[Federal Register: August 26, 2008 (Volume 73, Number 166)]
[
Notices]
[Page 50400-50402]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au08-125]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
Proposed Information Collection; Comment Request
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Notice and request for comment.
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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork
and respondent burden, invites the general public and other Federal
agencies to take this opportunity to comment on a continuing
information collection, as required by the Paperwork Reduction Act of
1995. Currently, the OCC is soliciting comment concerning its
extension, without change, of an information collection titled ``Debt
Cancellation Contracts and Debt Suspension Agreements--12 CFR 37.''
DATES: You should submit written comments by: October 27, 2008.
ADDRESSES: Communications Division, Office of the Comptroller of the
Currency, Public Information Room, Mail Stop 1-5, Attention: 1557-0224,
250 E Street, SW., Washington, DC 20219. In addition, comments may be
sent by fax to (202) 874-4448, or by electronic mail to
regs.comments@occ.treas.gov. You may personally inspect and photocopy
comments at the OCC's Public Information Room, 250 E Street, SW.,
Washington, DC. For security reasons, the OCC requires that visitors
make an appointment to inspect comments. You may do so by calling (202)
874-5043. Upon arrival, visitors will be required to present valid
government-issued photo identification and submit to security screening
in order to inspect and photocopy comments.
Additionally, you should send a copy of your comments to OCC Desk
Officer, 1557-0224, by mail to U.S. Office of Management and Budget,
725 17th Street, NW., 10235, Washington, DC 20503, or by fax
to (202) 395-6974.
FOR FURTHER INFORMATION CONTACT: You can request additional information
or a copy of the collection from Mary Gottlieb, (202) 874-5090,
Legislative and Regulatory Activities Division (1557-0202), Office of
the Comptroller of the Currency, 250 E Street, SW., Washington, DC
20219.
SUPPLEMENTARY INFORMATION:
The OCC is proposing to extend OMB approval of the following
information collection:
Title: Debt Cancellation Contracts and Debt Suspension Agreements.
OMB Number: 1557-0224.
[[Page 50401]]
Description: This submission covers an existing regulation and
involves no change to the regulation or the information collection. The
OCC requests that OMB approve its revised estimates and renew its
approval of the information collection. The estimates have been revised
to reflect the current number of national banks.
The regulation requires national banks to disclose information
about a Debt Cancellation Contract (DCC) or Debt Suspension Agreement
(DSA). The short form disclosure is usually made orally and is issued
at the time the bank firsts solicits the purchase of a contract. The
long form disclosure is usually made in writing and is issued before
the customer completes the purchase of the contract. There are special
rules for transactions by telephone, solicitations using written mail
inserts or ``take one'' applications, and electronic transactions. Part
37 provides two forms of disclosure that serve as models for satisfying
the requirements of the rule. Use of the forms is not mandatory. A bank
may adjust the form and wording of its disclosures so long as the
requirements of the regulation are met.
12 U.S.C. 24 (Seventh) authorizes national banks to enter into DCCs
and DSAs. The requirements of part 37 enhance consumer protections for
customers who buy DCCs and DSAs from national banks and ensure that
national banks provide these products on a safe and sound basis by
requiring them to effectively manage their risk exposure.
Section 37.6
Section 37.6 requires a bank to provide the following disclosures,
as appropriate:
Anti-tying--A bank must inform the customer that purchase
of the product is optional and neither its decision whether to approve
the loan nor the terms and conditions of the loan are conditioned on
the purchase of a DCC or DSA.
Explanation of debt suspension agreement--A bank must
disclose that if a customer activates the agreement, the customer's
duty to pay the loan principal and interest is only suspended and the
customer must fully repay the loan after the period of suspension has
expired.
Amount of the fee--A bank must make disclosures regarding
the amount of the fee. The disclosure must differ depending on whether
the credit is open-end or closed-end. In the case of closed-end credit,
the bank must disclose the total fee. In the case of open-end credit,
the bank must either disclose that the periodic fee is based on the
account balance multiplied by a unit cost and provide the unit cost, or
disclose the formula used to compute the fee.
Lump sum payment of fee--A bank must disclose, where
appropriate, that a customer has the option to pay the fee in a single
payment or in periodic payments. This disclosure is not appropriate in
the case of a DCC or DSA provided in connection with a home mortgage
loan since the option to pay the fee in a single payment is not
available in that case. Banks are also required to disclose that adding
the fee to the amount borrowed will increase the cost of the contract.
Lump sum payment of fee with no refund--A bank must
disclose that the customer has the option to choose a contract with or
without a refund provision. This disclosure also states that prices of
refund and no-refund products are likely to differ.
Refund of fee paid in lump sum--If a bank permits a
customer to pay the fee in a single payment and to add the fee to the
amount borrowed, the bank must disclose the bank's cancellation policy.
The disclosure informs the customer that the DCC or DSA may be canceled
at any time for a refund, within a specified number of days for a full
refund, or at any time with no refund.
Whether use of credit line is restricted--A bank must
inform a customer if the customer's activation of the contract would
prohibit the customer from incurring additional charges or using the
credit line.
Termination of a DCC or DSA--A bank must explain the
circumstances under which a customer or the bank could terminate the
contract if termination is permitted during the life of the loan.
Additional disclosures--A bank must inform consumers that
it will provide additional information before the customer is required
to pay for the product.
Eligibility requirements, conditions, and exclusions--A
bank must describe any material limitations relating to the DCC or DSA.
The content of the short and long form may vary, depending on
whether a bank elects to provide a summary of the conditions and
exclusions in the long form disclosures or refer the customer to the
pertinent paragraphs in the contract. The short form requires a bank to
instruct the customer to read carefully both the long form disclosures
and the contract for a full explanation of the terms of the contract.
The long form gives a bank the option of either separately summarizing
the limitations or advising the customer that a complete explanation of
the eligibility requirements, conditions, and exclusions is available
in the contract and identifying the paragraphs where a customer may
find that information.
Section 37.7
Section 37.7 requires a bank to obtain a customer's written
affirmative election to purchase a contract and written acknowledgment
of receipt of the disclosures required by Sec. 37.6. If the sale of
the contract occurs by telephone, the customer's affirmative election
to purchase and acknowledgment of receipt of the required short form
may be made orally, provided the bank maintains certain documentation.
If the contract is solicited through written materials such as mail
inserts or ``take one'' applications and the bank provides only the
short form disclosures in the written materials, then the bank shall
mail the acknowledgment, together with the long form disclosures, to
the customer. The bank may not obligate the customer to pay for the
contract until after the bank has received the customer's written
acknowledgment of receipt of disclosures unless the bank maintains
certain documentation. The affirmative election and acknowledgment may
also be made electronically.
Type of Review: Regular.
Affected Public: Businesses or other for-profit.
Number of Respondents: 1,800.
Total Annual Responses: 1,800.
Frequency of Response: On occasion.
Total Annual Burden Hours: 43,200.
Comments submitted in response to this notice will be summarized
and included in the request for OMB approval. All comments will become
a matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information shall have practical utility;
(b) The accuracy of the agency's estimate of the burden of the
collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
(d) Ways to minimize the burden of the collection on respondents,
including through the use of automated collection techniques or other
forms of information technology; and
(e) Estimates of capital or startup costs and costs of operation,
maintenance, and purchase of services to provide information.
[[Page 50402]]
Dated: August 15, 2008.
Michele Meyer,
Assistant Director, Legislative & Regulatory Activities Division.
[FR Doc. E8-19452 Filed 8-25-08; 8:45 am]
BILLING CODE 4810-33-P