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Federal Register / Vol. 79, No. 34 / Thursday, February 20, 2014 / Proposed Rules for developing test procedures. DOE actively encourages the participation and interaction of the public during the comment period at each stage of the rulemaking process. Interactions with and between members of the public provide a balanced discussion of the issues and assist DOE in the rulemaking process. Anyone who wishes to be added to the DOE mailing list to receive future notices and information about this rulemaking should contact Ms. Brenda Edwards at (202) 586–2945, or via email at Brenda.Edwards@ ee.doe.gov. Issued in Washington, DC, on February 7, 2014. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and Renewable Energy. [FR Doc. 2014–03299 Filed 2–19–14; 8:45 am] BILLING CODE 6450–01–P FEDERAL RESERVE SYSTEM 12 CFR Part 222 [Docket No. R–1484] RIN 7100 AE14 Identity Theft Red Flags (Regulation V) Board of Governors of the Federal Reserve System. ACTION: Notice of proposed rulemaking; request for public comment. AGENCY: The Board of Governors of the Federal Reserve System (Board) is proposing to amend its Identity Theft Red Flags rule, which implements section 615(e) of the Fair Credit Reporting Act (FCRA). The Red Flag Program Clarification Act of 2010 (Clarification Act) added a definition of ‘‘creditor’’ in FCRA section 615(e) that is specific to section 615(e). Accordingly, the proposed rule would amend the definition of ‘‘creditor’’ in the Identity Theft Red Flags rule to reflect the definition of that term as added by the statute. The proposed rule would also update a cross-reference in the Identity Theft Red Flags rule to reflect a statutory change in rulemaking authority. DATES: Comments must be received on or before April 21, 2014. ADDRESSES: You may submit comments, identified by Docket No. R–1484, by any of the following methods: • Agency Web site: http:// www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm. tkelley on DSK3SPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 17:08 Feb 19, 2014 Jkt 232001 • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Email: regs.comments@ federalreserve.gov. Include the docket number in the subject line of the message. • FAX: (202) 452–3819 or (202) 452– 3102. • Mail: Robert deV. Frierson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW., Washington, DC 20551. All public comments are available from the Board’s Web site at http:// www.federalreserve.gov/generalinfo/ foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper form in Room MP–500 of the Board’s Martin Building (20th and C Streets NW.) between 9:00 a.m. and 5:00 p.m. on weekdays. FOR FURTHER INFORMATION CONTACT: Kara L. Handzlik, Counsel, Legal Division, at (202) 452–3852, Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. For users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263– 4869. SUPPLEMENTARY INFORMATION: I. Background On November 9, 2007, the Board, along with the other banking agencies 1 and the Federal Trade Commission (FTC) (collectively, the ‘‘Agencies’’), published final rules and guidelines on identity theft ‘‘red flags’’ (‘‘Red Flags rule’’) to implement section 615(e) of the Fair Credit Reporting Act (FCRA) (15 U.S.C. 1681m(e)).2 The final rules require each financial institution and creditor that holds any consumer account, or other account for which there is a reasonably foreseeable risk of identity theft, to develop and implement an identity theft prevention program in connection with new and existing accounts. The program must include reasonable policies and procedures for 1 The other banking agencies included the Office of the Comptroller of the Currency (OCC); Federal Deposit Insurance Corporation (FDIC); Office of Thrift Supervision (OTS); and National Credit Union Administration (NCUA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) added the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to the list of agencies with rulemaking and enforcement authority under the Fair Credit Reporting Act with respect to the Red Flags rule. Public Law 111–203, 124 Stat. 1376 (2010). 2 72 FR 63718 (Nov. 9, 2007). PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 9645 detecting, preventing, and mitigating identity theft. The Agencies also issued guidelines to assist financial institutions and creditors in developing and implementing a program, including a supplement that provides examples of red flags. The Red Flags rule, implemented in the Board’s Regulation V Subpart J, defines the terms ‘‘credit’’ and ‘‘creditor’’ by cross-reference to FCRA section 603(r)(5). 15 U.S.C. 1681a(r)(5). Section 603(r)(5) defines the terms ‘‘credit’’ and ‘‘creditor’’ by crossreference to section 702 of the Equal Credit Opportunity Act (ECOA). ECOA section 702 defines ‘‘creditor’’ as ‘‘any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.’’ 15 U.S.C. 1691a(e). The ECOA defines ‘‘credit’’ as ‘‘the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor.’’ 15 U.S.C. 1691a(d). Thus, the FCRA’s red flags provisions have been broadly applied to banks, finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies. 12 CFR 222.90(b)(5). The scope of the Board’s Red Flags rule is set forth in § 222.90(a), which states that the Board’s rule applies to financial institutions and creditors that are state member banks (other than national banks) and their respective operating subsidiaries, 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. Financial institutions and creditors that are not covered by the Board’s rule are covered by substantially identical rules issued by other federal agencies. II. The Red Flag Program Clarification Act of 2010 On December 18, 2010, Congress enacted the Red Flag Program Clarification Act of 2010 (the Clarification Act).3 The Clarification Act amended section 615(e) of the FCRA (15 U.S.C. 1681m(e)) by adding a definition of the term ‘‘creditor’’ specific to section 615(e). The Clarification Act continues to define creditor by cross-reference to 3 Public Law 111–319, 124 Stat. 3457 (Dec. 18, 2010). E:\FR\FM\20FEP1.SGM 20FEP1 9646 Federal Register / Vol. 79, No. 34 / Thursday, February 20, 2014 / Proposed Rules tkelley on DSK3SPTVN1PROD with PROPOSALS the ECOA’s definition of creditor, but limits the application of the red flags provisions of the FCRA to only those creditors that regularly and in the ordinary course of business: (a) Obtain or use consumer reports, directly or indirectly, in connection with a credit transaction; (b) furnish information to consumer reporting agencies, as described in FCRA section 623, in connection with a credit transaction; or (c) advance funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person. 15 U.S.C. 1681m(e)(4)(A). The Clarification Act’s revised definition excludes, however, those creditors that advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person. 15 U.S.C. 1681m(e)(4)(B). The legislative intent of narrowing the definition of ‘‘creditor’’ in the Red Flags rule was to exclude from coverage those persons that sell a product or service for which the consumer can pay later, such as lawyers and doctors.4 The Clarification Act also grants authority to the Board and the other agencies to determine, through a rulemaking, whether there are other creditors that offer or maintain accounts that are subject to a reasonably foreseeable risk of identity theft that should be subject to the Red Flags rule. 12 U.S.C. 1681m(e)(4)(C). The Board is not using its discretionary rulemaking authority at this time to extend the application of its Red Flags rule to additional creditors. III. Proposed Amendment The Board is proposing to amend the definition of ‘‘creditor’’ in Regulation V (12 CFR 222.90) to conform the rule to the definition of ‘‘creditor’’ in FCRA as amended by the Clarification Act. As noted above, the existing definition of ‘‘creditor’’ in § 222.90(b)(5) makes a cross-reference to the general definition of ‘‘creditor’’ in section 603(r)(5) of the FCRA and provides a list of examples of lenders. The proposed revised definition of ‘‘creditor’’ in § 222.90(b)(5) would instead cross-reference the more limited definition of creditor in section 615(e) of the FCRA, which is specific to the statute’s red flags provisions. Accordingly, proposed § 222.90(b)(5) provides that ‘‘creditor has the same meaning as in 15 U.S.C. 1681m(e)(4).’’ As discussed above, the Red Flags rule requires each financial institution and creditor that holds any consumer 4 156 Cong. Rec. S8289 (daily ed. Nov. 30, 2010) (statement of Sen. Dodd). VerDate Mar<15>2010 17:08 Feb 19, 2014 Jkt 232001 account, or other account for which there is a reasonably foreseeable risk of identity theft, to develop and implement an identity theft prevention program. Under the revised definition, creditors that do not regularly and in the ordinary course of business: (a) Obtain or use consumer reports in connection with a credit transaction; (b) furnish information to consumer reporting agencies in connection with a credit transaction; or (c) advance funds to or on behalf of a person, would no longer be covered by the rule. The Board notes, however, that the Red Flags rule still covers all financial institutions, regardless of whether they meet the revised definition of creditor.5 The Board is also proposing to update a citation in Supplement A to Appendix J of the Red Flags rule. Supplement A to Appendix J includes a cross-reference to the Board’s definition of a ‘‘notice of address discrepancy’’ in Regulation V (12 CFR 222.82(b)). Pursuant to the Dodd-Frank Act, the Board’s rulemaking authority for the notice of address discrepancy provisions of the FCRA (15 U.S.C. 1681c(h)) transferred to the Consumer Financial Protection Bureau (CFPB). Accordingly, the Board is proposing to update the cross-reference to the CFPB’s definition of a ‘‘notice of address discrepancy’’ in the CFR’s Regulation V § 1022.82(b).6 IV. Initial Regulatory Flexibility Analysis The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) generally requires an agency to perform an assessment of the impact a rule is expected to have on small entities. Based on its analysis, and for the reasons stated below, the Board believes that this proposed rule will not have a significant economic impact on a substantial number of small entities. A final regulatory flexibility analysis will 5 The Board has consulted and coordinated with the other banking agencies, the FTC, the CFTC, and the SEC with respect to this proposed rulemaking to amend the Red Flags rule to conform it to the Clarification Act. The Board understands that the other banking agencies will act separately with respect to any necessary updates to each of the banking agency’s Red Flags rules. The FTC issued an interim final rule that amends the definition of ‘‘creditor’’ in its Red Flags rule, consistent with the revised definition in the Clarification Act. See 77 FR 72712 (Dec. 6, 2012). The CFTC and SEC issued final Red Flags rules implementing section 615 of FCRA, which includes the definition of ‘‘creditor’’ as set forth in the Clarification Act. See 76 FR 23638 (Apr. 19, 2013). 6 The Board notes that there is no substantive difference between the Board’s definition of a ‘‘notice of address discrepancy’’ and the CFPB’s definition. The Board also notes that it plans to make further revisions to Regulation V outside of this Red Flags rulemaking to reflect changes in rulemaking authority. PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 be conducted after consideration of comments received during the public comment period. 1. Statement of the need for, and objectives of, the proposed rule. As noted above, the Clarification Act amended the definition of ‘‘creditor’’ in the FCRA for purposes of the red flags provisions. The Board is proposing to amend the definition of ‘‘creditor’’ in its Red Flags rule to reflect the revised definition of that term in the Clarification Act. As also noted above, the Board is proposing to update a cross-reference in the Red Flags rule to reflect the CFPB’s rulemaking authority for the notice of address discrepancy provisions in the FCRA. 2. Small entities affected by the proposed rule. The proposed rule would amend the definition of ‘‘creditor’’ in the Board’s Regulation V Subpart J to conform to the revised definition of that term in the Clarification Act. The proposed definition continues to refer to the FCRA definition of ‘‘creditor,’’ which references the ECOA definition of ‘‘creditor,’’ but limits the application of the red flags provisions to only those creditors that regularly and in the ordinary course of business: (a) Obtain or use consumer reports in connection with a credit transaction; (b) furnish information to consumer reporting agencies in connection with a credit transaction; or (c) advance funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person. 12 U.S.C. 1681m(e)(4)(A). Creditors that advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person are excluded from the definition. Small entity creditors that do not meet this more limited definition would no longer be covered by the rule. However, small entities that are financial institutions would still be covered by the rule, regardless of whether they meet the revised definition of creditor. The proposed rule would also update a cross-reference in the Red Flags rule to reflect the CFPB’s rulemaking authority for the notice of address discrepancy provisions in the FCRA. This revision would have no effect on small entities because there is no substantive difference between the Board’s definition of a ‘‘notice of address discrepancy’’ and the CFPB’s definition. 3. Recordkeeping, reporting, and compliance requirements. The proposed rule does not impose any new recordkeeping, reporting, or compliance requirements on small entities. Small entities that no longer meet the E:\FR\FM\20FEP1.SGM 20FEP1 Federal Register / Vol. 79, No. 34 / Thursday, February 20, 2014 / Proposed Rules narrower definition of ‘‘creditor’’ would not have to comply with the requirements of the Red Flags rule. However, small entity financial institutions would still be required to comply with the Red Flags rule, regardless of whether they meet the revised definition of creditor. 4. Other federal rules. The Board has not identified any federal statutes or regulations that would duplicate, overlap, or conflict with the proposed revision. 5. Significant alternatives to the proposed revisions. The proposed revisions to the definition of ‘‘creditor’’ and the cross-reference to the definition of a ‘‘notice of address discrepancy’’ reflect statutory changes. The Board does not believe there are significant alternatives to these revisions. Although the Board has authority to determine through a rulemaking that any other creditor that offers or maintains accounts that are subject to a reasonably foreseeable risk of identity theft is subject to the Red Flags rule, the Board does not believe it is appropriate to use its discretionary rulemaking authority at this time. III. Paperwork Reduction Act In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the rule under the authority delegated to the Federal Reserve by the Office of Management and Budget (OMB). The proposed rule contains no requirements subject to the PRA. List of Subjects in 12 CFR Part 222 Authority and Issuance For the reasons set forth in the preamble, the Board proposes to amend Regulation V, 12 CFR part 222, as set forth below: PART 222—FAIR CREDIT REPORTING (REGULATION V) 1. The authority citation for part 222 continues to read as follows: tkelley on DSK3SPTVN1PROD with PROPOSALS ■ Authority 5 U.S.C. 1681b, 1681c, 1681m and 1681s; Secs. 3, 214, and 216, Pub. L. 108–159, 117 Stat. 1952. 2. Amend § 222.90 by revising paragraph (b)(5) to read as follows: ■ § 222.90 Duties regarding the detection, prevention, and mitigation of identity theft. * * (b) * * * VerDate Mar<15>2010 * * 17:08 Feb 19, 2014 Appendix J to Part 222—Interagency Guidelines on Identity Theft Detection, Prevention, and Mitigation * * * * * Supplement A to Appendix J * * * * * 3. A consumer reporting agency provides a notice of address discrepancy, as defined in 12 CFR 1022.82(b). * * * * * ■ By order of the Board of Governors of the Federal Reserve System, February 10, 2014. Robert deV. Frierson, Secretary of the Board. [FR Doc. 2014–03264 Filed 2–19–14; 8:45 am] BILLING CODE P FEDERAL RESERVE SYSTEM 12 CFR Part 230 [Docket No. R–1482] RIN 7100 AE12 Truth in Savings (Regulation DD) Board of Governors of the Federal Reserve System. ACTION: Notice of proposed rulemaking; request for public comment. AGENCY: The Board of Governors of the Federal Reserve System (Board) is proposing to repeal its Regulation DD, 12 CFR part 230, which was issued to implement the Truth in Saving Act (TISA). Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking authority for a number of consumer financial protection laws, including TISA, from the Board to the Bureau of Consumer Financial Protection (Bureau). In December 2011, the Bureau published an interim final rule establishing its own Regulation DD to implement TISA (Bureau Interim Final Rule).1 The Bureau Interim Final Rule substantially duplicates the Board’s Regulation DD. Credit unions are not subject to either the Board’s or Bureau’s Regulation DD, and are covered instead by a substantially identical regulation issued by the SUMMARY: Banks, banking, Consumer protection, Holding companies, Safety and soundness, and State member banks. * (5) Creditor has the same meaning as in 15 U.S.C. 1681m(e)(4). * * * * * ■ 3. Amend Supplement A to Appendix J by revising example 3. to read as follows: 1 12 CFR part 1030. See 76 FR 79276 (Dec. 21, 2011). Jkt 232001 PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 9647 National Credit Union Administration (NCUA) pursuant to 12 U.S.C. 4311. Under section 1029 of the Dodd-Frank Act, the Board retains authority to issue rules for certain motor vehicle dealers that offer consumer financial services and are not subject to the Bureau’s regulatory authority. The Board is not aware of any entities that are motor vehicle dealers engaging in activities subject to TISA that would be subject to the Board’s authority under section 1029 of the Dodd-Frank Act. Accordingly, the Board is proposing to repeal its Regulation DD. DATES: Comments must be received on or before April 21, 2014. ADDRESSES: You may submit comments, identified by Docket No. R–1482, by any of the following methods: • Agency Web site: http:// www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm. • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Email: regs.comments@ federalreserve.gov. Include the docket number in the subject line of the message. • FAX: (202) 452–3819 or (202) 452– 3102. • Mail: Robert deV. Frierson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW., Washington, DC 20551. All public comments are available from the Board’s Web site at http:// www.federalreserve.gov/generalinfo/ foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper form in Room MP–500 of the Board’s Martin Building (20th and C Streets NW.) between 9:00 a.m. and 5:00 p.m. on weekdays. FOR FURTHER INFORMATION CONTACT: Vivian W. Wong, Counsel, Division of Consumer and Community Affairs, at (202) 452–3667, Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. For users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263– 4869. SUPPLEMENTARY INFORMATION: I. Background The Truth in Savings Act (TISA), 12 U.S.C. 4301 et seq., historically has been implemented by the Board’s Regulation DD, published at 12 CFR part 230. The E:\FR\FM\20FEP1.SGM 20FEP1