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Federal Register / Vol. 72, No. 217 / Friday, November 9, 2007 / Rules and Regulations

disclosures in a timely manner on or with the
application. If the creditor instead mailed
paper disclosures to the applicant, this
requirement would not be met.
ii. In contrast, if an applicant is physically
present in the creditor’s office, and accesses
a credit application electronically, such as
via a terminal or kiosk, the creditor may
provide disclosures in either electronic or
paper form, provided the creditor complies
with the timing, delivery, and retainability
requirements of the regulation.

*

*

*

*

*

By order of the Board of Governors of the
Federal Reserve System, October 31, 2007.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E7–21697 Filed 11–8–07; 8:45 am]
BILLING CODE 6210–01–P

FEDERAL RESERVE SYSTEM
12 CFR Part 205
[Regulation E; Docket No. R–1282]

Electronic Fund Transfer
Board of Governors of the
Federal Reserve System.
ACTION: Final rule; official staff
interpretation.

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AGENCY:

SUMMARY: The Board is amending
Regulation E, which implements the
Electronic Fund Transfer Act, and the
official staff commentary to the
regulation, to withdraw portions of the
interim final rules for the electronic
delivery of disclosures issued March 30,
2001. The interim final rules addressed
the timing and delivery of electronic
disclosures, consistent with the
requirements of the Electronic
Signatures in Global and National
Commerce Act (E-Sign Act). Because
compliance with the 2001 interim final
rules has not been mandatory,
withdrawal of these provisions from the
Code of Federal Regulations reduces
confusion about the status of the
provisions and simplifies the regulation.
Similar rules are being adopted under
other consumer fair lending and
financial services regulations
administered by the Board.
DATES: The final rule is effective
December 10, 2007. The mandatory
compliance date is October 1, 2008.
FOR FURTHER INFORMATION CONTACT: John
C. Wood, Counsel, Division of
Consumer and Community Affairs, at
(202) 452–2412 or (202) 452–3667. For
users of Telecommunications Device for
the Deaf (TDD) only, contact (202) 263–
4869.
SUPPLEMENTARY INFORMATION:

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I. Statutory Background
The purpose of the Electronic Fund
Transfer Act (EFTA), 15 U.S.C. 1693 et
seq., is to provide a basic framework
establishing the rights, liabilities, and
responsibilities of participants in
electronic fund transfer (EFT) systems,
and to provide individual consumer
rights. The Board’s Regulation E (12
CFR part 205) implements the EFTA.
Examples of types of transfers covered
by the EFTA and Regulation E include
transfers initiated through an automated
teller machine (ATM), point-of-sale
(POS) terminal, automated
clearinghouse (ACH), telephone billpayment plan, or remote banking
service. The EFTA and Regulation E
require financial institutions to provide
certain disclosures to consumers in
writing, including but not limited to
initial disclosures of terms and
conditions of an EFT service,
documentation of EFTs by means of
terminal receipts and periodic account
activity statements, and change in terms
notices. Certain persons other than
financial institutions are also required
to comply with specific disclosure
provisions of Regulation E.
The Electronic Signatures in Global
and National Commerce Act (the E-Sign
Act), 15 U.S.C. 7001 et seq., was enacted
in 2000. The E-Sign Act provides that
electronic documents and electronic
signatures have the same validity as
paper documents and handwritten
signatures. The E-Sign Act contains
special rules for the use of electronic
disclosures in consumer transactions.
Under the E-Sign Act, consumer
disclosures required by other laws or
regulations to be provided or made
available in writing may be provided or
made available, as applicable, in
electronic form if the consumer
affirmatively consents after receiving a
notice that contains certain information
specified in the statute, and if certain
other conditions are met.
The E-Sign Act, including the special
consumer notice and consent
provisions, became effective October 1,
2000, and did not require implementing
regulations. Thus, financial institutions
are currently permitted to provide in
electronic form any disclosures that are
required to be provided or made
available to the consumer in writing
under Regulation E if the consumer
affirmatively consents to receipt of
electronic disclosures in the manner
required by section 101(c) of the E-Sign
Act.

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II. Board Proposals and Interim Rules
Regarding Electronic Disclosures
On April 4, 2001, the Board published
for comment interim final rules to
establish uniform standards for the
electronic delivery of disclosures
required under Regulation E (66 FR
17786). Similar interim final rules for
Regulations B, M, Z, and DD
(implementing the Equal Credit
Opportunity Act, the Consumer Leasing
Act, the Truth in Lending Act, and the
Truth in Savings Act, respectively) were
published on March 30, 2001 (66 FR
17322 and 66 FR 17329) (Regulations M
and Z, respectively), and April 4, 2001
(66 FR 17779 and 66 FR 17795)
(Regulations B and DD, respectively).
Each of the interim final rules
incorporated, but did not interpret, the
requirements of the E-Sign Act.
Financial institutions and other persons,
as applicable, generally were required to
obtain consumers’ affirmative consent to
provide disclosures electronically,
consistent with the requirements of the
E-Sign Act. The interim final rules also
incorporated many of the provisions
that were part of earlier regulatory
proposals issued by the Board regarding
electronic disclosures.1
Under the 2001 interim final rules,
disclosures could be sent to an e-mail
address designated by the consumer, or
could be made available at another
location, such as an Internet Web site.
If the disclosures were not sent by email, financial institutions would have
to provide a notice to consumers
(typically by e-mail) alerting them to the
availability of the disclosures.
Disclosures posted on a Web site would
have to be available for at least 90 days
to allow consumers adequate time to
access and retain the information.
Institutions also would be required to
make a good faith attempt to redeliver
electronic disclosures that were
returned undelivered, using the address
information available in their files.
Commenters on the interim final rules
identified significant operational and
information security concerns with
respect to the requirement to send the
disclosure or an alert notice to an e-mail
address designated by the consumer.
1 On May 2, 1996, the Board proposed to amend
Regulation E to permit financial institutions to
provide disclosures by sending them electronically
(61 FR 19696). Based on comments received, in
1998 the Board published an interim rule
permitting the electronic delivery of disclosures
under Regulation E (63 FR 14528, March 25, 1998)
and similar proposals under Regulations B, M, Z,
and DD (63 FR 14552, 14538, 14548, and 14533,
respectively, March 25, 1998). Based on comments
received on the 1998 proposals, in 1999 the Board
published revised proposals under Regulations B, E,
M, Z, and DD (64 FR 49688, 49699, 49713, 49722
and 49740, respectively, September 14, 1999).

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For example, commenters stated that
some consumers who choose to receive
electronic disclosures do not have email addresses or may not want
personal financial information sent to
them by e-mail. Commenters also noted
that e-mail is not a secure medium for
delivering confidential information and
that consumers’ e-mail addresses
frequently change. The commenters also
opposed the requirement for redelivery
in the event a disclosure was returned
undelivered. In addition, many
commenters asserted that making the
disclosures available for at least 90 days,
as required by the interim final rule,
would increase costs and would not be
necessary for consumer protection.
In August 2001, in response to
comments received, the Board lifted the
previously established October 1, 2001
mandatory compliance date for all of the
interim final rules. (66 FR 41439,
August 8, 2001.) Thus, institutions are
not required to comply with the interim
final rules. Since that time, the Board
had not taken further action with
respect to the interim final rules on
electronic disclosures in order to allow
electronic commerce, including
electronic disclosure practices, to
continue to develop without regulatory
intervention and to allow the Board to
gather further information about such
practices.
In April 2007, the Board proposed to
amend Regulation E and the official staff
commentary by (1) withdrawing
portions of the 2001 interim final rule
that restate or cross-reference provisions
of the E-Sign Act and accordingly are
unnecessary; (2) withdrawing other
portions of the interim final rule that the
Board now believes may impose undue
burdens on electronic banking and
commerce and may be unnecessary for
consumer protection; and (3) adding
certain provisions to provide guidance
regarding electronic disclosures. (72 FR
21131, April 30, 2007.) Similar
amendments were also proposed by the
Board under Regulations B, M, Z, and
DD. (72 FR 21125, 72 FR 21135, 72 FR
21141, and 72 FR 21155, respectively).
III. Summary of the Final Rule
The Board received about 25
comments on the April 2007 proposal,
primarily from financial institutions and
their representatives. Most of the
financial industry commenters generally
supported the proposal, although some
provided suggestions for clarifications
or changes to particular elements of the
proposal. A comment letter was also
submitted on behalf of four consumer
groups. The consumer group
commenters suggested a number of
changes to strengthen consumer

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protections. The comments are
discussed in more detail in the Sectionby-Section Analysis below.
For the reasons discussed below, the
Board is now adopting amendments to
Regulation E in final form, largely as
proposed in April 2007. As stated in the
proposal, because compliance with the
2001 interim final rules has not been
mandatory, the final rule will reduce
confusion about the status of the
electronic disclosure provisions and
simplify the regulation. (Certain
provisions in the 2001 interim rules,
including provisions addressing foreign
language disclosures, were not affected
by the lifting of the mandatory
compliance date and became final in
2001; thus, those provisions are not
dealt with in this rulemaking.)
Since 2001, industry and consumers
have gained considerable experience
with electronic disclosures. During that
period, the Board has received no
indication that consumers have been
harmed by the fact that compliance with
the interim final rules is not mandatory.
The Board also has reconsidered certain
aspects of the interim final rules, such
as sending disclosures by e-mail, in
light of concerns about data security,
identity theft, and ‘‘phishing’’ (i.e.,
prompting consumers to reveal
confidential personal or financial
information through fraudulent e-mail
requests that appear to originate from a
financial institution, government
agency, or other trusted entity) that have
become more pronounced since 2001.
The Board is eliminating certain aspects
of the 2001 interim final rules, such as
provisions regarding the availability and
retention of electronic disclosures, as
unnecessary in light of current industry
practices.
Finally, as proposed, certain
provisions that restate or cross-reference
the E-Sign Act’s general rules regarding
electronic disclosures (including the
consumer consent provisions) and
electronic signatures are being deleted
as unnecessary, because the E-Sign Act
is a self-effectuating statute. The
revisions to Regulation E and the official
staff commentary are described more
fully below in the Section-by-Section
Analysis.
IV. Section-by-Section Analysis
12 CFR Part 205 (Regulation E)
Section 205.4 General Disclosure
Requirements; Jointly Offered Services
Section 205.4 contains the general
disclosure requirements under
Regulation E, including provisions
relating to the form of disclosure.
Section 205.4(a)(1) generally requires
financial institutions to provide

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disclosures in writing and in a form that
the consumer may keep. As proposed,
the Board is revising § 205.4(a)(1) to
clarify that institutions may provide
disclosures to consumers in electronic
form, subject to compliance with the
consumer consent and other applicable
provisions of the E-Sign Act. Some
institutions may provide disclosures to
consumers both in paper and electronic
form and rely on the paper form of the
disclosures to satisfy their compliance
obligations. For those institutions, the
duplicate electronic form of the
disclosures may be provided to
consumers without regard to the
consumer consent or other provisions of
the E-Sign Act because the electronic
form of the disclosure is not used to
satisfy the regulation’s disclosure
requirements.
Section 205.4(c) in the 2001 interim
final rule refers to § 205.17, the section
of the interim final rule setting forth
general rules for electronic disclosures.
Because the Board is deleting § 205.17,
as discussed below, the Board is also
deleting § 205.4(c), as proposed.
Sections 205.4(d) (multiple accounts
and account holders) and (e) (services
offered jointly) are renumbered as
§§ 205.4(c) and (d) respectively.
Section 205.17 Requirements for
Electronic Communication
Section 205.17 was added by the 2001
interim final rule to address the general
requirements for electronic
communications. In the April 2007
proposal, the Board proposed to delete
§ 205.17 from Regulation E and the
accompanying sections of the staff
commentary. Financial institution
commenters largely supported the
proposed deletion, and § 205.17 and the
accompanying commentary are deleted
in the final rule, reserving that section
for future use.
In the interim rule, § 205.17(a)
defined the term ‘‘electronic
communication’’ to mean a message
transmitted electronically that can be
displayed on equipment as visual text,
such as a message displayed on a
personal computer monitor screen. The
deletion of § 205.17(a) does not change
applicable legal requirements under the
E-Sign Act.
Section 205.17(b) incorporated by
reference the provisions of the E-Sign
Act, such as the provision allowing
disclosures to be provided in electronic
form. The deletion of this provision has
no impact on the general applicability of
the E-Sign Act to Regulation E
disclosures. Section 205.17(e) was
added in the 2001 interim final rule to
clarify that persons, other than financial
institutions, that are required to comply

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with the regulation may use electronic
disclosures. This provision is deleted as
unnecessary because the E-Sign Act is a
self-effectuating statute and permits any
person to use electronic records subject
to the conditions set forth in the Act.
Sections 205.17(c) and (d) addressed
specific timing and delivery
requirements for electronic disclosures
under Regulation E, such as the
requirement to send disclosures to a
consumer’s e-mail address (or post the
disclosures on a Web site and send a
notice alerting the consumer to the
disclosures). The Board stated in the
proposal that it no longer believed that
these additional provisions were
necessary or appropriate. The Board
noted that electronic disclosures have
evolved since 2001, as industry and
consumers have gained experience with
them, and also noted concerns about email related to data security, identity
theft, and phishing.
The consumer group commenters
urged the Board to require the use of email to provide required disclosures in
electronic form, arguing that e-mail is
the only reliable way to ensure that
consumers are able to actually access,
receive, and retain disclosures. The
consumer groups also disagreed with
the statement that concerns relating to
phishing, identity theft, and data
security are a valid reason for not
requiring the use of e-mail, noting that
phishing involves gathering information
from the consumer, while disclosures
would be provided to the consumer, and
need not include sensitive information.
While the consumer’s receipt of an email message that is actually from the
consumer’s financial institution would
not in general pose a security risk,
consumers might ignore or delete emails from financial institutions (real or
purported), in order to avoid falling
victim to fraud schemes. Thus,
disclosures sent by consumers’ financial
institutions may not receive the
attention they should. Consequently,
some financial institutions may be
reluctant to communicate by e-mail. To
the extent consumers are instructed not
to ignore electronic mail messages from
their financial institutions, the risk of
consumers being victimized by
fraudulent e-mail might be increased. In
any event, the Board believes it is
preferable not to mandate the use of any
particular means of electronic delivery
of disclosures, but instead to allow
flexibility for institutions to use
whatever method may be best suited to
particular types of disclosure (for
example, account-opening, periodic
statements, or change in terms).
With regard to the requirement to
attempt to redeliver returned electronic

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disclosures, institutions would be
required to search their files for an
additional e-mail address to use, and
might be required to use a postal mail
address for redelivery if no additional email address was available. As stated in
the April 2007 proposal, the Board
continues to believe that both
requirements would likely be unduly
burdensome.
Under the April 2007 proposed rule,
the requirement in the 2001 interim
final rule for institutions to maintain
disclosures posted on a Web site for at
least 90 days would be deleted.
Financial institution commenters
supported the proposed deletion;
consumer group commenters expressed
concern about its impact on consumers.
As stated in the proposal, based on a
review of industry practices, it appears
that many institutions maintain
disclosures posted on an Internet Web
site for several months, and, in a
number of cases, for more than a year.
For example, it appears that institutions
that offer online periodic statements to
consumers typically make those
statements available without charge for
six months or longer in electronic form.
This practice has developed even
though Regulation E does not currently
require institutions to maintain
disclosures for any specific period of
time. In addition, the Board continues to
believe that an appropriate time period
consumers may want electronic
disclosures to be available may vary
depending upon the type of disclosure,
and is reluctant to establish specific
time periods that would vary depending
on the disclosures, which would
increase the compliance burden.
Therefore, the 90-day retention
provision is deleted as proposed.
Nevertheless, while the Board is not
requiring disclosures to be maintained
on an Internet Web site for any specific
time period, the general requirements of
Regulation E continue to apply to
electronic disclosures, such as the
requirement to provide disclosures to
consumers at certain specified times
and in a form that the consumer may
keep. The Board expects institutions to
maintain disclosures on Web sites for a
reasonable period of time (which may
vary depending upon the particular
disclosure) so that consumers have an
opportunity to access, view, and retain
the disclosures. As stated in the April
2007 proposal, the Board will monitor
institutions’ electronic disclosure
practices with regard to the ability of
consumers to retain Regulation E
disclosures and would consider further
revisions to the regulation to address
this issue if necessary.

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V. Other Issues Raised by Commenters
Clear and Readily Understandable
Disclosures
An issue raised in the comments on
the April 2007 proposal related to small
hand-held electronic devices through
which consumers may conduct financial
transactions using the Internet or other
electronic means (for example, Internetenabled cellphones, personal digital
assistants, and similar devices). One
commenter requested clarification on
whether financial institutions would be
deemed to comply with the requirement
to provide disclosures in a clear and
readily understandable form, even when
the consumer views them on a small
screen of a hand-held electronic device.
The commenter noted that the
institution has no control over what
devices consumers choose to use, for
example, to view disclosures on a web
page. The Board believes that
disclosures comply with the ‘‘clear and
readily understandable’’ requirement as
long as they are provided in a manner
such that they would be clear and
readily understandable when viewed on
a typical home personal computer
monitor.
Retainable Form
Several industry commenters
requested guidance on how financial
institutions can be sure of meeting the
requirement to provide disclosures in a
form that the consumer can keep. The
consumer group commenters were
concerned about retainability of
disclosures in light of the deletion of the
requirement to maintain disclosures on
a Web site for at least 90 days. They
urged that the final regulations require
that disclosures be delivered in a format
that is both downloadable and printable.
The Board believes that institutions
satisfy the requirement for providing
electronic disclosures in a form the
consumer can retain if they are provided
in a standard electronic format that can
be downloaded and saved or printed on
a typical home personal computer.
Typically any document that can be
downloaded by the consumer can also
be printed. The Board will, however,
monitor financial institutions’ practices
to evaluate whether further guidance is
needed on this issue. In a situation
where the consumer is provided
electronic disclosures through
equipment under the institution’s
control—such as a terminal or kiosk in
the institution’s offices—the institution
could, for example, provide a printer
that automatically prints the
disclosures.

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Exceptions From E-Sign Notice and
Consent Requirements
A few commenters suggested that the
Board adopt various exceptions from the
E-Sign notice and consent requirements.
Some of these commenters encouraged
the Board to allow the delivery of the
Regulation E account-opening
disclosures under § 205.7 (as well as
similar disclosures under the other four
regulations involved in the parallel
rulemakings) electronically, without
regard to the consumer consent
provisions of E-Sign, using the Board’s
authority under the E-Sign Act as well
as the statutes underlying the
regulations. One of the commenters
asserted that, since Internet commerce
has expanded greatly over the past few
years, when consumers choose to
conduct financial transactions online,
they presume that they will receive
related disclosures online as well. Other
suggested exceptions from the E-Sign
consent provisions included (1) the
copy of a consumer’s written
authorization for recurring debits under
§ 205.10(b) and (2) the notice of
recurring debits varying in amount
under § 205.10(d). The commenter
suggesting the latter exception also
recommended that the regulation permit
the notice to be given orally, such as by
toll-free telephone. The Board believes
that, at this time, there is insufficient
evidence that the consent requirements
are a burden on electronic commerce in
these situations.
VI. Use of ‘‘Plain Language’’
Section 722 of the Gramm-LeachBliley Act of 1999 requires the Board to
use ‘‘plain language’’ in all proposed
and final rules published after January
1, 2000. In the proposal, the Board
invited comments on whether the
proposed rules are clearly stated and
effectively organized, and how the
Board might make the proposed text
easier to understand. No comments
were received on ‘‘plain language’’
issues involving Regulation E.

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VII. Final Regulatory Flexibility
Analysis
The Board prepared an initial
regulatory flexibility analysis as
required by the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.) (RFA) in
connection with the April 2007
proposal. The Board received no
comments on its initial regulatory
flexibility analysis.
The RFA generally requires an agency
to perform an assessment of the impact
a rule is expected to have on small
entities. However, under section 605(b)
of the RFA, 5 U.S.C. 605(b), the

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regulatory flexibility analysis otherwise
required under section 604 of the RFA
is not required if an agency certifies,
along with a statement providing the
factual basis for such certification, that
the rule will not have a significant
economic impact on a substantial
number of small entities. Based on its
analysis and for the reasons stated
below, the Board certifies that the rule
will not have a significant economic
impact on a substantial number of small
entities.
1. Statement of the need for, and
objectives of, the final rule. The Board
is adopting revisions to Regulation E to
withdraw the 2001 interim final rule on
electronic communication. The Board is
also clarifying that Regulation E
disclosures may be provided to
consumers in electronic form in
accordance with the consumer consent
and other applicable provisions of the ESign Act.
The EFTA was enacted to provide a
basic framework establishing the rights,
liabilities, and responsibilities of
participants in electronic fund transfer
(EFT) systems. The primary purpose of
the act is the provision of individual
consumer rights. 15 U.S.C. 1593. The
EFTA authorizes the Board to prescribe
regulations to carry out the purposes of
the statute. 15 U.S.C. 1693b. The Act
expressly states that the Board’s
regulations may contain ‘‘such
classifications, differentiations, or other
provisions, * * * as, in the judgment of
the Board, are necessary or proper to
carry out the purposes of [the Act], to
prevent circumvention or evasion [of
the Act], or to facilitate compliance
[with the Act].’’ 15 U.S.C. 1693b(c). The
Board believes that the revisions to
Regulation E discussed above are within
Congress’s broad grant of authority to
the Board to adopt provisions that carry
out the purposes of the statute.
2. Issues raised by comments in
response to the initial regulatory
flexibility analysis. In accordance with
section 603(a) of the RFA, the Board
conducted an initial regulatory
flexibility analysis in connection with
the proposed rule. The Board did not
receive any comments on its initial
regulatory flexibility analysis.
3. Small entities affected by the final
rule. The final rule deletes provisions of
Regulation E that are not in effect on a
mandatory basis and, accordingly, the
final rule does not change the legal
requirements applicable to any financial
institutions, regardless of their size.
Therefore, the final rule would not have
a significant economic impact on small
entities. The number of small entities
affected by this final rule is unknown.

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4. Other federal rules. The Board
believes no federal rules duplicate,
overlap, or conflict with the final
revisions to Regulation E.
5. Significant alternatives to the
proposed revisions. The Board solicited
comment on any significant alternatives
that could provide additional ways to
reduce regulatory burden associated
with the proposed rule. Commenters did
not suggest any significant alternatives
to the proposed rule.
VIII. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. Ch.
3506; 5 CFR Part 1320 Appendix A.1),
the Board reviewed the rule under the
authority delegated to the Board by the
Office of Management and Budget
(OMB). The collection of information
that is subject to the PRA by this final
rulemaking is found in 12 CFR Part 205.
The Federal Reserve may not conduct or
sponsor, and an organization is not
required to respond to, this information
collection unless it displays a currently
valid OMB control number. The OMB
control number is 7100–0200.
Section 904 of the Electronic Fund
Transfer Act (EFTA) (15 U.S.C. 1693b)
authorizes the Board to issue regulations
to carry out the purposes of the Act.
This information collection is
mandatory. Since the Federal Reserve
does not collect any information, no
issue of confidentiality normally arises.
However, in the event the Board were to
retain records during the course of an
examination, the information may be
protected from disclosure under
exemptions (b)(4), (6), and (8) of the
Freedom of Information Act (5 U.S.C.
552 (b)(4), (6), and (8)). The disclosures
required by the rule and information
about error allegations and their
resolution are confidential between the
institution and the consumer.
The EFTA and Regulation E are
designed to ensure adequate disclosure
of basic terms, costs, and rights relating
to electronic fund transfer (EFT)
services provided to consumers.
Institutions offering EFT services must
disclose to consumers certain
information, including: initial and
updated EFT terms, transaction
information, periodic statements of
activity, the consumer’s potential
liability for unauthorized transfers, and
error resolution rights and procedures.
These disclosures are triggered by
certain events specified in the EFTA
and Regulation E. Institutions are
required to retain evidence of
compliance for not less than two years
from the date that disclosures are
required to be made or action is
required to be taken; however, the

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regulation does not specify the types of
records that must be retained. To ease
institutions’ burden and cost of
complying with the disclosure
requirements of Regulation E
(particularly for small entities), the
Federal Reserve publishes model forms
and disclosure clauses. Regulation E
applies to all financial institutions that
engage in EFT transactions. The Board
has determined that no new
requirements or revisions to existing
requirements are contained in this final
rulemaking.
The estimated annual burden for the
entities supervised by the Federal
Reserve is approximately 74,141 hours
for the 1,172 financial institutions that
are deemed respondents for purposes of
the PRA. As mentioned in the Preamble,
on April 30, 2007, a notice of proposed
rulemaking was published in the
Federal Register (72 FR 21131). No
comments specifically addressing the
burden estimate were received.
The Federal Reserve has a continuing
interest in the public’s opinions of our
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: Secretary, Board of
Governors of the Federal Reserve
System, 20th and C Streets, NW.,
Washington, DC 20551; and to the
Office of Management and Budget,
Paperwork Reduction Project (7100–
0200), Washington, DC 20503.
List of Subjects in 12 CFR Part 205
Consumer protection, Electronic fund
transfers, Federal Reserve System,
Reporting and recordkeeping
requirements.
■ For the reasons set forth in the
preamble, the Board amends 12 CFR
part 205 as set forth below:
PART 205—ELECTRONIC FUND
TRANSFERS (REGULATION E)
1. The authority citation for part 205
continues to read as follows:

■

Authority: 15 U.S.C. 1693b.

2. Section 205.4 is amended by
revising paragraph (a)(1), removing
paragraph (c), and redesignating
paragraph (d) as paragraph (c), and
paragraph (e) as paragraph (d),
respectively, as follows:

mstockstill on PROD1PC66 with RULES

■

§ 205.4 General disclosure requirements;
jointly offered services.

(a)(1) Form of disclosures. Disclosures
required under this part shall be clear
and readily understandable, in writing,
and in a form the consumer may keep.
The disclosures required by this part

VerDate Aug<31>2005

18:07 Nov 08, 2007

Jkt 214001

may be provided to the consumer in
electronic form, subject to compliance
with the consumer consent and other
applicable provisions of the Electronic
Signatures in Global and National
Commerce Act (E-Sign Act)(15 U.S.C.
7001 et seq.). A financial institution
may use commonly accepted or readily
understandable abbreviations in
complying with the disclosure
requirements of this part.
*
*
*
*
*
§ 205.17

[Removed]

3. Section 205.17 is removed and
reserved.
■ 4. In Supplement I to Part 205, section
205.17—Requirements for Electronic
Communication is removed and
reserved.
■

By order of the Board of Governors of the
Federal Reserve System, October 31, 2007.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E7–21698 Filed 11–8–07; 8:45 am]
BILLING CODE 6210–01–P

FEDERAL RESERVE SYSTEM
12 CFR Part 213
[Regulation M; Docket No. R–1283]

Consumer Leasing
Board of Governors of the
Federal Reserve System.
ACTION: Final rule; official staff
interpretation.
AGENCY:

SUMMARY: The Board is amending
Regulation M, which implements the
Consumer Leasing Act, to withdraw
portions of the interim final rules for the
electronic delivery of disclosures issued
March 30, 2001. The interim final rules
addressed the timing and delivery of
electronic disclosures, consistent with
the requirements of the Electronic
Signatures in Global and National
Commerce Act (E-Sign Act). Because
compliance with the 2001 interim final
rules has not been mandatory,
withdrawal of these provisions from the
Code of Federal Regulations reduces
confusion about the status of the
provisions and simplifies the regulation.
In addition, the Board is adopting
final amendments to Regulation M to
provide guidance on the electronic
delivery of disclosures. For example, the
final rules provide that when a lease
advertisement is accessed by a
consumer in electronic form,
disclosures may be provided to the
consumer in electronic form in the
advertisement without regard to the
consumer consent and other provisions

PO 00000

Frm 00012

Fmt 4700

Sfmt 4700

of the E-Sign Act. Similar final rules are
being adopted under other consumer
fair lending and financial services
regulations administered by the Board.
DATES: The final rule is effective
December 10, 2007. The mandatory
compliance date is October 1, 2008.
FOR FURTHER INFORMATION CONTACT: John
C. Wood, Counsel, Division of
Consumer and Community Affairs, at
(202) 452–2412 or (202) 452–3667. For
users of Telecommunications Device for
the Deaf (TDD) only, contact (202) 263–
4869.
SUPPLEMENTARY INFORMATION:
I. Statutory Background
The Consumer Leasing Act (CLA), 15
U.S.C. 1667–1667e, was enacted into
law in 1976 as an amendment to the
Truth in Lending Act (TILA), 15 U.S.C.
1601 et seq. The CLA requires lessors to
provide lessees with uniform cost and
other disclosures about consumer lease
transactions. The act generally applies
to consumer leases of personal property
in which the contractual obligation does
not exceed $25,000 and has a term of
more than four months. An automobile
lease is the most common type of
consumer lease covered by the act. The
Board’s Regulation M (12 CFR part 213)
implements the act. The CLA and
Regulation M require disclosures to be
provided in writing.
The Electronic Signatures in Global
and National Commerce Act (the E-Sign
Act), 15 U.S.C. 7001 et seq., was enacted
in 2000. The E-Sign Act provides that
electronic documents and electronic
signatures have the same validity as
paper documents and handwritten
signatures. The E-Sign Act contains
special rules for the use of electronic
disclosures in consumer transactions.
Under the E-Sign Act, consumer
disclosures required by other laws or
regulations to be provided or made
available in writing may be provided or
made available, as applicable, in
electronic form if the consumer
affirmatively consents after receiving a
notice that contains certain information
specified in the statute, and if certain
other conditions are met.
The E-Sign Act, including the special
consumer notice and consent
provisions, became effective October 1,
2000, and did not require implementing
regulations. Thus, lessors are currently
permitted to provide in electronic form
any disclosures that are required to be
provided or made available to the
consumer in writing under Regulation
M if the consumer affirmatively
consents to receipt of electronic
disclosures in the manner required by
section 101(c) of the E-Sign Act.

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