Unknown. Final rule; Official Interpretations

6,411 words·~29 min read·/register/2013/03/28/2013-07066·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2013-03-28.xml --- 78 60 Thursday, March 28, 2013 Contents Actuaries, Joint Board for Enrollment See Joint Board for Enrollment of Actuaries Agricultural Marketing Agricultural Marketing Service PROPOSED RULES Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida: Hearing on Amendment of Marketing Order No.905, 18899-18902 2013-07180 User Fees for 2013 Crop Cotton Classification Services to Growers, 18898-18899 2013-07181 Agriculture Agriculture Department See Agricultural Marketing Service Air Force Air Force Department NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 18966-18967 2013-07170 Antitrust Division Antitrust Division NOTICES Membership Changes under National Cooperative Research and Production Act: International Association of Plumbing and Mechanical Officials, 19009 2013-07134 Sematech, Inc. d/b/a International Sematech, 19009 2013-07136 Antitrust See Antitrust Division Bonneville Bonneville Power Administration NOTICES Environmental Impact Statements; Availability, etc.: Walla Walla Basin Spring Chinook Hatchery;

Floodplain and Wetlands Assessment, 18967-18968 2013-07248 Consumer Financial Protection Bureau of Consumer Financial Protection RULES Truth in Lending (Regulation Z), 18795-18798 2013-07066 PROPOSED RULES Defining Larger Participants of Student Loan Servicing Market, 18902-18917 2013-06291 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18983-18987 2013-07232 2013-07233 2013-07230 Statements of Organization, Functions, and Delegations of Authority, 18987 2013-07102 Coast Guard Coast Guard RULES Drawbridge Operations:

Atlantic Intracoastal Waterway, Wrightsville Beach, NC, and Northeast Cape Fear River, at Wilmington, NC, 18848 2013-07148 Saugus River, Saugus and Lynn, MA, 18849 2013-07151 PROPOSED RULES Drawbridge Operations: Upper Mississippi River, Rock Island, IL; Deviation, 18933 2013-07145 Commerce Commerce Department See Industry and Security Bureau See International Trade Administration See National Institute of Standards and Technology See National Oceanic and Atmospheric Administration See National Telecommunications and Information Administration NOTICES Incentives to Adopt Improved Cybersecurity Practices, 18954-18955 2013-07234 Community Development Community Development Financial Institutions Fund NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 19074-19075 2013-07228 Consumer Product Consumer Product Safety Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Safety Standard for Cigarette Lighters, 18965-18966 2013-07167 Court Court Services and Offender Supervision Agency for the District of Columbia NOTICES Service Contract Inventories: Fiscal Year 2012, 18966 2013-07197 Defense Acquisition Defense Acquisition Regulations System RULES Defense Federal Acquisition Regulation Supplement:

New Free Trade Agreement with Colombia, 18877 2013-07108 Proposal Adequacy Checklist, 18865-18876 2013-07106 Specialty Metals—Definition of Produce, 18877-18879 2013-07107 United States-Korea Free Trade Agreement, 18876 2013-07131 Defense Department Defense Department See Air Force Department See Defense Acquisition Regulations System See Navy Department Drug Drug Enforcement Administration NOTICES Decisions and Orders: Gary Alfred Shearer, M.D., 19009-19012 2013-07194 Pawan Kumar Jain, M.D., 19012-19015 2013-07195 Importers of Controlled Substances;

Applications: SA INTL GMBH C/O., Sigma Aldrich Co. LLC, St. Louis, MO, 19015-19016 2013-07152 Stepan Co., Maywood, NJ, 19015 2013-07147 Importers of Controlled Substances; Registrations: Johnson Matthey, Inc., West Deptford, NJ, 19016 2013-07150 Mylan Pharmaceuticals, Inc., Morgantown, WV, 19016 2013-07143 Manufacturers of Controlled Substances; Applications: Johnson Matthey Pharmaceutical Materials, Inc., Devens, MA, 19017 2013-07140 Patheon Pharmaceuticals, Inc., Cincinnati, OH, 19016 2013-07138 Manufacturers of Controlled Substances;

Registrations: Siemens Healthcare Diagnostics Inc., Newark, DE, 19017 2013-07141 Education Department Education Department PROPOSED RULES Proposed Priority; National Institute on Disability and Rehabilitation Research: Advanced Rehabilitation Research Training Program, 18933-18935 2013-07260 Employment and Training Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Program Reporting and Performance Standards System for Indian and Native American Programs, 19018-19019 2013-07200 Labor Certification Process for Temporary Employment of Aliens in Agriculture:

Prevailing Wage Rates for Certain Occupations; Correction and Rescission, 19019-19021 2013-07201 Energy Department Energy Department See Bonneville Power Administration See Federal Energy Regulatory Commission See Southeastern Power Administration Environmental Protection Environmental Protection Agency RULES Implementation Plan Revisions; Disapprovals: State of California; South Coast VMT Emissions Offset Demonstrations, 18849-18853 2013-06905 State Implementation Plans: California, South Coast Air Quality Management District;

Revision, 18853-18855 2013-06423 PROPOSED RULES State Implementation Plans: California, South Coast Air Quality Management Plan; Revision, 18936 2013-06427 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: NSPS for Pressure Sensitive Tape and Label Surface Coating Operations, 18977 2013-07208 Meetings: Human Studies Review Board; Public Webinar/Teleconference, 18978-18979 2013-07263 Proposed Settlement Agreements under Clean Air Act Citizen Suit, 18979-18981 2013-07262 Executive Office of the President See Presidential Documents Federal Aviation Federal Aviation Administration RULES Class E Airspace;

Amendments: Decorah, IA, 18800-18801 2013-06952 Superior, WI, 18799-18800 2013-06923 West Union, IA, 18798-18799 2013-06908 Class E Airspace; Establishment: Beeville, TX, 18801-18802 2013-06913 Tecumseh, NE, 18802-18803 2013-06911 Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures: Miscellaneous Amendments, 18803-18808 2013-06786 2013-06793 PROPOSED RULES Airworthiness Directives: Airbus Airplanes, 18925-18928 2013-07203 Austro Engine GmbH Engines, 18920-18922 2013-07210 The Boeing Company Airplanes, 18917-18920, 18922-18925 2013-07205 2013-07213 Class E Airspace;

Amendments: Tuskegee, AL, 18928-18929 2013-07115 Class E Airspace; Establishment: Bass Harbor, ME, 18931-18932 2013-07112 Boothbay, ME, 18929-18931 2013-07110 Unmanned Aircraft Systems Test Site Program, Privacy Approach; Meeting, 18932-18933 2013-07280 NOTICES Airworthiness Approval for Aircraft Forward-Looking Windshear and Turbulence Radar Systems, 19063 2013-07227 Federal Energy Federal Energy Regulatory Commission RULES Revisions to Reliability Standard for Transmission Vegetation Management, 18817-18837 2013-07113 NOTICES Applications:

Natural Gas Pipeline Co. of America LLC, 18968-18969 2013-07081 Combined Filings, 18969-18970 2013-07218 Environmental Impact Statements; Availability, etc.: Trunkline LNG Co., LLC, et al.; Lake Charles Liquefaction Project, 18970-18972 2013-07079 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Alta Wind X, LLC, 18972-18973 2013-07220 Alta Wind XI, LLC, 18973 2013-07221 DTE Stockton, LLC, 18973 2013-07215 Petitions for Rate Approval:

Bridgeline Holdings, LP, 18973-18974 2013-07080 ONEOK Texas Gas Storage, LLC, 18974 2013-07082 Technical Conferences: Increasing Market and Planning Efficiency through Improved Software, 18974-18975 2013-07216 Federal Highway Federal Highway Administration NOTICES Buy America Waivers, 19063-19064 2013-07206 Fish Fish and Wildlife Service PROPOSED RULES Endangered and Threatened Wildlife and Plants: 12-Month Finding on a Petition to List Rosemont Talussnail, 18936-18938 2013-07149 Listing as Endangered and Designation of Critical Habitat for Acuna Cactus and Fickeisen Plains Cactus, 18938-18943 2013-07159 Listing as Endangered and Designation of Critical Habitat for Gierisch Mallow, 18943-18947 2013-07122 NOTICES Comprehensive Conservation Plans and Environmental Assessments;

Availability, etc.: Montezuma National Wildlife Refuge, Cayuga, Seneca, and Wayne Counties, NY, 19000-19002 2013-07237 Marine Mammal Protection Act: Draft Revised Stock Assessment Reports for Two Stocks of West Indian Manatee, 19002-19004 2013-07157 Food and Drug Food and Drug Administration NOTICES Guidance for Industry and Staff; Availability: Establishing Performance Characteristics of In Vitro Diagnostic Devices for the Detection of Antibodies to Borrelia Burgdorferi, 18988 2013-07085 Foreign Assets Foreign Assets Control Office NOTICES Blocking and Unblocking of Persons and Property:

Identification of One Individual, Fourteen Entities, and Eight Vessels Pursuant to Iranian Sanctions, 19075-19076 2013-07174 General Services General Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: General Services Administration Acquisition Regulation; Proposal to Lease Space, 18981-18982 2013-07249 Maximum Per Diem Rates: States of Oklahoma and Texas, 18982 2013-07243 Geological Geological Survey NOTICES Meetings:

Scientific Earthquake Studies Advisory Committee, 19004 2013-07133 Health and Human Health and Human Services Department See Centers for Disease Control and Prevention See Food and Drug Administration See Health Resources and Services Administration See Indian Health Service See National Institutes of Health RULES World Trade Center Health Program Eligibility Requirements: Shanksville, PA and Pentagon Responders, 18855-18865 2013-07146 NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 18982-18983 2013-07144 Health Resources Health Resources and Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18988-18989 2013-07190 Part C Early Intervention Services Grants: Ryan White HIV/AIDS Program, 18989-18990 2013-07189 Homeland Homeland Security Department See Coast Guard See U.S. Customs and Border Protection Indian Affairs Indian Affairs Bureau NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Acquisition of Trust Land, 19004-19005 2013-07217 Tribal Energy Resource Agreements, 19005 2013-07212 Service Area Designations, 19005-19006 2013-07207 Indian Health Indian Health Service See Indian Health Service NOTICES Cooperative Agreements: Medical Professionals Recruitment and Continuing Education Programs, 18990-18995 2013-07117 Industry Industry and Security Bureau RULES Additions of Certain Persons to the Entity List: Removal of Person from the Entity List Based on Removal Request;

Implementation of Entity List Annual Review Changes, 18808-18814 2013-07135 Export Administration Regulations: List of Items Classified Under Export Control Classification 0Y521 Series - Biosensor Systems, 18814-18817 2013-07132 Interior Interior Department See Fish and Wildlife Service See Geological Survey See Indian Affairs Bureau See National Park Service International Trade Adm International Trade Administration NOTICES Antidumping Duty Administrative Reviews; Results, Extensions, Amendments, etc.:

Sodium Hexametaphosphate from the People's Republic of China, 18956-18957 2013-07254 Antidumping Duty New Shipper Reviews; Results, Extensions, Amendments, etc.: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 18957-18958 2013-07253 Antidumping Duty Orders; Results, Extensions, Amendments, etc.: Certain Frozen Warmwater Shrimp from People's Republic of China and Diamond Sawblades and Parts Thereof from People's Republic of China, 18958-18960 2013-07251 International Trade Com International Trade Commission NOTICES Investigations:

Certain Products Having Laminated Packaging, and Components Thereof, 19007-19008 2013-07130 Joint Joint Board for Enrollment of Actuaries NOTICES Meetings: Advisory Committee on Actuarial Examinations, 19008-19009 2013-07160 Justice Department Justice Department See Antitrust Division See Drug Enforcement Administration Labor Department Labor Department See Employment and Training Administration See Mine Safety and Health Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Annual Funding Notice for Defined Benefit Pension Plans, 19017-19018 2013-07236 Maritime Maritime Administration NOTICES Requests for Administrative Waivers of Coastwise Trade Laws: Vessel CHI, 19064-19065 2013-07242 Vessel FRANK S. CRESSEY, 19066-19067 2013-07240 Vessel GOLDEN BOY II, 19068 2013-07247 Vessel MARAE, 19067 2013-07239 Vessel MI CASA, 19066 2013-07245 Vessel NAUTILE, 19064 2013-07244 Vessel SCOUT, 19065-19066 2013-07229 Vessel VANESSA, 19065 2013-07238 Vessel WILDCAT, 19068-19069 2013-07231 Mine Mine Safety and Health Administration NOTICES Petitions for Modification of Application of Existing Mandatory Safety Standards, 19021-19024 2013-07163 National Institute National Institute of Standards and Technology NOTICES Incentives to Adopt Improved Cybersecurity Practices, 18954-18955 2013-07234 National Institute National Institutes of Health NOTICES Meetings:

Eunice Kennedy Shriver National Institute of Child Health and Human Development, 18996-18999 2013-07121 2013-07123 2013-07124 2013-07125 2013-07126 2013-07127 National Heart, Lung, and Blood Institute, 18995-18996 2013-07119 National Institute of Allergy and Infectious Diseases, 18996 2013-07120 National Institute of Environmental Health Sciences, 18997 2013-07118 National Institute of Neurological Disorders and Stroke, 18996-18997 2013-07128 Prospective Grants of Start-Up Exclusive Licenses:

Photosensitizing Antibody—Fluorophore Conjugates for Photoimmunotherapy, 18999 2013-07166 National Oceanic National Oceanic and Atmospheric Administration RULES Fisheries of the Exclusive Economic Zone Off Alaska: Pacific Cod by Catcher Vessels Less Than 60 feet in Bogoslof Exemption Area, Bering Sea and Aleutian Islands, 18896-18897 2013-07246 Fisheries off West Coast States: Pacific Coast Groundfish Fishery; Trawl Rationalization Program; Reconsideration of Allocation of Whiting, 18879-18896 2013-07162 PROPOSED RULES Fisheries of the Northeastern United States:

Tilefish Fishery Management Plan; Regulatory Amendment, Corrections, and Clarifications, 18947-18953 2013-07161 NOTICES Applications for Exempted Fishing Permits: Atlantic Coastal Fisheries Cooperative Management Act Provisions; General Provisions for Domestic Fisheries, 18960-18961 2013-07258 Meetings: Gulf of Mexico Fishery Management Council, 18961-18962 2013-07188 New England Fishery Management Council, 18963 2013-07187 North Pacific Fishery Management Council; Public Workshop, 18962-18963 2013-07186 Permit Applications for Scientific Research and Enhancement:

Endangered and Threatened Species; Take of Anadromous Fish, 18963-18965 2013-07226 Takes of Marine Mammals Incidental to Specified Activities: Exploration Drilling Program in the Chukchi Sea, AK, 18965 2013-07176 National Park National Park Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Historic Preservation Certifications, 19006-19007 2013-07137 National Telecommunications National Telecommunications and Information Administration NOTICES Incentives to Adopt Improved Cybersecurity Practices, 18954-18955 2013-07234 National Transportation National Transportation Safety Board NOTICES Meetings:

Lithium Ion Batteries in Transportation Public Forum, 19024 2013-07101 Navy Navy Department RULES Certifications and Exemptions under the International Regulations for Preventing Collisions at Sea, 1972, 18846-18848 2013-07224 NOTICES Meetings: Secretary of the Navy Advisory Panel, 18967 2013-07219 Personnel Personnel Management Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application to Make Deposit or Redeposit and Application to Make Service Credit Payment for Civilian Service, 19027 2013-07158 CSRS/FERS Documentation in Support of Disability Retirement Application, 19026 2013-07156 Freedom of Information/Privacy Act Record Request Form, 19025-19026 2013-07202 It's Time to Sign Up for Direct Deposit or Direct Express, 19024-19025 2013-07199 Request to Disability Annuitant for Information on Physical Condition and Employment, 19026-19027 2013-07154 Postal Regulatory Postal Regulatory Commission NOTICES Negotiated Service Agreements, 2013-07129 19028-19029 2013-07223 Presidential Documents Presidential Documents PROCLAMATIONS Charles Young Buffalo Soldiers National Monument;

Establishment (Proc. 8945), 18777-18782 2013-07404 First State National Monument; Establishment (Proc. 8944), 18769-18776 2013-07401 Harriet Tubman--Underground Railroad National Monument; Establishment (Proc. 8943), 18763-18767 2013-07399 Rio Grande del Norte National Monument; Establishment (Proc. 8946), 18783-18787 2013-07406 San Juan Islands National Monument; Establishment (Proc. 8947), 18789-18793 2013-07408 Securities Securities and Exchange Commission NOTICES Joint Industry Plans:

BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Inc., et al., 19029-19031 2013-07191 Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc., 19059-19062 2013-07222 ICE Clear Europe Ltd., 19057-19059 2013-07177 NASDAQ OMX BX, Inc., 19054-19057 2013-07214 NASDAQ OMX PHLX LLC, 19031-19034 2013-07183 NASDAQ Stock Market LLC, 19037-19047, 19051-19054 2013-07178 2013-07184 2013-07192 National Securities Clearing Corp., 19050-19051 2013-07185 National Stock Exchange, Inc., 19034-19037, 19047-19049 2013-07179 2013-07182 Social Social Security Administration RULES Revised Medical Criteria for Evaluating Visual Disorders, 18837-18846 2013-06975 Southeastern Southeastern Power Administration NOTICES Proposed Rate Extensions and Opportunities for Public Review and Comment:

Cumberland System, 18976 2013-07241 State Department State Department NOTICES Culturally Significant Objects Imported for Exhibition; Determinations: Hans Richter, Encounters; Correction, 19062 2013-07256 Meetings: Electronic Commerce; Department of State Advisory Committee on Private International Law, 19062-19063 2013-07255 Surface Transportation Surface Transportation Board NOTICES Acquisition of Control: Southfield Coinvest Holdings, LLC; Southfield Hallcon Investment Corp. and Hallcon Crew Transport Inc., et al., 19069-19070 2013-07309 Transportation Department Transportation Department See Federal Aviation Administration See Federal Highway Administration See Maritime Administration See Surface Transportation Board Treasury Treasury Department See Community Development Financial Institutions Fund See Foreign Assets Control Office NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 19070-19074 2013-07164 2013-07165 2013-07169 2013-07172 Customs U.S. Customs and Border Protection NOTICES Accreditation and Approval of Commercial Gaugers and Laboratories: SGS North America, Inc., 18999-19000 2013-07075 2013-07077 Veteran Affairs Veterans Affairs Department NOTICES Meetings: Veterans' Rural Health Advisory Committee, 19076 2013-07175 Reader Aids Consult the Reader Aids section at the end of this page for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 78 60 Thursday, March 28, 2013 Rules and Regulations BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1026 [Docket No. CFPB-2012-0015] RIN 3170-AA21 Truth in Lending (Regulation Z) AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; Official Interpretations. SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is amending Regulation Z, which implements the Truth in Lending Act, and the Official Interpretations of the regulation, which interpret the requirements of Regulation Z. Regulation Z generally limits the total amount of fees that a credit card issuer may require a consumer to pay with respect to an account to 25 percent of the credit limit in effect when the account is opened.

Regulation Z previously stated that this limitation applies prior to account opening and during the first year after account opening. This final rule amends Regulation Z to apply the limitation only during the first year after account opening. DATES: This rule is effective March 28, 2013. FOR FURTHER INFORMATION CONTACT: Gregory Evans, Counsel, Office of Regulations, Bureau of Consumer Financial Protection, 1700 G Street NW., Washington, DC 20552, at

(202)435-7700. SUPPLEMENTARY INFORMATION: I. Background The Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act) was signed into law on May 22, 2009. Public Law 111-24, 123 Stat. 1734 (2009). The Credit Card Act primarily amended the Truth in Lending Act

(TILA)and instituted new substantive and disclosure requirements to establish fair and transparent practices for open-end consumer credit plans. The Credit Card Act added TILA section 127(n)(1), which states that “[i]f the terms of a credit card account under an open end consumer credit plan require the payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) by the consumer in the first year during which the account is opened in an aggregate amount in excess of 25 percent of the total amount of credit authorized under the account when the account is opened,” then “no payment of any fees (other than any late fee, over-the-limit fee, or fee for a payment returned for insufficient funds) may be made from the credit made available under the terms of the account.” 15 U.S.C. 1637(n)(1). On January 12, 2010, the Board of Governors of the Federal Reserve System (Board) issued a final rule implementing new TILA section 127(n) in 12 CFR 226.52(a). *See* 75 FR 7658, 7819 (Feb. 22, 2010) (January 2010 Final Rule). Section 226.52(a) limits the total amount of fees that a credit card issuer may require a consumer to pay with respect to an account to “25 percent of the credit limit in effect when the account is opened.” *Id.* Under the Board's January 2010 Final Rule, this limitation applied only during the first year after account opening. *Id.* This rule became effective on February 22, 2010. On April 8, 2011, the Board issued a final rule expanding § 226.52(a) to apply to fees the consumer is required to pay with respect to an account prior to account opening. 1 The change was based on the Board's understanding that certain credit card issuers were “requiring consumers to pay application or processing fees prior to account opening that, when combined with other fees charged to the account after account opening, exceed 25 percent of the account's initial credit limit.” 76 FR at 22977. The Board viewed this practice as “inconsistent with the intent of [TILA] [s]ection 127(n)(1) insofar as it alters the statutory relationship between the costs and benefits of opening a credit card account.” *Id.* The Board's change to § 226.52(a) was scheduled to become effective on October 1, 2011. *Id.* at 22948. 1 76 FR 22948, 23002 (Apr. 25, 2011) (April 2011 Final Rule). The Board proposed this provision for comment in November 2010. 75 FR 67458, 67475 (Nov. 2, 2010). On July 20, 2011, a credit card issuer filed a lawsuit in the United States District Court for the District of South Dakota, alleging that the Board exceeded its authority by expanding § 226.52(a) to apply to fees the consumer is required to pay prior to account opening. *See First Premier Bank* v. *U.S. Consumer Fin. Prot. Bureau,* 819 F. Supp. 2d. 906 (D.S.D. Sept. 23, 2011). On July 21, 2011, the Board's rulemaking authority to implement the provisions of TILA transferred to the Bureau pursuant to sections 1061 and 1100A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Public Law 111-203 (2010). 2 On August 5, 2011, the card issuer filed a motion for a preliminary injunction, asking the court to postpone the October 1, 2011 effective date with respect to the application of § 226.52 to fees paid prior to account opening. The district court granted the motion for a preliminary injunction on September 23, 2011. *First Premier Bank,* 819 F. Supp. 2d. at 923 (South Dakota litigation). As a result of the court's order, the portion of the Board's 2011 final rule applying § 226.52(a) to pre-account opening fees has not become effective. 2 *See* 12 U.S.C. 5581; 15 U.S.C. 1604(a); Designated Transfer Date, 75 FR 57252 (Sept. 20, 2010). On December 22, 2011, the Bureau published in the **Federal Register** an interim final rule to reflect its assumption of rulemaking authority over Regulation Z. 76 FR 79768 (Dec. 22, 2011). The interim final rule made only technical changes to Regulation Z, such as noting the Bureau's authority and renumbering Regulation Z as 12 CFR Part 1026. Accordingly, the provision addressed in this rulemaking and in the litigation discussed above is properly cited as 12 CFR 1026.52(a). II. Summary of the Bureau's Rulemaking Process A. The Bureau's Proposal On April 12, 2012, the Bureau issued a proposal to amend 12 CFR 1026.52(a), and associated Official Interpretations, to provide that the fee limit of 25 percent of the credit limit in effect when the account is opened applies only during the first year after account opening. 77 FR 21875 (Apr. 12, 2012) (April 2012 Proposed Rule). The Bureau issued the April 2012 Proposed Rule to resolve the uncertainty created by the South Dakota litigation discussed above. The comment period closed on June 11, 2012. B. Summary of Public Comments In response to the April 2012 Proposed Rule, the Bureau received over 50 electronically submitted comments, as well as approximately 1,000 mailed form letters, prior to the comment closing date. The majority of the comment letters were submitted by members of the public, although the Bureau also received comments from industry, consumer advocacy groups, and the New York State Office of the Attorney General. Many members of the public opposed the April 2012 Proposed Rule, arguing that amending 12 CFR 1026.52(a) would reduce protections for vulnerable consumers. Consumer advocates and the New York State Office of the Attorney General expressed similar views. Some of these commenters suggested that the Bureau pursue other means of limiting pre-account opening fees, such as writing additional rules, coordinating examination activities, or bringing enforcement actions. Industry representatives, however, supported the proposed rule as a more accurate implementation of the Credit Card Act and an effective way to resolve the current litigation. III. Legal Authority The Bureau is issuing this final rule pursuant to its authority under TILA and the Dodd-Frank Act. Effective July 21, 2011, section 1061 of the Dodd-Frank Act transferred to the Bureau the “consumer financial protection functions” previously vested in certain other Federal agencies. The term “consumer financial protection functions” is defined to include “all authority to prescribe rules or issue orders or guidelines pursuant to any Federal consumer financial law, including performing appropriate functions to promulgate and review such rules, orders, and guidelines.” 3 TILA is a Federal consumer financial law. 4 Accordingly, effective July 21, 2011, except with respect to persons excluded from the Bureau's rulemaking authority by section 1029 of the Dodd-Frank Act, the authority of the Board to issue regulations pursuant to TILA transferred to the Bureau. 3 Public Law 111-203, Section 1061(a)(1). Effective on the designated transfer date, the Bureau was also granted “all powers and duties” vested in each of the Federal agencies, relating to the consumer financial protection functions, on the day before the designated transfer date. 4 Public Law 111-203, Section 1002(14) (defining “Federal consumer financial law” to include “enumerated consumer laws”); *id* . Section 1002(12) (defining “enumerated consumer laws” to include TILA). TILA, as amended by the Dodd-Frank Act, authorizes the Bureau to “prescribe regulations to carry out the purposes of [TILA].” Public Law 111-203, Section 1100A(2); 15 U.S.C. 1604(a). These regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, that in the Bureau's judgment are necessary or proper to effectuate the purpose of TILA, facilitate compliance with TILA, or prevent circumvention or evasion of TILA. *Id.* IV. Summary of the Final Rule The Bureau is amending § 1026.52(a) to provide that the limitation on credit card fees applies only during the first year after account opening. The Bureau is also amending the Official Interpretations of § 1026.52(a) to reflect this change and to correct a mathematical error present in the Board's Official Staff Interpretations, and now the Bureau's Official Interpretations, since the Board's January 2010 Final Rule. The Bureau takes seriously the concerns raised by commenters, particularly with respect to the effect that the rule may have on vulnerable consumers. The Bureau believes, however, that the final rule is necessary to resolve the uncertainty created by the South Dakota litigation discussed above. The Bureau will continue to monitor the credit card market to determine if it should take further action to protect consumers, using one or more of its powers under TILA, the Credit Card Act, or the Dodd-Frank Act. V. Section 1022(b)(2) of the Dodd-Frank Act In developing the final rule, the Bureau has conducted an analysis of potential benefits, costs, and impacts, 5 and has consulted or offered to consult with the prudential regulators and the Federal Trade Commission, including regarding consistency with any prudential, market, or systemic objectives administered by such agencies. 5 Specifically, section 1022(b)(2)(A) of the Dodd-Frank Act calls for the Bureau to consider the potential benefits and costs of a regulation to consumers and covered persons, including the potential reduction of access by consumers to consumer financial products or services; the impact on depository institutions and credit unions with $10 billion or less in total assets as described in section 1026 of the Dodd-Frank Act; and the impact on consumers in rural areas. This discussion considers the impacts of the final rule relative to existing law. The final rule provides that the limitation on credit card account fees in § 1026.52(a) applies only during the first year after account opening. Thus, once the final rule takes effect, fees that a consumer is required to pay prior to account opening are not subject to the limitation in § 1026.52(a). The Bureau believes that the final rule may impose potential costs on consumers by permitting a creditor to collect fees that would have been disallowed under the Board's April 2011 Final Rule. Card issuers should benefit from clarification of the scope of § 1026.52(a), which will resolve any uncertainty created by the South Dakota litigation. The final rule also permits card issuers to collect fees that were previously prohibited. The Bureau does not expect the final rule to impose costs on card issuers or to cause a reduction in consumer access to credit. All methods of compliance under previous regulation remain available to card issuers. Thus, a card issuer who was previously in compliance with § 1026.52(a) need not take any additional action to remain so. The final rule has no unique impact on insured depository institutions or insured credit unions with $10 billion or less in assets as described in section 1026 of the Dodd-Frank Act, nor does the final rule have a unique impact on rural consumers. VI. Regulatory Flexibility Act The Regulatory Flexibility Act

(RFA)generally requires an agency to conduct an initial regulatory flexibility analysis

(IRFA)and a final regulatory flexibility analysis

(FRFA)of any rule subject to notice-and-comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities, including small businesses, small governmental units, and small not-for-profit organizations. 6 The RFA defines a “small business” as a business that meets the size standard developed by the Small Business Administration pursuant to the Small Business Act. 7 The Bureau also is subject to certain additional procedures under the RFA involving the convening of a panel to consult with small business representatives prior to proposing a rule for which an IRFA is required. 5 U.S.C. 609. 6 5 U.S.C. 601 *et seq.* The Bureau is not aware of any governmental units or not-for-profit organizations to which the rule would apply. 7 5 U.S.C. 601(3). The Bureau may establish an alternative definition after consultation with the Small Business Administration and an opportunity for public comment. In the April 2012 Proposed Rule, the Bureau did not conduct an IRFA because the Bureau concluded that the proposed rule, if finalized, would not have a significant economic impact on any small entities. The Bureau reasoned that it did not expect the proposal to impose costs on card issuers because if the Bureau adopted the proposal as written, all previous methods of compliance would remain available to small entities. Thus, a small entity already in compliance need not take any additional action. The undersigned therefore certified that the proposed rule would not have a significant economic impact on a substantial number of small entities. 77 FR 21875, 21877 (Apr. 12, 2012). The Bureau did not receive comment with respect to this certification or its underlying reasoning. The Bureau reiterates its previous conclusion that the overall effect of the final rule is to narrow the compliance obligations under § 1026.52(a) for card issuers and to give card issuers additional certainty about how to comply with § 1026.52(a). Accordingly, the undersigned certifies that this final rule will not have a significant economic impact on a substantial number of small entities. VII. Paperwork Reduction Act The collection of information related to this final rule has been previously reviewed and approved by the Office of Management and Budget

(OMB)in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and assigned OMB Control Number 3170-0015 (Expiration Date 11/30/15). The Bureau determined that the April 2012 Proposed Rule would not impose any new recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would constitute collections of information requiring approval under the Paperwork Reduction Act, 44 U.S.C. 3501, *et seq.* The Bureau did not receive any comments regarding this conclusion, to which the Bureau adheres. The Bureau concludes that the final rule, which adopts the proposal in relevant respects, also imposes no new information collection requirements subject to the Paperwork Reduction Act. With this final rule, card issuers subject to § 1026.52(a) will not have to comply with its fee limitations with respect to fees the consumer is required to pay prior to account opening. The Bureau believes that any burden associated with updating compliance under the final rule is already accounted for in the previously approved burden estimates associated with the collection in Regulation Z under the Board's January 2010 Final Rule. That rule imposed a similar limitation on fees. 8 Accordingly, for the reasons stated above, the Bureau estimates that there is no increase in the one-time or ongoing burden to comply with the requirements under § 1026.52(a). 8 *See* 75 FR 7791 for the Board's burden analysis under the Paperwork Reduction Act. The Bureau has a continuing interest in the public's opinions of its collections of information. At any time, comments regarding the burden estimate, or any other aspect of this collection of information, including suggestions for reducing the burden, may be sent to: Consumer Financial Protection Bureau, Attention: PRA Office, 1700 G Street NW., Washington, DC 20552, or by the internet to *CFPB_Public_PRA@cfpb.gov* . List of Subjects in 12 CFR Part 1026 Advertising, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending. Authority and Issuance For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below: PART 1026—TRUTH IN LENDING (REGULATION Z) 1. The authority citation for Part 1026 continues to read as follows: Authority: 12 U.S.C. 2601; 2603-2605, 2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 U.S.C. 1601 *et seq.* Subpart G—Special Rules Applicable to Credit Card Accounts and Open-End Credit Offered to College Students 2. Section 1026.52 is amended by revising paragraph (a)(1) to read as follows: § 1026.52 Limitations on fees.

(a)*Limitations during first year after account opening.*

(1)*General rule.* Except as provided in paragraph (a)(2) of this section, the total amount of fees a consumer is required to pay with respect to a credit card account under an open-end (not home-secured) consumer credit plan during the first year after account opening must not exceed 25 percent of the credit limit in effect when the account is opened. For purposes of this paragraph, an account is considered open no earlier than the date on which the account may first be used by the consumer to engage in transactions. 3. In Supplement I to Part 1026—Official Interpretations: A. Under *Section 1026.52—Limitation on Fees:* i. The heading *52(a) Limitations prior to account opening and during the first year after account opening* is revised. ii. Under *52(a)(1) General rule,* paragraphs 1 and 3 are revised. iii. Under *52(a)(2) Fees not subject to limitations,* paragraph 1 is revised. The revisions read as follows: Supplement I to Part 1026—Official Interpretations *Section 1026.52—Limitations on fees.* *52(a) Limitations during first year after account opening.* *52(a)(1) General rule.* 1. *Application.* The 25 percent limit in § 1026.52(a)(1) applies to fees that the card issuer charges to the account as well as to fees that the card issuer requires the consumer to pay with respect to the account through other means (such as through a payment from the consumer's asset account to the card issuer or from another credit account provided by the card issuer). For example: i. Assume that, under the terms of a credit card account, a consumer is required to pay $120 in fees for the issuance or availability of credit at account opening. The consumer is also required to pay a cash advance fee that is equal to five percent of the cash advance and a late payment fee of $15 if the required minimum periodic payment is not received by the payment due date (which is the twenty-fifth of the month). At account opening on January 1 of year one, the credit limit for the account is $500. Section 1026.52(a)(1) permits the card issuer to charge to the account the $120 in fees for the issuance or availability of credit at account opening. On February 1 of year one, the consumer uses the account for a $100 cash advance. Section 1026.52(a)(1) permits the card issuer to charge a $5 cash-advance fee to the account. On March 26 of year one, the card issuer has not received the consumer's required minimum periodic payment. Section 1026.52(a)(2) permits the card issuer to charge a $15 late payment fee to the account. On July 15 of year one, the consumer uses the account for a $50 cash advance. Section 1026.52(a)(1) does not permit the card issuer to charge a $2.50 cash advance fee to the account. Furthermore, § 1026.52(a)(1) prohibits the card issuer from collecting the $2.50 cash advance fee from the consumer by other means. ii. Assume that, under the terms of a credit card account, a consumer is required to pay $125 in fees for the issuance or availability of credit during the first year after account opening. At account opening on January 1 of year one, the credit limit for the account is $500. Section 1026.52(a)(1) permits the card issuer to charge the $125 in fees to the account. However, § 1026.52(a)(1) prohibits the card issuer from requiring the consumer to make payments to the card issuer for additional non-exempt fees with respect to the account during the first year after account opening. Section 1026.52(a)(1) also prohibits the card issuer from requiring the consumer to open a separate credit account with the card issuer to fund the payment of additional non-exempt fees during the first year after the credit card account is opened. 3. *Changes in credit limit during first year.* i. *Increases in credit limit.* If a card issuer increases the credit limit during the first year after the account is opened, § 1026.52(a)(1) does not permit the card issuer to require the consumer to pay additional fees that would otherwise be prohibited (such as a fee for increasing the credit limit). For example, assume that, at account opening on January 1, the credit limit for a credit card account is $400 and the consumer is required to pay $100 in fees for the issuance or availability of credit. On July 1, the card issuer increases the credit limit for the account to $600. Section 1026.52(a)(1) does not permit the card issuer to require the consumer to pay additional fees based on the increased credit limit. ii. *Decreases in credit limit.* If a card issuer decreases the credit limit during the first year after the account is opened, § 1026.52(a)(1) requires the card issuer to waive or remove any fees charged to the account that exceed 25 percent of the reduced credit limit or to credit the account for an amount equal to any fees the consumer was required to pay with respect to the account that exceed 25 percent of the reduced credit limit within a reasonable amount of time but no later than the end of the billing cycle following the billing cycle during which the credit limit was reduced. For example, assume that, at account opening on January 1, the credit limit for a credit card account is $1,000 and the consumer is required to pay $250 in fees for the issuance or availability of credit. The billing cycles for the account begin on the first day of the month and end on the last day of the month. On July 30, the card issuer decreases the credit limit for the account to $600. Section 1026.52(a)(1) requires the card issuer to waive or remove $100 in fees from the account or to credit the account for an amount equal to $100 within a reasonable amount of time but no later than August 31. *52(a)(2) Fees not subject to limitations.* 1. *Covered fees.* Except as provided in § 1026.52(a)(2), § 1026.52(a) applies to any fees or other charges that a card issuer will or may require the consumer to pay with respect to a credit card account during the first year after account opening, other than charges attributable to periodic interest rates. For example, § 1026.52(a) applies to: i. Fees that the consumer is required to pay for the issuance or availability of credit described in § 1026.60(b)(2), including any fee based on account activity or inactivity and any fee that a consumer is required to pay in order to receive a particular credit limit; ii. Fees for insurance described in § 1026.4(b)(7) or debt cancellation or debt suspension coverage described in § 1026.4(b)(10) written in connection with a credit transaction, if the insurance or debt cancellation or debt suspension coverage is required by the terms of the account; iii. Fees that the consumer is required to pay in order to engage in transactions using the account (such as cash advance fees, balance transfer fees, foreign transaction fees, and fees for using the account for purchases); iv. Fees that the consumer is required to pay for violating the terms of the account (except to the extent specifically excluded by § 1026.52(a)(2)(i)); v. Fixed finance charges; and vi. Minimum charges imposed if a charge would otherwise have been determined by applying a periodic interest rate to a balance except for the fact that such charge is smaller than the minimum. Dated: March 22, 2013. Richard Cordray, Director, Bureau of Consumer Financial Protection. [FR Doc. 2013-07066 Filed 3-27-13; 8:45 am]

Connectionstraces to 11

Traces to 11 documents

U.S. Code