This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

65599

Vol. 60, No. 244

Wednesday, December 20, 1995

1 In a rulemaking issued on August 24, 1995 (60

FR 44144), the effective date of Subpart B has been

delayed until April 1, 1996.

FEDERAL RESERVE SYSTEM

12 CFR Part 219

[Regulation S; Docket No. R–0906]

Reimbursement for Providing Financial

Records; Recordkeeping

Requirements for Certain Financial

Records

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Proposed rule.

SUMMARY: The Board of Governors of the

Federal Reserve System (Board) is

proposing amendments to Subpart A of

Regulation S, which implements the

requirement under the Right to

Financial Privacy Act (RFPA) that the

Board establish the rates and conditions

under which payment shall be made by

a government authority to a financial

institution for assembling or providing

financial records pursuant to RFPA.

These proposed amendments update the

fees to be charged and streamlines the

subpart generally.

DATES: Comments must be submitted on

or before February 20, 1996.

ADDRESSES: Comments should refer to

Docket No. R–0906, and may be mailed

to William W. Wiles, Secretary, Board of

Governors of the Federal Reserve

System, 20th Street and Constitution

Avenue, N.W., Washington, D.C. 20551.

Comments also may be delivered to

Room B–2222 of the Eccles Building

between 8:45 a.m. and 5:15 p.m.

weekdays, or to the guard station in the

Eccles Building courtyard on 20th

Street, N.W. (between Constitution

Avenue and C Street) at any time.

Comments received will be available for

inspection in Room MP–500 of the

Martin Building between 9:00 a.m. and

5:00 p.m. weekdays, except as provided

in 12 CFR 261.8 of the Board’s rules

regarding availability of information.

FOR FURTHER INFORMATION CONTACT:

Elaine M. Boutilier, Senior Counsel

(202/452–2418), Legal Division, Board

of Governors of the Federal Reserve

System, Washington, DC 20551. For

users of the Telecommunication Device

for the Deaf (TDD), please contact

Dorothea Thompson (202/452–3544).

SUPPLEMENTARY INFORMATION:

Background

Section 1115 of the RFPA (12 U.S.C.

3415) requires the Board to establish, by

regulation, the rates and conditions

under which payment is made by a

Government authority to a financial

institution for searching for,

reproducing, or transporting data

required or requested under the RFPA.

Shortly after the RFPA was adopted, the

Board issued Regulation S (12 CFR 219)

to implement this provision (44 FR

55812, September 28, 1979). No changes

to the rates have been made since that

time. In January 1995, the Board

adopted a new Subpart B of Regulation

S (to become effective on January 1,

1996 1) and designated this part of

Regulation S as Subpart A. 60 FR 231

(January 3, 1995) No substantive

changes were made to the newly

designated Subpart A. Pursuant to

section 303 of the Riegle Community

Development and Regulatory

Improvement Act of 1994, Pub. L. 103–

325 (12 U.S.C. 4803), the Board has

reviewed Subpart A of Regulation S and

proposes to update it through these

amendments. These amendments

streamline the regulation by eliminating

unnecessary provisions, and they

update the rates to be paid and the

exceptions to the provisions of this

Subpart.

I. Definitions

The definitions in Subpart A reiterate

the statutory definitions from the RFPA

for the applicable terms of this Subpart.

The definition for ‘‘directly incurred

costs’’ has been removed and

incorporated into the section concerning

cost reimbursement.

II. Cost Reimbursement

This section has been streamlined and

reorganized to place the rates in a

separate Appendix A for clarity and

ease of amendment when updating the

rates. The proposed amendments also

recognize that courts issuing orders or

subpoenas in connection with grand

jury proceedings must pay the rates set

by Subpart A.

III. Rates

The Board is particularly interested in

receiving comments on the rates

proposed in Appendix A. It is difficult

to establish rates to be applied across all

geographic regions and to all depository

institutions, regardless of size. While

recognizing this difficulty, the Board

nevertheless proposes a uniform rate in

the belief that administration of a

complex fee schedule would be

difficult.

A. Reproduction

The rates proposed for reproduction

are the same rates used by the Board to

charge requesters seeking documents

under the Freedom of Information Act

(FOIA). The Board establishes its FOIA

fees based upon the actual costs of

making such reproductions and believes

that these costs are similar to those

incurred by other entities. The Board

welcomes comments on the

appropriateness of the proposed fees

and any suggested alternative methods

of determining the fees.

B. Search and Processing

The proposed fees for search and

processing are separated into two

categories—clerical/technical and

manager/supervisory. Any search for

sensitive customer records is likely to

involve both clerical staff and

managerial staff, who are paid at

different levels. The rates set for this

reimbursement were calculated using

the 1994 Bank Cash Compensation

Survey done by the Bank

Administration Institute. Based upon

the job descriptions in the Cash

Compensation Survey, the position of

Supervisor, Bookkeeping was used to

calculate the managerial rate. The

calculation was made based upon the

total compensation (with bonus) for all

banks on a national average ($27,600)

divided by 2080 hours, adjusted up by

25% to cover benefits, and further

adjusted by 3% for inflation since 1994.

The clerical rate was calculated in the

same way, but using an average of the

two job positions of Clerk II

(Bookkeeping and Operations @

$18,100) and Clerk I (Bookkeeping and

Operations @ $15,100). The Board is

very interested in receiving comments

on the rates and the method of

calculation.
65600 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Proposed Rules

IV. Exceptions

This section has been updated to

reflect changes in the exceptions listed

by the RFPA.

V. Conditions for Payment and Payment

Procedures

No substantive changes have been

made to these two sections.

Regulatory Flexibility Act

Pursuant to 5 U.S.C. 605, the Board

certifies that this proposed rule, if

adopted, will not have a significant

economic impact on a substantial

number of small entities. The proposed

rule confers a benefit on financial

institutions, including small financial

institutions, by providing for

reimbursement of certain costs incurred

in complying with a requirement to

assemble and produce financial records.

Paperwork Reduction Act

In accordance with section 3506 of

the Paperwork Reduction Act of 1995

(44 U.S.C. Ch. 35; 5 CFR 1320 Appendix

A.1), the Board reviewed the proposed

rule under the authority delegated to the

Board by the Office of Management and

Budget. Comments on the collections of

information should be sent to the Office

of Management and Budget, Paperwork

Reduction Project (7100–0203),

Washington, DC 20503, with copies of

such comments to be sent to Mary M.

McLaughlin, Federal Reserve Board

Clearance Officer, Division of Research

and Statistics, Mail Stop 97, Board of

Governors of the Federal Reserve

System, Washington, DC 20551.

The Right to Financial Privacy Act

mandates that each financial institution

maintain a record of instances in which

it releases a consumer’s financial

information to a government agency.

Generally, the institution may not

release records until the government

agency has notified the consumer of its

intent to request the record, together

with the reason for the request.

Normally, the agency may not obtain

records unless it has a subpoena, a

search warrant, or an authorization from

the consumer.

The Federal Reserve may not conduct

or sponsor, and an organization is not

required to respond to, this information

collection unless it displays a currently

valid OMB control number. The OMB

control number for the Recordkeeping

and Disclosure Requirements in

Connection with the Right to Financial

Privacy Act is 7100–0203.

Because the records would be

maintained at banks, no issue of

confidentiality under the Freedom of

Information Act arises.

This proposed regulation, 12 CFR 219,

has no effect upon the paperwork

burden associated with the

Recordkeeping and Disclosure

Requirements in Connection with the

Right to Financial Privacy Act. That

hour burden is estimated to be 22

minutes per response. It is estimated

that the frequency of response at state

member banks is 30 responses per year.

Thus the annual hour burden across the

975 state member banks is estimated to

be 10,725 hours. Based on an hourly

cost of $20, the annual cost to the public

is estimated to be $214,500.

List of Subjects in 12 CFR Part 219

Banks, banking, Currency, Federal

Reserve System, Foreign banking,

Reporting and recordkeeping

requirements.

For the reasons set out in the

preamble, 12 CFR Part 219, as amended

at 60 FR 231 and 44144 effective April

1, 1996, is proposed to be amended as

set forth below.

PART 219—REIMBURSEMENT FOR

PROVIDING FINANCIAL RECORDS;

RECORDKEEPING REQUIREMENTS

FOR CERTAIN FINANCIAL RECORDS

(REGULATION)

Subpart A—Reimbursement to

Financial Institutions for Providing

Financial Records

1. The authority citation for Subpart

A continues to read as follows:

Authority: 12 U.S.C. 3415

2. Subpart A is amended by revising

§§ 219.2 through 219.6 to read as

follows:

§ 219.2 Definitions.

For the purposes of this subpart, the

following definitions shall apply:

Customer means any person or

authorized representative of that person

who uses any service of a financial

institution, or for whom a financial

institution acts or has acted as a

fiduciary in relation to an account

maintained in the person’s name.

Customer does not include corporations

or partnerships comprised of more than

five persons.

Financial institution means any office

of a bank, savings bank, card issuer as

defined in section 103 of the Consumers

Credit Protection Act (15 U.S.C.

1602(n)), industrial loan company, trust

company, savings association, building

and loan, or homestead association

(including cooperative banks), credit

union, or consumer finance institution,

located in any State or territory of the

United States, the District of Columbia,

Puerto Rico, Guam, American Samoa, or

the Virgin Islands.

Financial record means an original or

copy of, or information known to have

been derived from, any record held by

a financial institution pertaining to a

customer’s relationship with the

financial institution.

Government authority means any

agency or department of the United

States, or any officer, employee or agent

thereof.

Person means an individual or a

partnership of five or fewer individuals.

§ 219.3 Cost reimbursement.

(a) Fees payable. Except as provided

in § 219.4, a government authority, or a

court issuing an order or subpoena in

connection with grand jury proceedings,

seeking access to financial records

pertaining to a customer shall reimburse

the financial institution for reasonably

necessary costs directly incurred in

searching for, reproducing or

transporting books, papers, records, or

other data as set forth in this section.

The reimbursement schedule for a

financial institution is set forth in

Appendix A to this section. If a

financial institution has financial

records that are stored at an

independent storage facility that charges

a fee to search for, reproduce, or

transport particular records requested,

these costs are considered to be directly

incurred by the financial institution and

may be included in the reimbursement.

(b) Search and processing costs. (1)

Reimbursement of search and

processing costs shall cover the total

amount of personnel time spent in

locating, retrieving, reproducing, and

preparing financial records for

shipment. Search and processing costs

shall not cover analysis of material or

legal advice.

(2) If itemized separately, search and

processing costs may include the actual

cost of extracting information stored by

computer in the format in which it is

normally produced, based on computer

time and necessary supplies; however,

personnel time for computer search may

be paid for only at the rates specified in

Appendix A to this section.

(c) Reproduction costs. The

reimbursement rates for reproduction

costs for requested documents are set

forth in Appendix A to this section.

Copies of photographs, films, computer

tapes, and other materials not listed in

Appendix A to this section are

reimbursed at actual cost.

(d) Transportation costs.

Reimbursement for transportation costs

shall be for the reasonably necessary

costs directly incurred to transport

personnel to locate and retrieve the
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Proposed Rules 65601

requested information, and to convey

such material to the place of

examination.

Appendix A to § 219.3—

Reimbursement Schedule

Reproduction:

Photocopy, per page .................... .15

Paper copies of microfiche, per

frame ......................................... .15

Duplicate microfiche, per microfiche ........................................... .30

Computer diskette ........................ 5.00

Search and Processing:

Clerical/Technical, hourly rate ... 11.00

Manager/Supervisory, hourly

rate ............................................. 17.00

§ 219.4 Exceptions.

A financial institution is not entitled

to reimbursement under this subpart for

costs incurred in assembling or

providing financial records or

information related to:

(a) Security interests, bankruptcy

claims, debt collection. Any financial

records provided as an incident to

perfecting a security interest, proving a

claim in bankruptcy, or otherwise

collecting on a debt owing either to the

financial institution itself or in its role

as a fiduciary.

(b) Government loan programs.

Financial records that are necessary to

permit the appropriate government

authority to carry out its responsibilities

under a government loan, loan guaranty

or loan insurance program.

(c) Nonidentifiable information.

Financial records that are not identified

with or identifiable as being derived

from the financial records of a particular

customer.

(d) Financial supervisory agencies.

Financial records disclosed to a

financial supervisory agency in the

exercise of its supervisory, regulatory, or

monetary functions with respect to a

financial institution.

(e) Internal Revenue summons.

Financial records disclosed in

accordance with procedures authorized

by the Internal Revenue Code.

(f) Federally required reports.

Financial records required to be

reported in accordance with any federal

statute or rule promulgated thereunder.

(g) Government civil or criminal

litigation. Financial records sought by a

government authority under the Federal

Rules of Civil or Criminal Procedure or

comparable rules of other courts in

connection with litigation to which the

government authority and the customer

are parties.

(h) Administrative agency subpoenas.

Financial records sought by a

government authority pursuant to an

administrative subpoena issued by an

administrative law judge in an

adjudicatory proceeding subject to 5

U.S.C. 554, and to which the

government authority and the customer

are parties.

(i) Investigation of financial

institution or its noncustomer. Financial

records sought by a government

authority in connection with a lawful

proceeding, investigation, examination,

or inspection directed at the financial

institution in possession of such

records, or at an entity that is not a

customer as defined in § 219.2.

(j) General Accounting Office

requests. Financial records sought by

the General Accounting Office pursuant

to an authorized proceeding,

investigation, examination, or audit

directed at a government authority.

(k) Federal Housing Finance Board

requests. Financial records or

information sought by the Federal

Housing Finance Board (FHFB) or any

of the Federal home loan banks in the

exercise of the FHFB’s authority to

extend credit to financial institutions or

others.

(l) Department of Veterans Affairs.

The disclosure of the name and address

of any customer to the Department of

Veterans Affairs where such disclosure

is necessary to, and used solely for, the

proper administration of benefits

programs under laws administered by

that Department.

§ 219.5 Conditions for payment.

(a) Direct costs. Payment shall be

made only for costs that are both

directly incurred and reasonably

necessary to provide requested material.

Search and processing, reproduction,

and transportation costs shall be

considered separately when

determining whether the costs are

reasonably necessary.

(b) Compliance with legal process,

request, or authorization. No payment

may be made to a financial institution

until it satisfactorily complies with the

legal process, the formal written request,

or the customer authorization. When the

legal process or formal written request

is withdrawn, or the customer

authorization is revoked, or where the

customer successfully challenges

disclosure to a grand jury or government

authority, the financial institution shall

be reimbursed for the reasonably

necessary costs incurred in assembling

the requested financial records prior to

the time the financial institution is

notified of such event.

(c) Itemized bill or invoice. No

reimbursement is required unless a

financial institution submits an

itemized bill or invoice specifically

detailing its search and processing,

reproduction, and transportation costs.

§ 219.6 Payment procedures.

(a) Notice to submit invoice. Promptly

following a service of legal process or

request, the court or government

authority shall notify the financial

institution that it must submit an

itemized bill or invoice in order to

obtain payment and shall furnish an

address for this purpose.

(b) Special notice. If a grand jury or

government authority withdraws the

legal process or formal written request,

or if the customer revokes the

authorization, or if the legal process or

request has been successfully

challenged by the customer, the grand

jury or government authority shall

promptly notify the financial institution

of these facts, and shall also notify the

financial institution that it must submit

an itemized bill or invoice in order to

obtain payment of costs incurred prior

to the time of the notice to the financial

institution receives this notice.

3. Section 219.7 is removed.

By order of the Board of Governors of the

Federal Reserve System, December 13, 1995.

William W. Wiles,

Secretary of the Board.

[FR Doc. 95–30725 Filed 12–19–95; 8:45 am]

BILLING CODE 6210–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 95–ACE–17]

Proposed Amendment to Class E

Airspace; Muscatine, IA

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: This notice proposes to

amend the Class E airspace area at

Muscatine Municipal Airport,

Muscatine, IA. The development of a

new Standard Instrument Approach

Procedure (SIAP) based on the relocated

Port City Very High Frequency

Omnidirectional Range/Distance

Measuring Equipment (VOR/DME), has

made the proposal necessary. The

intended effect of this proposal is to

provide additional controlled airspace

for aircraft executing the SIAP at

Muscatine Municipal Airport.

DATES: Comments must be received on

or before January 19, 1996.

ADDRESSES: Send comments on the

proposal in triplicate to: Manager, Air