Request for Comment on Adequacy of Existing Documents on Debit Card Fees - District Notice 04-35 -

Board Of Governors

Description

ll★KFederal Reserve Bank of Dallas2200 N. PEARL ST.DALLAS, TX 75201-2272June 24, 2004Notice 04-35TO: The Chief Executive Officer of eachfinancial institution and others concernedin the Eleventh Federal Reserve DistrictSUBJECTRequest for Comment on Adequacy of Existing Disclosureson Debit Card FeesDETAILSThe Board of Governors is conducting a study about disclosures of debit card fees, atthe request of members of the U. S. Senate Committee on Banking, Housing, and Urban Affairs.In connection with the study, the Board is requesting public comment on whether the existingdisclosures required by the Electronic Fund Transfer Act adequately inform consumers of feesimposed by a financial institution that holds the consumer’s account and has issued a debit card(“account-holding institution”) when the debit card is used to make a purchase from a merchant(or other provider of services).The Board is also requesting the public’s views on the need for, and the potentialbenefits of, requiring additional disclosures in each periodic account activity statement to reflectfees imposed by account-holding institutions for debit card use. Lastly, the Board is requestingcomment on the benefits of requiring disclosure of the amount, source, and recipient of eachsuch fee, as well as a summary of the total amount of such fees for the period, and calendar yearto date.The Board must receive comments by July 23, 2004. Please address comments toJennifer J. Johnson, ...

Informations

• Publié par: Zoev
• Nombre de lectures: 92
• Langue: English

Extrait

FederalReserve Bank of Dallas
2200 N. PEARL ST.
DALLAS, TX 75201-2272

June 24, 2004

TO:
The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

SUBJECT

Request for Comment on Adequacy of Existing Disclosures
on Debit Card Fees

Notice 04-35

DETAILS
The Board of Governors is conducting a study about disclosures of debit card fees, at
the request of members of the U. S. Senate Committee on Banking, Housing, and Urban Affairs.
In connection with the study, the Board is requesting public comment on whether the existing
disclosures required by the Electronic Fund Transfer Act adequately inform consumers of fees
imposed by a financial institution that holds the consumer’s account and has issued a debit card
(“account-holding institution”) when the debit card is used to make a purchase from a merchant
(or other provider of services).

The Board is also requesting the public’s views on the need for, and the potential
benefits of, requiring additional disclosures in each periodic account activity statement to reflect
fees imposed by account-holding institutions for debit card use. Lastly, the Board is requesting
comment on the benefits of requiring disclosure of the amount, source, and recipient of each
such fee, as well as a summary of the total amount of such fees for the period, and calendar year
to date.

The Board must receive comments by July 23, 2004. Please address comments to
Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street
and Constitution Avenue, N.W., Washington, DC 20551. Also, you may mail comments elec-
tronically to
[e-mail]
. All comments should refer to Docket No. OP-
.6911

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 [phone]; El Paso Branch
Intrastate
[phone],
Interstate
[phone];
Houston Branch
Intrastate
[phone],
Interstate
[phone]; San Antonio Branch
Intrastate
[phone].

2 --

The public can also view and submit comments on proposals by the Board and other
federal agencies from the
www.regulations.gov
web site.

ATTACHMENT

A copy of the Board’s notice as it appears on pages 29308–10, Vol. 69, No. 99 of the
Federal Register
dated May 21, 2004, is
attached
.

MORE INFORMATION

For more information, please contact Eugene Coy, Banking Supervision Department,
[phone]. Paper copies of this notice or previous Federal Reserve Bank notices can be
printed from our web site at
www.dallasfed.org/banking/notices/index.html
.

80392

Federal Register
/Vol. 69, No. 99/Friday, May 21, 2004/Notices

http://www.federalreserve.gov/
card transaction during the statement
generalinfo/foia/ProposedRegs.cfm.
period, as well as information regarding
•
Federal eRulemaking Portal:
http://
the source and recipient of such fee,
www.regulations.gov.
Follow the along with a summary of the total
instructions for submitting comments. amount of such fees for the period.
•
E-mail:
Point-of-Sale Transactions.
When a
[e-mail].
consumer uses a debit card to make a
Include docket number in the subject point-of-sale purchase, the parties to the
line of the message. transaction are typically the consumer,
•
FAX: 202/452
–
3819 or 202/452
–
the merchant, the merchant
’
s bank, and
3102. the consumer
’
s account-holding bank.
•
Mail: Jennifer J. Johnson, Secretary, The consumer presents a debit card to
Board of Governors of the Federal the merchant to make a purchase, or
Reserve System, 20th Street and
‘‘
swipes
’’
the card through the
Constitution Avenue, NW., Washington, merchant
’
s POS electronic reader to
DC 20551. initiate the process of having the
All public comments are available purchase amount debited from the
from the Board
’
s Web site at
http://
consumer
’
s checking account. In order
www.federalreserve.gov/generalinfo/
to enable the account-holding
foia/ProposedRegs.cfm
as submitted, institution to identify the consumer as
except as necessary for technical provided by current regulation, and
reasons. Accordingly, your comments authorize the electronic fund transfer,
FEDERAL RESERVE SYSTEM
will not be edited to remove any the consumer is asked either to enter a
identifying or contact information. personal identification number (
‘‘
PIN
’’
),
[Docket No. OP
–
1196]
Public comments may also be viewed for an
‘‘
online
’’
debit, or is asked to
Notice of Study
electronically or in paper in Room MP
–
provide a signature, for an
‘‘
offline
’’

500 of the Board
’
s Martin Building (20th debit. If the transaction is successfully
AGENCY
:
Board of Governors of the and C Streets, NW.) between 9 a.m. and processed, the consumer will receive
Federal Reserve System.5 p.m. on weekdays.the goods or services sought, an account
ACTION
:
Notice of study and request for
FORFURTHERINFORMATIONCONTACT
:
at the consumer
’
s bank will be debited,
and the merchant
’
s account at the
Information. Daniel Lonergan, Counsel, Division of merchant
’
s bank will be credited.
Consumer and Community Affairs,
SUMMARY
:
The Board is conducting a Board of Governors of the Federal This is a simplified description of the
study about disclosures of debit card Reserve System, at (202) 452
–
3667 or debit card transaction process, as the
fees, at the request of members of the 452
–
2412. For users of transaction information described above
United States Senate Committee on Telecommunications Device for the Deaf is commonly carried over one or
Banking, Housing, and Urban Affairs. In (
‘‘
TDD
’’
) only, contact (202) 263
–
4869.multiple networks to obtain
connection with the study, the Board authorization for the transaction, and
solicits comment on whether the
SUPPLEMENTARYINFORMATION
:
commonly involves additional third-
existing disclosures required by the
I. Background
party participants. Moreover, the use of
Electronic Fund Transfer Act adequately such networks and participants can
inform consumers of fees imposed by a At the request of members of the U.S. result in the imposition of fees such as
financial institution that holds the Senate Committee on Banking, Housing, interchange fees that can result in costs
consumer
’
s account and has issued a and Urban Affairs, the Board is to, or revenue for, the various parties
initiating a study of the disclosure of involved.
debit card (
‘‘
account-holding fees imposed by financial institutions The number of cards in circulation
institution
’’
) when the debit card is used that hold a consumer
’
s account and with a debit function is estimated to be
to make a purchase from a merchant (or have issued a debit card to access the approximately 287 million, and the
other provider of services). The Board account (
‘‘
account-holding institution
’’
). number of POS debit card
‘‘
readers
’’
has
also seeks the public
’
s views on the The Board is specifically studying the risen dramatically. Consequently, the
need for, and the potential benefits of, fees imposed by such account-holding use of debit cards at point-of-sale
—
both
requiring additional disclosures in each institutions when consumers engage in online (PIN-based) and offline
periodic account activity statement to debit card purchase transactions with a (signature-based)
—
has risen sharply
reflect fees imposed by account-holding merchant (or other provider of services), since the mid-1990s.
1
While PIN-based
institutions for debit card use. Lastly, otherwise known as
‘‘
point-of-sale
’’
or debit
’
s share of total debit transactions
the Board seeks comment on the
‘‘
POS
’’
transactions. The Board has been was greater than signature-based debit
’
s
benefits of requiring disclosure of the asked to consider whether existing share in the early-1990s, this is no
amount, source, and recipient of each disclosure requirements are adequate longer true. Both PIN-based debit and
such fee, as well as a summary of the
total amount of such fees for the period, and effective in making consumers signature-based debit continue to show
aware of the imposition of debit card
and calendar year-to-date.tra