[Federal Register Volume 79, Number 202 (Monday, October 20, 2014)]
[Notices]
[Pages 62710-62712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24798]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
Agency Information Collection Requirements: Information
Collection Renewal; Comment Request; Debt Cancellation Contracts and
Debt Suspension Agreements
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Notice and request for comment.
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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork
and respondent burden, invites the general public and other Federal
agencies to take this opportunity to comment on a continuing
information collection, as required by the Paperwork Reduction Act of
1995 (PRA).
In accordance with the requirements of the PRA, the OCC may not
conduct or sponsor, and the respondent is not required to respond to,
an information collection unless it displays a currently valid Office
of Management and Budget (OMB) control number.
Currently, the OCC is soliciting comment concerning its renewal of
an information collection titled ``Debt Cancellation Contracts and Debt
Suspension Agreements.''
DATES: You should submit written comments by: December 19, 2014.
Because paper mail in the Washington, DC area and at the OCC is
subject to delay, commenters are encouraged to submit comments by email
if possible. Comments may be sent to: Legislative and Regulatory
Activities Division, Office of the Comptroller of the Currency,
Attention: 1557-0224, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-
11, Washington, DC 20219. In addition, comments may be sent by fax to
(571) 465-4326 or by electronic mail to [email protected].
You may personally inspect and photocopy comments at the OCC, 400 7th
Street SW., Washington, DC 20219. For security reasons, the OCC
requires that visitors make an appointment to inspect comments. You may
do so by calling (202) 649-6700. Upon arrival, visitors will be
required to present valid government-issued photo identification and to
submit to security screening in order to inspect and photocopy
comments.
All comments received, including attachments and other supporting
materials, are part of the public record and subject to public
disclosure. Do not enclose any information in your comment or
supporting materials that you consider confidential or inappropriate
for public disclosure.
FOR FURTHER INFORMATION CONTACT: Johnny Vilela or Mary H. Gottlieb, OCC
Clearance Officers, (202) 649-5490, for persons who are deaf or hard of
hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities
Division, Office of the Comptroller of the Currency, 400 7th Street
SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219.
SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal
agencies must obtain approval from OMB for each collection of
information they conduct or sponsor. ``Collection of information'' is
defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) to include agency
requests or requirements that members of the public submit reports,
keep records, or provide information to a third party. Section
3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal
agencies to provide a 60-day notice in the Federal Register concerning
each proposed collection of information, including each proposed
extension of an existing collection of information, before submitting
the collection to OMB for approval. To comply with this requirement,
the OCC is publishing notice of the proposed collection of information
set forth in this document.
The OCC is proposing to extend OMB approval of the following
information collection:
Title: Debt Cancellation Contracts and Debt Suspension Agreements.
OMB Control No.: 1557-0224.
Description: This submission covers an existing regulation, 12 CFR
37, and involves no change to the regulation or the information
collection. The OCC requests that OMB approve its revised estimates and
renew its approval of the information collection. The estimates have
been revised to reflect the current number of national banks.
Twelve U.S.C. 24(Seventh) authorizes national banks to enter into
Debt Cancellation Contracts (DCCs) and Debt Suspension Agreements
(DSAs). Part 37 requires national banks and Federal branches and
agencies of foreign banks (banks) to disclose information about a DCC
or a DSA using either a short or long form disclosure. The short form
disclosure usually is made orally and issued at the time the bank
firsts solicits the purchase of a contract. The long form disclosure
usually is made in writing and issued before the customer completes the
purchase of the contract. There are special rules for transactions by
telephone, solicitations using written mail inserts or ``take one''
applications, and electronic transactions. Part 37 provides two forms
of disclosure that serve as models for satisfying the
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requirements of the rule. Use of the forms is not mandatory, however,
and a bank may adjust the form and wording of its disclosures so long
as it meets the requirements of the regulation. The requirements of
part 37 enhance consumer protections for customers who purchase DCCs
and DSAs from banks and ensure that banks offer these products in a
safe and sound manner by requiring them to effectively manage their
risk exposure.
Section 37.6
Section 37.6 requires the form of the disclosures to be readily
understandable and meaningful. The content of the short and long form
may vary, depending on whether a bank elects to provide a summary of
the conditions and exclusions in the long form disclosures or refer the
customer to the pertinent paragraphs in the contract. For example, the
short form disclosure requires a bank to instruct the customer to read
carefully both the long form disclosures and the contract for a full
explanation of the contract terms, while the long form gives a bank the
option of either summarizing the limitations or advising the customer
that a complete explanation of the eligibility requirements,
conditions, and exclusions is available in the contract and identifying
the paragraphs where a customer may find that information.
Section 37.6 and Appendices A and B to part 37 require a bank to
provide the following disclosures (summarized below), as appropriate:
Optional (anti-tying)--A bank must inform the customer
that purchase of the product is optional and neither its decision
whether to approve the loan nor the terms and conditions of the loan
are conditioned on the purchase of a DCC or DSA (short and long form).
Explanation of debt suspension agreement--A bank must
disclose that if a customer activates the agreement, the customer's
duty to pay the loan principal and interest is only suspended and the
customer must fully repay the loan after the period of suspension has
expired (long form).
Amount of the fee--A bank must make disclosures regarding
the amount of the fee. The content of the disclosure depends on whether
the credit is open-end or closed-end. In the case of closed-end credit,
the bank must disclose the total fee. In the case of open-end credit,
the bank must either disclose that the periodic fee is based on the
account balance multiplied by a unit cost and provide the unit cost or
disclose the formula used to compute the fee (long form).
Lump sum payment of fee--A bank must disclose, where
appropriate, that a customer has the option to pay the fee in a single
payment or in periodic payments. This disclosure is not appropriate in
the case of a DCC or DSA provided in connection with a home mortgage
loan because the option to pay the fee in a single payment is not
available in that case. Banks must also disclose that adding the fee to
the amount borrowed will increase the cost of the contract (short and
long form).
Lump sum payment of fee with no refund--A bank must
disclose that the customer has the option to choose a contract with or
without a refund provision. This disclosure also states that prices of
refund and no-refund products are likely to differ (short and long
form).
Refund of fee paid in lump sum--If a bank permits a
customer to pay the fee in a single payment and to add the fee to the
amount borrowed, the bank must disclose its cancellation policy. The
disclosure informs the customer of the bank's refund policy, as
applicable, i.e., that the DCC or DSA may be: (i) canceled at any time
for a refund; (ii) cancelled within a specified number of days for a
full refund; or (iii) cancelled at any time with no refund (short and
long form).
Whether use of credit line is restricted--A bank must
inform a customer if the customer's activation of the contract would
prohibit the customer from incurring additional charges or using the
credit line (long form).
Termination of a DCC or DSA-- If termination is permitted
during the life of the loan, a bank must explain the circumstances
under which a customer or the bank may terminate the contract (long
form).
Additional disclosures--A bank must inform consumers that
it will provide additional information before the customer is required
to pay for the product (short form).
Eligibility requirements, conditions, and exclusions--A
bank must describe any material limitations relating to the DCC or DSA
(short and long form).
Section 37.7
Section 37.7 requires a bank to obtain a customer's written
affirmative election to purchase a contract and written acknowledgment
of receipt of the disclosures required by Sec. 37.6. The section
further provides that the election and acknowledgment must be
conspicuous, simple, direct, readily understandable, and designed to
call attention to their significance. Pursuant to Sec. 37.7(b), if the
sale of the contract occurs by telephone, the customer's affirmative
election to purchase and acknowledgment of receipt of the required
short form may be made orally, provided the bank: (i) maintains
sufficient documentation to show that the customer received the short
form disclosures and then affirmatively elected to purchase the
contract; (ii) mails the affirmative written election and written
acknowledgment, together with the long form disclosures required by
Sec. 37.6, to the customer within 3 business days after the telephone
solicitation and maintains sufficient documentation to show it made
reasonable efforts to obtain the documents from the customer; and (iii)
permits the customer to cancel the purchase of the contract without
penalty within 30 days after the bank has mailed the long form
disclosures to the customer.
Pursuant to Sec. 37.7(c), if the DCC or DSA is solicited through
written materials such as mail inserts or ``take one'' applications and
the bank provides only the short form disclosures in the written
materials, then the bank shall mail the acknowledgment, together with
the long form disclosures, to the customer. The bank may not obligate
the customer to pay for the contract until after the bank has received
the customer's written acknowledgment of receipt of disclosures, unless
the bank takes certain steps, maintains certain documentation, and
permits the customer to cancel the purchase within 30 days after
mailing the long form disclosures to the customer. Section 37.6(d)
permits the affirmative election and acknowledgment to be made
electronically.
Type of Review: Regular.
Affected Public: Businesses or other for-profit.
Number of Respondents: 1,219.
Total Annual Responses: 1,219.
Frequency of Response: On occasion.
Total Annual Burden Hours: 29,256 hours.
Comments submitted in response to this notice will be summarized
and included in the request for OMB approval. All comments will become
a matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the functions of the OCC, including whether the
information shall have practical utility;
(b) The accuracy of the OCC's estimate of the burden of the
collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
[[Page 62712]]
(d) Ways to minimize the burden of the collection on respondents,
including through the use of automated collection techniques or other
forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Dated: October 10, 2014.
Stuart E. Feldstein,
Director, Legislative & Regulatory Activities Division.
[FR Doc. 2014-24798 Filed 10-17-14; 8:45 am]
BILLING CODE 4810-33-P