36102 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

By order of the Board of Governors of the 

Federal Reserve System, July 15, 2009. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. E9–17195 Filed 7–21–09; 8:45 am] 

BILLING CODE 6210–01–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 707 

RIN 3133–AD57 

Truth in Savings 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: NCUA is amending its Truth 

in Savings rule and official staff 

interpretation to remove the provisions 

regarding the electronic delivery of 

disclosures. The official staff 

interpretations are amended to include 

guidance on electronic disclosures. 

Additionally, NCUA is amending the 

rule to require all credit unions to 

disclose aggregate overdraft fees on 

periodic statements regardless of 

whether they promote the payment of 

overdrafts. The final rule also addresses 

account balance disclosures provided to 

members through automated systems. 

DATES: This rule is effective January 1, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Moisette Green, Staff Attorney, Office of 

General Counsel, National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, Virginia 22314–3428, or 

telephone: (703) 518–6540. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Truth in Savings Act (TISA) 

requires NCUA to promulgate 

regulations substantially similar to those 

promulgated by the Federal Reserve 

Board (FRB). 12 U.S.C. 4311(b). In doing 

so, NCUA is to take into account the 

unique nature of credit unions and the 

limitations under which they pay 

dividends on member accounts. In 

March 2009, NCUA proposed 

amendments to its TISA rule to align it 

with recent changes the Federal Reserve 

Board made to Regulation DD. See 74 

FR 13129 (March 26, 2009). 

As required by the Truth in Savings 

Act (TISA), NCUA proposed to amend 

its TISA rule and official staff 

interpretation to align it with the 

Federal Reserve Board’s Regulation DD. 

Specifically, the proposed rule 

contained the provisions and guidance 

on the electronic delivery of disclosures. 

Additionally, NCUA proposed to amend 

the rule and the official staff 

commentary to require all credit unions 

to disclose aggregate overdraft fees on 

periodic statements. The proposed rule 

also addressed balance disclosures 

credit unions provide to members 

through automated systems. 

II. Comments and the Final Rule 

NCUA is adopting the rule as it was 

proposed with minor changes. 

Specifically, the final rule amends 

§ 707.1 to include the Office of 

Management and Budget approval 

number for the information collections 

in the rule and includes a minor 

technical correction to the sample form 

in Appendix B–12 for formatting 

purposes. 

NCUA received comments from two 

credit unions and two trade 

associations. One credit union 

supported the proposal to withdraw the 

provisions regulating electronic delivery 

of disclosures under TISA and to permit 

electronic disclosures in accordance 

with the E–Sign Act, but opposed the 

proposed amendments that would 

require all credit unions to disclose the 

aggregate periodic and year-to-date fees 

charged to a member account for 

overdraft services. The credit union 

commented the amendment would be 

burdensome and act as a disincentive to 

credit unions that do not advertise or 

market overdraft programs to their 

members. NCUA must issue TISA rules 

that are substantially similar to 

Regulation DD, 12 CFR Part 230, unless 

the unique nature of credit unions and 

their payment of dividends call for 

different regulations. See 12 U.S.C. 

4311(b). The Board concludes the nature 

of credit unions and the payment of 

dividends do not give it reason to issue 

regulations regarding overdraft fees and 

the electronic delivery of disclosures 

that differ from Regulation DD. 

The second credit union commenter 

requested a final rule become effective 

no earlier than January 1, 2010, to give 

credit unions sufficient time to make the 

necessary operational changes and 

educate members. The Board is aware 

that credit unions have anticipated 

amendments to Part 707 since the 

Federal Reserve Board issued 

amendments to Regulation DD in 

December 2008. Therefore, the Board is 

issuing this final rule with an effective 

date of January 1, 2010. 

One trade association supported the 

proposed amendments regarding 

electronic disclosures, but had concerns 

with the provisions involving disclosure 

of overdraft fees. It does not believe the 

benefit of the rule would outweigh the 

burden. To mitigate the burden, the 

trade association suggested permitting 

members to request the aggregate 

overdraft fee disclosures instead of 

requiring credit unions to provide them 

to all members. Additionally, it 

encouraged NCUA to differentiate 

between overdraft fees resulting from 

credit unions paying funds to cover an 

overdraft as a courtesy and fees that 

result from a credit union’s contractual 

obligation to pay a transaction, such as 

under an agreement with VISA or 

MasterCard. The trade association 

believes credit unions should be 

required to disclose the fees resulting 

from a courtesy payment, but not the 

fees that stem from a contractual 

obligation. Another trade association 

supported the provisions that would 

exclude funds in an overdraft program 

from a member’s available balance 

disclosed in response to a balance 

inquiry on an automated system and 

that address electronic disclosures, but 

questioned the need for the 

amendments to the overdraft fee 

disclosures. 

The final rule requires all credit 

unions to disclose periodic and 

aggregate year-to-date overdraft fees on 

periodic statements, regardless of 

whether they advertise or promote 

member use of overdraft services. Under 

the current TISA regulation, credit 

unions that provide periodic statements 

must disclose fees or charges imposed 

on a member account during the 

statement period. 12 CFR 707.6(a)(3). 

Further, credit unions that promote the 

payment of overdrafts in an 

advertisement must also disclose the 

aggregate totals for overdraft fees and 

returned item fees for both the statement 

period and calendar year-to-date. 12 

CFR 707.11(a). The rule eliminates the 

distinction between credit unions that 

promote overdraft services and those 

that do not, and requires all credit 

unions offering overdraft services to 

disclose the fees imposed for the 

payment of overdrafts for each 

statement period and the year-to-date 

aggregate. The amendment also 

eliminates the confusion surrounding 

the distinction between marketing and 

educational materials for purposes of 

determining when to disclose the yearto-date fees. 

Additionally, credit unions are not 

required to offer overdraft services and 

may restrict the payment of overdrafts 

on debit card or point-of-sale 

transactions. Credit unions generally 

impose a fee for overdraft services 

regardless of whether the payment of an 

overdraft is a courtesy or results from a 

contractual obligation. To inform 

members about the fees charged for 

using discretionary overdraft services 


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Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 36103 

and to help them better understand the 

costs associated with their accounts, the 

rule requires all credit unions to 

disclose the aggregate fee information 

for the statement period and calendar 

year-to-date. 

III. Regulatory Procedures 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

requires NCUA to prepare an analysis to 

describe any significant economic 

impact any regulation may have on a 

substantial number of small entities. 5 

U.S.C. 603(a). For purposes of this 

analysis, NCUA considers credit unions 

having under $10 million in assets small 

entities. Interpretive Ruling and Policy 

Statement 03–2, 68 FR 31949 (May 29, 

2003). As of March 31, 2009, out of 

7,749 federally insured credit unions, 

3,335 had less than $10 million in 

assets. 

NCUA prepared a regulatory 

flexibility analysis as a part of the 

proposed rule issued in March 2009. 74 

FR 13129, 13135 (March 26, 2009). The 

Board received no comments addressing 

how the rule would affect small credit 

unions. 

This final rule aligns NCUA’s 

regulation with the Federal Reserve 

Board’s Regulation DD, as required 

under TISA. TISA was enacted, in part, 

for the purpose of requiring clear and 

uniform disclosures regarding deposit 

account terms and fees assessable 

against these accounts. Such disclosures 

allow consumers to make meaningful 

comparisons between different financial 

institutions and also allow consumers to 

make informed judgments about the use 

of their accounts. 12 U.S.C. 4301. TISA 

requires the Board to prescribe 

regulations to carry out the purpose and 

provisions of the statute. 12 U.S.C. 

4308(a)(1), 4311(b). The Board is 

adopting revisions to part 707 to address 

the uniformity and adequacy of credit 

unions’ disclosure of fees associated 

with overdraft services. Additionally, 

the rule eliminates the regulatory 

burden associated with credit unions 

providing disclosures to their members 

through electronic means. 

Credit unions must consider other 

laws when administering an overdraft 

protection program. Although other 

laws and regulations may apply to a 

credit union’s payment of overdrafts, 

the final revisions to part 707 do not 

duplicate or conflict with the 

requirements imposed by these laws. 

The Board has also considered the 

interagency guidance on overdraft 

protection programs issued in February 

2005 and has determined that issuance 

of the final revisions to part 707 is 

consistent with the interagency 

guidance. 70 FR 9127 (February 24, 

2005). 

This final rule directly affects all 

credit unions that offer overdraft 

services or provide electronic 

disclosures. While NCUA does know 

how many credit unions provide 

electronic disclosures, it estimates 2,782 

credit unions offer overdraft services 

other than a traditional line of credit, 

and 226 of them are small credit unions. 

Therefore, NCUA has determined this 

final rule will not have an impact on a 

substantial number of small entities. 

Additionally, NCUA has determined 

the economic impact on small credit 

unions affected by the final rule will not 

be significant. NCUA expects the rule 

will increase the paperwork burden for 

disclosing overdraft fees and eliminate 

the burden for electronic delivery of 

disclosures. Therefore, the economic 

impact, if any, will be minimal. A 

majority of credit unions use software 

vendors to provide the disclosures 

required under TISA and the 

implementing regulations. The vendors 

routinely provide updates to software 

and other products to credit unions to 

ensure compliance with regulatory 

requirements under the terms of the 

service contract. NCUA expects credit 

unions employing a third party vendor 

to provide TISA disclosures will incur 

minimal additional costs, if any. 

Accordingly, the Board certifies this 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995, 44 U.S.C. 3501 

et seq., the Board has submitted the 

information collection requirements 

contained in this final rule to the Office 

of Management and Budget (OMB). The 

NCUA 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 current OMB 

control number for the Truth in Savings 

program is 3133–0134. This information 

collection has been revised to include 

the requirements of this final rule. The 

proposed rule contained a discussion of 

the revised information collection. 74 

FR 13129, 13136 (March 26, 2009). OMB 

approval is pending. 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996, Public Law 104–121, provides 

generally for congressional review of 

agency rules. A reporting requirement is 

triggered in instances where NCUA 

issues a final rule as defined by Section 

551 of the Administrative Procedures 

Act. 5 U.S.C. 551. The Office of 

Information and Regulatory Affairs, an 

office within OMB, is reviewing this 

final rule for purposes of SBREFA, and 

a determination is pending. 

Executive Order 13132 

Executive Order 13132 encourages 

independent regulatory agencies to 

consider the impact of their actions on 

state and local interests. In adherence to 

fundamental federalism principles, 

NCUA, an independent regulatory 

agency as defined in 44 U.S.C. 3502(5), 

voluntarily complies with the executive 

order. The final rule will not have 

substantial direct effect on the states, on 

the connection between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. NCUA has 

determined this final rule does not 

constitute a policy that has federalism 

implications for purposes of the 

executive order. 

The Treasury and General Government 

Appropriations Act, 1999—Assessment 

of Federal Regulations and Policies on 

Families 

NCUA has determined that this final 

rule will not affect family well-being 

within the meaning of section 654 of the 

Treasury and General Government 

Appropriations Act, 1999, Public Law 

105–277, 112 Stat. 2681 (1998). 

By the National Credit Union 

Administration Board on July 16, 2009. 

Mary F. Rupp, 

Secretary of the Board. 

List of Subjects in 12 CFR Part 707 

Advertising, Credit unions, Consumer 

protection, Reporting and recordkeeping 

requirements, Truth in Savings. 

■ For the reasons set forth in the 

preamble, NCUA amends 12 CFR Part 

707 and the Official Staff Commentary 

as set forth below: 

PART 707—TRUTH IN SAVINGS 

■ 1. The authority citation for part 707 

continues to read as follows: 

Authority: 12 U.S.C. 4311. 

■ 2. Section 707.1 is amended by 

revising paragraph (a) to read as follows: 

§ 707.1 Authority, purpose, coverage, and 

effect on state laws. 

(a) Authority. This regulation is 

issued by the National Credit Union 

Administration to implement the Truth 

in Savings Act of 1991 (TISA), 


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36104 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

contained in the Federal Deposit 

Insurance Corporation Improvement Act 

of 1991, 12 U.S.C. 3201 et seq., Pub. L. 

102–242, 105 Stat. 2236. Information 

collection requirements in this 

regulation have been approved by the 

Office of Management and Budget under 

the provisions of 44 U.S.C. 3501 et seq. 

and have been assigned OMB No. 3133– 

0134. 

* * * * * 

■ 3. Section 707.3 is amended by 

revising paragraph (a) and removing 

paragraph (g) to read as follows: 

§ 707.3 General disclosure requirements. 

(a) Form. Credit unions must make the 

disclosures required by §§ 707.4 through 

707.6 of this part, as applicable, clearly 

and conspicuously, in writing, and in a 

form the member or potential member 

may keep. Credit unions may provide 

the disclosures required by this part to 

a member or potential member in 

electronic form, subject to compliance 

with the consent and other applicable 

provisions of the Electronic Signatures 

in Global and National Commerce Act 

(E–Sign Act), 15 U.S.C. 7001 et seq. 

Credit unions may provide the 

disclosures required by §§ 707.4(a)(2) 

and 707.8 to a member or potential 

member in electronic form without 

regard to the consent or other provisions 

of the E–Sign Act in the circumstances 

set forth in those sections. Disclosures 

for each account offered by a credit 

union may be presented separately or 

combined with disclosures for the credit 

union’s other accounts, as long as it is 

clear which disclosures are applicable 

to the member or potential member’s 

account. 

* * * * * 

■ 4. Section 707.4 is amended by 

revising paragraph (a)(1) and (a)(2)(i), to 

read as follows: 

§ 707.4 Account disclosures. 

(a) Delivery of account disclosures— 

(1) Account opening. (i) General. A 

credit union must provide account 

disclosures to a member or potential 

member before an account is opened or 

a service is provided, whichever is 

earlier. A credit union is deemed to 

have provided a service when a fee 

required to be disclosed is assessed. 

Except as provided in paragraph 

(a)(1)(ii) of this section, if a member or 

potential member is not present at the 

credit union when the account is 

opened or the service is provided and 

has not already received the disclosures, 

the credit union must mail or deliver 

the disclosures no later than 10 business 

days after the account is opened or the 

service is provided, whichever is earlier. 

(ii) Timing of electronic disclosures. If 

a member or potential member who is 

not present at the credit union uses 

electronic means, for example, an 

internet Web site, to open an account or 

request a service, the disclosures 

required under paragraph (a)(1) of this 

section must be provided before the 

account is opened or the service is 

provided. 

(2) Requests. (i) A credit union must 

provide account disclosures to a 

member or potential member upon 

request. If a member or potential 

member who is not present at the credit 

union makes a request, the credit union 

must mail or deliver the disclosures 

within a reasonable time after it receives 

the request and may provide the 

disclosures in paper form or 

electronically if the member or potential 

member agrees. 

* * * * * 

§ 707.10 [Reserved] 

■ 5. Section 707.10 is removed and 

reserved. 

■ 6. Section 707.11 is amended by 

revising the heading, paragraphs (a), 

(b)(2)(x) and (b)(2)(xi), and adding 

paragraphs (b)(2)(xii) and (c) to read as 

follows: 

§ 707.11 Additional disclosure 

requirements for overdraft services. 

(a) Disclosure of total fees on periodic 

statements. (1) General. A credit union 

must separately disclose on each 

periodic statement, as applicable: 

(i) The total dollar amount for all fees 

or charges imposed on the account for 

paying checks or other items when there 

are insufficient or unavailable funds and 

the account becomes overdrawn; and 

(ii) The total dollar amount for all fees 

or charges imposed on the account for 

returning items unpaid. 

(2) Totals required. The disclosures 

required by paragraph (a)(1) of this 

section must be provided for the 

statement period and for the calendar 

year-to-date. 

(3) Format requirements. The 

aggregate fee disclosures required by 

paragraph (a) of this section must be 

disclosed in close proximity to fees 

identified under § 707.6(a)(3), using a 

format substantially similar to Sample 

Form B–10 in appendix B. 

(b) * * * 

(2) * * * 

(x) a notice provided to a member, 

such as at an ATM, that completing a 

requested transaction may trigger a fee 

for overdrawing an account, or a general 

notice that items overdrawing an 

account may trigger a fee; 

(xi) informational or educational 

materials concerning the payment of 

overdrafts if the materials do not 

specifically describe the credit union’s 

overdraft service; or 

(xii) an opt-out or opt-in notice 

regarding the credit union’s payment of 

overdrafts or provision of discretionary 

overdraft services. 

* * * * * 

(c) Disclosure of account balances. If 

a credit union discloses balance 

information to a member through an 

automated system, the balance may not 

include additional amounts that the 

credit union may provide to cover an 

item when there are insufficient or 

unavailable funds in the member’s 

account, whether under a service 

provided in its discretion, a service 

subject to part 226 of this title 

(Regulation Z), or a service to transfer 

funds from another member account. 

The credit union may, at its option, 

disclose additional account balances 

that include such additional amounts, if 

the credit union prominently states that 

any such balance includes such 

additional amounts and, if applicable, 

that additional amounts are not 

available for all transactions. 

■ 7. Amend Appendix B to part 707, by 

adding B–12 to read as follows: 

Appendix B to Part 707—Model Clauses 

and Sample Forms 

* * * * * 

B–12 AGGREGATE OVERDRAFT AND RETURNED ITEM FEES SAMPLE FORM

Total for 

this period 

Total 

year-to-date 

Total Overdraft Fees ............................................................................................................................................ $60.00 $150.00 

Total Returned Item Fees .................................................................................................................................... 0.00 30.00 


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■ 8. In Appendix C to Part 707, the 

following amendments are made: 

■ a. In Section 707.4—Account 

disclosures, under (a)(2)(i), paragraphs 

3. and 4. are revised. 

■ b. In Section 707.8—Advertising, 

under (a) Misleading or inaccurate 

advertisements, paragraph 9. is revised 

and new paragraph 11. is added. 

■ c. In Section 707.8—Advertising, 

under (b) Permissible rates, paragraph 4. 

is removed. 

■ d. In Section 707.8—Advertising, 

under (e)(1)(i), paragraph 1. is revised. 

■ e. Section 707.10—Electronic 

Communication is removed and 

reserved. 

■ f. In Sections 707.11, revise the 

section heading and the headings for 

paragraphs (a) and (a)(1) and remove 

(a)(1)–2g. In Section 707.11, paragraphs 

(a)(1)–3. through (a)(1)–8. are 

redesignated as paragraphs (a)(1)–1. 

through (a)(1)–6, respectively. 

■ h. In Section 707.11, new paragraphs 

(a)(1)–2. through (a)(1)–4 are revised. 

■ i. In Section 707.11, paragraph (a)(3)– 

1. is revised. 

■ j. In Section 707.11, paragraph (a)(5)– 

1. is removed. 

■ k. In Section 707.11, new paragraphs 

(c)–1. through (c)–3. are added. 

The amendments read as follows: 

Appendix C to Part 707—Official Staff 

Interpretations 

* * * * * 

Section 707.4—Account Disclosures 

(a) Delivery of Account Disclosures 

* * * * * 

(a)(2) Requests 

(a)(2)(i) 

* * * * * 

3. Timing for response. Ten business days 

is a reasonable time for responding to 

requests for account information that 

members or potential members do not make 

in person, including requests made by 

electronic means, such as by electronic mail. 

4. Use of electronic means. If a member or 

potential member who is not present at the 

credit union makes a request for account 

disclosures, including a request made by 

telephone, e-mail, or via the credit union’s 

Web site, the credit union may send the 

disclosures in paper form or, if the member 

or potential member agrees, may provide the 

disclosures electronically, such as to an email address that the member or potential 

member provides for that purpose, or on the 

credit union’s Web site, without regard to the 

consent or other provisions of the E–Sign 

Act. The regulation does not require a credit 

union to provide, nor a member or potential 

member to agree to receive, the disclosures 

required by § 707.4(a)(2) in electronic form. 

* * * * * 

Section 707.8—Advertising 

(a) Misleading or Inaccurate Advertisements 

* * * * * 

9. Electronic advertising. If an electronic 

advertisement, such as an advertisement 

appearing on an internet Web site, displays 

a triggering term, such as a bonus or annual 

percentage yield, the advertisement must 

clearly refer the member to the location 

where the additional required information 

begins. For example, an advertisement that 

includes a bonus or annual percentage yield 

may be accompanied by a link that directly 

takes the member to the additional 

information. 

* * * * * 

11. Additional disclosures in connection 

with the payment of overdrafts. The rule in 

§ 707.3(a), providing that disclosures 

required by § 707.8 may be provided to the 

member in electronic form without regard to 

E–Sign Act requirements, applies to the 

disclosures described in § 707.11(b), which 

are incorporated by reference in § 707.8(f). 

* * * * * 

(e) Exemption for Certain Advertisements 

(e)(1) Certain Media 

(e)(1)(i) 

1. Internet advertisements. The exemption 

for advertisements made through broadcast 

or electronic media does not extend to 

advertisements posted on the internet or sent 

by e-mail. 

* * * * * 

Section 707.11 Additional disclosures 

regarding the payment of overdrafts 

(a) Disclosure of total fees on periodic 

statements 

(a)(1) General 

* * * * * 

2. Fees for paying overdrafts. Credit unions 

must disclose on periodic statements a total 

dollar amount for all fees or charges imposed 

on the account for paying overdrafts. The 

credit union must disclose separate totals for 

the statement period and for the calendar 

year-to-date. The total dollar amount 

includes per-item fees as well as interest 

charges, daily or other periodic fees, or fees 

charged for maintaining an account in 

overdraft status, whether the overdraft is by 

check or by other means. It also includes fees 

charged when there are insufficient funds 

because previously deposited funds are 

subject to a hold or are uncollected. It does 

not include fees for transferring funds from 

another member account to avoid an 

overdraft, or fees charged under a service 

subject to part 226 of this title (Regulation Z). 

3. Fees for returning items unpaid. The 

total dollar amount for all fees for returning 

items unpaid must include all fees charged 

to the account for dishonoring or returning 

checks or other items drawn on the account. 

The credit union must disclose separate 

totals for the statement period and for the 

calendar year-to-date. Fees imposed when 

deposited items are returned are not 

included. Credit unions may use terminology 

such as ‘‘returned item fee’’ or ‘‘NSF fee’’ to 

describe fees for returning items unpaid. 

4. Waived fees. In some cases, a credit 

union may provide a statement for the 

current period reflecting that fees imposed 

during a previous period were waived and 

credited to the account. Credit unions may, 

but are not required to, reflect the adjustment 

in the total for the calendar year-to-date and 

in the applicable statement period. For 

example, if a credit union assesses a fee in 

January and refunds the fee in February, the 

credit union could disclose a year-to-date 

total reflecting the amount credited, but it 

should not affect the total disclosed for the 

February statement period, because the fee 

was not assessed in the February statement 

period. If a credit union assesses and then 

waives and credits a fee within the same 

cycle, the credit union may, at its option, 

reflect the adjustment in the total disclosed 

for fees imposed during the current statement 

period and for the total for the calendar yearto-date. Thus, if the credit union assesses and 

waives the fee in the February statement 

period, the February fee total could reflect a 

total net of the waived fee. 

* * * * * 

(a)(3) Time period covered by disclosures 

1. Periodic statement disclosures. The 

disclosures under § 707.11(a) must be 

included on periodic statements provided by 

a credit union starting with the first 

statement period that begins after January 1, 

2010. For example, if a member’s statement 

period typically closes on the 15th of each 

month, a credit union must provide the 

disclosures required by § 707.11(a)(1) on 

subsequent periodic statements for that 

member beginning with the statement 

reflecting the period from January 16, 2010 

to February 15, 2010. 

* * * * * 

(c) Disclosure of account balances 

1. Balance that does not include additional 

amounts. For purposes of the balance 

disclosure requirement in § 707.11(c), if a 

credit union discloses balance information to 

a member through an automated system, it 

must disclose a balance that excludes any 

funds the credit union may provide to cover 

an overdraft pursuant to a discretionary 

overdraft service that will be paid by the 

credit union under a service subject to part 

226 of this title (Regulation Z) or that will be 

transferred from another account held 

individually or jointly by a member. The 

balance may, but need not, include funds 

that are deposited in the member’s account, 

such as from a check, that are not yet made 

available for withdrawal in accordance with 

the funds availability rules under part 229 of 

the title (Regulation CC). In addition, the 

balance may, but need not, include funds 

that are held by the credit union to satisfy a 

prior obligation of the member, for example, 

to cover a hold for an ATM or debit card 

transaction that has been authorized but for 

which the credit union has not settled. 

2. Additional balance. The credit union 

may disclose additional balances 

supplemented by funds that may be provided 

by the credit union to cover an overdraft, 

whether pursuant to a discretionary overdraft 

service, a service subject to part 226 of this 

title (Regulation Z), or a service that transfers 


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36106 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

funds from another account held 

individually or jointly by the member, so 

long as the credit union prominently states 

that any additional balance includes these 

additional overdraft amounts. The credit 

union may not simply state, for instance, that 

the second balance is the member’s 

‘‘available balance,’’ or contains ‘‘available 

funds.’’ Rather, the credit union should 

provide enough information to convey that 

the second balance includes these amounts. 

For example, the credit union may state that 

the balance includes ‘‘overdraft funds.’’ 

Where a member has opted out of the credit 

union’s discretionary overdraft service, any 

additional balance disclosed should not 

include funds credit unions provide under 

that service. Where a member has opted out 

of the credit union’s discretionary overdraft 

service for some, but not all transactions, e.g., 

the member has opted out of overdraft 

services for ATM and debit card transactions, 

a credit union that includes funds from its 

discretionary overdraft service in the balance 

should convey that the overdraft funds are 

not available for all transactions. For 

example, the credit union could state that 

overdraft funds are not available for ATM 

and debit card transactions. 

3. Automated systems. The balance 

disclosure requirement in § 707.11(c) applies 

to any automated system through which the 

member requests a balance, including, but 

not limited to, a telephone response system, 

the credit union’s Internet site, or an ATM. 

The requirement applies whether the credit 

union discloses a balance through an ATM 

owned or operated by the credit union or 

through an ATM not owned or operated by 

the credit union, including an ATM operated 

by an entity that is not a financial institution. 

If the balance is obtained at an ATM, the 

requirement also applies whether the balance 

is disclosed on the ATM screen or on a paper 

receipt. 

* * * * * 

[FR Doc. E9–17313 Filed 7–21–09; 8:45 am] 

BILLING CODE 7535–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 115 and 121 

RIN 3245–AF94 

American Recovery and Reinvestment 

Act: Surety Bond Guarantees; Size 

Standards 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This interim final rule 

implements provisions of the American 

Recovery and Reinvestment Act of 2009 

that pertain to the Surety Bond 

Guaranty (SBG) Program. Until 

September 30, 2010, the U.S. Small 

Business Administration (SBA) is 

authorized to guarantee bonds on 

Contracts of up to $5,000,000 (or up to 

$10 million based upon the certification 

of a Federal contracting officer). SBA is 

further authorized, until September 30, 

2010, to partially deny liability under its 

bond guarantee, but cannot deny 

liability in whole or even in part on the 

basis of material facts disclosed to SBA 

in a guarantee application submitted 

under the Prior Approval Program. In 

addition to implementing these 

authorities, this rule also revises the size 

standard for participation in the SBG 

Program, and makes several changes 

primarily for clarification purposes. 

DATES: This rule is effective July 22, 

2009. 

Comment Date: Comments must be 

received on or before August 21, 2009. 

ADDRESSES: You may submit comments, 

identified by RIN: 3245–AF94, by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Office of Surety Guarantees, 

Suite 8600, 409 Third Street, SW., 

Washington, DC 20416. 

• Hand Delivery/Courier: Office of 

Surety Guarantees, 409 Third Street, 

SW., Washington, DC 20416. 

SBA will post all comments on http:// 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at http://www.regulations.gov, 

please submit the information to Office 

of Surety Guarantees, 409 Third Street, 

SW., Washington, DC 20416 or send an 

email to Office of Surety Guarantees. 

Highlight the information that you 

consider to be CBI and explain why you 

believe SBA should hold this 

information as confidential. SBA will 

review the information and make the 

final determination whether it will 

publish the information. 

FOR FURTHER INFORMATION CONTACT: 

Barbara J. Brannan, Office of Surety 

Guarantees, 202–205–6545. 

SUPPLEMENTARY INFORMATION: 

I. Background Information. 

The American Recovery and 

Reinvestment Act of 2009 (Recovery 

Act), Public Law 111–5, was enacted on 

February 17, 2009 to, among other 

things, promote economic activity by 

preserving and creating jobs and 

assisting those most impacted by the 

severe economic conditions facing the 

nation. The U.S. Small Business 

Administration is one of several 

agencies that will play a role in 

achieving these goals. As part of its 

recovery efforts, SBA will make several 

changes to the Agency’s SBG program, 

which will provide an enhanced level of 

benefits to the small business 

contractors and Surety companies that 

participate in the program. Under the 

SBG program SBA guarantees bid, 

payment and performance bonds for 

small contractors who cannot obtain 

bonds through regular commercial 

channels. SBA’s guarantee gives Surety 

Companies an incentive to provide 

bonding for small businesses, and 

thereby assists small businesses in 

gaining greater access to contracting 

opportunities. 

The various modifications to the SBG 

program as a result of the Recovery Act 

are temporary in nature and will expire 

on September 30, 2010. These 

modifications include an increase in the 

amount of the Contract or Order for 

which SBA is authorized to guarantee 

bonds; and revised standards for denial 

of liability on claims, and determining 

whether the small business contractor 

qualifies for a Recovery Act guaranteed 

bond. This interim final rule 

implements these changes and others as 

described in the following section-bysection analysis. 

II. Section-by-Section Analysis 

A new defined term, ‘‘Applicable 

Statutory Limit’’, has been added to 

§ 115.10. Currently, §§ 115.12(e)(1) and 

(3), 115.19(a), 115.31(d) and 115.68 all 

state that ‘‘$2,000,000’’ is the maximum 

dollar amount of a Contract for which 

SBA is authorized to guarantee bonds. 

Substitution of ‘‘Applicable Statutory 

Limit’’ for ‘‘$2,000,000’’ in each of these 

provisions will make future 

amendments unnecessary each time the 

statutory limit is revised. 

The definition of ‘‘Applicable 

Statutory Limit’’ also makes it clear that 

for any particular bond the Applicable 

Statutory Limit is the statutory limit in 

effect at the time a Prior Approval 

Surety’s request for a bond guarantee is 

approved by SBA or a Preferred Surety 

executes a bond, without regard to any 

subsequent changes in that limit. 

However, if SBA guaranteed a Bid Bond, 

the Applicable Statutory Limit for the 

related Final Bonds, including Ancillary 

Bonds, is the one in effect when SBA 

guaranteed the Bid Bond. 

The Recovery Act temporarily raises 

the Applicable Statutory Limit from 

$2,000,000 to $5,000,000 and further 

authorizes SBA to guarantee bonds on 

Federal Contracts in excess of 

$5,000,000 (up to $10,000,000) if a 

Federal contracting officer certifies the 

need for the guarantee; but SBA’s 

authority to guarantee bonds on any 

Contract in excess of $2,000,000 is 

scheduled to expire on September 30, 

2010. Restrictions on bond guarantees 

for Contracts in excess of $2,000,000 are 


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