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F ederal R eserve Bank

J . S A L V A G G IO


January 19, 1996



Notice 96-07


The Chief Operating Officer of
each financial institution in the
Eleventh Federal Reserve District
Proposed Revision to Regulation S
(Reimbursement to Financial Institutions for Assembling
or Providing Financial Records)

The Board of Governors of the Federal Reserve System is requesting public
comment on a proposed revision of Subpart A of Regulation S (Reimbursement to
Financial Institutions for Assembling or Providing Financial Records). The Board
proposes to streamline the regulation by eliminating unnecessary provisions, by updating
the rates to be charged for assembling or providing financial records, and by updating
the exceptions to the provisions of this Subpart.
The Board must receive comments by February 20, 1996. Please address
comments to William W. Wiles, Secretary, Board of Governors of the Federal Reserve
System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. All
comments should refer to Docket No. R-0906.
A copy of the Board’s notice as it appears on pages 65599-601, Vol. 60, No.
244, of the Federal Register dated December 20, 1995, is attached.
For more information, please contact James D ean at (214) 922-6237. For
additional copies of this Bank’s notice, please contact the Public Affairs Departm ent at
(214) 922-5254.

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333 -4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston
Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (


Proposed Rules

Federal Register
Vol. 60, No. 244
Wednesday, December 20, 1995

This section of the FEDERAL REGISTER
contains notices to the public ot the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final

users of the Telecommunication Device
for the Deaf (TDD), please contact
Dorothea Thompson (202/452-3544).


Section 1115 of the RFPA (12’U.S.C.
3415) requires the Board to establish, by
regulation, the rates and conditions
under which payment is made by a
12 CFR Part 219
Government authority to a financial
institution for searching for,
[Regulation S; Docket No. R-0906]
reproducing, or transporting data
Reimbursement for Providing Financial required or requested under the RFPA.
Shortly after the RFPA was adopted, the
Records; Recordkeeping
Board issued Regulation S (12 CFR 219)
Requirements for Certain Financial
to implement this provision (44 FR
55812, September 28,1979). No changes
AGENCY: Board of Governors of the
to the rates have been made since that
Federal Reserve System.
time. In January 1995, the Board
ACTION: P roposed ru le .
adopted a new Subpart B of Regulation
S (to become effective on January 1,
SUMMARY: The Board of Governors of the
1996 ') and designated this part of
Federal Reserve System (Board) is
Regulation S as Subpart A. 60 FR 231
proposing amendments to Subpart A of
(January 3,1995) No substantive
Regulation S, which implements the
changes were made to the newly
requirement under the Right to
designated Subpart A. Pursuant to
Financial Privacy Act (RFPA) that the
section 303 of the Riegle Community
Board establish the rates and conditions Development and Regulatory
under which payment shall be made by .Improvement Act of 1994, Pub. L. 103­
a government authority to a financial
325 (12 U.S.C. 4803), the Board has
institution for assembling or providing
reviewed Subpart A of Regulation S and
financial records pursuant to RFPA.
proposes to update it through these
These proposed amendments update the amendments. These amendments
fees to be charged and streamlines the
streamline the regulation by eliminating
subpart generally.
unnecessary provisions, and they
DATES: Comments must be submitted on
update the rates to be paid and the
or before February 20,1996.
exceptions to the provisions of this
ADDRESSES: Comments should refer to
Docket No. R-0906, and may be mailed
I. Definitions
to William W. Wiles, Secretary, Board of
The definitions in Subpart A reiterate
Governors of the Federal Reserve
the statutory definitions from the RFPA
System, 20th Street and Constitution
Avenue, N.W., Washington, D.C. 20551. for the applicable terms of this Subpart.
The definition for “directly incurred
Comments also may be delivered to
costs” has been removed and
Room B-2222 of the Eccles Building
incorporated into the section concerning
between 8:45 a.m. and 5:15 p.m.
cost reimbursement.
weekdays, or to the guard station in the
Eccles Building courtyard on 20th
II. Cost Reimbursement
Street, N.W. (between Constitution
This section has been streamlined and
Avenue and C Street) at any time.
Comments received will be available for reorganized to place the rates in a
separate Appendix A for clarity and
inspection in Room MP-500 of the
ease of amendment when updating the
Martin Building between 9:00 a.m. and
rates. The proposed amendments also
5:00 p.m. weekdays, except as provided
recognize that courts issuing orders or
in 12 CFR 261.8 of the Board’s rules
subpoenas in connection with grand
regarding availability of information.
jury proceedings must pay the rates set
by Subpart A.
Elaine M. Boutilier, Senior Counsel
(202/452-2418), Legal Division, Board
1 In a rulemaking issued on August 24,1995 (60
of Governors of the Federal Reserve
FR 44144), the effective date of Subpart B has been
System, Washington, DC 20551. For
delayed until A pril 1,1996.

III. Rates
The Board is particularly interested in
receiving comments on the rates
proposed in Appendix A. It is difficult
to establish rates to be applied across all
geographic regions and to all depository
institutions, regardless of size. While
recognizing this difficulty, the Board
nevertheless proposes a uniform rate in
the belief that administration of a
complex fee schedule would be
A. Reproduction
The rates proposed for reproduction
are the same rates used by the Board to
charge requesters seeking documents
under the Freedom of Information Act
(FOIA). The Board establishes its FOLA
fees based upon the actual costs of
making such reproductions and believes
that these costs are similar to those
incurred by other entities. The Board
welcomes comments on the
appropriateness of the proposed fees
and any suggested alternative methods
of determining the fees.
B. Search and Processing
The proposed fees for search and
processing are separated into two
categories—clerical/technical and
manager/supervisory. Any search for
sensitive customer records is likely to
involve both clerical staff and
managerial staff, who are paid at
different levels. The rates set for this
reimbursement were calculated using
the 1994 Bank Cash Compensation
Survey done by the Bank
Administration Institute. Based upon
the job descriptions in the Cash
Compensation Survey, the position of
Supervisor, Bookkeeping was used to
calculate the managerial rate. The
calculation was made based upon the
total compensation (with bonus) for all
banks on a national average ($27,600)
divided by 2080 hours, adjusted up by
25% to cover benefits, and further
adjusted by 3% for inflation since 1994.
The clerical rate was calculated in the
same way, but using an average of the
two job positions of Clerk II
(Bookkeeping and Operations @
$18,100) and Clerk I (Bookkeeping and
Operations @$15,100). The Board is
very interested in receiving comments
on the rates and the method of


Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Proposed Rules

This proposed regulation, 12 CFR 219, Puerto Rico, Guam, American Samoa, or
the Virgin Islands.
has no effect upon the paperwork
Financial record means an original or
burden associated with the
copy of, or information known to have
Recordkeeping and Disclosure
been derived from, any record held by
Requirements in Connection with the
a financial institution pertaining to a
V. Conditions for Payment and Payment Right to Financial Privacy Act. That
customer’s relationship with the
hour burden is estimated to be 22
financial institution.
minutes per response. It is estimated
No substantive changes have been
Government authority means any
that the frequency of response at state
made to these two sections.
agency or department of the United
member banks is 30 responses per year.
Regulatory Flexibility Act
Thus the annual hour burden across the States, or any officer, employee or agent
975 state member banks is estimated to
Pursuant to 5 U.S.C. 605, the Board
Person means-an individual or a
be 10,725 hours. Based on an hourly
certifies that this proposed rule, if
cost of $20, the annual cost to the public partnership of five or fewer individuals.
adopted, will not have a significant
is estimated to be $214,500.
economic impact on a substantial
§ 219.3 Cost reimbursement
number of small entities. The proposed
(a) Fees payable. Except as provided
List o f Subjects in 12 CFR Part 219
rule confers a benefit on financial
in § 219.4, a government authority, or a
Banks, banking, Currency, Federal
institutions, including small financial
court issuing an order or subpoena in
Reserve System, Foreign banking,
institutions, by providing for
connection with grand jury proceedings,
Reporting and recordkeeping
reimbursement of certain costs incurred
seeking access to financial records
in complying with a requirement to
pertaining to a customer shall reimburse
For the reasons set out in the
assemble and produce financial records.
the financial institution for reasonably
preamble, 12 CFR Part 219, as amended necessary costs directly incurred in
Paperwork Reduction Act
at 60 FR 231 and 44144 effective April
searching for, reproducing or
.1,1996, is proposed to be amended as
In accordance with section 3506 of
transporting books, papers, records, or
set forth below.
the Paperwork Reduction Act of 1995
other data as set forth in this section.
(44 U.S.C. Ch. 35; 5 CFR 1320 Appendix
The reimbursement schedule for a
A.l), the Board reviewed the proposed
financial institution is set forth in
rule under the authority delegated to the PROVIDING FINANCIAL RECORDS;
Appendix A to this section. If a
Board by the Office of Management and
financial institution has financial
Budget. Comments on the collections of FOR CERTAIN FINANCIAL RECORDS
records that are stored at an
information should be sent to the Office
independent storage facility that charges
of Management and Budget, Paperwork
a fee to search ior, reproduce, or
Subpart A—Reimbursement to
Reduction Project (7100-0203),
transport particular records requested,
Financial Institutions for Providing
Washington, DC 20503, with copies of
these costs are considered to be directly
Financial Records
such comments to be sent to Mary M.
incurred by the financial institution and
McLaughlin, Federal Reserve Board
may be included in the reimbursement.
1. The authority citation for Subpart
Clearance Officer, Division of Research
(b) Search and processing costs. (1)
A continues to read as follows:
and Statistics, Mail Stop 97, Board of
Reimbursement of search and
Authority: 12 U.S.C. 3415
Governors of the Federal Reserve
processing costs shall cover the total
System, Washington, DC 20551.
2. Subpart A is amended by revising
amount of personnel time spent in
The Right to Financial Privacy Act
§§ 219.2 through 219.6 to read as
locating, retrieving, reproducing, and
mandates that each financial institution follows:
preparing financial records for
maintain a record of instances in which
shipment. Search and processing costs
§219.2 Definitions.
it releases a consumer’s financial
shall not cover analysis of material or
For the purposes of this subpart, the
information to a government agency.
legal advice.
following definitions shall apply:
Generally, the institution may not
(2) If itemized separately, search and
Customer means any person or
release records until the government
processing costs may include the actual
authorized representative of that person cost of extracting information stored by
agency has notified the consumer of its
who uses any service of a financial
intent to request the record, together
computer in the format in which it is
institution, or for whom a financial
with the reason for the request.
normally produced, based on computer
institution acts or has acted as a
Normally, the agency may not obtain
time and necessary supplies; however,
records unless it has a subpoena, a
fiduciary in relation to an account
personnel lime for computer search may
^search warrant, or an authorization from maintained in the person’s name.
be paid for only at the rates specified in
Customer does not include corporations Appendix A to this section.
the consumer.
The Federal Reserve may not conduct or partnerships comprised of more than
(c) Reproduction costs. The
five persons.
or sponsor, and an organization is not
reimbursement rates for reproduction
Financial institution means any office costs for requested documents are set
required to respond to, this information
of a bank, savings bank, card issuer as
collection unless it displays a currently
forth in Appendix A to this section.
defined in section 103 of the Consumers Copies of photographs, films, computer
valid OMB control number. The OMB
control number for the Recordkeeping
Credit Protection Act (15 U.S.C.
tapes, and other materials not listed in
1602(n)), industrial loan company, trust Appendix A to this section are
and Disclosure Requirements in
Connection with the Right to Financial
reimbursed at actual cost.
company, savings association, building
(d) Transportation costs.
Privacy Act is 7100-0203.
and loan, or homestead association
Reimbursement for transportation costs
(including cooperative banks), credit
Because the records would be
shall be for the reasonably necessary
union, or consumer finance institution,
maintained at banks, no issue of
costs directly incurred to transport
located in any State or territory of the
confidentiality under the Freedom of
personnel to locate and retrieve the
United States, the District of Columbia,
Information Act arises.
IV. Exceptions
This section has been updated to
reflect changes in the exceptions listed
by the RFPA.

Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Proposed Rules
requested information, and to convey
such material to the place of
Appendix A to §219.3—
Reimbursement Schedule
Photocopy, per page .....................
Paper copies of microfiche, per
frame ............................................
Duplicate microfiche, per micro­
fiche ..............................................
Computer d isk ette.........................
Search and Processing:
Clerical/Technical, hourly rate ...



A financial institution is not entitled
to reimbursement under this subpart for
costs incurred in assembling or
providing financial records or
information related to:
(a) Security interests, bankruptcy
claims, debt collection. Any financial
records provided as an incident to
perfecting a security interest, proving a
claim in bankruptcy, or otherwise
collecting on a debt owing either to the
financial institution itself or in its role
as a fiduciary.
(b) Government loan programs.
Financial records that are necessary to
permit the appropriate government
authority to carry out its responsibilities
under a government loan, loan guaranty
or loan insurance program.
(c) Nonidentifiable information.
Financial records that are not identified
with or identifiable as being derived
from the financial records of a particular
(d) Financial supervisory agencies.
Financial records disclosed to a
financial supervisory agency in the
exercise of its supervisory, regulatory, or
monetary functions with respect to a
financial institution.
(e) internal Revenue summons.
Financial records disclosed in
accordance with procedures authorized
by the Internal Revenue Code. '
(f) Federally required reports.
Financial records required to be
reported in accordance with any federal
statute or rule promulgated thereunder.
(g) Government civil or criminal
litigation. Financial records sought by a
government authority under the Federal
Rules of Civil or Criminal Procedure or
comparable rules of other courts in
connection with litigation to which the
government authority and the customer
are parties.
(h) Administrative agency subpoenas.
Financial records sought by a
government authority pursuant to an
administrative subpoena issued by an

administrative law judge in an
adjudicatory proceeding subject to 5
U.S.C. 554, and to which the
government authority and the customer
are parties.
(i) Investigation o f financial
institution or its noncustomer. Financial
records sought by a government
authority in connection with a lawful
proceeding, investigation, examination,
or inspection directed at the financial
institution in possession of such
records, or at an entity that is not a
customer as defined in § 219.2.
(j) General Accounting Office
requests. Financial records sought by
the General Accounting Office pursuant
to an authorized proceeding,
investigation, examination, or audit
directed at a government authority.
(k) Federal Housing Finance Board
requests. Financial records or
information sought by the Federal
Housing Finance Board (FHFB) or any
of the Federal home loan banks in the
exercise of the FHFB’s authority to
extend credit to financial institutions or
(1) Department o f Veterans Affairs.
The disclosure of the name and address
of any customer to the Department of
Veterans Affairs where such disclosure
is necessary to, and used solely for, the
proper administration of benefits
programs under laws administered by
that Department.
§ 219.5 Conditions for payment

(a) Direct costs. Payment shall be
made only for costs that are both
directly incurred and reasonably
necessary to provide requested material.
Search and processing, reproduction,
and transportation costs shall be
considered separately when
determining whether the costs are
reasonably necessary.
(b) Compliance with legal process,
request, or authorization. No payment
may be made to a financial institution
until it satisfactorily complies with the
legal process, the formal written request,
or the customer authorization. When the
legal process or formal written request
is withdrawn, or the customer
authorization is revoked, or where the
customer successfully challenges
disclosure to a grand jury or government
authority, the financial institution shall
be reimbursed for the reasonably
necessary costs incurred in assembling
the requested financial records prior to
the time the financial institution is
notified of such event.
(c) Itemized bill or invoice. No
reimbursement is required unless a
financial institution submits an
itemized bill or invoice specifically


detailing its search and processing,
reproduction, and transportation costs.

Payment procedures.

(a) Notice to submit invoice. Promptly
following a service of legal process or
request, the court or government
authority shall notify the financial
institution that it must submit an
itemized bill or invoice in order to
obtain payment and shall furnish an
address for this purpose.
(b) Special notice. If a grand jury or
government authority withdraws the
legal process or formal written request,
or if the customer revokes the
authorization, or if the legal process or
request has been successfiilly
challenged by the customer, the grand
jury or government authority shall
promptly notify the financial institution
of these facts, and shall also notify the
financial institution that it must submit
an itemized bill or invoice in order to
obtain payment of costs incurred prior
to the time of the notice to the financial
institution receives this notice.
3. Section 219.7 is removed.
By order of the Board of Governors of the
Federal Reserve System, December 13,1995.
William W. Wiles,
Secretary o f the Board.
[FR Doc. 95-30725 Filed 12-19-95; 8:45 am]
BILUNG CODE 6 2 1 0 -0 1 -P