[Federal Register Volume 75, Number 93 (Friday, May 14, 2010)]
[Proposed Rules]
[Pages 27239-27248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-11492]
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DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 210
RIN 1510-AB24
Federal Government Participation in the Automated Clearing House
AGENCY: Financial Management Service, Fiscal Service, Treasury.
ACTION: Notice of proposed rulemaking with request for comment.
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SUMMARY: The Department of the Treasury, Financial Management Service
(Service) is proposing to amend our regulation governing the use of the
Automated Clearing House (ACH) system by Federal agencies. Our
regulation adopts, with some exceptions, the ACH Rules developed by
NACHA--The Electronic Payments
[[Page 27240]]
Association (NACHA) as the rules governing the use of the ACH Network
by Federal agencies. We are issuing this proposed rule to address
changes that NACHA has made to the ACH Rules since the publication of
NACHA's 2007 ACH Rules book. These changes include new requirements to
identify all international payment transactions using a new Standard
Entry Class Code and to include certain information in the ACH record
sufficient to allow the receiving financial institution to identify the
parties to the transaction and to allow Office of Foreign Assets
Control (OFAC) screening.
In addition, we are proposing to streamline the process for
reclaiming post-death benefit payments from financial institutions; to
require financial institutions to provide limited account-related
customer information related to the reclamation of post-death benefit
payments as permitted under the Payment Transactions Integrity Act of
2008; to allow Federal payments to be delivered to pooled or master
accounts established by nursing facilities for residents or held by
religious orders whose members have taken vows of poverty; and to allow
Federal payments to be delivered to stored value card, prepaid card or
similar card accounts meeting certain consumer protection requirements.
DATES: Comments on the proposed rule must be received by July 13, 2010.
ADDRESSES: You can download this proposed rule at the following Web
site: http://www.fms.treas.gov/ach. You may also inspect and copy this
proposed rule at: Treasury Department Library, Freedom of Information
Act (FOIA) Collection, Room 1428, Main Treasury Building, 1500
Pennsylvania Avenue, NW., Washington, DC 20220. Before visiting, you
must call (202) 622-0990 for an appointment.
In accordance with the U.S. government's eRulemaking Initiative,
the Service publishes rulemaking information on http://www.regulations.gov. Regulations.gov offers the public the ability to
comment on, search, and view publicly available rulemaking materials,
including comments received on rules.
Comments on this rule, identified by docket FISCAL-FMS-2009-0001,
should only be submitted using the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions on the Web site for submitting comments.
Mail: Bill Brushwood, Financial Management Service, 401
14th Street, SW., Room 400A, Washington, DC 20227.
The fax and e-mail methods of submitting comments on rules to the
Service have been decommissioned.
Instructions: All submissions received must include the agency name
(``Financial Management Service'') and docket number FISCAL-FMS-2009-
0001 for this rulemaking. In general, comments received will be
published on Regulations.gov without change, including any business or
personal information provided. Comments received, including attachments
and other supporting materials, are part of the public record and
subject to public disclosure. Do not disclose any information in your
comment or supporting materials that you consider confidential or
inappropriate for public disclosure.
FOR FURTHER INFORMATION CONTACT: Bill Brushwood, Director of the
Settlement Services Division, at (202) 874-1251 or
[email protected]; or Natalie H. Diana, Senior Counsel, at
(202) 874-6680 or [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Title 31 CFR part 210 (Part 210) governs the use of the ACH Network
by Federal agencies. The ACH Network is a nationwide electronic fund
transfer (EFT) system that provides for the inter-bank clearing of
electronic credit and debit transactions and for the exchange of
payment-related information among participating financial institutions.
Part 210 incorporates the ACH Rules adopted by NACHA, with certain
exceptions. From time to time we amend Part 210 in order to address
changes that NACHA periodically makes to the ACH Rules or to revise the
regulation as otherwise appropriate.
NACHA has adopted a number of changes to the ACH Rules since the
publication of the 2007 ACH Rules book. We are proposing to incorporate
in Part 210 some, but not all, of the changes to the ACH Rules. The
changes to the ACH Rules include new requirements to identify all
international payment transactions using a new Standard Entry Class
Code and to include in the ACH record certain information sufficient to
allow the receiving financial institution to identify the parties to
the transaction and the path of the transaction. In addition, NACHA
amended the ACH Rules to allow NACHA to request data from Originating
Depository Financial Institutions (ODFIs) for an Originator or Third-
Party Sender that exceeds a rate of 1 percent for debit entries
returned as unauthorized.
In addition to addressing NACHA Rule changes, we are proposing to
amend Part 210, effective January 1, 2012, to streamline the
reclamation process for post-death benefit payments. Currently, the
reclamation process is a manual, paper-based process in which Treasury
sends out a Notice of Reclamation (FMS Form 133) that the financial
institution must complete, certify and return. Under Part 210, a
financial institution generally is liable for the total amount of
payments sent within 45 days of the recipient's death even if the
financial institution was not aware of the death. In light of the fact
that the great majority of reclamations are limited to just this ``45-
day Amount,'' consisting of one or two post-death payments for which
the financial institution will ultimately be liable, we are requesting
comment on an approach in which Treasury would proceed with an
automatic debit to the financial institution's reserve account,
following advance notice to the financial institution of the debit with
a right to challenge. This process would apply only to situations in
which a notice of reclamation is limited to payments received within 45
days after the recipient's death. As discussed in Section II below, we
believe this change would result in operational efficiencies for both
Treasury and financial institutions.
For reclamations limited to the 45-day Amount, financial
institutions would no longer be required to provide customer account-
related information related to the disposition of the post-death
payments. For reclamations of payments received more than 45 days after
the recipient's death, we are proposing to require financial
institutions to provide the last-known telephone number of account
holders and withdrawers, in addition to name and address. Also, as now
permitted pursuant to the Payment Transactions Integrity Act of 2008,
financial institutions would be required to provide withdrawer
information for all types of benefit payments being reclaimed. Prior to
the enactment of the Payment Transactions Integrity Act, account-
related information could be shared only for certain types of benefit
payments.
Finally, we are proposing to amend our long-standing requirement in
Part 210 that non-vendor payments be delivered to a deposit account at
a financial institution in the name of the recipient. The proposed
amendment would allow the delivery of Federal payments to resident
trust or patient fund accounts held by nursing homes,
[[Page 27241]]
to accounts held by religious orders for members who have taken a vow
of poverty, and to prepaid and stored value card accounts provided that
the cardholder's balance is FDIC insured and covered by the consumer
protections of the Federal Reserve's Regulation E.
We are requesting public comment on all the foregoing proposed
amendments to Part 210.
II. Summary of Rule Changes
International ACH Transactions
Effective September 18, 2009, the NACHA Rules require ODFIs and
Gateway Operators to identify all international payment transactions
transmitted via the ACH Network for any portion of the money trail as
International ACH Transactions using a new Standard Entry Class Code
(IAT). IAT transactions must include the specific data elements defined
within the Bank Secrecy Act's (BSA) ``Travel Rule'' so that all parties
to the transaction have the information necessary to comply with U.S.
law, including the laws administered by OFAC.
OFAC has stated that financial institutions need to safeguard the
U.S. financial system from terrorist and other sanctions abuses
involving international ACH payments processed through the domestic
U.S. ACH Network. In the domestic payment environment, ODFIs and
Receiving Depository Financial Institutions (RDFIs) can rely on each
other to ensure compliance with OFAC obligations with regard to their
own customers. For international payments, however, Depository
Financial Institutions (DFIs) cannot rely on international counterparts
for compliance with U.S. law.
Previously, many payments that are international in nature were
being introduced as domestic transactions into the U.S. ACH Network
through correspondent banking relationships, making it difficult for
processing DFIs to identify them for purposes of complying with U.S.
law. NACHA's new IAT Standard Entry Class Code classifies international
payments based on the geographical location of the financial
institutions or money transmitting businesses involved in the
transaction, instead of the location of the originator or receiver.
Each IAT entry is accompanied by mandatory Addenda Records conveying
the following information:
Name and physical address of the Originator.
Name and physical address of the Receiver.
Account number of the Receiver.
Identity of the Receiver's bank.
Foreign Correspondent Bank name, Foreign Correspondent
Bank ID number, and Foreign Correspondent Bank Branch Country Code.
As defined in the 2009 ACH Rules, an International ACH Transaction
(IAT) entry is:
A debit or credit Entry that is part of a payment transaction
involving a financial agency's office that is not located in the
territorial jurisdiction of the United States. For purposes of this
definition, a financial agency means an entity that is authorized by
applicable law to accept deposits or is in the business of issuing
money orders or transferring funds. An office of a financial agency
is involved in the payment transaction if it (1) holds an account
that is credited or debited as part of the payment transaction; (2)
receives payment directly from a Person or makes payment directly to
a Person as part of the payment transaction; or (3) serves as an
intermediary in the settlement of any part of the payment
transaction.
See 2009 ACH Rules, Subsection 14.1.36. The term ``Person'' means a
natural person or an organization. 2009 ACH Rules, Subsection 14.1.52.
The term ``payment transaction'' is not defined within the ACH Rules,
but the 2009 Operating Guidelines state that within the IAT definition,
payment transaction refers to: ``An instruction of a sender to a bank
to pay, or to obtain payment of, or to cause another bank to pay or
obtain payment of, a fixed or determinate amount of money that is to be
paid to, or obtained from, a receiver, and any and all settlements,
accounting entries, or disbursements that are necessary or appropriate
to carry out the instruction.'' 2009 Operating Guidelines, Section IV,
Chapter XI, p. 202.
The 2009 Operating Guidelines provide various examples of
transactions that would be classified as IAT entries. One example deals
with pension or Social Security benefit payments delivered to the U.S.
bank accounts of retirees residing offshore. If the U.S. bank to which
such a payment is delivered further credits the payment to an offshore
bank with which it has a correspondent relationship, the entry is to be
classified by the ODFI as IAT. In other words, despite being destined
to U.S. bank accounts, the transactions would be IATs because the
ultimate destinations of the payments are accounts held with offshore
banks or financial agencies. The 2009 Operating Guidelines indicate
that it is the Originator's obligation to understand the legal domicile
of its retirees and inquire whether they hold accounts in U.S. banks or
with offshore financial institutions. See 2009 Operating Guidelines,
Section IV, Chapter XI, Scenario F, p. 209. As applied to Federal
payments, this would mean that an agency certifying a payment to a
recipient residing overseas must inquire whether the payment, although
directed to a domestic bank, will be further credited to a foreign
correspondent bank. If so, the agency must classify the payment as IAT.
We are proposing to accept the IAT rule for Federal payments. For
Federal benefit payments delivered to overseas recipients in Mexico,
Canada and Panama through the FedGlobal\SM\ ACH Payment Services, we do
not foresee any difficulty in implementing the IAT rule. For other
payments, however, we anticipate that it may take until January 1, 2012
to make the system and operational changes necessary to implement the
IAT, due in part to the dedication of operational resources to the
delivery of Economic Recovery Act payments in 2009. We plan to phase in
IAT requirements in stages, based on the type of payment and the agency
issuing the payment, as expediently as operationally possible, and we
have already ceased originating Consumer Cross Border (PBR) and
Corporate Cross Border (CBR) entries. Accordingly, we are proposing to
adopt the IAT rule for Federal benefit payments delivered to Mexico,
Canada and Panama through the FedGlobal\SM\ ACH Payment Service. For
all other Federal payments, we are proposing an effective date of
January 1, 2012.
The proposed January 1, 2012 effective date does not affect
agencies' existing and ongoing obligation to perform OFAC screening of
all payments that they certify to Treasury for disbursement, and in
fact presupposes that agencies are screening all payments prior to
certification. As set forth in the Treasury Financial Manual, agencies
must not make or certify payments, or draw checks or warrants, payable
to an individual or organization listed on the Specially Designated
National and Blocked Person list, and agencies must consult the list
before making payments. See Treasury Financial Manual, Vol. I, Part 4,
Chapter 1000, sec. 1020.
Lastly, in implementing the IAT requirements, we anticipate that
some agencies will format as an IAT transaction any payment to an
individual or entity with an address outside the territorial
jurisdiction of the U.S. This may result in the identification of some
transactions as IAT even though funds do not ultimately leave the
United States. However, taking an ``over-inclusive''
[[Page 27242]]
approach to implementing IAT greatly eases the administrative burden
that Federal agencies would otherwise be faced with. We do not believe
this over-inclusive approach would create any compliance issues, but we
request comment from agencies and financial institutions on this
approach.
B. NACHA Rules Enforcement
Effective December 21, 2007, NACHA modified its rules to broaden
the scope of Appendix Eleven (The National System of Fines). The
Appendix was revised to (1) allow NACHA to request data from ODFIs for
an Originator or Third-Party Sender that appears to exceed a rate of
one percent for debit entries returned as unauthorized; and (2) define
the circumstances under which NACHA may submit violations related to
the ODFI reporting requirement to the National System of Fines. Several
other provisions of the National System of Fines were also modified.
Part 210 does not incorporate Appendix 11 of the NACHA Rules. See
31 CFR 210.2(d)(3). The Federal government is constrained from entering
into arrangements that may result in unfunded liabilities. Moreover, we
do not believe that subjecting Federal agencies to the System of Fines
is necessary or appropriate in light of its underlying purpose.
Accordingly, we are proposing not to adopt the modifications to
Appendix 11. In the event that a Federal agency were to experience a
high rate of debit entries returned as unauthorized, we would work with
the agency and coordinate with NACHA to address the situation.
C. ODFI Reporting Requirements
Effective March 20, 2009, NACHA amended its rules to incorporate
new reporting requirements for ODFIs within Article Two (Origination of
Entries). These reporting requirements require ODFIs to provide, when
requested by NACHA, certain information about specific Originators or
Third-Party Senders believed to have a return rate for unauthorized
debit entries in excess of 1 percent. The rule also requires ODFIs to
reduce the return rate for any such Originator or Third-Party Sender to
a rate below 1 percent within 60 days. The amendment replaced a
reporting requirement for Telephone-Initiated (TEL) entries that was
previously in the ACH Rules.
We are proposing not to adopt the new reporting requirements. When
NACHA adopted the TEL reporting requirement in 2003, we did not adopt
it, in part because we did not believe that agencies were likely to
experience excessive rates of returned entries, which has proved to be
true. Similarly, we do not believe that it is necessary or appropriate
to subject Federal agencies to a formal reporting process for
unauthorized entries. However, in the event that NACHA were to bring to
our attention an excessive return rate at any agency, we would work
with the agency and coordinate with NACHA to address the situation.
D. Reclamations
Currently, based on instructions from the Social Security
Administration (SSA) and other Federal agencies that pay recurring
benefit payments, Treasury sends paper Notices of Reclamation to RDFIs
in order to reclaim post-death benefit payments. RDFIs must respond to
these notices by providing information on the notices and returning
them to Treasury within a specific time frame. Depending on the
circumstances of a reclamation, the RDFI would be liable for either the
full amount or a partial amount of the post-death payments that were
issued. In general, an RDFI is liable to Treasury for the total amount
of all benefit payments received after the death or legal incapacity of
a recipient or death of a beneficiary unless the RDFI can limit its
liability. An RDFI can limit its liability to the total amount of
payments sent within 45 days after the recipient's death if it: (1)
Certifies that it did not have actual or constructive knowledge of the
recipient's death or incapacity at the time the RDFI received one or
more benefit payments; (2) returns all post-death benefit payments it
receives after it learns of the death; and (3) responds to the FMS-133,
Notice of Reclamation, within 60 days from the date of the Notice.
Since most benefit payments are issued on a monthly basis, the ``45-day
Amount'' consists of either one or two payments.
Currently, after receiving the completed Notice of Reclamation from
the RDFI, Treasury debits the RDFI for the 45-day Amount less any
amount the RDFI has returned with the completed Notice of Reclamation.
In some cases, the Federal agency that issued the payment(s) (e.g.,
SSA) may be able to collect an amount from whoever withdrew the funds
after they were deposited, thereby reducing the 45-day Amount. In such
cases, the amount of the reclamation debit against the RDFI's reserve
account is sometimes less than the 45-day Amount.
Approximately 85 percent of all reclamation notices sent to RDFIs
are for payments disbursed within 45 days after death or legal
incapacity of the recipient. Of this 85 percent figure, RDFIs return
the full 45-day Amount approximately 89 percent of the time. For the
other 11 percent of reclamation notices, in many cases the RDFIs
eventually remit any remaining portion of the 45-day Amount.
Example: To illustrate, assume that for a given month the
Service sends 100 reclamation notices to RDFIs. Of those 100
notices, approximately 85 notices will request reclamation of only
payments disbursed within 45 days after death or legal incapacity.
Of those 85 notices, RDFIs will return the 45-day Amount in response
to 76 notices. The RDFIs will eventually return the 45-day Amount
for most of the other 9 notices.
As the example illustrates, in the vast majority of cases, the amount
of the reclamation is the 45-day Amount, which represents one or two
post-death payments, and the vast majority of RDFIs return that amount
with their response to the Notice of Reclamation.
To achieve cost savings and efficiencies for both the Federal
government and RDFIs, we are proposing to automatically debit RDFIs for
the 45-day Amount, following a 30-day advance notice of the debit.
RDFIs could choose to return the 45-day Amount after receiving the
notice, or could elect to let the debit proceed. By automatically
originating a debit for the 45-day Amount (less any amount collected by
the paying agency), rather than issuing forms that must be manually
processed, the Service would create a more streamlined process with
reduced processing, paperwork, and postage. The Service would not need
to expend resources manually processing reclamation notices and RDFIs
would not be required to expend resources processing notices and
returning funds to Treasury. The proposed change, which would take
effect on January 1, 2012, would affect only the procedure used to
process a reclamation, and not the amount of an RDFI's liability. In
order to provide RDFIs with a process for challenging any debit for a
45-day Amount, we are proposing to adopt a formal procedure for
protesting such debits. An RDFI that believes that a debit was or would
be improper, either entirely or in part, would be able to submit a
notice that it is disputing the reclamation either before the debit is
carried out or within 90 days after the debit to its reserve account.
The Service would be required to make a determination within 60 days of
receipt of the dispute notice, subject to a 60- day extension if
necessary. If the RDFI files a dispute notice before the debit is
carried out, the Service would not proceed with the debit until a final
[[Page 27243]]
determination is made that the debit is proper.
Only reclamations limited to the 45-day Amount would be subject to
this process. As discussed above, 15 percent of all reclamation actions
are for an amount that exceeds the 45-day Amount. For these
reclamations, the current paper-based manual process would be
continued, meaning that RDFIs would receive and need to respond to a
Notice of Reclamation as they currently do.
E. Payment Transactions Integrity Act of 2008 Changes
Last year Congress enacted the Payment Transactions Integrity Act
of 2008. The Payment Transactions Integrity Act amended the Right to
Financial Privacy Act of 1978, which had prohibited Treasury and other
Federal agencies from obtaining from banks information contained within
the financial records of any customer, with limited exceptions. Under
the Payment Transactions Integrity Act, Treasury and other agencies are
now permitted to obtain customer information in connection with the
investigation or recovery of an improper Federal payment. We are
proposing to amend Sec. 210.11(b)(3)(i) in order to require RDFIs to
provide the name and last-known address and phone number for account
owners and others who have withdrawn, or were authorized to withdraw,
funds subject to a reclamation. Currently, Part 210 requires banks to
provide only the name and address (not the phone number) of account
owners and withdrawers, and only in connection with the reclamation of
Social Security Federal Old-Age, survivors, and Disability Insurance
benefit payments or benefit payments certified by the Railroad
Retirement Board or the Department of Veterans' Affairs. The proposed
change would require financial institutions to provide information for
other types of benefit payments, such as Civil Service benefit payments
and Supplemental Security Income payments, as now permitted under the
Payment Transactions Integrity Act. As discussed above, the Service is
proposing to discontinue the collection of such information for all
reclamations that do not exceed the 45-day Amount. Accordingly,
information would be collected in connection with reclamations only for
the approximately 15 percent of total reclamations involving more than
the 45-day Amount.
F. ``In The Name Of The Recipient'' Requirements
Title 31 CFR Sec. 210.5(a) provides that, notwithstanding ACH
rules 2.1.2, 4.1.3, and Appendix Two, section 2.2 (listing general
ledger and loan accounts as permissible transaction codes), an ACH
credit entry representing a Federal payment other than a vendor payment
shall be deposited into a deposit account at a financial institution.
For all payments other than vendor payments, the account at the
financial institution must be in the name of the recipient, subject to
certain exceptions.\1\ As we indicated in the preamble of the Federal
Register notice promulgating Sec. 210.5, our long-standing
interpretation of the words ``in the name of the recipient,'' has been
that the payment recipient's name must appear in the account title.
See, e.g., 64 FR 17480, referring to discussion at 63 FR 51490, 51499.
From time to time financial institutions and other payment service
providers have urged Treasury to opine that the ``in the name of the
recipient'' requirement is met if the recipient has an ownership
interest in a pooled account and that individual's interest is
reflected in a subacccount record, even if the recipient's name is not
included in the title of the account. To date we have declined to adopt
this interpretation.
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\1\ Identical requirements appear in 31 CFR 208.6. In the event
that we finalize the proposed amendment to Sec. 210.5, we will
amend 31 CFR 208.6 to create an identical exception.
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The ``in the name of the recipient'' requirement is, in essence, a
consumer protection policy. The requirement that an account be in the
name of the recipient is designed to ensure that a payment reaches the
intended recipient. See discussion at 63 FR 51490, 51499. We have had
concerns in the past that Federal benefit payment recipients could
enter into master/sub account relationships in which they have little
control over the account to which their benefit payments are directed.
The Service's ``in the name of the recipient'' requirement was last
opened for public comment in the late 1990's during the rulemaking
process for 31 CFR part 208. It was at this time that Treasury
reaffirmed that the policy applies not only to benefit payments, but
also to wage, salary and retirement payments, and that the account must
be at a financial institution, with specific exceptions provided for
authorized payment agents and investment accounts. The exclusion of
vendor payments was a result of the comments received during the
comment period and accepted in the final rule.
Currently, there are four exceptions to the ``in the name of the
recipient'' requirement of Sec. 210.5(a), which are set forth in
paragraphs (b)(1), (b)(2), (b)(3), and (b)(4). Paragraph 210.5(b)(1)
allows deposits into an account held by an ``authorized payment agent''
and titled in accordance with the regulations governing the authorized
payment agent. An authorized payment agent is defined as a
representative payee or fiduciary appointed to act on behalf of an
individual under agency regulations. 31 CFR 210.2(e). Section
210.5(b)(2) allows deposits into investment accounts established
through a registered securities broker or dealer. Section 210.5(b)(3)
allows Federal agency employee travel reimbursement payments to be
credited to the account of the travel card issuing bank for credit to
the employee's travel card account. Section 210.5(b)(4) allows deposits
to an account held by a fiscal or financial agent designated by the
Service for card programs established by the Service and provides that
the account title, access terms and other account provisions may be
specified by the Service. We are proposing to add three additional
exceptions to the ``in the name of the recipient'' requirements: (1) An
exception for payments to individuals residing in nursing facilities;
(2) an exception for payments to members of religious orders who have
taken a vow of poverty; and (3) an exception for payments to prepaid
debit and stored value card accounts meeting certain consumer
protection requirements.
1. Accounts Held by Nursing Facilities
On April 21, 2008, SSA published a Federal Register notice
requesting comments on arrangements in which Social Security benefit
payments are deposited into a third-party's ``master'' account when the
third party maintains separate ``sub'' accounts for individual
beneficiaries. 73 FR 21403. The issue of master/sub accounts had come
to SSA's attention in the context of concerns regarding the use of
master/sub accounts by ``payday lenders'' who solicit Social Security
beneficiaries to take out high-interest loans. SSA requested comments
on the use of master/sub accounts not only by beneficiaries, lenders,
advocates, and other members of the public, but also specifically asked
if nursing homes would be able to receive and manage benefits for their
residents without the use of master/sub accounts. The comments received
by SSA indicated that the use of master/sub account arrangements by
residents of nursing facilities is widespread, and that these
arrangements are beneficial for residents
[[Page 27244]]
(particularly for the elderly population needing assistance with
banking or for whom it can be difficult to make trips to the bank).
None of the commenters noted any abuses associated with these
arrangements. Based on the comments received, SSA's view is that
master/sub accounts held by nursing facilities serve useful purposes
and do not present the concerns raised by payday lender account
arrangements.
Nursing facilities are highly regulated entities, and resident
trust or patient fund accounts held by nursing facilities are fiduciary
accounts subject to specific requirements and protections under Federal
statute and regulation. The Federal Nursing Home Reform Act, which was
part of the Omnibus Budget Reconciliation Act of 1987 (OBRA '87),
revised Federal standards for nursing home care established in the 1965
creation of both Medicare and Medicaid. 42 U.S.C. 1395i-3, 42 U.S.C.
1396r. OBRA '87 created a set of national minimum standards of care and
rights for people living in nursing facilities. Detailed regulations at
42 CFR part 483 implement the statute. The Centers for Medicare and
Medicaid Services (CMS) provides additional detailed guidance as part
of its oversight and compliance enforcement. See http://www.cms.hhs.gov/GuidanceforLawsand Regulations/12_NHs.asp.
One element of the revised standards was to mandate that nursing
facilities manage and account for the personal funds residents often
deposit with the facility. Residents have the right to manage their
financial affairs, and nursing facilities are prohibited from requiring
residents to deposit their personal funds with the facility. 42 U.S.C.
1396r(c)(6); 42 CFR 483.10(c)(1). At the same time, upon written
authorization of a resident, facilities must ``hold, safeguard, manage
and account for'' the personal funds of the resident deposited with the
facility. 42 U.S.C. 1396r(c)(1)(B); 42 CFR 483.10(c)(2). The statute
requires that residents be provided a written description of their
legal rights that includes a description of the protection of personal
funds and a statement that a resident may file a complaint with a state
survey and certification agency respecting resident abuse and neglect
and misappropriation of resident property in the facility. 42 U.S.C.
1396r(c)(1)(B); 42 CFR 483.10(b)(7)(i). Other statutory provisions
address the management of personal funds, as follows:
The facility must deposit any amount of personal funds in
excess of $50 with respect to a resident in an interest bearing account
that is separate from any of the facility's operating accounts and all
interest earned on that separate account must be credited to resident's
account balance. With respect to any other personal funds, the facility
must maintain such funds in a non-interest bearing account or petty
cash fund. 42 U.S.C. 1396r(c)(6)(B)(i).
The facility must assure a full and complete separate
accounting of each resident's personal funds, maintain a written record
of all financial transactions involving the personal funds of a
resident deposited with the facility, and afford the resident (or a
legal representative of the resident) reasonable access to such record.
42 U.S.C. 1396r(c)(6)(B)(ii).
The facility must notify each resident receiving medical
assistance under the state plan when the amount in the resident's
account reaches $200 less than the dollar amount determined under 42
U.S.C. 1382(a)(3)(B) and of the fact that, if the amount in the account
(in addition to the value of the resident's other nonexempt resources)
reaches the amount determined under such section, the resident may lose
eligibility for such medical assistance or for certain other benefits.
42 U.S.C. 1396r(c)(6)(B)(iii).
To protect personal funds of residents deposited with a nursing
facility, the nursing facility must purchase a security bond to assure
the security of all personal funds. 42 U.S.C. 1396r(c)(6)(C). Lastly,
nursing facilities cannot charge anything for these services. A
facility may not impose a charge against the personal funds of a
resident for any item or service for which payment is made under
Medicare or Medicaid. 42 U.S.C. 1396r(c)(6)(D). It can only offset the
bank service fee on the patient fund account against the interest
earned.
In light of the extensive protections provided to residents of
nursing facilities whose funds are maintained in resident trust or
patient fund accounts, we believe it is appropriate to permit the
delivery of Federal benefit payments to these accounts, which are
typically master/sub accounts. We are therefore requesting comment on a
proposed amendment to the existing ``in the name of the recipient''
requirement in order to permit payments to be deposited into resident
trust or patient fund accounts established by nursing facilities.
2. Accounts for Members of Religious Orders Who Have Taken Vows of
Poverty
SSA's Federal Register notice regarding master/sub accounts
specifically requested comment on accounts established by religious
orders for members of such orders who have taken vows of poverty. The
comments received did not indicate that there are any problems
associated with these accounts, and commenters recommended that they be
permitted. Accordingly, we are proposing to allow payments disbursed to
a member of a religious order who has taken a vow of poverty to be
deposited to an account established by the religious order.
For purposes of defining who is a ``member of a religious order who
has taken a vow of poverty,'' we are proposing to utilize existing
guidance issued by the Internal Revenue Service (IRS). The treatment
for Federal tax purposes of services performed by a member of a
religious order who has taken a vow of poverty is addressed in IRS
Publication 517 (2008). For example, IRS Publication 517 states that a
member of a religious order who has taken a vow of poverty is exempt
from Self-Employment (SE) tax on earnings for services performed for
the member's church or its agencies. For purposes of Federal income tax
withholding and employment tax (FICA), a member of a religious order
who has taken a vow of poverty may be entitled to receive Social
Security benefits if the order (or an autonomous subdivision of the
order) has elected coverage for its current and future vow-of-poverty
members. In that case, the religious order pays all FICA taxes,
including the employee's share. See IRS Publication 517 (2008).
Organizations and individuals may request rulings from IRS on whether
they are religious orders, or members of a religious order,
respectively, for FICA, SE tax and Federal income tax withholding
purposes. We request comment on whether it is appropriate to define the
phrase ``member of a religious order who has taken a vow of poverty''
in the same way that the phrase would be defined by IRS for Federal tax
purposes.
3. Prepaid Debit and Stored Value Card Accounts
The utilization of prepaid debit cards and stored value cards has
expanded substantially over the last decade, and cards have become a
vital payment delivery mechanism for the under-banked. Typically,
prepaid card programs are set up so that cardholders' funds are pooled
in a master account with each individual cardholder having a subaccount
established in the underlying records maintained by the financial
institution. Thus, in most cases the individual cardholder's name is
not on the title of the deposit account in which the funds are held,
even though the cardholder's name may be
[[Page 27245]]
embossed on the card itself. We believe that the ``in the name of the
recipient'' requirement may be impeding the use of prepaid card
programs that may be beneficial to the unbanked and underbanked
populations. In view of developments in the prepaid and stored value
card industry during the past ten years, we are proposing to add an
exception to the ``in the name of the recipient'' requirement of Sec.
210.5 to adjust to the changing payment environment and the financial
products that support the private sector. As part of this proposal, we
are seeking comment on whether the ``in the name of the recipient''
requirement unduly hampers account options for Federal payment
recipients. We request comment from consumers and consumer groups,
industry associations, Federal agencies, financial institutions and
payment services providers on this issue.
The ``in the name of the recipient'' requirement was put in place
to ensure that the payment reaches the intended recipient through a
deposit account, and that the recipient has the usual consumer control
and protections associated with a deposit account. We believe that
account structures underlying prepaid and stored value cards can be set
up to ensure that the recipient receives and has control of payments,
even if the cardholder's name is not on the account title in which the
funds are held. In this regard, we have taken into consideration the
Federal Deposit Insurance Corporation's (FDIC) issuance in 2008 of New
General Counsel's Opinion No. 8 (GC8). See 73 FR 67155. The FDIC's
Legal Division, noting that stored value cards now commonly serve as
the delivery mechanism for vital funds such as employee payroll and
government payments such as benefits and tax refunds, clarified that
deposit insurance coverage would be provided to the holders of prepaid
and stored value cards. The FDIC's Legal Division concluded that funds
underlying prepaid and stored value cards that are held for
cardholders' benefit at insured depository institutions should always
be treated as deposits, without regard to whether the funds are
accessed by a plastic card or a paper check. Under GC8, all funds
underlying stored value cards and other nontraditional access
mechanisms will be treated as ``deposits'' to the extent that the funds
have been placed at an insured depository institution. If cardholders'
funds are commingled in a pooled account, each cardholder will be
treated as the insured owner of the funds held on his or her behalf in
the pooled account, provided that the three requirements for pass-
through insurance are met. Those requirements are:
(1) The account records of the insured depository institution must
disclose the existence of the agency or custodial relationship. This
requirement can be met by opening the account under a title such as:
``ABC Company as Custodian for Cardholders;''
(2) The records of the insured depositor institution or records
maintained by the custodian or other party must disclose the identities
of the actual owners and the amount owned by each such owner; and
(3) The funds in the account actually must be owned (under the
agreements among the parties or applicable law) by the purported owners
and not by the custodian or other party. See GC8, 73 FR67157. See 73 FR
67155, 67157.
We are proposing to allow the delivery of Federal payments to
prepaid and stored value card accounts, provided that the card bears
the cardholder's name and meets the following requirements:
The account accessed by the card is held at an insured
depository institution and meets the requirements for pass-through
insurance under 12 CFR part 330 such that the cardholder's balance is
FDIC insured to the extent permitted by law; and
The card account constitutes an ``account'' as defined in
12 CFR 205.2(b) such that the consumer protections of Regulation E
apply to the cardholder.
Stored value or prepaid cards that do not meet the foregoing
requirements would not fall under the proposed exception. For example,
some merchants, such as book stores and coffee shops, offer prepaid
cards that function in the same manner as gift certificates. These
cards do not typically bear the cardholder's name, do not provide
access to money at a depository institution and do not meet the FDIC's
requirements for pass-through insurance. See 73 FR 67156. These types
of cards also are not covered by the Federal Reserve's Regulation E.
Therefore, they could not be used to deliver certain Federal payments,
such as Federal benefit payments.
We request comment on the implications of allowing delivery of
Federal benefit payments to accounts that meet the requirements listed
above. We are mindful of concerns that account arrangements may be
structured to facilitate payday lending and similar arrangements that
are inappropriate for Federal benefit recipients, and we are
particularly interested in comment on whether the consumer protections
required in the proposed exceptions are adequate to prevent potential
abuses. In addition, we request comment on whether to revise the
wording in 31 CFR 210.5(a) which provides that ``an ACH credit entry
representing a Federal payment other than a vendor payment shall be
deposited into a deposit account at a financial institution.'' We are
considering revising that sentence to read ``an ACH credit entry
representing a Federal payment other than a vendor payment shall be
deposited into a deposit account held by a financial institution and
directly accessible by the recipient.'' The purpose of the revision
would be to make it clear that accounts established by payday lenders
or other third parties under terms that prevent the recipient from
being able to freely withdraw or access funds in the account do not
satisfy the requirements of 31 CFR 210.5.
III. Section-by-Section Analysis
In order to incorporate in Part 210 the ACH rule changes that we
are accepting, we are replacing references to the 2007 ACH Rules book
with references to the 2009 ACH Rules book. No change to Part 210 is
necessary in order to exclude the amendments to the rules enforcement
provisions, since Part 210 already provides that the rules enforcement
provisions of Appendix 11 of the ACH Rules do not apply to Federal
agency ACH transactions. See Sec. 210.2(d).
Sec. 210.2(d)
We are proposing to amend the definition of applicable ACH Rules at
Sec. 210.2(d) to reference the rules published in NACHA's 2009 Rules
book rather than the rules published in NACHA's 2007 Rules book.
Proposed Sec. 210.2(d)(6) is revised to reflect a numbering change to
the ACH Rules pursuant to which former ACH Rule 2.11.2.3 is now ACH
Rule 2.12.2.3. In addition, we are proposing to revise 210.2(d)(7) to
remove a reference to former ACH Rule 2.13.3, which required reporting
regarding unauthorized Telephone-Initiated entries. NACHA has replaced
that reporting requirement with a broader reporting requirement which
we are proposing not to adopt. Proposed Sec. 210.2(d)(7) sets forth
ACH Rule 2.18, which contains those broader reporting requirements and
which we are proposing not to adopt.
Proposed Sec. 210.2(d)(8) has been added in order to exclude
entries other than Federal benefit payments delivered to Mexico, Canada
and Panama through the FedGlobalSM ACH Payment Service
[[Page 27246]]
from ACH Rule 2.11 (International ACH Transactions) until January 1,
2012.
Sec. 210.3(b)
We are proposing to amend Sec. 210.3(b) by replacing the
references to the ACH Rules as published in the 2007 Rules book with
references to the ACH Rules as published in the 2009 Rules book.
Sec. 210.5(b)
We are proposing to redesignate paragraph (b)(5) as paragraph
(b)(8) and to add new paragraphs (b)(5), (b)(6) and (b)(7), which
create additional exceptions to the requirement in paragraph (a) that
all payments other than vendor payments be delivered to an account in
the name of the recipient. Proposed paragraph (b)(5) would allow
payments disbursed to a resident of a nursing facility, as defined in
42 U.S.C. 1396r, to be deposited into a resident trust or patient fund
account established by the nursing facility. Proposed paragraph (b)(6)
would allow payments disbursed to a member of a religious order who has
taken a vow of poverty to be deposited to an account established by the
religious order. Proposed paragraph (b)(7) would allow payments to be
deposited to an account accessed through a stored value card, prepaid
card or similar card that bears the cardholder's name and meets certain
requirements. The requirements include that the account meets the
FDIC's pass-through insurance requirements so that cardholder's balance
is FDIC insured to the cardholder, and that the card constitutes an
``account'' for purposes of requiring compliance with the Federal
Reserve's Regulation E.
Sec. 210.10
Proposed Sec. 210.10(a) retains certain provisions not affected by
the proposed changes to the reclamation process. RDFIs must return all
payments after becoming aware of the death or incapacity of a
recipient. Also, an RDFI must notify an agency issuing payments if it
learns of the death or legal incapacity of a recipient or beneficiary
from a source other than the agency.
Proposed Sec. 210.10(b) sets forth the automated reclamation
process for payments not exceeding the 45-day Amount. Proposed Sec.
210.10(c) sets forth the process for payments exceeding the 45-day
Amount, which is unchanged from the current process.
Proposed Sec. Sec. 210.10(d), 210.10(e) and 210.10(f) contain the
language currently located in current Sec. Sec. 210.10(c), 210.10(d)
and 210.10(e), without any changes. Proposed Sec. 210.10(f) sets forth
the procedure by which financial institutions can protest a debit
carried out under proposed Sec. 210.10(b).
Proposed Sec. Sec. 210.10(b) and (f) would not become effective
until January 1, 2012.
Sec. 210.11
We are proposing to amend Sec. 210.11(b)(3)(i) in order to require
RDFIs to provide the name and last-known address and phone number for
account owners and others who have withdrawn, or were authorized to
withdraw, funds from the account, as permitted by the Payment
Transactions Integrity Act of 2008. This requirement applies only to
reclamations for an amount exceeding the 45-day Amount.
IV. Procedural Analysis
Request for Comment on Plain Language
Executive Order 12866 requires each agency in the Executive branch
to write regulations that are simple and easy to understand. We invite
comment on how to make the proposed rule clearer. For example, you may
wish to discuss: (1) Whether we have organized the material to suit
your needs; (2) whether the requirements of the rule are clear; or (3)
whether there is something else we could do to make these rule easier
to understand.
Regulatory Planning and Review
The proposed rule does not meet the criteria for a ``significant
regulatory action'' as defined in Executive Order 12866. Therefore, the
regulatory review procedures contained therein do not apply.
Regulatory Flexibility Act Analysis
It is hereby certified that the proposed rule will not have a
significant economic impact on a substantial number of small entities.
The proposed changes to the regulation related to automating
reclamations may nominally reduce costs for financial institutions,
including financial institutions that are small entities, because the
costs of completing reclamation forms and mailing them back to Treasury
would be eliminated. However, the economic impact of this cost
reduction would be minimal. Accordingly, a regulatory flexibility
analysis under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is
not required.
Unfunded Mandates Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532 (Unfunded Mandates Act), requires that the agency prepare a
budgetary impact statement before promulgating any rule likely to
result in a Federal mandate that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any one year. If a budgetary
impact statement is required, section 205 of the Unfunded Mandates Act
also requires the agency to identify and consider a reasonable number
of regulatory alternatives before promulgating the rule. We have
determined that the proposed rule will not result in expenditures by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any one year. Accordingly,
we have not prepared a budgetary impact statement or specifically
addressed any regulatory alternatives.
List of Subjects in 31 CFR Part 210
Automated Clearing House, Electronic funds transfer, Financial
institutions, Fraud, and Incorporation by reference.
For the reasons set out in the preamble, we propose to amend 31 CFR
part 210 as follows:
PART 210--FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED
CLEARING HOUSE
1. The authority citation for part 210 continues to read as
follows:
Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301,
3302, 3321, 3332, 3335, and 3720.
2. Revise Sec. 210.2, paragraph (d), to read as follows:
Sec. 210.2 Definitions.
* * * * *
(d) Applicable ACH Rules means the ACH Rules with an effective date
on or before September 18, 2009, as published in Parts IV, V and VII of
the ``2009 ACH Rules: A Complete Guide to Rules & Regulations Governing
the ACH Network'' except:
(1) ACH Rule 1.1 (limiting the applicability of the ACH Rules to
members of an ACH association);
(2) ACH Rule 1.2.2 (governing claims for compensation);
(3) ACH Rules 1.2.4 and 2.2.1.12; Appendix Eight; and Appendix
Eleven (governing the enforcement of the ACH Rules, including self-
audit requirements);
(4) ACH Rules 2.2.1.10; 2.6; and 4.8 (governing the reclamation of
benefit payments);
(5) ACH Rule 9.3 and Appendix Two (requiring that a credit entry be
originated no more than two banking days before the settlement date of
the entry--see definition of ``Effective Entry Date'' in Appendix Two);
(6) ACH Rule 2.12.2.3 (requiring that originating depository
financial
[[Page 27247]]
institutions (ODFIs) establish exposure limits for Originators of
Internet-initiated debit entries);
(7) ACH Rule 2.18 (requiring reporting and reduction of high rates
of entries returned as unauthorized); and
(8) ACH Rule 2.11 (International ACH Transactions), which shall not
apply until January 1, 2012 to entries other than Federal benefit
payments delivered to Mexico, Canada and Panama through the
FedGlobal\SM\ ACH Payment Service.
* * * * *
3. Revise Sec. 210.3, paragraph (b), to read as follows:
* * * * *
(b) Incorporation by reference--applicable ACH Rules.
(1) This part incorporates by reference the applicable ACH Rules,
including rule changes with an effective date on or before September
18, 2009, as published in Parts IV, V, and VII of the ``2009 ACH Rules:
A Complete Guide to Rules & Regulations Governing the ACH Network.''
The Director of the Federal Register approves this incorporation by
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies
of the ``2009 ACH Rules'' are available from NACHA--The Electronic
Payments Association, 13450 Sunrise Valley Drive, Suite 100, Herndon,
Virginia 20171. Copies also are available for public inspection at the
Office of the Federal Register, 800 North Capitol Street, NW., Suite
700, Washington, DC 20002; and the Financial Management Service, 401
14th Street, SW., Room 400A, Washington, DC 20227.
(2) Any amendment to the applicable ACH Rules that is approved by
NACHA--The Electronic Payments Association after January 1, 2009, shall
not apply to Government entries unless the Service expressly accepts
such amendment by publishing notice of acceptance of the amendment to
this part in the Federal Register. An amendment to the ACH Rules that
is accepted by the Service shall apply to Government entries on the
effective date of the rulemaking specified by the Service in the
Federal Register notice expressly accepting such amendment.
* * * * *
4. In Sec. 210.5, redesignate paragraph (b)(5) as (b)(8) and add
new paragraphs (b)(5), (b)(6) and (b)(7), to read as follows:
Sec. 210.5 Account requirements for Federal payments.
* * * * *
(b) * * *
(5) Where a Federal payment is disbursed to a resident of a nursing
facility as defined in 42 U.S.C. 1396r, the payment may be deposited
into a resident trust or patient fund account established by the
nursing facility.
(6) Where a Federal payment is disbursed to a member of a religious
order who has taken a vow of poverty, the payment may be deposited to
an account established by the religious order. As used in this
paragraph, the phrase ``member of a religious order who has taken a vow
of poverty'' is defined as it would be by the Internal Revenue Service
for Federal tax purposes.
(7) Where a Federal payment is to be deposited to an account
accessed through a stored value card, prepaid card or similar card that
bears the cardholder's name and meets the following requirements:
(i) The account accessed by the card is held at an insured
depository institution and meets the requirements for pass through
insurance under 12 CFR part 330 such that the cardholder's balance is
FDIC insured to the extent permitted by law; and
(ii) The card account constitutes an ``account'' as defined in 12
CFR 205.2(b) such that the consumer protections of Regulation E apply
to the cardholder.
* * * * *
5. Revise Sec. 210.10 to read as follows:
Sec. 210.10 RDFI liability.
(a) RDFI obligations. An RDFI must return any benefit payments
received after RDFI becomes aware of the death or legal incapacity of a
recipient or the death of a beneficiary, regardless of the manner in
which the RDFI discovers such information. If the RDFI learns of the
death or legal incapacity of a recipient or death of a beneficiary from
a source other than notice from the agency issuing payments to the
recipient, the RDFI must immediately notify the agency of the death or
incapacity. The proper use of the R15 or R14 return reason code shall
be deemed to constitute such notice.
(b) Liability for 45-day Amount. An RDFI is liable to the Federal
Government for the full amount of all benefit payments received by the
RDFI from an agency within 45 days after the death or legal incapacity
of the recipient or death of the beneficiary (45-day Amount). When an
agency notifies the Service that benefit payments in an amount not
exceeding the 45-day Amount were originated to a deceased or
incapacitated recipient, the Service will instruct the appropriate
Federal Reserve Bank to debit the RDFI's reserve account for the 45-day
Amount. The Service will notify the RDFI at least 30 days prior to the
debit. If the RDFI returns the amount specified in the notice during
the 30-day period, the Service will not proceed with the debit. If the
RDFI files a reclamation dispute notice during the 30-day period before
the debit is carried out, the Service will not proceed with the debit
until a final decision has been reached, in accordance with paragraph
(g), that the debit is proper.
(c) Liability for amounts exceeding 45-day Amount. An RDFI is
liable to the Federal Government for the full amount of all benefit
payments received by the RDFI after 45 days following the death or
legal incapacity of the recipient or death of the beneficiary unless
the RDFI has the right to limit its liability under 210.11 of this
part. When an agency notifies the Service that benefit payments in an
amount exceeding the 45-day Amount were originated to a deceased or
incapacitated recipient, the Service will send a notice of reclamation
to the RDFI. Upon receipt of the notice of reclamation, the RDFI must
provide the information required by the notice of reclamation and
return the amount specified in the notice of reclamation in a timely
manner.
(d) Exception to liability rule. An RDFI shall not be liable for
post-death benefit payments sent to a recipient acting as a
representative payee or fiduciary on behalf of a beneficiary, if the
beneficiary was deceased at the time the authorization was executed and
the RDFI did not have actual or constructive knowledge of the death of
the beneficiary.
(e) Time limits. An agency that initiates a request for a
reclamation must do so within 120 calendar days after the date that the
agency first has actual or constructive knowledge of the death or legal
incapacity of a recipient or the death of a beneficiary. An agency may
not reclaim any post-death or post-incapacity payment made more than
six years prior to the date of the notice of reclamation; provided,
however, that if the account balance at the time the RDFI receives the
notice of reclamation exceeds the total amount of post-death or post-
incapacity payments made by the agency during such six-year period,
this limitation shall not apply and the RDFI shall be liable for the
total amount of all post-death or post-incapacity payments made, up to
the amount in the account at the time the RDFI receives the notice of
reclamation and has had a reasonable opportunity to act on the notice
(not to exceed one business day).
(f) Debit of RDFI's account. If an RDFI does not return the full
amount of the outstanding total or any other amount for which the RDFI
is liable under this subpart in a timely manner, the Federal Government
will collect the amount outstanding by instructing the
[[Page 27248]]
appropriate Federal Reserve Bank to debit the account utilized by the
RDFI. The Federal Reserve Bank will provide advice of the debit to the
RDFI.
(g) Reclamation disputes. Where the Service, in accordance with
paragraph (b) of this section, has instructed a Federal Reserve Bank to
debit the account of a financial institution for the 45-day Amount, the
financial institution may file a dispute notice challenging the
reclamation. A dispute notice filed under this paragraph must be in
writing, and must be sent to the Claims Manager, Department of the
Treasury, Financial Management Service, at the address listed on the
notice of the debit, or to such other address as the Service may
publish in the Green Book. The reclamation dispute notice must include
supporting documentation. The Service will not consider reclamation
dispute notices received more than 90 days after the date on which the
financial institution's reserve account was debited. The Claims
Manager, or an authorized designee, will make every effort to decide
any dispute notice submitted under this section within 60 days. If it
is not possible to render a decision within 60 days, the Claims Manager
or an authorized designee will notify the financial institution of the
delay and may take up to an additional 60 days to render a decision.
If, based on the evidence provided, the Claims Manager, or an
authorized designee, finds that the financial institution has proved,
by a preponderance of the evidence, that debit was improper or
excessive, the Service will notify the financial institution in writing
and, within ten days of the decision, recredit the financial
institution's reserve account for the amount improperly debited. Such
notice shall serve as the final agency determination under the
Administrative Procedure Act (5 U.S.C. 701 et seq.). No civil suit may
be filed until the financial institution has filed a dispute notice
under this section, and the Service has provided notice of its final
determination.
6. Revise Sec. 210.11, paragraph (b)(3)(i) to read as follows:
Sec. 210.11 Limited liability.
* * * * *
(b) * * *
(3)(i) Provide the name and last known address and phone number of
the following person(s):
(A) The recipient and any co-owner(s) of the recipient's account;
(B) All other person(s) authorized to withdraw funds from the
recipient's account; and
(C) All person(s) who withdrew funds from the recipient's account
after the death or legal incapacity of the recipient or death of the
beneficiary.
* * * * *
Dated: May 10, 2010.
Richard L. Gregg,
Acting Fiscal Assistant Secretary.
[FR Doc. 2010-11492 Filed 5-13-10; 8:45 am]
BILLING CODE 4810-35-P