19064 Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices

added cash services that the Federal

Reserve Banks do not provide. For

example, some private-sector service

providers maintain automated teller

machines for depository institutions and

offer specific retail services for the

depository institutions’ customers.

Therefore, it is unlikely that the policy

will result in any significant shift to

Federal Reserve cash services away from

private-sector providers. The Board’s

policy, as revised, does not adversely

affect the ability of depository

institutions or service providers to

compete with the Federal Reserve Banks

to provide cash services.

V. Federal Reserve Cash Service Access

Policy

The Board has adopted the following

Federal Reserve cash access policy:

1. Number of endpoints eligible for

free cash access. Each depository

institution with a banking presence in a

Federal Reserve office territory can

designate up to ten offices in that

territory to receive free cash access

(deposit and order) service from the

local Reserve Bank office.

Beyond the ten offices, Reserve Bank

offices will provide free cash access to

endpoints whose volumes exceed a

specified threshold and that satisfy the

local Reserve Bank office’s

denomination bundle standard. Each

Reserve Bank office will set a ‘‘high

bundle threshold,’’ within the range of

fifty to one hundred bundles, to

accommodate the needs of the

geographic area being serviced within

that Federal Reserve office territory. If a

depository institution receives free

access for more than ten endpoints, all

endpoints must meet the high bundle

threshold.

2. Frequency of access. Normal free

access for each designated office of the

depository institution will be once per

week. Access more frequent than once

per week will be available free of charge

to each designated office whose volume

exceeds a twenty-bundle aggregate

threshold and that satisfies the local

Reserve Bank office’s denomination

bundle standard.

3. Priced access. Reserve Bank offices

may choose to accommodate additional

access where the demand exists subject

to the constraints of the physical

facilities at each Reserve Bank office.

Reserve Banks must price access to cash

services beyond the free service

described above, if offered.

4. Delegation of authority. The

Director of the Division of Reserve Bank

Operations and Payment Systems, under

delegated authority, may (1) approve

changes in the base number of free

endpoints and the volume thresholds;

and (2) waive the policy for a limited

period if warranted by special

circumstances, such as a natural disaster

or the introduction of new currency.

By order of the Board of Governors of the

Federal Reserve System.

Dated: April 24, 1996.

William W. Wiles,

Secretary of the Board.

[FR Doc. 96–10606 Filed 4–29–96; 8:45 am]

BILLING CODE 6210–01–P

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Board of

Governors of the Federal Reserve

System.

TIME AND DATE: 11:00 a.m., Monday, May

6, 1996.

PLACE: Marriner S. Eccles Federal

Reserve Board Building, C Street

entrance between 20th and 21st Streets,

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

STATUS: Closed.

MATTERS TO BE CONSIDERED:

1. Personnel actions (appointments,

promotions, assignments, reassignments, and

salary actions) involving individual Federal

Reserve System employees.

2. Any items carried forward from a

previously announced meeting.

CONTACT PERSON FOR MORE INFORMATION:

Mr. Joseph R. Coyne, Assistant to the

Board; (202) 452–3204. You may call

(202) 452–3207, beginning at

approximately 5 p.m. two business days

before this meeting, for a recorded

announcement of bank and bank

holding company applications

scheduled for the meeting.

Dated: April 26, 1996.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 96–10837 Filed 4–26–96; 2:54 pm]

BILLING CODE 6210–01–P

FEDERAL TRADE COMMISSION

[File No. 932–3331]

The May Department Stores Company;

Proposed Consent Agreement With

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair or deceptive acts or practices and

unfair methods of competition, this

consent agreement, accepted subject to

final Commission approval, would

require, among other things, the St.

Louis-based company to cease

unwarranted collection activity on

certain acquired credit card accounts, to

correct the inaccurate or obsolete credit

data it sent to credit reporting agencies

about these accounts, and to take steps

to ensure that the information

maintained and reported with respect to

the acquired accounts is accurate. May

would also be prohibited from sending

credit cards to consumers except: (1) In

response to an oral or written request or

application for the card, or (2) as a

renewal of, or substitute for, an accepted

credit card. The Consent Agreement

settles allegations that, as an example,

in converting its Thalhimer’s customers’

credit card accounts to Hecht’s

accounts, May’s conversion process

transferred obsolete derogatory

information to the new accounts. The

conversion process also allegedly led to

the inaccurate reporting of payments

and other negative data and to the

initiation of collection activity against

some customers.

DATES: Comments must be received on

or before July 1, 1996.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

David Medine, Federal Trade

Commission, S–4429, 6th and

Pennsylvania Ave., NW., Washington

DC 20580. (202) 326–3224. Christopher

Keller, Federal Trade Commission, S–

4429, 6th and Pennsylvania Ave., NW.,

Washington, DC 20580. (202) 326–3159.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46 and Section 2.34 of the Commission’s

Rules of Practice (16 CFR 2.34), notice

is hereby given that the following

consent agreement containing a consent

order to cease and desist, having been

filed with and accepted, subject to final

approval, by the Commission, has been

placed on the public record for a period

of sixty (60) days. Public comment is

invited. Such comments or views will

be considered by the Commission and

will be available for inspection and

copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of

the Commission’s Rules of Practice (16

CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order

To Cease and Desist

The Federal Trade Commission

having initiated an investigation of

certain acts and practices of The May

Department Stores Company, a

corporation, (‘‘May’’), hereinafter

sometimes referred to as proposed

respondent, and it now appears that

proposed respondent is willing to enter
Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices 19065

into an agreement containing an order to

cease and desist from the use of the acts

and practices being investigated,

It is hereby agreed by and between

May, by its duly authorized officer, and

its attorney, and counsel for the Federal

Trade Commission that:

1. Proposed respondent May is a

corporation organized, existing, and

doing business under and by virtue of

the laws of the State of New York.

Respondent’s office and principal place

of business is located at 611 Olive

Street, St. Louis, Missouri 63101.

2. Proposed respondent is now and

has been regularly engaged in the

practice of extending consumer credit

pursuant to an open end credit plan

involving a credit card, and in the

practice of honoring that credit card.

Hence, respondent is a creditor as

defined in § 103(f) of the Truth in

Lending Act (‘‘TILA’’), 15 U.S.C.

§ 1602(f).

3. The Federal Trade Commission has

jurisdiction of the subject matter of this

proceeding and of the proposed

respondent, and the proceeding is in the

public interest.

4. Proposed respondent admits all the

jurisdictional facts set forth in the draft

of complaint.

5. Proposed respondent waives:

(a) Any further procedural steps;

(b) The requirement that the

Commission’s decision contain a

statement of findings of fact and

conclusions of law;

(c) All rights to seek judicial review

or otherwise to challenge or contest the

validity of the order entered into

pursuant to this agreement; and

(d) Any claim under the Equal Access

to Justice Act, 5 U.S.C. § 50 et seq.

6. This agreement shall not become

part of the public record of the

proceeding unless and until it is

accepted by the Commission. If this

agreement is accepted by the

Commission, it, together with the draft

complaint contemplated thereby, will be

placed on the public record for a period

of sixty (60) days and information in

respect thereto publicly released. The

Commission thereafter may either

withdraw its acceptance of this

agreement and so notify the proposed

respondent, in which event it will take

such action as it may consider

appropriate or issue and serve its

complaint (in such form as the

circumstances may require) and

decision, in disposition of the

proceeding.

7. This agreement is for settlement

purposes only and does not constitute

an admission by proposed respondent of

facts, other than jurisdictional facts, or

of violations of law as alleged in the

draft of complaint.

8. This agreement contemplates that,

if it is accepted by the Commission, and

if such acceptance is not subsequently

withdrawn by the Commission pursuant

to the provisions of § 2.34 of the

Commission’s Rules, the Commission

may, without further notice to proposed

respondent, (1) issue its complaint

corresponding in form and substance

with the draft of complaint and its

decision containing the following order

to cease and desist in disposition of the

proceeding and (2) make information

public with respect thereto. When so

entered, the order to cease and desist

shall have the same force and effect and

may be altered, modified or set aside in

the same manner and within the same

time provided by statute for other

orders. The order shall become final

upon service. Delivery by the U.S.

Postal Service of the complaint and

decision containing the agreed-to order

to proposed respondent’s address as

stated in this agreement shall constitute

service. Proposed respondent waives

any right it may have to any other

manner of service. The complaint may

be used in construing the terms of the

order, and no agreement, understanding,

representation, or interpretation not

contained in the order or the agreement

may be used to vary or contradict the

terms of the order.

9. Proposed respondent has read the

proposed complaint and order

contemplated hereby. It understands

that once the order has been issued, it

will be required to file one or more

compliance reports showing that it has

fully complied with the order. Proposed

respondent further understands that it

may be liable for civil penalties in the

amount provided by law for each

violation of the order after it becomes

final.

Order

Definitions

For the purpose of this Order the

following definitions apply:

The terms ‘‘open and credit plan,’’

‘‘credit card,’’ and ‘‘cardholder’’ are

defined as set forth in §§ 103(i), (k), and

(m), respectively, of the Truth in

Lending Act (‘‘TILA’’), 15 U.S.C.

§§ 1602(i), 1602(k), and 1602(m).

The term ‘‘consumer reporting

agency’’) is defined as set forth in

§§ 603(f) of the Fair Credit Reporting

Act (‘‘FCRA’’), 15 U.S.C. §§ 1681a(f).

‘‘Fair Credit Billing Act’’ refers to

Chapter 4, Credit Billing, 15 U.S.C.

§ 1666 et seq., of the Consumer Credit

Protection Act.

I

It is hereby ordered that respondent,

The May Department Stores Company, a

corporation, its successors and assigns,

and its officers, agents, representatives,

and employees, directly or through any

corporate subsidiary, division, or other

device, do forthwith cease and desist

from failing to follow reasonable

procedures to assure the accuracy of the

information that respondent maintains

with respect to cardholder accounts that

respondent has acquired or acquires

from other retail sellers of consumer

goods or services and that respondent

provides to consumer reporting

agencies, including but not limited to

the accuracy of dates of relevant actions.

II

It is further ordered that, to the extent

not already accomplished, within ninety

(90) days of service of this Order,

respondent, its successors and assigns,

shall identify current cardholders on

whom, since January 1, 1992,

respondent has reported incorrectly to

any consumer reporting agency

derogatory information related solely to

the cardholder’s open end credit plan

account with an acquired creditor.

Respondent shall instruct each such

consumer reporting agency, in writing,

to remove or correct any such

derogatory information.

III

It is further ordered that respondent,

its successors and assigns, shall, after

written notice from a consumer to its

Bill Adjustment Department in

accordance with the Fair Credit Billing

Act of a failure by respondent accurately

to ascribe charges, credits, payments, or

other activity to the correct account,

cease collection activity as to the

disputed amount, either directly or

through any third party, on any

outstanding balance that is due, in

whole or in part, to respondent’s failure

accurately to ascribe charges, credits,

payments, or other activity to the correct

account.

IV

It is further ordered that respondent,

its successors and assigns, in order to

give effect to Paragraph III of this Order,

shall institute reasonable procedures to

train respondent’s collection personnel

in the obligations of the Fair Credit

Billing Act, and to further train

respondent’s collection personnel to

inform consumers who assert billing

errors of the correct address of

respondent’s Bill Adjustment

Department.
19066 Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices

V

It is further ordered that respondent,

its successors and assigns, and its

officers, agents, representatives, and

employees, directly or through any

corporate subsidiary, division, or other

device, in connection with any open

end credit plan, do forthwith cease and

desist from violating § 132 of the Truth

in Lending Act, 15 U.S.C. § 1642, and

§ 226.12 of Regulation Z, 12 C.F.R.

§ 226.12, by issuing a credit card to any

person except (1) in response to an oral

or written request or application for the

card; or (2) as a renewal of, or substitute

for, an accepted credit card.

VI

It is further ordered that respondent,

its successors and assigns, shall

maintain for five (5) years and upon

request make available to the Federal

Trade Commission for inspection and

copying, documents demonstrating

compliance with the requirements of

this Order.

VII

It is further ordered that respondent,

its successors and assigns, shall deliver

for five (5) years a copy of this Order to

all present and future personnel, agents,

or representatives having

responsibilities with respect to the

subject matter of this Order.

VIII

It is further ordered that respondent,

its successors and assigns, shall

promptly notify the Commission at least

thirty (30) days prior to any proposed

change in respondent such as

dissolution, assignment, or sale

resulting in the emergence of a

successor corporation, the creation or

dissolution of subsidiaries or affiliates,

or any other change in the corporation

that may affect compliance obligations

arising out of the Order.

IX

This Order will terminate twenty

years from the date of its issuance, or

twenty years from the most recent date

that the United States or the Federal

Trade Commission files a complaint

(with or without an accompanying

consent decree) in federal court alleging

any violation of the Order, whichever

comes later; provided, however, that the

filing of such a complaint will not affect

the duration of:

A. Any paragraph in this Order that

terminates in less than twenty years;

B. This Order’s application to any

respondent that is not named as a

defendant in such complaint; and

C. This Order if such complaint is

filed after the Order has terminated

pursuant to this paragraph.

Provided further, that if such

complaint is dismissed or a federal

court rules that the respondent did not

violate any provision of the Order, and

the dismissal or ruling is either not

appealed or upheld on appeal, then the

Order will terminate according to this

paragraph as though the complaint was

never filed, except that the Order will

not terminate between the date such

complaint is filed and the later of the

deadline for appealing such dismissal or

ruling and the date such dismissal or

ruling is upheld on appeal.

X

It is further ordered that respondent,

its successors and assigns, shall, within

one hundred and eighty (180) days of

the date of service of this Order, file

with the Federal Trade Commission,

Division of Enforcement, a report, in

writing, setting forth in detail the

manner and form in which it has

complied with this Order.

Analysis of Proposed Consent Order To

Aid Public Comment

The Federal Trade Commission has

accepted, subject to final approval, an

agreement containing a consent order

from the May Department Stores

Company, a corporation (‘‘the

respondent’’). The proposed consent

order has been placed on the public

record for sixty (60) days for receipt of

comments by interested persons.

Comments received during this period

will become part of the public record.

After sixty (60) days, the Commission

will again review the agreement and the

comments received and will decide

whether it should withdraw from the

agreement and take other appropriate

action, or make final the proposed order

contained in the agreement.

This matter concerns the placement of

inaccurate information in the credit

bureau files of consumers whose

accounts were acquired by respondent

in the course of its purchase of another

retailer. The complaint alleges these

inaccuracies were a result of the process

used to convert the accounts, which,

among other things, included dating

past negative activity in a way that

allowed it to remain on consumers’

credit reports longer than the seven year

obsolescence period found in the federal

Fair Credit Reporting Act (‘‘FCRA’’). In

addition, the complaint alleges that

once respondent knew or should have

known the information was not

accurate, it failed to take steps to correct

it.

This matter also addresses the

issuance of credit cards to consumers

who did not apply for the cards orally

or in writing. The complaint

accompanying the proposed consent

order alleges that in connection with

these practices, the respondent engaged

in acts and practices in violation of

Section 5 of the Federal Trade

Commission Act and Section 132 of the

Truth in Lending Act and Section

226.12(a)(2) of Regulation Z.

According to Count I of the

complaint, when the respondent

acquires other retail sellers of consumer

goods or services, it converts the

acquired open end credit plan accounts

to its own open end credit plan

accounts; an example of this occurred

when it converted Thalhimer’s accounts

the Hecht Co. accounts. The respondent

creates new open end credit plan

accounts and issues new account

numbers in the name of each consumer

having an open end credit plan account

in good standing with the retail

company acquired by respondent. As

part of this process, certain inaccuracies

appeared in consumers’ credit files.

Respondent, in the normal course of

its business, furnishes account

information concerning its open end

credit plan accounts to consumer

reporting agencies. This reported

information reflected the inaccuracies

allegedly caused by the respondent’s

account conversion process. The

complaint alleges that respondent’s

reporting of inaccurate information

constitutes an unfair practice in

violation of Section 5 of the Federal

Trade Commission Act.

Count I also alleges that respondent

on some occasions initiates collection

activity on purported delinquencies,

created in error when respondent

creates a second account without the

knowledge or authorization of

consumers, and subsequently posts

payments and other credits to the

incorrect account. The complaint alleges

that this practice also constitutes an

unfair practice in violation of Section 5

of the Federal Trade Commission Act.

Count II of the complaint alleges that

in connection with telephone marketing

of offers of pre-approved open end

credit plan accounts, respondent in

some cases establishes open end credit

accounts for consumers who have not

received or approved the offer or who

have specifically declined the offer, in

violation of Section 132 of the Truth in

Lending Act and 226.12(a)(2) of

Regulation Z.

The consent order contains provisions

designed to ensure that the respondent

does not engage in similar allegedly

illegal acts and practices in the future.
Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices 19067

Specifically, Paragraph I of the order

requires the respondent to cease and

desist from failing to follow reasonable

procedures to assure the accuracy of the

information that respondent maintains

with respect to cardholder accounts that

respondent has acquired or acquires

from other retail sellers of consumer

goods or services and that respondent

provides to consumer reporting

agencies, including but not limited to

the accuracy of dates or relevant actions.

Paragraph II of the order requires

respondent, to the extent not already

accomplished, within ninety (90) days

of service of the order, to identify

current cardholders on whom, since

January 1, 1992, respondent has

reported incorrectly to any consumer

reporting agency derogatory information

related solely to the cardholder’s open

end credit plan account with an

acquired creditor. The respondent must

instruct each consumer reporting

agency, in writing, to remove or correct

any such derogatory information.

Paragraph III of the order requires

respondent, after written notice from a

consumer to its Bill Adjustment

Department in accordance with the Fair

Credit Billing Act of a failure by

respondent accurately to ascribe

charges, credits, payments, or other

activity to the correct account, to cease

collection activity as to the disputed

amount, either directly or through any

third party, or any outstanding balance

that is due, in whole or in part, to

respondent’s failure accurately to

ascribe charges, credits, payments, or

other activity to the correct account.

Paragraph IV of the order requires that

the respondent institute reasonable

procedures to train their collection

personnel in the obligations of the Fair

Credit Billing Act, and to further train

their collection personnel to inform

consumers who assert billing errors of

the correct address of respondent’s Bill

Adjustment Department.

Paragraph V of the order requires

respondent to cease and desist from

issuing credit cards to any person

except (1) in response to an oral or

written request or application for the

card; or (2) as a renewal of, or substitute

for, an accepted credit card.

Paragraph VI of the order requires the

respondent to make documents

demonstrating compliance with the

requirements of the order available to

the Federal Trade Commission for

inspection and copying.

Paragraph VII of the order requires

respondent for a period of five years to

deliver a copy of the order to all present

and future personnel, agents, or

representatives having responsibilities

with respect to the subject matter of the

order.

Paragraph VIII of the order requires

that the respondent promptly notify the

Commission at least thirty (30) days

prior to any proposed change in

respondent such as dissolution,

assignment, or sale resulting in the

emergence of a successor corporation,

the creation or dissolution of

subsidiaries or affiliates, or any other

change in the corporation that may

affect compliance obligations arising out

of the Order.

Paragraph IX of the order is a

provision terminating the order in

twenty years from the date of its

issuance, or twenty years from the most

recent date that the Untied States or the

Federal Trade Commission files a

complaint in federal court alleging any

violation of the order, whichever comes

later.

Paragraph X of the order requires

respondent within one hundred and

eighty (180) days of the date of service

of the order, to file with the

Commission’s Division of Enforcement,

a written report setting forth in detail

the manner and form in which it has

complied with the order.

The purpose of this analysis is to

facilitate public comment on the

proposed order, and it is not intended

to constitute an official interpretation of

the agreement and proposed order or to

modify in any way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 96–10561 Filed 4–29–96; 8:45 am]

BILLING CODE 6750–01–M

Request for Comments Concerning

Disclosures in the Resale of Vehicles

Repurchased Due to Warranty Defects

AGENCY: Federal Trade Commission.

ACTION: Request for public comments.

SUMMARY: The Federal Trade

Commission (‘‘the Commission’’ or

‘‘FTC’’) is requesting public comment

and holding a public forum concerning

the practices of motor vehicle

manufacturers, their franchised dealers,

and other firms and individuals in the

resale of allegedly defective vehicles

previously repurchased from consumers

because of warranty defects. This notice

sets forth a statement of the

Commission’s reasons for requesting

public comment, a list of specific

questions and issues upon which the

Commission particularly desires written

comment, an invitation for written

comments, and an invitation to

participate in the public forum.

On November 8, 1995, the Consumers

for Auto Reliability and Safety and other

consumer groups (‘‘Consumer

Coalition’’ or ‘‘Petitioners’’) filed a

petition in which they requested that

the Commission initiate either a

rulemaking proceeding or an

enforcement action regarding the

alleged industry practice of reselling

vehicles repurchased due to defects

without disclosure of the vehicle’s prior

history to the subsequent purchaser.

The Commission is publishing this

petition without endorsing or

supporting the views expressed therein.

The Commission is seeking public

comment and holding a public forum on

the issues raised by the petition and on

other related issues.

DATES: Written comments will be

accepted until June 28, 1996.

Notification of interest in participating

in the public forum also must be

submitted on or before June 28, 1996.

The public forum will be held in

Washington, D.C. on July 15, 1996, from

9 a.m. until 5 p.m.

ADDRESSES: Five paper copies of each

written comment should be submitted

to the Office of the Secretary, Room 159,

Federal Trade Commission, Sixth Street

and Pennsylvania Avenue, N.W.,

Washington, D.C. 20580. To encourage

prompt and efficient review and

dissemination of the comments to the

public, all comments should also be

submitted, if possible, in electronic

form, on either a 51⁄4 or a 31⁄2 inch

computer disk, with a label on the disk

stating the name of the commenter and

the name and version of the word

processing program used to create the

document. (Programs based on DOS are

preferred. Files from other operating

systems should be submitted in ASCII

text format to be accepted.) Individuals

filing comments need not submit

multiple copies or comments in

electronic form. Comments should be

identified as ‘‘Vehicle Buybacks—

Comment. FTC File No. P96 4402.’’

Notification of interest in

participating in the public forum should

be submitted in writing to Carole I.

Danielson, Division of Marketing

Practices, Federal Trade Commission,

Sixth and Pennsylvania Ave., N.W.,

Washington, D.C. 20580. The public

forum will be held at the Federal Trade

Commission, Sixth and Pennsylvania

Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

Carole I. Danielson (202) 326–3115,

Division of Marketing Practices, Bureau

of Consumer Protection, Federal Trade

Commission, Washington, D.C. 20580.