[Federal Register Volume 77, Number 240 (Thursday, December 13, 2012)]
[Notices]
[Pages 74187-74191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30094]
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FEDERAL RESERVE SYSTEM
Agency Information Collection Activities: Announcement of Board
Approval Under Delegated Authority and Submission to OMB
AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: Notice is hereby given of the final approval of a proposed
information collection by the Board of Governors of the Federal Reserve
System under OMB delegated authority, as per 5 CFR 1320.16 (OMB
Regulations on Controlling Paperwork Burdens on the Public). Board-
approved collections of information are incorporated into the official
OMB inventory of currently approved collections of information. Copies
of the Paperwork Reduction Act Submission, supporting statements and
approved collection of information instrument(s) are placed into OMB's
public docket files. The Federal Reserve may not conduct or sponsor,
and the respondent is not required to respond to, an information
collection that has been extended, revised, or implemented on or after
October 1, 1995, unless it displays a currently valid OMB control
number.
FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance
Officer--Cynthia Ayouch--Division of Research and Statistics, Board of
Governors of the Federal Reserve System, Washington, DC 20551 (202)
452-3829. Telecommunications Device for the Deaf (TDD) users may
contact (202) 263-4869, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
OMB Desk Officer--Shagufta Ahmed--Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503.
Final approval under OMB delegated authority the implementation of
the following information collection:
Report title: Retail Payments Surveys.
Agency form number: FR 3066a, b, c, and d.
OMB control number: 7100-0351.
Frequency: FR 3066a, b, and c: triennial (once every three years)
and FR 3066d: annual and on occasion.
Reporters: Depository and financial institutions, payment networks,
payment processors, and payment instrument issuers.
Estimated reporting hours: FR 3066a: 49,000 hours; FR 3066b: 1,040
hours; FR 3066c: 450 hours; FR 3066d: 400 hours.
Estimated average hours per response: FR 3066a: 35 hours; FR 3066b:
8 hours; FR 3066c: 3 hours; FR 3066d: 8 hours.
Estimated number of respondents: FR 3066a: 1,400; FR 3066b: 130; FR
3066c: 150; FR 3066d: 50.
General description of report: The Federal Reserve is generally
authorized to collect the information called for by the FR 3066 series
pursuant to sections
[[Page 74188]]
2A and 12A of the Federal Reserve Act. In addition, survey questions in
the FR 3066 are authorized pursuant to the Board's authority under one
or more of the following statutes:
Expedited Funds Availability Act Sec. 609 (12 U.S.C.
4008).
Electronic Fund Transfer Act Sec. 904 (15 U.S.C. 1693b)
and Sec. 920 (15 U.S.C. 1693o-2).
Truth in Lending Act Sec. 105 (15 U.S.C. 1604).
The Check Clearing for the 21st Century Act Sec. 15 (12
U.S.C. 5014).
Federal Reserve Act Sec. 11 (Examinations and reports,
Supervision over Reserve Banks, and Federal Reserve Note provisions, 12
U.S.C. 248); Sec. 11A (Pricing of Services, 12 U.S.C. 248a); Sec. 13
(FRB deposits and collections, 12 U.S.C. 342); and Sec. 16 (Issuance
of Federal Reserve Notes, par clearance, and FRB clearinghouse, 12
U.S.C. 248-1, 360, and 411).
Additionally, depending upon the survey respondent, the information
collection may be authorized under a more specific statute.
Specifically, the Board is authorized to collect information from state
member banks under section 9 of the Federal Reserve Act (12 U.S.C.
324); from bank holding companies (and their subsidiaries) under
section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844(c)); from
savings and loan holding companies under (12 U.S.C. 1467a(b)(3) and
5412), from Edge Act and agreement corporations under sections 25 and
25A of the Federal Reserve Act (12 U.S.C. 602 and 625); and from U.S.
branches and agencies of foreign banks under section 7(c)(2) of the
International Banking Act of 1978 (12 U.S.C. 3105(c)(2)), and under
section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)).
Obligation to Respond: Voluntary.
Confidentiality: Respondents to the various surveys are requested
to report confidential business information, such as information
requested in the FR 3066a (for depository and financial institutions)
about the number and value of deposits in various customer account
types, image check deposits, paper check deposits, ACH entries, wire
transfers, debit and prepaid card transactions, credit card
transactions, mobile payments, and transactions involving third-party
fraud. The other surveys request similar types of confidential ``number
and value'' information appropriate to the surveyed entities. For
example, the Network, Processor, and Issuer Payments Surveys (FR 3066b)
request the number, value, and type of transactions involving credit
cards (both general-purpose and private-label), debit cards, and
prepaid cards from respondents (card networks, card processors, and
retail merchants). Only aggregate totals from the surveys, such as
estimated national volumes and trends in different types and categories
of payments, check distribution, and established and emerging payment
instruments, are proposed to be publicly released.
Under exemption 4 of the Freedom of Information Act (``FOIA''), 5
U.S.C. 552(b)(4), ``trade secrets and commercial or financial
information obtained from a person and privileged or confidential'' may
be excluded from disclosure. The confidential business information
collected voluntarily from individual respondents may be withheld, as
release of such information would impair the Board's ability to collect
such information in the future. Moreover, disclosure of such
confidential business information could cause substantial competitive
harm to the survey respondents. See National Parks & Conservation Ass'n
v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).
Abstract: The voluntary Retail Payments Surveys are designed to
collect information needed to support the Federal Reserve System's role
in the retail payments system.\1\ The FR 3066a and the FR 3066b collect
information on the national volume (number and value) of major
categories and subcategories of established and emerging methods of
noncash payment from a nationally representative, stratified random
sample of depository institutions and from a census of payments
networks, processors, and issuers, respectively. These two surveys also
collect information on trends in different business arrangements and
technologies connected with the initiation, authorization, collection,
and processing of payments. In addition, the FR 3066a collects the
volumes of bank customers' cash withdrawals and deposits at retail
branches, wholesale vaults, and automated teller machines (ATMs). The
FR 3066b collects information on cash substitution, such as the
distribution of low-value purchases made with noncash instruments and
the loading of cash onto other payment instruments.
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\1\ While the Federal Reserve is involved with both retail and
wholesale payments, these surveys are designed to collect
information on retail payments and the systems or networks that are
primarily used to make retail payments. Retail payments are
generally for relatively small dollar amounts and often involve a
depository institution's retail clients--individuals, businesses,
and governments. Wholesale payments are generally for relatively
large dollar amounts, and often involve a depository institution's
large corporate customers or counterparties, including other
financial institutions. Wholesale payments are not the main focus of
the surveys, but may be included in cases where there is a need.
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The FR 3066c collects data from samples of individual checks
obtained from a sample of depository institutions.\2\ The FR 3066d
collects payment volumes similar to those collected in the FR 3066a or
the FR 3066b from a subset of respondents to obtain information about
changes in volumes that may occur in the two years between triennial
surveys.
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\2\ This survey is similar to the Check Sample Studies, part of
the Federal Reserve Payments Study (FRPS), conducted by the Retail
Payment Office (RPO) in 2001, 2007, and 2010. As with past studies,
copies of checks or any information that would identify payers or
payees on the checks would not be retained or used for any purpose
other than estimating the aggregate proportions of different types
of checks.
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In general, the FR3066a, b, and c surveys will be distributed in
the first quarter of2013, and data collection will primarily take place
during the second quarter 2013.
Current Actions: On September 6, 2012, the Federal Reserve
published a notice in the Federal Register (77 FR 54912) requesting
public comment for 60 days on the implementation of the FR 3066a, b, c,
and d. The comment period for this notice expired on November 5, 2012.
The Federal Reserve received four comment letters addressing the
proposed implementation of this information collection, which are
summarized and addressed below.
Summary Discussion of Public Comments and Responses
The Federal Reserve received written comments from one financial
institution, one merchant trade association, one payment card network,
and one payment industry association. All commenters supported the data
collection effort, and noted that the information is widely used by
payment system participants as a benchmark and to gain insights into
payment system trends. Commenters believed that providing the data
requested in the surveys would generally not be burdensome to
respondents.
At the Federal Reserve's request, contractors assisting with the
survey design conducted industry outreach calls to obtain additional
insights into the clarity of the survey forms and the feasibility of
providing the requested data items. Institutions represented in the
calls included financial institutions, networks, and processors of
several types and sizes.
The detailed discussion in this notice addresses the specific
substantive issues that arose from the written comments
[[Page 74189]]
and the industry outreach calls, and modifications to the surveys in
response to the comments. In addition to the modifications discussed
below, minor clarifications will be made to the surveys in response to
the comments.
Detailed Discussion of Public Comments and Response
Depository and Financial Institution Payments Survey (FR 3066a)
General Comments
The Federal Reserve specifically requested comment on whether
reporting data for March 2013 was more feasible and/or useful than
reporting data for another period such as March and April 2013
combined. One commenter specifically noted that reducing the number of
months of data from two consecutive months to one (as compared with the
2010 version of the survey) would simplify the response process, but
have no substantial effect on the quality or validity of the data
provided. If, as proposed, only March data were collected, another
commenter urged the Federal Reserve to maintain comparability with
previous surveys by accounting for the seasonality in card data when
annualizing estimates from the survey. The Federal Reserve believes
that the reduction in the complexity provided by reporting one month
rather than two months of data will help maintain high response rates,
and offset the increased complexity of the survey compared with the
2010 version, and will use the available information to ensure
comparability with previous studies.
The Federal Reserve plans to help respondents prepare for data
submission by engaging a contractor to assist with several voluntary
interactive survey training sessions where respondents will be invited
to ask clarifying questions or discuss their own data-reporting
circumstances. Based on these sessions, the FR 3066 information
collection will continue to be clarified and a frequently asked
questions document will be developed.
Section-by-Section Analysis of Substantive Comments
Customer Accounts
This section contains questions about the number and value of
transaction deposit accounts, prepaid card program accounts, and credit
card accounts, as well as the number of debit, prepaid and credit cards
outstanding. Some commenters noted that various sections of the survey
would be distributed to several different business lines within their
institution and, in order to more readily associate the account and
card data to the related transaction data, suggested that these
questions be moved to account specific sections of the survey. The
Federal Reserve will implement this suggestion.
The Federal Reserve specifically requested comment on how
institutions refer to ``full service'' transaction deposit accounts
(e.g. checking accounts, debit card accounts, etc.) to distinguish them
from prepaid card accounts. One commenter noted that the main
distinguishing factor for prepaid versus full service is unlimited
check writing ability on a full service account. Based on this comment
and others, the Federal Reserve will clarify the definition of prepaid
card accounts compared with other types of accounts.
The Federal Reserve also specifically asked for comment on whether
it is more feasible and/or useful to ask for the number of active cards
outstanding or the number of accounts with recent card activity for
credit card, debit card, and prepaid card accounts. Several commenters
generally believed that it was most relevant to request the number of
eligible and active cards outstanding rather than the number of
accounts with cards outstanding. The Federal Reserve will modify the
survey to request the number of ``cards in force'' and active cards for
credit cards, debit cards, and prepaid cards.
One commenter requested that information on the total number of
cards in force with embedded chip technology would be valuable to the
industry. The Federal Reserve will modify the survey to collect a count
of the number of cards outstanding that have chip technology for credit
cards, debit cards, and prepaid cards.
The Federal Reserve specifically asked for comment on the most
feasible and/or useful time period over which a payment card account
should have payment or transaction activity to be considered active as
well as what kinds of transactions, if any, should not be counted
toward activity. One commenter suggested that the definition of an
active card for debit and prepaid cards--which would include purchases,
but not cash withdrawals--should be 30 days, while the credit card
activity definition--which potentially would include purchases and
balance transfers--should be 90 days due to the lower activity, in
general, of credit cards. The Federal Reserve notes that the definition
of an active card for debit, prepaid, and credit cards in this survey
should be based on whether the card was used for a payment transaction
(as defined in the survey form) during the 31-day survey period of
March 2013. This approach allows for consistency of definition across
cards, and also allows for the calculation of the number of payments
per active card during the survey period.
Check Deposits
Some commenters expressed interest in understanding the number and
value of consumer checks deposited remotely via a mobile device and
believed it was feasible to do so. The Federal Reserve will add
``checks deposited via mobile device'' and ``other'' as subsets of data
under item 7a.1.1 ``consumer client image capture'' to allow the
reporting of this item. However, similar additional subsets will not be
requested for business/government or correspondent checks.
ACH
The Federal Reserve specifically requested comment on whether
including a breakout of ACH volumes (number and value) into
subcategories needed to identify interbank ACH payments would help to
avoid double-counting correspondent ACH volumes. Based on comments
received, the Federal Reserve will add a check box question on whether
the responding institution processes ACH payments for another
institution.
Outreach discussions raised a number of issues concerning the
measurement of total ACH payments in the presence of several different
practices involving the use of offset entries. In response, the Federal
Reserve will add three check box questions to help account for and
identify the prevalence of these different practices.
Wire Transfers
The Federal Reserve specifically requested comment on whether
institutions can separate wire transfer origination volumes (number and
value) by consumer and business/government customers. Some commenters
stated that settlement transfers (including some ``bank business''
wires) would be included in the business wire category and should be
listed in a separate subcategory. The Federal Reserve will include the
subsets of ``settlement'' and ``other'' under business wire transfers.
Some commenters noted that allocating wire transfers to consumer
and business categories would be a manual process and subject to error
(e.g., some financial institutions might categorize some small-business
wires as consumer wires and others as business/government wires). The
Federal Reserve realizes that respondents' ability to separate wires by
type vary across institutions and will instruct
[[Page 74190]]
respondents answer items they cannot measure as ``not reportable''
(``NR''). While some wires may be difficult for respondents to
categorize, the responses in aggregate should provide a clearer measure
of wire usage than what is currently available.
The Federal Reserve also specifically requested comment on whether
institutions can separate wire transfer origination volumes (number and
value) between domestic and foreign wire transfers. No commenters
suggested that such a separation would be infeasible or burdensome. In
addition, some outreach discussions identified an interest in measuring
consumer cross-border payments. To address this interest, the Federal
Reserve will create subsets of ``consumer'' and ``other'' transactions
under ``foreign wire transfers.''
Debit and Prepaid Cards
One commenter stated that it could report cash back transactions
for debit cards overall, but was not able to identify cash back from
prepaid card transactions from other debit card transactions. The
Federal Reserve will modify the survey so that respondents report cash
back transactions for debit cards in the aggregate and enter NR in
cases where data are unavailable.
Cash
Industry outreach discussions identified an interest in the number
of remote currency management terminals (``smart safes'') and the
number and value of deposit transactions that are associated with them.
The Federal Reserve will include a section on Currency Management
Terminals with six quantitative data items to accommodate reporting of
this information. These terminals are relatively rare but are becoming
more prevalent in the currency management industry. Most respondents
likely will not be involved with these new terminals, and will be able
to just enter ``0'' for these new data items.
Unauthorized Transactions (Third-party Fraud)
The Federal Reserve specifically requested comment on whether
institutions can report information on unauthorized transactions, as
defined, or whether another definition of third-party fraud would be
more feasible and/or useful to report. One commenter was interested in
the collection of more details on the types of fraud, suggesting a
collection of stratified fraud categories. In weighing the inclusion of
a fraud category, the Federal Reserve tried to balance the value of
detailed information against the burden and feasibility of obtaining
details on fraud. There are many ways to categorize fraud, and
institutions follow differing methods of tracking it. While recognizing
the importance of the other types of fraud (such as first-party fraud)
which the survey does not measure, the Federal Reserve will not make
any changes to this section, which quantifies one broad and important
type of payment fraud.
One commenter was concerned that the definition of ``unauthorized
payments'' may not capture chargebacks, often initiated by the
cardholder, and which may require payees or their agents to spend
significant time and resources to validate the charge. While the
Federal Reserve recognizes that the burden imposed by non-fraudulent
chargebacks can be a significant concern for particular merchants, they
do not necessarily constitute third-party fraud and should not be
reported in this survey unless linked to an unauthorized transaction
determined to be third-party fraud. Other surveys are designed to
address some of these issues more fully and the Federal Reserve
believes that this particular survey is not the proper forum to address
chargebacks.
Network, Processor, & Issuer Payments Surveys (FR 3066b)
General Comments
Based on an evaluation of written comments and information gathered
from industry outreach calls, the Federal Reserve will modify the
survey forms with several minor definitional and reorganizational
changes. One change designed to ease the burden for certain items that
may be unavailable are check boxes to allow respondents to indicate
that the item is not tracked by the organization. Other general changes
include revisions to create better consistency across forms.
One commenter suggested using the definition of a ``general-use
prepaid card'' of Regulation II to define a prepaid card account for
the network surveys. The Federal Reserve will keep the surveys
consistent with this basic definition where applicable. In addition,
for private label prepaid cards which are not for general use or for
other cards that may not be covered by Regulation II, the definitions
will be adapted as appropriate to maintain consistency.
One commenter requested that information be collected on the number
and value of chargebacks and the number of cards outstanding that
include chip technology. The Federal Reserve will add a field for the
number and value of chargebacks as a subset of ``adjustments and
returns'' for the relevant card networks. In addition, the Federal
Reserve will request a count of the number of cards outstanding that
have chip technology in the appropriate surveys.
The Federal Reserve specifically requested comment on whether card
networks can report cash advances received in physical cash form as a
subset of total cash advances. (Total cash advances include not only
physical cash advances but also other funds transfers such as an
electronic transfer to a transaction deposit account or a payment made
with credit account funds using a special check issued to the
cardholder). One commenter noted that a particular network could report
physical cash back from a bank teller or ATM, but could not report
other types of cash advances. Industry outreach discussions with other
networks reflected a similar position. Because it is the most feasible
category, the Federal Reserve will revise the forms to ensure that
physical cash back from ATMs and bank tellers may be reported as a
separate line item for the relevant payment types.
The Federal Reserve specifically requested comment on the most
feasible and/or useful time period over which various payment
instruments should have payment or transaction activity to be
considered active, as well as what kinds of transactions, if any,
should not be counted toward activity. The Federal Reserve will use the
definition of active as cards with any transaction activity during the
survey reference period (calendar year 2012) as proposed, for
consistency with previous surveys.
The Federal Reserve specifically requested comment on
categorizations of payments that would be the most useful or feasible
for respondents to report. Based on industry outreach discussions, the
Federal Reserve will add one or two categorizations of payments (such
as procurement and fleet card accounts under private-label credit card)
to increase the clarity of the survey forms. In addition, the Federal
Reserve would, in a few cases, adjust volume subcategories to ensure
that the most relevant categories are included for each of the specific
types of payments. In some cases this would mean the addition of a line
item, and in others it would mean the removal of a line item. For
example, in the case of the signature debit survey, a line item for
``PINless debit (i.e., bill pay to a utility)'' may be added. In
another example, the line item for ``cash back'' may be removed from
the general purpose credit card survey. In a further example, ``direct
send/consolidator (i.e., Fiserv/CheckFree)
[[Page 74191]]
may be added to the online bill payment survey.
Board of Governors of the Federal Reserve System, December 10,
2012.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2012-30094 Filed 12-12-12; 8:45 am]
BILLING CODE 6210-01-P