into consideration the Federal 

Deposit Insurance Corporation’s (FDIC) 

issuance in 2008 of New General 

Counsel’s Opinion No. 8 (GC8). See 73 

FR 67155. The FDIC’s Legal Division, 

noting that stored value cards now 

commonly serve as the delivery 

mechanism for vital funds such as 

employee payroll and government 

payments such as benefits and tax 

refunds, clarified that deposit insurance 

coverage would be provided to the 

holders of prepaid and stored value 

cards. The FDIC’s Legal Division 

concluded that funds underlying 

prepaid and stored value cards that are 

held for cardholders’ benefit at insured 

depository institutions should always be 

treated as deposits, without regard to 

whether the funds are accessed by a 

plastic card or a paper check. Under 

GC8, all funds underlying stored value 

cards and other nontraditional access 

mechanisms will be treated as 

‘‘deposits’’ to the extent that the funds 

have been placed at an insured 

depository institution. If cardholders’ 

funds are commingled in a pooled 

account, each cardholder will be treated 

as the insured owner of the funds held 

on his or her behalf in the pooled 

account, provided that the three 

requirements for pass-through insurance 

are met. Those requirements are: 

(1) The account records of the insured 

depository institution must disclose the 

existence of the agency or custodial 

relationship. This requirement can be 

met by opening the account under a title 

such as: ‘‘ABC Company as Custodian 

for Cardholders;’’ 

(2) The records of the insured 

depositor institution or records 

maintained by the custodian or other 

party must disclose the identities of the 

actual owners and the amount owned by 

each such owner; and 

(3) The funds in the account actually 

must be owned (under the agreements 

among the parties or applicable law) by 

the purported owners and not by the 

custodian or other party. See GC8, 73 

FR67157. See 73 FR 67155, 67157. 

We are proposing to allow the 

delivery of Federal payments to prepaid 

and stored value card accounts, 

provided that the card bears the 

cardholder’s name and meets the 

following requirements: 

• The account accessed by the card is 

held at an insured depository institution 

and meets the requirements for passthrough insurance under 12 CFR part 

330 such that the cardholder’s balance 

is FDIC insured to the extent permitted 

by law; and 

• The card account constitutes an 

‘‘account’’ as defined in 12 CFR 205.2(b) 

such that the consumer protections of 

Regulation E apply to the cardholder. 

Stored value or prepaid cards that do 

not meet the foregoing requirements 

would not fall under the proposed 

exception. For example, some 

merchants, such as book stores and 

coffee shops, offer prepaid cards that 

function in the same manner as gift 

certificates. These cards do not typically 

bear the cardholder’s name, do not 

provide access to money at a depository 

institution and do not meet the FDIC’s 

requirements for pass-through 

insurance. See 73 FR 67156. These types 

of cards also are not covered by the 

Federal Reserve’s Regulation E. 

Therefore, they could not be used to 

deliver certain Federal payments, such 

as Federal benefit payments. 

We request comment on the 

implications of allowing delivery of 

Federal benefit payments to accounts 

that meet the requirements listed above. 

We are mindful of concerns that account 

arrangements may be structured to 

facilitate payday lending and similar 

arrangements that are inappropriate for 

Federal benefit recipients, and we are 

particularly interested in comment on 

whether the consumer protections 

required in the proposed exceptions are 

adequate to prevent potential abuses. In 

addition, we request comment on 

whether to revise the wording in 31 CFR 

210.5(a) which provides that ‘‘an ACH 

credit entry representing a Federal 

payment other than a vendor payment 

shall be deposited into a deposit 

account at a financial institution.’’ We 

are considering revising that sentence to 

read ‘‘an ACH credit entry representing 

a Federal payment other than a vendor 

payment shall be deposited into a 

deposit account held by a financial 

institution and directly accessible by the 

recipient.’’ The purpose of the revision 

would be to make it clear that accounts 

established by payday lenders or other 

third parties under terms that prevent 

the recipient from being able to freely 

withdraw or access funds in the account 

do not satisfy the requirements of 31 

CFR 210.5. 

III. Section-by-Section Analysis 

In order to incorporate in Part 210 the 

ACH rule changes that we are accepting, 

we are replacing references to the 2007 

ACH Rules book with references to the 

2009 ACH Rules book. No change to 

Part 210 is necessary in order to exclude 

the amendments to the rules 

enforcement provisions, since Part 210 

already provides that the rules 

enforcement provisions of Appendix 11 

of the ACH Rules do not apply to 

Federal agency ACH transactions. See 

§ 210.2(d). 

§ 210.2(d) 

We are proposing to amend the 

definition of applicable ACH Rules at 

§ 210.2(d) to reference the rules 

published in NACHA’s 2009 Rules book 

rather than the rules published in 

NACHA’s 2007 Rules book. Proposed 

§ 210.2(d)(6) is revised to reflect a 

numbering change to the ACH Rules 

pursuant to which former ACH Rule 

2.11.2.3 is now ACH Rule 2.12.2.3. In 

addition, we are proposing to revise 

210.2(d)(7) to remove a reference to 

former ACH Rule 2.13.3, which required 

reporting regarding unauthorized 

Telephone-Initiated entries. NACHA has 

replaced that reporting requirement 

with a broader reporting requirement 

which we are proposing not to adopt. 

Proposed § 210.2(d)(7) sets forth ACH 

Rule 2.18, which contains those broader 

reporting requirements and which we 

are proposing not to adopt. 

Proposed § 210.2(d)(8) has been added 

in order to exclude entries other than 

Federal benefit payments delivered to 

Mexico, Canada and Panama through 

the FedGlobalSM ACH Payment Service 


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27246 Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 

from ACH Rule 2.11 (International ACH 

Transactions) until January 1, 2012. 

§ 210.3(b) 

We are proposing to amend § 210.3(b) 

by replacing the references to the ACH 

Rules as published in the 2007 Rules 

book with references to the ACH Rules 

as published in the 2009 Rules book. 

§ 210.5(b) 

We are proposing to redesignate 

paragraph (b)(5) as paragraph (b)(8) and 

to add new paragraphs (b)(5), (b)(6) and 

(b)(7), which create additional 

exceptions to the requirement in 

paragraph (a) that all payments other 

than vendor payments be delivered to 

an account in the name of the recipient. 

Proposed paragraph (b)(5) would allow 

payments disbursed to a resident of a 

nursing facility, as defined in 42 U.S.C. 

1396r, to be deposited into a resident 

trust or patient fund account established 

by the nursing facility. Proposed 

paragraph (b)(6) would allow payments 

disbursed to a member of a religious 

order who has taken a vow of poverty 

to be deposited to an account 

established by the religious order. 

Proposed paragraph (b)(7) would allow 

payments to be deposited to an account 

accessed through a stored value card, 

prepaid card or similar card that bears 

the cardholder’s name and meets certain 

requirements. The requirements include 

that the account meets the FDIC’s passthrough insurance requirements so that 

cardholder’s balance is FDIC insured to 

the cardholder, and that the card 

constitutes an ‘‘account’’ for purposes of 

requiring compliance with the Federal 

Reserve’s Regulation E. 

§ 210.10 

Proposed § 210.10(a) retains certain 

provisions not affected by the proposed 

changes to the reclamation process. 

RDFIs must return all payments after 

becoming aware of the death or 

incapacity of a recipient. Also, an RDFI 

must notify an agency issuing payments 

if it learns of the death or legal 

incapacity of a recipient or beneficiary 

from a source other than the agency. 

Proposed § 210.10(b) sets forth the 

automated reclamation process for 

payments not exceeding the 45-day 

Amount. Proposed § 210.10(c) sets forth 

the process for payments exceeding the 

45-day Amount, which is unchanged 

from the current process. 

Proposed §§ 210.10(d), 210.10(e) and 

210.10(f) contain the language currently 

located in current §§ 210.10(c), 

210.10(d) and 210.10(e), without any 

changes. Proposed § 210.10(f) sets forth 

the procedure by which financial 

institutions can protest a debit carried 

out under proposed § 210.10(b). 

Proposed §§ 210.10(b) and (f) would 

not become effective until January 1, 

2012. 

§ 210.11 

We are proposing to amend 

§ 210.11(b)(3)(i) in order to require 

RDFIs to provide the name and lastknown address and phone number for 

account owners and others who have 

withdrawn, or were authorized to 

withdraw, funds from the account, as 

permitted by the Payment Transactions 

Integrity Act of 2008. This requirement 

applies only to reclamations for an 

amount exceeding the 45-day Amount. 

IV. Procedural Analysis 

Request for Comment on Plain Language 

Executive Order 12866 requires each 

agency in the Executive branch to write 

regulations that are simple and easy to 

understand. We invite comment on how 

to make the proposed rule clearer. For 

example, you may wish to discuss: (1) 

Whether we have organized the material 

to suit your needs; (2) whether the 

requirements of the rule are clear; or (3) 

whether there is something else we 

could do to make these rule easier to 

understand. 

Regulatory Planning and Review 

The proposed rule does not meet the 

criteria for a ‘‘significant regulatory 

action’’ as defined in Executive Order 

12866. Therefore, the regulatory review 

procedures contained therein do not 

apply. 

Regulatory Flexibility Act Analysis 

It is hereby certified that the proposed 

rule will not have a significant 

economic impact on a substantial 

number of small entities. The proposed 

changes to the regulation related to 

automating reclamations may nominally 

reduce costs for financial institutions, 

including financial institutions that are 

small entities, because the costs of 

completing reclamation forms and 

mailing them back to Treasury would be 

eliminated. However, the economic 

impact of this cost reduction would be 

minimal. Accordingly, a regulatory 

flexibility analysis under the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) is 

not required. 

Unfunded Mandates Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, 2 U.S.C. 

1532 (Unfunded Mandates Act), 

requires that the agency prepare a 

budgetary impact statement before 

promulgating any rule likely to result in 

a Federal mandate that may result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. If a budgetary impact 

statement is required, section 205 of the 

Unfunded Mandates Act also requires 

the agency to identify and consider a 

reasonable number of regulatory 

alternatives before promulgating the 

rule. We have determined that the 

proposed rule will not result in 

expenditures by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. Accordingly, we have 

not prepared a budgetary impact 

statement or specifically addressed any 

regulatory alternatives. 

List of Subjects in 31 CFR Part 210 

Automated Clearing House, Electronic 

funds transfer, Financial institutions, 

Fraud, and Incorporation by reference. 

For the reasons set out in the 

preamble, we propose to amend 31 CFR 

part 210 as follows: 

PART 210—FEDERAL GOVERNMENT 

PARTICIPATION IN THE AUTOMATED 

CLEARING HOUSE 

1. The authority citation for part 210 

continues to read as follows: 

Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 

31 U.S.C. 321, 3301, 3302, 3321, 3332, 3335, 

and 3720. 

2. Revise § 210.2, paragraph (d), to 

read as follows: 

§ 210.2 Definitions. 

* * * * * 

(d) Applicable ACH Rules means the 

ACH Rules with an effective date on or 

before September 18, 2009, as published 

in Parts IV, V and VII of the ‘‘2009 ACH 

Rules: A Complete Guide to Rules & 

Regulations Governing the ACH 

Network’’ except: 

(1) ACH Rule 1.1 (limiting the 

applicability of the ACH Rules to 

members of an ACH association); 

(2) ACH Rule 1.2.2 (governing claims 

for compensation); 

(3) ACH Rules 1.2.4 and 2.2.1.12; 

Appendix Eight; and Appendix Eleven 

(governing the enforcement of the ACH 

Rules, including self-audit 

requirements); 

(4) ACH Rules 2.2.1.10; 2.6; and 4.8 

(governing the reclamation of benefit 

payments); 

(5) ACH Rule 9.3 and Appendix Two 

(requiring that a credit entry be 

originated no more than two banking 

days before the settlement date of the 

entry—see definition of ‘‘Effective Entry 

Date’’ in Appendix Two); 

(6) ACH Rule 2.12.2.3 (requiring that 

originating depository financial 


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institutions (ODFIs) establish exposure 

limits for Originators of Internetinitiated debit entries); 

(7) ACH Rule 2.18 (requiring reporting 

and reduction of high rates of entries 

returned as unauthorized); and 

(8) ACH Rule 2.11 (International ACH 

Transactions), which shall not apply 

until January 1, 2012 to entries other 

than Federal benefit payments delivered 

to Mexico, Canada and Panama through 

the FedGlobalSM ACH Payment Service. 

* * * * * 

3. Revise § 210.3, paragraph (b), to 

read as follows: 

* * * * * 

(b) Incorporation by reference— 

applicable ACH Rules. 

(1) This part incorporates by reference 

the applicable ACH Rules, including 

rule changes with an effective date on 

or before September 18, 2009, as 

published in Parts IV, V, and VII of the 

‘‘2009 ACH Rules: A Complete Guide to 

Rules & Regulations Governing the ACH 

Network.’’ The Director of the Federal 

Register approves this incorporation by 

reference in accordance with 5 U.S.C. 

552(a) and 1 CFR part 51. Copies of the 

‘‘2009 ACH Rules’’ are available from 

NACHA—The Electronic Payments 

Association, 13450 Sunrise Valley 

Drive, Suite 100, Herndon, Virginia 

20171. Copies also are available for 

public inspection at the Office of the 

Federal Register, 800 North Capitol 

Street, NW., Suite 700, Washington, DC 

20002; and the Financial Management 

Service, 401 14th Street, SW., Room 

400A, Washington, DC 20227. 

(2) Any amendment to the applicable 

ACH Rules that is approved by 

NACHA—The Electronic Payments 

Association after January 1, 2009, shall 

not apply to Government entries unless 

the Service expressly accepts such 

amendment by publishing notice of 

acceptance of the amendment to this 

part in the Federal Register. An 

amendment to the ACH Rules that is 

accepted by the Service shall apply to 

Government entries on the effective date 

of the rulemaking specified by the 

Service in the Federal Register notice 

expressly accepting such amendment. 

* * * * * 

4. In § 210.5, redesignate paragraph 

(b)(5) as (b)(8) and add new paragraphs 

(b)(5), (b)(6) and (b)(7), to read as 

follows: 

§ 210.5 Account requirements for Federal 

payments. 

* * * * * 

(b) * * * 

(5) Where a Federal payment is 

disbursed to a resident of a nursing 

facility as defined in 42 U.S.C. 1396r, 

the payment may be deposited into a 

resident trust or patient fund account 

established by the nursing facility. 

(6) Where a Federal payment is 

disbursed to a member of a religious 

order who has taken a vow of poverty, 

the payment may be deposited to an 

account established by the religious 

order. As used in this paragraph, the 

phrase ‘‘member of a religious order who 

has taken a vow of poverty’’ is defined 

as it would be by the Internal Revenue 

Service for Federal tax purposes. 

(7) Where a Federal payment is to be 

deposited to an account accessed 

through a stored value card, prepaid 

card or similar card that bears the 

cardholder’s name and meets the 

following requirements: 

(i) The account accessed by the card 

is held at an insured depository 

institution and meets the requirements 

for pass through insurance under 12 

CFR part 330 such that the cardholder’s 

balance is FDIC insured to the extent 

permitted by law; and 

(ii) The card account constitutes an 

‘‘account’’ as defined in 12 CFR 205.2(b) 

such that the consumer protections of 

Regulation E apply to the cardholder. 

* * * * * 

5. Revise § 210.10 to read as follows: 

§ 210.10 RDFI liability. 

(a) RDFI obligations. An RDFI must 

return any benefit payments received 

after RDFI becomes aware of the death 

or legal incapacity of a recipient or the 

death of a beneficiary, regardless of the 

manner in which the RDFI discovers 

such information. If the RDFI learns of 

the death or legal incapacity of a 

recipient or death of a beneficiary from 

a source other than notice from the 

agency issuing payments to the 

recipient, the RDFI must immediately 

notify the agency of the death or 

incapacity. The proper use of the R15 or 

R14 return reason code shall be deemed 

to constitute such notice. 

(b) Liability for 45-day Amount. An 

RDFI is liable to the Federal 

Government for the full amount of all 

benefit payments received by the RDFI 

from an agency within 45 days after the 

death or legal incapacity of the recipient 

or death of the beneficiary (45-day 

Amount). When an agency notifies the 

Service that benefit payments in an 

amount not exceeding the 45-day 

Amount were originated to a deceased 

or incapacitated recipient, the Service 

will instruct the appropriate Federal 

Reserve Bank to debit the RDFI’s reserve 

account for the 45-day Amount. The 

Service will notify the RDFI at least 30 

days prior to the debit. If the RDFI 

returns the amount specified in the 

notice during the 30-day period, the 

Service will not proceed with the debit. 

If the RDFI files a reclamation dispute 

notice during the 30-day period before 

the debit is carried out, the Service will 

not proceed with the debit until a final 

decision has been reached, in 

accordance with paragraph (g), that the 

debit is proper. 

(c) Liability for amounts exceeding 45- 

day Amount. An RDFI is liable to the 

Federal Government for the full amount 

of all benefit payments received by the 

RDFI after 45 days following the death 

or legal incapacity of the recipient or 

death of the beneficiary unless the RDFI 

has the right to limit its liability under 

210.11 of this part. When an agency 

notifies the Service that benefit 

payments in an amount exceeding the 

45-day Amount were originated to a 

deceased or incapacitated recipient, the 

Service will send a notice of 

reclamation to the RDFI. Upon receipt of 

the notice of reclamation, the RDFI must 

provide the information required by the 

notice of reclamation and return the 

amount specified in the notice of 

reclamation in a timely manner. 

(d) Exception to liability rule. An 

RDFI shall not be liable for post-death 

benefit payments sent to a recipient 

acting as a representative payee or 

fiduciary on behalf of a beneficiary, if 

the beneficiary was deceased at the time 

the authorization was executed and the 

RDFI did not have actual or constructive 

knowledge of the death of the 

beneficiary. 

(e) Time limits. An agency that 

initiates a request for a reclamation 

must do so within 120 calendar days 

after the date that the agency first has 

actual or constructive knowledge of the 

death or legal incapacity of a recipient 

or the death of a beneficiary. An agency 

may not reclaim any post-death or postincapacity payment made more than six 

years prior to the date of the notice of 

reclamation; provided, however, that if 

the account balance at the time the RDFI 

receives the notice of reclamation 

exceeds the total amount of post-death 

or post-incapacity payments made by 

the agency during such six-year period, 

this limitation shall not apply and the 

RDFI shall be liable for the total amount 

of all post-death or post-incapacity 

payments made, up to the amount in the 

account at the time the RDFI receives 

the notice of reclamation and has had a 

reasonable opportunity to act on the 

notice (not to exceed one business day). 

(f) Debit of RDFI’s account. If an RDFI 

does not return the full amount of the 

outstanding total or any other amount 

for which the RDFI is liable under this 

subpart in a timely manner, the Federal 

Government will collect the amount 

outstanding by instructing the 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
27248 Federal Register / Vol. 75, No. 93 / Friday, May 14, 2010 / Proposed Rules 

appropriate Federal Reserve Bank to 

debit the account utilized by the RDFI. 

The Federal Reserve Bank will provide 

advice of the debit to the RDFI. 

(g) Reclamation disputes. Where the 

Service, in accordance with paragraph 

(b) of this section, has instructed a 

Federal Reserve Bank to debit the 

account of a financial institution for the 

45-day Amount, the financial institution 

may file a dispute notice challenging the 

reclamation. A dispute notice filed 

under this paragraph must be in writing, 

and must be sent to the Claims Manager, 

Department of the Treasury, Financial 

Management Service, at the address 

listed on the notice of the debit, or to 

such other address as the Service may 

publish in the Green Book. The 

reclamation dispute notice must include 

supporting documentation. The Service 

will not consider reclamation dispute 

notices received more than 90 days after 

the date on which the financial 

institution’s reserve account was 

debited. The Claims Manager, or an 

authorized designee, will make every 

effort to decide any dispute notice 

submitted under this section within 60 

days. If it is not possible to render a 

decision within 60 days, the Claims 

Manager or an authorized designee will 

notify the financial institution of the 

delay and may take up to an additional 

60 days to render a decision. If, based 

on the evidence provided, the Claims 

Manager, or an authorized designee, 

finds that the financial institution has 

proved, by a preponderance of the 

evidence, that debit was improper or 

excessive, the Service will notify the 

financial institution in writing and, 

within ten days of the decision, recredit 

the financial institution’s reserve 

account for the amount improperly 

debited. Such notice shall serve as the 

final agency determination under the 

Administrative Procedure Act (5 U.S.C. 

701 et seq.). No civil suit may be filed 

until the financial institution has filed 

a dispute notice under this section, and 

the Service has provided notice of its 

final determination. 

6. Revise § 210.11, paragraph (b)(3)(i) 

to read as follows: 

§ 210.11 Limited liability. 

* * * * * 

(b) * * * 

(3)(i) Provide the name and last 

known address and phone number of 

the following person(s): 

(A) The recipient and any co-owner(s) 

of the recipient’s account; 

(B) All other person(s) authorized to 

withdraw funds from the recipient’s 

account; and 

(C) All person(s) who withdrew funds 

from the recipient’s account after the 

death or legal incapacity of the recipient 

or death of the beneficiary. 

* * * * * 

Dated: May 10, 2010. 

Richard L. Gregg, 

Acting Fiscal Assistant Secretary. 

[FR Doc. 2010–11492 Filed 5–13–10; 8:45 am] 

BILLING CODE 4810–35–P 

LIBRARY OF CONGRESS 

Copyright Office 

37 CFR Part 201 

Gap in Termination Provisions; Inquiry 

AGENCY: Copyright Office, Library of 

Congress. 

ACTION: Notice of public inquiry; request 

for comments; extension of comment 

period. 

SUMMARY: The Copyright Office is 

extending the time in which reply 

comments may be filed on the topic of 

the application of Title 17 to the 

termination of certain grants of transfers 

or licenses of copyright, specifically 

those for which execution of the grant 

occurred prior to January 1, 1978 and 

creation of the work occurred on or after 

January 1, 1978. 

DATES: The comment period for initial 

comments on the Notice of Inquiry and 

Requests for Comments published on 

March 29, 2010 (75 FR 15390) closed on 

April 30, 2010. Reply comments are due 

on or before May 21, 2010. 

ADDRESSES: The Copyright Office 

strongly prefers that comments be 

submitted electronically. A comment 

page containing a comment form is 

posted on the Copyright Office Web site 

at http://www.copyright.gov/docs/ 

termination. The Web site interface 

requires submitters to complete a form 

specifying name and organization, as 

applicable, and to upload comments as 

an attachment via a browse button. To 

meet accessibility standards, all 

comments must be uploaded in a single 

file in either the Adobe Portable 

Document File (PDF) format that 

contains searchable, accessible text (not 

an image); Microsoft Word; 

WordPerfect; Rich Text Format (RTF); or 

ASCII text file format (not a scanned 

document). The maximum file size is 6 

megabytes (MB). The name of the 

submitter and organization should 

appear on both the form and the face of 

the comments. All comments will be 

posted publicly on the Copyright Office 

web site exactly as they are received, 

along with names and organizations. If 

electronic submission of comments is 

not feasible, please contact the 

Copyright Office at 202–707–1027 for 

special instructions. 

FOR FURTHER INFORMATION CONTACT: 

Maria Pallante, Associate Register, 

Policy and International Affairs, by 

telephone at 202–707–1027 or by 

electronic mail at mpall@loc.gov. 

SUPPLEMENTARY INFORMATION: The 

United States Copyright Office is 

extending the reply comment period for 

commenting on the topic of the 

application of Title 17 to the 

termination of certain grants of transfers 

or licenses of copyright, specifically 

those for which execution of the grant 

occurred prior to January 1, 1978 and 

creation of the work occurred on or after 

January 1, 1978. This action is being 

taken in order to allow interested parties 

adequate time to give input on this 

important issue. Reply comments are 

due by 5 p.m. on May 21, 2010. 

Subject of Inquiry 

The Copyright Office seeks comment 

on the question of whether and how 

Title 17 provides a termination right to 

authors (and other persons specified by 

statute) when the grant was made prior 

to 1978 and the work was created on or 

after January 1, 1978. For purposes of 

illustration, please note the following 

examples: 

Example 1: A composer signed an 

agreement with a music publisher in 1977 

transferring the copyrights to future musical 

compositions pursuant to a negotiated fee 

schedule. She created numerous 

compositions under the agreement between 

1978 and 1983, some of which were 

subsequently published by the publishertransferee. Several of these achieved 

immediate popular success and have been 

economically viable ever since. The original 

contract has not been amended or 

superseded. 

Example 2: A writer signed an agreement 

with a book publisher in 1977 to deliver a 

work of nonfiction. The work was completed 

and delivered on time in 1979 and was 

published in 1980. The book’s initial print 

run sold out slowly, but because the author’s 

subsequent works were critically acclaimed, 

it was released with an updated cover last 

year and is now a best seller. The rights 

remained with the publisher all along and 

the original royalty structure continues to 

apply. 

Questions 

In order to better understand the 

application of sections 304(c), 304(d) 

and 203 to the grants of transfers and 

licenses discussed above, the Copyright 

Office seeks comments as follows: 

A. Experience. Please describe any 

experience you have in exercising or 

negotiating termination rights for pre1978 grants of transfers or licenses for 


emcdonald on DSK2BSOYB1PROD with PROPOSALS