[Federal Register Volume 75, Number 34 (Monday, February 22, 2010)]
[Rules and Regulations]
[Pages 7925-7926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-2672]
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FEDERAL RESERVE SYSTEM
12 CFR Part 227
[Regulation AA; Docket No. R-1383]
Unfair or Deceptive Acts or Practices
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: On January 29, 2009, the Board published a final rule amending
Regulation AA and the staff commentary to the regulation. The
substantive requirements in the January 2009 Regulation AA Rule, which
were scheduled to go into effect on July 1, 2010, have been superseded
by provisions of the Credit Card Accountability Responsibility and
Disclosure Act of 2009 (Credit Card Act) that go into effect on
February 22, 2010. Elsewhere in this issue of the Federal Register, the
Board is implementing these Credit Card Act provisions in a new final
rule amending Regulation Z. Accordingly, in order to avoid duplication
and inconsistency, the Board is further amending Regulation AA to
remove the substantive requirements in the January 2009 Regulation AA
Rule. For procedural reasons, these requirements will be removed
effective July 1, 2010. However, it is the Board's intent that the
substantive requirements of the January 2009 Regulation AA Rule will
not take effect.
The Board issued its January 2009 Regulation AA Rule jointly with
rules issued by the Office of Thrift Supervision (OTS) and the National
Credit Union Administration (NCUA). This final rule applies only to the
Board's Regulation AA and does not affect the rules issued by the OTS
and NCUA.
DATES: This rule is effective July 1, 2010.
FOR FURTHER INFORMATION CONTACT: Stephen Shin, Attorney, or Amy
Henderson or Benjamin K. Olson, Senior Attorneys, Division of Consumer
and Community Affairs, Board of Governors of the Federal Reserve
System, at (202) 452-3667 or 452-2412; for users of Telecommunications
Device for the Deaf (TDD) only, contact (202) 263-4869.
SUPPLEMENTARY INFORMATION: On December 18, 2008, the Board used its
authority under the Federal Trade
[[Page 7926]]
Commission Act (FTC Act) to adopt a final rule amending Regulation AA
(12 CFR Part 227) and the staff commentary to the rule in order to
protect consumers from unfair acts or practices with respect to
consumer credit card accounts. In addition to imposing new substantive
requirements, the rule also made several non-substantive amendments to
Regulation AA. For example, the Board revised certain subpart headings
and consolidated the consumer complaint provisions in Sec. Sec. 227.1
and 227.2 into a new Sec. 227.1 and added an e-mail address and Web
site where consumers can submit complaints.
The rule was published in the Federal Register on January 29, 2009
(See 74 FR 5498 (January 2009 Regulation AA Rule)), and the effective
date for the amendments is July 1, 2010. The Board issued its January
2009 Regulation AA Rule jointly with a rule issued by the Office of
Thrift Supervision (OTS) amending 12 CFR Part 535 and a rule issued by
the National Credit Union Administration (NCUA) amending 12 CFR Part
706.
On May 22, 2009, the Credit Card Accountability Responsibility and
Disclosure Act of 2009 (Credit Card Act) was signed into law. See
Public Law 111-24, 123 Stat. 1734 (2009). The Credit Card Act primarily
amends the Truth in Lending Act (TILA) and establishes a number of new
substantive and disclosure requirements to establish fair and
transparent practices pertaining to open-end consumer credit plans,
including credit card accounts. The majority of the Credit Card Act's
provisions go into effect on February 22, 2010, including provisions
that supersede the substantive requirements in the Board's January 2009
Regulation AA Rule. Elsewhere in today's Federal Register, the Board
has published a new final rule amending Regulation Z and the staff
commentary to the regulation in order to implement those provisions of
the Credit Card Act.
Accordingly, because the substantive requirements in the Board's
January 2009 Regulation AA Rule are no longer necessary and--in some
cases--are inconsistent with the provisions of the Credit Card Act, the
Board is amending Regulation AA to remove those requirements. However,
the Board is retaining the non-substantive amendments in the January
2009 Regulation AA Rule, such as the revisions to the consumer
complaint provisions.
For procedural reasons, these requirements will be removed
effective July 1, 2010. However, it is the Board's intent that the
substantive requirements in the January 2009 Regulation AA Rule will
not take effect. In addition, the Board does not intend to finalize the
proposed amendments to the January 2009 Regulation AA Rule, which were
published in the Federal Register on May 5, 2009. See 74 FR 20804. This
final rule applies only to the Board's Regulation AA and does not
affect the rule issued by the OTS amending 12 CFR Part 535 or the rule
issued by the NCUA amending 12 CFR Part 706.
List of Subjects in 12 CFR Part 227
Banks, Banking, Credit, Intergovernmental relations, Trade
practices.
Board of Governors of the Federal Reserve System
12 CFR Chapter II
Authority and Issuance
0
For the reasons discussed in the preamble, the Board amends 12 CFR part
227 as set forth below:
PART 227--UNFAIR OR DECEPTIVE ACTS OR PRACTICES (REGULATION AA)
0
1. The authority citation for part 227 continues to read as follows:
Authority: 15 U.S.C. 57a(f).
Subpart A--General Provisions
0
2. Section 227.1 is revised to read as follows:
Sec. 227.1 Authority, purpose, and scope.
(a) Authority. This part is issued by the Board under section 18(f)
of the Federal Trade Commission Act, 15 U.S.C. 57a(f) (section 202(a)
of the Magnuson-Moss Warranty--Federal Trade Commission Improvement
Act, Pub. L. 93-637).
(b) Purpose. The purpose of this part is to prohibit unfair or
deceptive acts or practices in violation of section 5(a)(1) of the
Federal Trade Commission Act, 15 U.S.C. 45(a)(1). This part defines and
contains requirements prescribed for the purpose of preventing specific
unfair or deceptive acts or practices of banks. The prohibitions in
this part do not limit the Board's or any other agency's authority to
enforce the FTC Act with respect to any other unfair or deceptive acts
or practices.
(c) Scope. This part applies to banks, including subsidiaries of
banks and other entities listed in paragraph (c)(2) of this section.
This part does not apply to savings associations as defined in 12
U.S.C. 1813(b). Compliance is to be enforced by:
(1) The Comptroller of the Currency, in the case of national banks
and federal branches and federal agencies of foreign banks;
(2) The Board of Governors of the Federal Reserve System, in the
case of banks that are members of the Federal Reserve System (other
than banks referred to in paragraph (c)(1) of this section), branches
and agencies of foreign banks (other than federal branches, federal
agencies, and insured state branches of foreign banks), commercial
lending companies owned or controlled by foreign banks, and
organizations operating under section 25 or 25A of the Federal Reserve
Act; and
(3) The Federal Deposit Insurance Corporation, in the case of banks
insured by the Federal Deposit Insurance Corporation (other than banks
referred to in paragraphs (c)(1) and (c)(2) of this section), and
insured state branches of foreign banks.
(d) Definitions. Unless otherwise noted, the terms used in
paragraph (c) of this section that are not defined in the Federal Trade
Commission Act or in section 3(s) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(s)) shall have the meaning given to them in section
1(b) of the International Banking Act of 1978 (12 U.S.C. 3101).
Subpart C--[Removed and Reserved]
0
3. Subpart C is removed and reserved.
0
4. Supplement I is revised to read as follows:
Supplement I to Part 227--Official Staff Commentary
Subpart A--General Provisions for Consumer Protection Rules
Sec. 227.1 Authority, purpose, and scope.
1(c) Scope
1. Penalties for noncompliance. Administrative enforcement of the
rule for banks may involve actions under section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818), including cease-and-desist
orders requiring that actions be taken to remedy violations and civil
money penalties.
2. Industrial loan companies. Industrial loan companies that are
insured by the Federal Deposit Insurance Corporation are covered by the
Board's rule.
By order of the Board of Governors of the Federal Reserve
System, February 3, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010-2672 Filed 2-19-10; 8:45 am]
BILLING CODE 6210-01-P