This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

8133 

Vol. 81, No. 32 

Thursday, February 18, 2016 

1 15 U.S.C. 45 and 57a(a)(1). 

2 16 CFR 444.1–.5. 

3Section 18(f)(1) of the Act was previously 

codified at 15 U.S.C. 57a(f)(1). The Board was not 

required to impose substantially similar rules if it 

found that: (1) Such acts or practices of banks were 

not unfair or deceptive, or (2) implementation of 

similar regulations with respect to banks would 

seriously conflict with essential monetary and 

payments systems policies of the Board. 

4The same authority that was conferred to the 

Board by section 18(f)(1) of the Act also applied to 

the Federal Home Loan Bank Board (FHLBB) 

(predecessor to the Office of Thrift Supervision), 

with respect to savings associations, and to the 

National Credit Union Administration (NCUA), 

with respect to Federal credit unions. 

5 12 CFR part 227, subpart B. 

6 12 CFR 227.2. This provision listed an address 

to which consumers may send their complaint, and 

explained that consumers will receive, within 15 

business days, either a substantive response or an 

acknowledgment setting a reasonable time for a 

substantive response. 7 12 CFR 227.16. 

8http://www.federalreserve.gov/regulations/cg/

crdtpracrul.htm. 

9Public Law 111–203, 124 Stat. 1376 (Jul. 21, 

2010). 

10See section 1092(2) of the Dodd-Frank Act. The 

repeal of section 18(f)(1) of the FTC Act also 

repealed the authorities of the former FHLBB and 

the NCUA. See supra note 4. Section 1092(2) of the 

Dodd-Frank Act did not repeal FTC Act rule writing 

authority for the FTC, so the FTC Credit Practices 

Rule remains in effect. See supra note 2. 

11The Dodd-Frank Act transferred rule writing 

authority only for ‘‘Federal consumer financial 

laws,’’ but did not include the FTC Act in the 

definition of ‘‘Federal consumer financial law.’’ 

Therefore, Regulation AA was excluded from the 

authority that transferred from the Board to the 

Bureau. See Dodd-Frank Act sections 1061(a)(1), 

(b)(1) (transferring authority of ‘‘Federal consumer 

financial laws’’ to the Bureau) and section 1002(14) 

(defining ‘‘Federal consumer financial laws’’). 

12Section 1031 of the Dodd-Frank Act. 

13 79 FR 51115 (Aug. 27, 2014). 

FEDERAL RESERVE SYSTEM 

12 CFR Part 227 

[Docket No. R–1490; RIN 7100 AE–19] 

Unfair or Deceptive Acts or Practices 

(Regulation AA) 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (Board) is 

repealing its Regulation AA, which was 

issued pursuant to its rule writing 

authority under section 18(f)(1) of the 

Federal Trade Commission Act (FTC 

Act or Act). Section 1092(2) of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act) repealed section 18(f)(1) of the FTC 

Act, thus eliminating the Board’s rule 

writing authority under the Act. 

DATES: The final rule is effective March 

21, 2016. 

FOR FURTHER INFORMATION CONTACT: 

Mandie K. Aubrey, Counsel, Division of 

Consumer and Community Affairs, at 

(202) 452–3667, Board of Governors of 

the Federal Reserve System, 20th and C 

Streets NW., Washington, DC 20551. For 

users of Telecommunications Device for 

the Deaf (TDD) only, contact (202) 263– 

4869. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The FTC Act directs the Federal Trade 

Commission (FTC) to promulgate rules 

to define and prevent unfair or 

deceptive acts or practices for persons 

other than banks, savings and loans, and 

Federal credit unions.1 Pursuant to the 

Act, in 1984 the FTC issued its Credit 

Practices Rule, which applied to 

persons within the FTC’s jurisdiction.2

Prior to amendments to the FTC Act 

made by the Dodd-Frank Act in 2010, 

section 18(f)(1) of the FTC Act required 

the Board to promulgate rules 

applicable to banks that were 

‘‘substantially similar’’ to these FTC 

rules, with some exceptions.3 In 

addition, section 18(f)(1) of the Act 

provided the Board the authority to 

prescribe additional rules for banks 

addressing unfair or deceptive acts or 

practices—regardless of whether the 

FTC had promulgated rules about such 

acts or practices. The Act also required 

the Board to take appropriate action on 

complaints about unfair or deceptive 

acts or practices by banks.4

Pursuant to its rule writing authority 

in section 18(f)(1) of the FTC Act, the 

Board issued Regulation AA, including 

the Board’s credit practices rule, which 

was adopted in 1985.5 The Board’s 

credit practices rule was substantially 

similar to the FTC’s Credit Practices 

Rule; in adopting the rule, the Board 

relied on the extensive findings that had 

been made by the FTC that the 

prohibited practices were unfair or 

deceptive. 

The Board’s credit practices rule in 

Regulation AA prohibited banks from 

using certain remedies to enforce 

consumer credit obligations and from 

including these remedies in their 

consumer credit contracts. The rule also 

prohibited banks from: (1) Obligating a 

co-signer on the debt unless the cosigner previously received a clear and 

conspicuous written notice explaining 

the nature of the co-signer’s obligations 

and liabilities under the contract; and 

(2) imposing a late fee when a consumer 

makes a full loan payment on time or 

within the grace period, solely because 

the consumer did not pay a previous 

late fee imposed on an earlier 

installment (the ‘‘pyramiding’’ of late 

fees). 

In addition, Regulation AA contained 

a provision that informed consumers 

how to file a complaint regarding a state 

member bank and explained the Board’s 

procedure for responding to such 

complaints.6 Regulation AA also 

contained information regarding state 

exemptions from the credit practices 

rule.7 The Board published, separately 

from the regulation, Staff Guidelines to 

clarify how Regulation AA applied in 

particular circumstances.8

The Dodd-Frank Act 9 repealed 

section 18(f)(1) of the FTC Act.10 This 

legislative repeal of the Board’s 

rulemaking authority nullified the 

provisions in Regulation AA that were 

issued pursuant to that authority. 

Regulation AA did not transfer from the 

Board to the Consumer Financial 

Protection Bureau (Bureau) under the 

Dodd-Frank Act, as did other consumer 

protection laws and regulations.11 As a 

result, neither the Board nor the Bureau 

has authority to promulgate rules 

pursuant to the FTC Act. The Bureau, 

however, was given separate authority 

under the Dodd-Frank Act to 

promulgate rules to identify unfair, 

deceptive, or abusive acts or practices.12

In August 2014, the Board published 

a proposal to repeal Regulation AA 

(Proposed Rule).13 Simultaneously with 

the proposed repeal of Regulation AA, 

the Board joined the Bureau, Federal 

Deposit Insurance Corporation, NCUA, 

and Office of the Comptroller of the 


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8134 Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Rules and Regulations 

14 ‘‘Interagency Guidance Regarding Unfair or 

Deceptive Credit Practices’’ (Aug. 22, 2014). 

http://www.federalreserve.gov/newsevents/press/

bcreg/bcreg20140822a2.pdf. 

15One state chartered bank commenter did not 

address the proposed repeal, but objected to 

examiners’ citations of banks for unfair or deceptive 

practices in the supervisory process. Two 

individual commenters did not address the 

proposed repeal of Regulation AA. 

16https://www.federalreserveconsumerhelp.gov/. 

17 5 U.S.C. 601 et seq. 

18See section 1092(2) of the Dodd-Frank Act. 

Currency in issuing interagency 

guidance stating that, depending on the 

facts and circumstances, a depository 

institution might violate the prohibition 

against unfair or deceptive practices in 

the FTC Act and the Dodd-Frank Act if 

it engages in the practices prohibited by 

the former credit practices rules.14

II. Discussion 

Fourteen commenters responded to 

the proposed repeal of Regulation AA. 

Three individual commenters stated 

that Regulation AA was a necessary and 

helpful regulation; two of these 

commenters stated that the Board’s 

reasons for repealing the regulation 

were unclear. A comment letter received 

from seven consumer advocate 

organizations acknowledged that the 

Board’s repeal of Regulation AA was 

required by the Dodd-Frank Act. In their 

letter, these commenters also provided 

recommendations to the Bureau 

regarding acts or practices that the 

Bureau now has to authority to regulate 

if it finds they are unfair or deceptive.15

Eight commenters addressed the 

interagency guidance that was issued 

simultaneously with the proposed 

repeal of Regulation AA. One individual 

commenter believed the guidance 

would discourage banks from engaging 

in unfair or deceptive acts or practices, 

but seven consumer advocate 

commenters recommended 

strengthening the guidance language. 

The consumer advocate commenters 

also recommended that the Board issue 

additional guidance regarding other acts 

or practices that the commenters believe 

should be declared unfair or deceptive 

acts or practices. 

The Board is finalizing the repeal of 

Regulation AA as proposed. As the 

Board discussed in the Proposed Rule, 

the Dodd-Frank Act eliminated the 

Board’s rule writing authority under the 

FTC Act, which nullified the regulation. 

The Board will continue to monitor 

developments with respect to unfair or 

deceptive acts or practices and assess 

whether to issue additional supervisory 

guidance. 

The repeal of Regulation AA also 

eliminates Subpart A of the regulation, 

which generally describes the internal 

procedures used by the Board in 

handling consumer complaints. The 

Board did not receive comment on the 

removal of these internal procedures 

from the Code of Federal Regulations. 

Information about how the Board 

processes consumer complaints is 

provided on the Board’s public Web 

site.16

III. Final Regulatory Flexibility 

Analysis 

The Regulatory Flexibility Act 17

(RFA) generally requires an agency to 

perform an assessment of the impact a 

rule is expected to have on small 

entities. Based on its analysis, and for 

the reasons stated below, the Board 

believes that this final rule will not have 

a significant economic impact on a 

substantial number of small entities. 

1. Statement of the need for, and 

objectives of, the final rule. Regulation 

AA was issued pursuant to section 

18(f)(1) of the FTC Act. As noted above, 

the Dodd-Frank Act repealed this 

provision of the FTC Act.18

Accordingly, the Board is repealing its 

Regulation AA. 

2. Summary of issues raised by 

comments in response to the initial 

regulatory flexibility analysis. The 

Board did not receive any comments on 

the initial regulatory flexibility analysis. 

3. Small entities affected by the final 

rule. The final rule repeals Regulation 

AA, which was issued pursuant to 

section 18(f)(1) of the FTC. As a result 

of the FTC Act amendments made by 

the Dodd-Frank Act, the Board no 

longer has rule writing authority under 

section 18(f)(1). The legislative repeal of 

the Board’s rulemaking authority 

nullified the provisions in Regulation 

AA that were issued pursuant to that 

authority. Consequently, the Board’s 

repeal of the regulation, which no 

longer has legal effect, will not affect 

any entity, including any small entity. 

The repeal of Regulation AA will also 

remove information about how the 

Board processes consumer complaints 

from the Code of Federal Regulations. 

This is not expected to have an effect on 

small entities because that information 

is provided on the Board’s public Web 

site. 

4. Recordkeeping, reporting, and 

compliance requirements. The final rule 

repeals Regulation AA and therefore 

does not impose any recordkeeping, 

reporting, or compliance requirements 

on any entities. 

5. Significant alternatives to the final 

revisions. Because the repeal of 

Regulation AA will have no impact, 

there are no alternatives that would 

further minimize the economic impact 

of the final rule on small entities. 

IV. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (PRA) of 1995 (44 U.S.C. 

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

Board reviewed the rule under the 

authority delegated to the Federal 

Reserve by the Office of Management 

and Budget (OMB). The final rule 

contains no requirements subject to the 

PRA. 

List of Subjects in 12 CFR Part 227 

Banks, Banking, Consumer protection, 

Credit, Federal Reserve System, 

Finance. 

Authority and Issuance 

For the reasons set forth in the 

preamble, and under the authority of 

section 1092(2) of Public Law 111–203, 

124 Stat. 1376 (Jul. 21, 2010), the Board 

amends 12 CFR chapter II by removing 

part 227. 

PART 227—[REMOVED] 

By order of the Board of Governors of the 

Federal Reserve System, February 11, 2016. 

Robert deV. Frierson, 

Secretary of the Board. 

[FR Doc. 2016–03228 Filed 2–17–16; 8:45 am] 

BILLING CODE–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2016–0467; Directorate 

Identifier 2016–NM–008–AD; Amendment 

39–18395; AD 2016–04–01] 

RIN 2120–AA64 

Airworthiness Directives; Airbus 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule; request for 

comments. 

SUMMARY: We are superseding 

Airworthiness Directive (AD) 2015–26– 

02 for all Airbus Model A330–200, 

A330–200 Freighter, and A330–300 

series airplanes; and Airbus Model 

A340–200, A340–300, A340–500, and 

A340–600 series airplanes. AD 2015– 

26–02 required, for certain airplanes, 

identification of the part number, serial 

number, and standard of the ram air 

turbine (RAT) pump, RAT module, RAT 

actuator, and RAT lower gearbox 

assembly; replacement of the balance 


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