[Federal Register Volume 75, Number 209 (Friday, October 29, 2010)]
[Rules and Regulations]
[Pages 66644-66649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27191]


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FEDERAL RESERVE SYSTEM

12 CFR Part 205

[Regulation E; Docket No. R-1377]


Electronic Fund Transfers

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board is amending Regulation E, which implements the 
Electronic Fund Transfer Act, and the official staff commentary to the 
regulation, in order to implement legislation that modifies the 
effective date of certain disclosure requirements in the gift card 
provisions of the Credit Card Accountability Responsibility and 
Disclosure Act of 2009.

DATES: This final rule is effective November 29, 2010.

FOR FURTHER INFORMATION CONTACT: Dana Miller or Mandie Aubrey, Senior 
Attorneys, Ky Tran-Trong or Vivian Wong, Counsels, Division of Consumer 
and Community Affairs, Board of Governors of the Federal Reserve 
System, Washington, DC 20551, at (202) 452-2412 or (202) 452-3667. For 
users of Telecommunications Device for the Deaf (TDD) only, contact 
(202) 263-4869.

SUPPLEMENTARY INFORMATION: 

I. Statutory Background

    On May 22, 2009, the Credit Card Accountability Responsibility and 
Disclosure Act of 2009 (Credit Card Act) was signed into law.\1\ 
Section 401 of the Credit Card Act amended the Electronic Fund Transfer 
Act, 15 U.S.C. 1693 et seq., and imposed certain restrictions on a 
person's ability to impose dormancy, inactivity, or service fees with 
respect to gift certificates, store gift cards, and general-use prepaid 
cards. In addition, the Credit Card Act generally prohibited

[[Page 66645]]

the issuance or sale of such products if they expire earlier than five 
years from the date of issuance of a gift certificate or the date on 
which funds were last loaded to a store gift card or general-use 
prepaid card.
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    \1\ Public Law 111-24, 123 Stat. 1734 (2009).
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    Section 403 of the Credit Card Act required that the gift card and 
related provisions of the Credit Card Act become effective 15 months 
after enactment, or on August 22, 2010. See EFTA Section 915(d)(3). The 
Board published a final rule implementing the gift card provisions of 
the Credit Card Act on April 1, 2010 (final gift card rule). 75 FR 
16580. As mandated by the Credit Card Act, the final gift card rule has 
an effective date of August 22, 2010.
    On July 27, 2010, Congress passed legislation amending Section 403 
of the Credit Card Act to delay the effective date of certain gift card 
disclosure provisions of the Credit Card Act for certificates or cards 
produced prior to April 1, 2010 (Gift Card Amendment).\2\ The Gift Card 
Amendment provides a delayed effective date with respect to these 
provisions in order to permit the sale of card stock produced before 
that date until January 31, 2011, so long as certain conditions are 
met, including the provision of in-store disclosures. Moreover, the 
substantive fee and expiration date protections provided by the Credit 
Card Act continue to apply to all certificates or cards sold to a 
consumer on or after August 22, 2010. Due to the time constraints 
imposed by the August 22, 2010 effective date of the Credit Card Act, 
the Board issued an interim final rule revising the April 2010 final 
gift card rule in order to implement the Gift Card Amendment, 75 FR 
50683 (Aug. 17, 2010), but stated its intent to consider comments on 
the interim final rule. The Board is adopting the final rule today.
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    \2\ Public Law 111-209, 124 Stat. 2254 (July 27, 2010).
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II. Overview of Public Comment; Summary of Final Rule

    The Board received two comments on the interim final rule from a 
credit union trade association and a bankers' trade association. Both 
commenters generally supported the interim final rule. The bankers' 
trade association suggested that the Board exercise its exception 
authority to eliminate in-store disclosures where cards sold meet the 
final gift card rule's substantive fee and expiration date protections. 
This commenter also requested an extension of the delayed effective 
date. No other comments were received. The final rule adopts the 
interim final rule as issued, with minor non-substantive edits.
    With respect to gift certificates, store gift cards, and general-
use prepaid cards produced prior to April 1, 2010, the Gift Card 
Amendment delayed the effective date of the disclosure requirements in 
EFTA Sections 915(b)(3) and (c)(2)(B) (as amended by the Credit Card 
Act) until January 31, 2011, provided that several specified conditions 
are met. The final rule implements the Gift Card Amendment.
    The Gift Card Amendment did not address the status of additional 
requirements adopted in the Board's final gift card rule that were not 
contained in the Credit Card Act. As a result, persons seeking to take 
advantage of the relief afforded by the Gift Card Amendment would have 
been unable to do so if certain of these additional provisions became 
effective on August 22, 2010. For example, Sec.  205.20(e)(1) of the 
final gift card rule prohibits any person from selling or issuing a 
certificate or card unless the consumer has had a reasonable 
opportunity to purchase a certificate or card with at least five years 
remaining until the certificate or card expiration date. Thus, a card 
produced prior to April 1, 2010 that has a card expiration date of less 
than five years could not be sold under the final gift card rule, 
notwithstanding the provisions of the Gift Card Amendment. Therefore, 
in order to carry out the intended purpose of the Gift Card Amendment, 
the final rule also delays the effective date of certain of these 
supplemental requirements.
    As in the interim final rule, the final rule revises Sec. Sec.  
205.20(c) and (g) of the final gift card rule (``Form of Disclosures'' 
and ``Compliance Dates,'' respectively) and adds a new Sec.  205.20(h) 
(``Temporary Exemption'').

III. Section-by-Section Analysis

20(c) Form of Disclosures

20(c)(2) Format
    To take advantage of the delayed effective date, the Gift Card 
Amendment requires that certain disclosures be made to the consumer 
through in-store signage, messages during customer service calls, Web 
sites, and general advertising. These disclosure requirements are 
implemented through Sec.  205.20(h)(2) of the final rule, discussed in 
more detail below.
    Section 205.20(c)(2) of the final gift card rule generally requires 
disclosures to be made in writing or electronically, and in retainable 
form. The Board believes such requirements are unnecessary with respect 
to the disclosures required by Sec.  205.20(h)(2). For example, it 
would be impracticable to provide in-store signage under Sec.  
205.20(h)(2) in a retainable form. Moreover, the disclosures required 
by Sec.  205.20(h)(2) are intended to relieve the burden of replacing 
non-compliant card stock with card stock bearing disclosures that 
comply with the final gift card rule, so the Board believes that the 
format standards in Sec.  205.20(c)(2) are less appropriate in this 
instance. Commenters supported the Board's stance in this regard.
    Section 205.20(c)(2) has been revised to provide that the 
disclosures required by Sec.  205.20(h)(2) need not be made in a 
retainable form. For similar reasons, Sec.  205.20(c)(2) is revised to 
provide that the prior-to-purchase disclosures required by Sec.  
205.20(c)(3) need not be provided in a retainable form. Section 
205.20(c)(2) has also been revised to make clear that the disclosures 
required by Sec.  205.20(h)(2) may be provided orally.

20(g) Compliance Dates

20(g)(1) Effective Date for Gift Certificates, Store Gift Cards, and 
General-Use Prepaid Cards
    The final gift card rule became effective August 22, 2010, 
consistent with the Credit Card Act. Consistent with the interim final 
rule, to give effect to the delayed effective date set forth in the 
Gift Card Amendment, the final rule revises Sec.  205.20(g)(1) of the 
final gift card rule to state that, except as provided in new Sec.  
205.20(h), Sec.  205.20 applies to any gift certificate, store gift 
card, or general-use prepaid card sold to a consumer on or after August 
22, 2010, or provided to a consumer as a replacement for such 
certificate or card.
20(g)(2) Effective Date for Loyalty, Award, or Promotional Gift Cards
    Section 205.20(g)(2) of the final gift card rule sets forth a 
special transition rule for the disclosure requirements applicable to 
loyalty, award, and promotional gift cards. Specifically, Sec.  
205.20(g)(2) provides that the disclosure requirements in Sec.  
205.20(a)(4)(iii) apply to any card, code or other device provided to a 
consumer in connection with a loyalty, award, or promotional program 
where the period of eligibility for the program begins on or after 
August 22, 2010. The Gift Card Amendment does not specifically delay 
the effective date of the disclosures required by Sec.  
205.20(a)(4)(iii), and accordingly the effective date for loyalty, 
award, and promotional cards was unchanged both in the interim final 
rule and in this final rule.

[[Page 66646]]

20(h) Temporary Exemption

20(h)(1) Delayed Effective Date
    As discussed above, the Gift Card Amendment delays the effective 
date of certain disclosure requirements in EFTA Sections 915(b)(3) and 
(c)(2)(B). Section 205.20(h)(1) implements the delayed effective date. 
Specifically, Sec.  205.20(h)(1) provides that, for any gift 
certificate, store gift card, or general-use prepaid card produced 
prior to April 1, 2010, the effective date of the requirements of 
paragraphs (c)(3), (d)(2), (e)(1), (e)(3), and (f) of this section is 
January 31, 2011, provided that an issuer of such certificate or card 
meets several specified conditions.
    One commenter urged the Board to extend the delayed effective date 
an additional 24 months. By its terms, the Gift Card Amendment permits 
issuers to sell existing card stock until January 31, 2011, the end of 
the 2010 holiday season. The Board believes that further extension of 
the effective date would be inconsistent with the legislation.
Provisions of the Final Gift Card Rule Subject to the Delayed Effective 
Date
    Section 205.20(h)(1) delays the effective dates of Sec. Sec.  
205.20(d)(2) and (e)(3)(i) of the final gift card rule. Section 
205.20(d)(2), which implemented EFTA Section 915(b)(3)(A), prohibits 
the imposition of any dormancy, inactivity, or service fee unless, 
among other things, certain specified clear and conspicuous disclosures 
about the fees are made on the certificate or card. Section 
205.20(e)(3)(i), which implemented EFTA Section 915(c)(2)(B), requires 
disclosure of the expiration date for the certificate or card's 
underlying funds--or the fact that the underlying funds do not expire--
on the certificate or card. These disclosure requirements are subject 
to the delayed effective date under the Gift Card Amendment for 
certificates or cards produced prior to April 1, 2010.
    In addition, Sec.  205.20(h)(1) delays the effective dates of 
Sec. Sec.  205.20(e)(1), (e)(3)(ii), (e)(3)(iii), and (f). Section 
205.20(e)(1) prohibits the issuance or sale of certificates or cards, 
unless policies and procedures have been established to ensure that a 
consumer will have a reasonable opportunity to purchase a certificate 
or card with at least five years remaining until the certificate or 
card expiration date. Section 205.20(e)(3)(ii) requires the disclosure 
on the certificate or card of a toll-free telephone number, and, if one 
is maintained, a Web site that a consumer may use to obtain a 
replacement certificate or card after expiration if the underlying 
funds may be available. Section 205.20(e)(3)(iii) requires certain 
disclosures on the certificate or card about expiration and replacement 
cards, except where a non-reloadable certificate or card bears an 
expiration date that is at least seven years from the date of 
manufacture. Section 205.20(f) requires additional fee disclosures on 
or with the certificate or card, and, similar to Sec.  
205.20(e)(3)(ii), disclosure on the certificate or card of a toll-free 
telephone number, and, if one is maintained, a Web site that a consumer 
may use to obtain fee information. As discussed in more detail in the 
final gift card rule, these provisions were adopted pursuant to the 
Board's authority under EFTA Sections 904(a) and 915(d)(2), as amended 
by the Credit Card Act.
    Although not mandated by the Gift Card Amendment, the Board 
believes that the effective date of Sec. Sec.  205.20(e)(1), 
(e)(3)(iii), and (f) should also be delayed in order to carry out the 
intended purpose of the Gift Card Amendment. For example, some gift 
cards produced before April 1, 2010 may bear expiration dates of less 
than five years, which would not comply with Sec.  205.20(e)(1). If the 
Board did not provide for a delayed effective date with respect to 
Sec.  205.20(e)(1), issuers would not be permitted to sell this 
existing card stock, even if issuers otherwise satisfied the statutory 
prerequisites to qualify for relief under the Gift Card Amendment. Such 
a result would undermine the purpose of the Gift Card Amendment.
    Finally, Sec.  205.20(h)(1) delays the effective date of Sec.  
205.20(c)(3). Section 205.20(c)(3) requires that the disclosures 
required by Sec. Sec.  205.20(d)(2), (e)(3), and (f)(1) be made prior 
to purchase. As discussed in more detail in the final gift card rule, 
Sec.  205.20(c)(3) was adopted pursuant to both the statutory mandate 
(in EFTA Section 915(c)(3)(B)) and the Board's authority under EFTA 
Section 904(a). For the reasons discussed above, any disclosures that 
are required to be provided prior to purchase under Sec.  205.20(c)(3) 
are subject to the delayed effective date, provided that the issuer 
complies with the conditions specified in Sec.  205.20(h)(1).
Conditions Imposed
    To take advantage of the Gift Card Amendment's delayed effective 
date, an issuer of the certificate or card must meet several specified 
conditions. First, the issuer must comply with the other provisions of 
Sec.  205.20, including the section's substantive restrictions on the 
imposition of fees. Second, the issuer must not impose an expiration 
date with respect to the funds underlying such a certificate or card. 
Third, the issuer must, at the consumer's request and at no cost to the 
consumer, replace such certificate or card if the certificate or card 
has funds remaining. Finally, the issuer must satisfy the disclosure 
requirements of new Sec.  205.20(h)(2), discussed in more detail below. 
See Sec. Sec.  205.20(h)(1)(i)-(iv).
    Comment 20(h)(1)-1 is adopted with minor, non-substantive edits for 
clarity. Comment 20(h)(1)-1 explains that certificates or cards 
produced prior to April 1, 2010 may be sold to a consumer for a limited 
time without satisfying the requirements of Sec.  205.20(c)(3), (d)(2), 
(e)(1), (e)(3), and (f), provided that issuers of such certificates or 
cards comply with the additional substantive and disclosure 
requirements of Sec. Sec.  205.20(h)(1)(i)-(iv). Issuers of 
certificates or cards produced prior to April 1, 2010 need not satisfy 
these additional requirements if the certificates or cards fully comply 
with the final gift card rule. Thus, if on August 22, 2010 an issuer 
sells gift cards produced prior to April 1, 2010 that do not have fees 
and do not expire, and which otherwise comply with the final gift card 
rule, that issuer would not then be required to make the in-store 
signage and other disclosures required by Sec.  205.20(h)(2) with 
respect to those gift cards because those cards satisfy the 
requirements of the final gift card rule.
    Comment 20(h)(1)-2 clarifies when the temporary relief afforded by 
the Gift Card Amendment expires. This comment explains that 
certificates or cards produced prior to April 1, 2010 that do not fully 
comply with the final gift card rule may not be issued or sold to 
consumers on or after January 31, 2011.
20(h)(2) Additional Disclosures
    The Gift Card Amendment imposes certain additional disclosure 
requirements in order for an issuer to take advantage of the delayed 
effective date. Section 205.20(h)(2) of the final rule implements these 
disclosure requirements, largely tracking the language of the statute, 
and with minor non-substantive edits from the interim final rule for 
clarity. Specifically, Sec.  205.20(h)(2) provides that issuers relying 
on the delayed effective date in Sec.  205.20(h)(1) must disclose 
through in-store signage, messages during customer service calls, Web 
sites, and general advertising, that: (i) The underlying funds of such 
certificate or card do not expire; (ii) consumers holding such 
certificate or card have a right to a free replacement certificate or 
card, which must be accompanied by the packaging and materials 
typically associated with

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such certificate or card; and (iii) any dormancy, inactivity, or 
service fee for such certificate or card that might otherwise be 
charged will not be charged if such fees do not comply with Section 915 
of the Electronic Fund Transfer Act.
    One commenter requested that the Board exercise its exception 
authority to eliminate these additional disclosures where the 
certificate or card meets the final gift card rule's fee limitations 
and other substantive restrictions. If the Board were to take such an 
action, consumers could be sold cards that, on their face, contain 
disclosures that do not reflect the certificate or card's actual terms. 
In particular, consumers may elect to discard an expired gift card 
notwithstanding the fact that the underlying funds remain valid after 
the card expiration, and thus be denied the Credit Card Act's 
protections. Thus, the Board believes that the disclosures required by 
the Gift Card Amendment are necessary to alert the consumer about the 
protections afforded them by the Credit Card Act.
    In some cases, issuers may not have direct control over in-store 
signage and store advertisements. Accordingly, comment 20(h)(2)-1 
explains that issuers may make the disclosures required by Sec.  
205.20(h)(2) through a third party, such as a retailer or merchant. For 
example, an issuer may have a merchant install in-store signage with 
the disclosures required by Sec.  205.20(h)(2) on the issuer's behalf. 
Comment 20(h)(2)-2 also clarifies that Sec.  205.20(h)(2) does not 
impose an obligation on an issuer to advertise certificates or cards.
20(h)(3) Expiration of Disclosure Requirements
    The Gift Card Amendment requires the additional disclosures to be 
maintained until January 31, 2013. The Board believes that such a 
requirement is appropriate with respect to Web sites that a certificate 
or card recipient may visit and phone numbers that a recipient may call 
for more information. For example, a gift card recipient may call a 
customer service phone number printed on the card to obtain more 
information about the card's fees or terms of expiration. See Sec.  
205.20(h)(3)(ii).
    However, certificates or cards sold on or after January 31, 2011 
must comply with Sec. Sec.  205.20(a)-(f) of the final gift card rule. 
Because consumers would only be able to purchase cards that are fully 
compliant with the Credit Card Act from that date forward, consumers 
purchasing certificates or cards might mistakenly believe that the 
additional disclosures set forth in the Gift Card Amendment stated in 
advertisements or in-store signage are applicable to their certificates 
or cards. Thus, the Board believes that requiring issuers to maintain 
Gift Card Amendment-related advertisements or in-store signage on or 
after January 31, 2011 could be confusing and even misleading to 
consumers because certificates or cards that do not comply with the 
final gift card rule cannot be issued or sold after that date.
    For this reason, the Board is exercising its exception authority in 
EFTA Section 904(c) to provide that, with respect to in-store signage 
and general advertising, the disclosure requirements of Sec.  
205.20(h)(2) are not required to be provided on or after January 31, 
2011. See Sec.  205.20(h)(3)(i). Section 904(c) of the EFTA provides 
that regulations prescribed by the Board may contain any 
classifications, differentiations, or other provisions, and may provide 
for such adjustments or exceptions for any class of electronic fund 
transfers that in the judgment of the Board are necessary or proper to 
effectuate the purposes of the title, to prevent circumvention or 
evasion, or to facilitate compliance.

IV. Legal Authority

General Rulemaking Authority

    Section 401(d)(1) of the Credit Card Act directs the Board to 
prescribe rules to carry out the gift card provisions of the Credit 
Card Act. The Board is exercising its authority under Section 401(d)(1) 
to implement the provisions of the Credit Card Act as superseded by the 
Gift Card Amendment with respect to the delayed effective date of the 
requirements in Sec. Sec.  205.20(d)(2) and (e)(1)(i), and part of 
Sec.  205.20(c)(3).
    Section 401(d)(2) of the Credit Card Act requires the Board to 
determine the extent to which the individual definitions and provisions 
of the EFTA and Regulation E should apply to gift certificates, store 
gift cards, and general-use prepaid cards. See EFTA Section 915(d)(2); 
15 U.S.C. 1693m(d)(2). Further, Section 904(a) of the EFTA authorizes 
the Board to prescribe regulations necessary to carry out the purposes 
of the title. The express purposes of the EFTA are to establish ``the 
rights, liabilities, and responsibilities of participants in electronic 
fund transfer systems'' and to provide ``individual consumer rights.'' 
See EFTA Section 902(b); 15 U.S.C. 1693. The Board is exercising its 
authority under EFTA Sections 904(a) and 915(d)(2) for the reasons 
discussed above to provide for the delayed effective date of the 
disclosure requirements of Sec. Sec.  205.20(e)(1), 205.20(e)(3)(ii)-
(iii), and 205.20(f), and part of Sec.  205.20(c)(3).
    Finally, as discussed above, the Board is exercising its authority 
under EFTA Section 904(c) to implement Sec.  205.20(h)(3)(i), which 
clarifies that, with respect to in-store signage and general 
advertising, the disclosures required by Sec.  205.20(h)(2) are not 
required to be provided on or after January 31, 2011.

V. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
initial and final regulatory flexibility analysis only when 5 U.S.C. 
553 requires publication of a notice of proposed rulemaking. See 5 
U.S.C. 603(a), 604(a). As discussed in the interim final rule, the 
Board found good cause under 5 U.S.C. 553(b)(3)(B) to conclude that 
publication of a notice of proposed rulemaking was impracticable. 
Accordingly, the Board is not required to perform an initial or final 
regulatory flexibility analysis. Nonetheless, the Board is publishing a 
final regulatory flexibility analysis. Based on its analysis and for 
the reasons stated below, the Board believes that the final rule is not 
likely to have a significant economic impact on a substantial number of 
small entities.
    1. Statement of the need for, and objectives of, the final rule. 
This final rule implements the Gift Card Amendment by delaying the 
effective date of certain disclosures required by the Credit Card Act. 
This final rule also carries out the intended purpose of the Gift Card 
Amendment by delaying the effective date of certain supplemental 
requirements adopted in the final gift card rule. The Board believes 
that these revisions to Regulation E are within Congress's broad grant 
of authority to the Board to adopt provisions that carry out the 
purposes of the Credit Card Act and to facilitate compliance with the 
EFTA. These revisions facilitate compliance with the EFTA by permitting 
gift certificates, store gift cards, and general-use prepaid cards 
produced prior to April 1, 2010 to be sold through January 31, 2011, 
even if they do not state the disclosures required under the final gift 
card rule, so long as consumers continue to receive specified 
substantive protections with respect to certificate or card fees and 
expiration dates.
    2. Small entities affected by the final rule. The number of small 
entities affected by this final rule is unknown, as discussed in more 
detail in the Regulatory Flexibility Analysis in the

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final gift card rule. 75 FR 16610 (Apr. 1, 2010). The delayed effective 
date of certain disclosures on certificates and cards will reduce the 
burden and compliance costs for small institutions by providing relief 
from the requirement to remove and destroy non-compliant certificates 
and cards and to replace them with compliant certificates or cards, so 
long as consumers are provided substantive rights under the rule and so 
long as alternative specified disclosures are made.
    3. Reporting, recordkeeping, and compliance requirements. The 
compliance requirements of this final rule are described above in Part 
III. Section-by-Section Analysis.
    4. Steps taken to minimize economic impact on small entities. As 
previously noted, the final rule implements the statutory mandate to 
delay the effective date of certain gift card provisions of the Credit 
Card Act. The final rule also delays the effective date of certain 
additional requirements finalized in the April 2010 final gift card 
rule. As such, the final rule minimizes the economic impact of the 
final gift card rule on small entities.
    5. Other federal rules. The Board has not identified any federal 
rules that duplicate, overlap, or conflict with the final revisions to 
Regulation E.

VI. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the 
final rule under the authority delegated to the Board by the Office of 
Management and Budget (OMB). The collection of information that is 
subject to the PRA by this final rule is found in 12 CFR part 205. The 
Federal Reserve may not conduct or sponsor, and an organization is not 
required to respond to, this information collection unless the 
information collection displays a currently valid OMB control number. 
The OMB control number is 7100-0200.
    This information collection is required to provide benefits for 
consumers and is mandatory. See 15 U.S.C. 1693 et seq. Since the Board 
does not collect any information, no issue of confidentiality arises. 
The respondents/recordkeepers are for-profit financial institutions, 
including small businesses. Institutions are required to retain records 
for 24 months, but this regulation does not specify types of records 
that must be retained.
    The Gift Card Amendment amends section 403 of the Credit Card Act 
to delay the effective date of certain gift card disclosure provisions 
of the Credit Card Act for certificates or cards produced prior to 
April 1, 2010. The Gift Card Amendment provides an extended effective 
date with respect to these provisions in order to permit the sale of 
existing card stock until January 31, 2011. The final rule published 
today revises the April 2010 final gift card rule in order to implement 
the Gift Card Amendment.
    While the final rule delays the implementation of several 
disclosure requirements (Sec. Sec.  205.20(c)(3), (d)(2), (e)(1), and 
(e)(3)), and temporarily implements several other requirements 
(Sec. Sec.  205.20(h)), it does not change the overall burden 
associated with Regulation E. The Federal Reserve believes that the 
original burden estimates are more than sufficient to cover the 
temporary requirements. The estimates and total burden (738,600 hours) 
therefore will remain unchanged as published in the final rule. The 
Federal Reserve continues to expect that the amount of time required to 
implement each of the proposed changes for a given institution may vary 
based on the size and complexity of the respondent.
    The other federal financial agencies are responsible for estimating 
and reporting to OMB the total paperwork burden for the institutions 
for which they have administrative enforcement authority. They may, but 
are not required to, use the Federal Reserve's burden estimation 
methodology. Using the Federal Reserve's method, the total annual 
burden for the respondents regulated by the federal financial agencies 
is estimated to be 4,430,659 hours. This estimate also remains 
unchanged.
    The Federal Reserve has a continuing interest in the public's 
opinions of our collections of information. At any time, comments 
regarding the burden estimate, or any other aspect of this collection 
of information, including suggestions for reducing the burden, may be 
sent to: Secretary, Board of Governors of the Federal Reserve System, 
Washington, DC 20551; and to the Office of Management and Budget, 
Paperwork Reduction Project (7100-0200), Washington, DC 20503.

List of Subjects in 12 CFR Part 205

    Consumer protection, Electronic fund transfers, Federal Reserve 
System, Reporting and recordkeeping requirements.

0
For the reasons set forth in the preamble, the Board adopts as final 
the interim final rule published at 75 FR 50683, August 17, 2010, with 
the following changes:

PART 205--ELECTRONIC FUND TRANSFERS (REGULATION E)

0
1. The authority citation for part 205 continues to read as follows:

    Authority:  15 U.S.C. 1693b.


0
2. In Sec.  205.20 paragraphs (c)(2) and (g)(1) are republished and 
paragraph (h) is revised to read as follows:


Sec.  205.20  Requirements for gift cards and gift certificates.

* * * * *
    (c) * * *
    (2) Format. Disclosures made under this section generally must be 
provided to the consumer in written or electronic form. Except for the 
disclosures in paragraphs (c)(3) and (h)(2), written and electronic 
disclosures made under this section must be in a retainable form. Only 
disclosures provided under paragraphs (c)(3) and (h)(2) of this section 
may be given orally.
* * * * *
    (g) * * *
    (1) Effective date for gift certificates, store gift cards, and 
general-use prepaid cards. Except as provided in paragraph (h), the 
requirements of this section apply to any gift certificate, store gift 
card, or general-use prepaid card sold to a consumer on or after August 
22, 2010, or provided to a consumer as a replacement for such 
certificate or card.
* * * * *
    (h) Temporary exemption. (1) Delayed effective date. For any gift 
certificate, store gift card, or general-use prepaid card produced 
prior to April 1, 2010, the effective date of the requirements of 
paragraphs (c)(3), (d)(2), (e)(1), (e)(3), and (f) of this section is 
January 31, 2011, provided that an issuer of such certificate or card:
    (i) Complies with all other provisions of this section;
    (ii) Does not impose an expiration date with respect to the funds 
underlying such certificate or card;
    (iii) At the consumer's request, replaces such certificate or card 
if it has funds remaining at no cost to the consumer; and
    (iv) Satisfies the requirements of paragraph (h)(2) of this 
section.
    (2) Additional disclosures. Issuers relying on the delayed 
effective date in Sec.  205.20(h)(1) must disclose through in-store 
signage, messages during customer service calls, Web sites, and general 
advertising, that:
    (i) The underlying funds of such certificate or card do not expire;
    (ii) Consumers holding such certificate or card have a right to a 
free replacement certificate or card, which must be accompanied by the 
packaging

[[Page 66649]]

and materials typically associated with such certificate or card; and
    (iii) Any dormancy, inactivity, or service fee for such certificate 
or card that might otherwise be charged will not be charged if such 
fees do not comply with Section 915 of the Electronic Fund Transfer 
Act.
    (3) Expiration of additional disclosure requirements. The 
disclosures in paragraph (h)(2) of this section:
    (i) Are not required to be provided on or after January 31, 2011, 
with respect to in-store signage and general advertising.
    (ii) Are not required to be provided on or after January 31, 2013, 
with respect to messages during customer service calls and Web sites.
* * * * *

0
3. In Supplement I to part 205, new paragraph 20(h) is revised as 
follows:

Supplement I to Part 205--Official Staff Interpretations

* * * * *

Section 205.20--Requirements for Gift Cards and Gift Certificates

* * * * *

20(h) Temporary Exemption

20(h)(1)--Delayed Effective Date

    1. Application to certificates or cards produced prior to April 
1, 2010. Certificates or cards produced prior to April 1, 2010 may 
be sold to a consumer on or after August 22, 2010 without satisfying 
the requirements of Sec.  205.20(c)(3), (d)(2), (e)(1), (e)(3), and 
(f) through January 30, 2011, provided that issuers of such 
certificates or cards comply with the additional substantive and 
disclosure requirements of Sec. Sec.  205.20(h)(1)(i) through (iv). 
Issuers of certificates or cards produced prior to April 1, 2010 
need not satisfy these additional requirements if the certificates 
or cards fully comply with the rule (Sec. Sec.  205.20(a) through 
(f)). For example, the in-store signage and other disclosures 
required by Sec.  205.20(h)(2) do not apply to gift cards produced 
prior to April 1, 2010 that do not have fees and do not expire, and 
which otherwise comply with the rule.
    2. Expiration of temporary exemption. Certificates or cards 
produced prior to April 1, 2010 that do not fully comply with 
Sec. Sec.  205.20(a) through (f) may not be issued or sold to 
consumers on or after January 31, 2011.

20(h)(2)--Additional Disclosures

    1. Disclosures through third parties. Issuers may make the 
disclosures required by Sec.  205.20(h)(2) through a third party, 
such as a retailer or merchant. For example, an issuer may have a 
merchant install in-store signage with the disclosures required by 
Sec.  205.20(h)(2) on the issuer's behalf.
    2. General advertising disclosures. Section 205.20(h)(2) does 
not impose an obligation on the issuer to advertise gift 
certificates, store gift cards, or general-use prepaid cards.

    By order of the Board of Governors of the Federal Reserve 
System, October 22, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010-27191 Filed 10-28-10; 8:45 am]
BILLING CODE 6210-01-P