81 FR 11270 - Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB

FEDERAL RESERVE SYSTEM

Federal Register Volume 81, Issue 42 (March 3, 2016)

Notice is hereby given of the final approval of a proposed information collection by the Board of Governors of the Federal Reserve System (Board) under OMB delegated authority. 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.

[Federal Register Volume 81, Number 42 (Thursday, March 3, 2016)]
[Notices]
[Pages 11270-11273]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-04654]


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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 (Board) under OMB delegated authority. 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 Acting Clearance 
Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, 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 of the extension for 
three years, with revision, of the following report:
    Report title: Retail Payment Surveys.
    Agency form number: FR 3066a, b, c, and d.
    OMB Control number: 7100-0351.
    Frequency: FR 3066a and b: Triennial (once every three years) with 
an annual component; FR 3066c: Triennial: and FR 3066d: Annual and on 
occasion.
    Respondents: Depository and financial institutions, payment 
networks, payment processors, and payment instrument issuers.
    Estimated annual burden hours: For 2016 surveys: FR 3066a: 43,200 
hours; FR 3066b: 1,000 hours; FR 3066c: 450 hours; FR 3066d: 600 hours. 
For 2017 and 2018 surveys: FR 3066a: 1,700 hours; FR 3066b: 150 hours; 
FR 3066d: 1,200 hours.
    Estimated average hours per response: For 2016 surveys: FR 3066a: 
32 hours; FR 3066b: 8 hours; FR 3066c: 3 hours; FR 3066d: 12 hours. For 
2017 and 2018 surveys: FR 3066a: 10 hours; FR 3066b: 5 hours; FR 3066d: 
12 hours.
    Number of respondents: FR 3066a: 1,350; FR 3066b: 125; FR 3066c: 
150; FR 3066d: 50.
    General description of report: The FR 3066 series is broadly 
authorized under sections 2A and 12A of the Federal Reserve Act. 
Section 2A requires that the Board of Governors of the Federal Reserve 
System and the Federal Open Market Committee (FOMC) maintain long run 
growth of the monetary and credit aggregates commensurate with the 
economy's long run potential to increase production, so as to promote 
effectively the goals of maximum employment, stable prices, and 
moderate long-term interest rates (12 U.S.C. 225a). In addition, under 
section 12A of the Federal Reserve Act, the FOMC is required to 
implement regulations relating to the open market operations conducted 
by Federal Reserve Banks with a view to accommodating commerce and 
business and with regard to the regulations' bearing upon the general 
credit situation of the country (12 U.S.C. 263). The authority of the 
Federal Reserve to collect economic data to carry out the requirements 
of these provisions is implicit. Accordingly, the Federal Reserve is 
generally authorized to collect the information called for by the FR 
3066 series by sections 2A and 12A of the Federal Reserve Act.
    In addition, the Board is responsible for implementing and drafting 
regulations, interpretations, and other guidance for various payments, 
consumer protection, and other laws (including provisions of the 
Federal Reserve Act other than those cited above). The information 
obtained from the Federal Reserve Payments Study may be used in support 
of the Board's development and implementation of regulations, 
interpretations, and supervisory guidance for these laws. Therefore, 
the 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 section 609 (12 U.S.C. 4008)

[[Page 11271]]

 Electronic Fund Transfer Act section 904 (15 U.S.C. 1693b) and 
section 920 (15 U.S.C. 1693o-2)
 Truth In Lending Act section 105 (15 U.S.C. 1604)
 The Check Clearing for the 21st Century Act section 15 (12 
U.S.C. 5014)
 Federal Reserve Act section 11 (Examinations and reports, 
Supervision over Reserve Banks, and Federal Reserve Note provisions, 12 
U.S.C. 248); section 11A (Pricing of Services, 12 U.S.C. 248a); section 
13 (FRB deposits and collections, 12 U.S.C. 342); and section 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) and 5412, 
from Edge 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)).
    Participation in the survey is voluntary. Although the Board has 
the authority to require participation by state member banks, bank 
holding companies (and their subsidiaries), savings and loan holding 
companies, Edge and agreement corporations, and U.S. branches and 
agencies of foreign banks supervised by the Federal Reserve, it has not 
done so.
    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 accounts, broken out by type; 
image check deposits vs. paper check deposits, ACH entries, wire 
transfers, debit and prepaid card transactions, credit card 
transactions, mobile payments, and third-party fraud. The other surveys 
request similar types of confidential ``number and value'' information 
appropriate to the surveyed entities: e.g., for the Network, Processor 
and Issuer Payments Survey (FR 3066b), the number, value and type of 
transactions involving credit cards (both general purpose and private 
label), debit cards, and prepaid cards from each of the respondents 
(card networks, retail merchants, and processors). Only aggregate data 
from the surveys, such as estimated volumes and trends in cash usage, 
noncash 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 FR 3066a, FR 3066b, FR 3066c, and FR 3066d are the 
latest iteration of the Federal Reserve Payments Study (FRPS), which 
has been conducted by FRB Atlanta and the Board since 2000. The FRPS 
originated from a system-wide effort to improve the measurement and 
public availability of information on volumes and trends in checks and 
other noncash payments. Despite the retail payments system's critical 
importance in supporting everyday commerce, there was a significant gap 
in quantitative information on U.S. retail payments before 2000. The 
FRPS filled this gap by providing a reliable and transparent non-
mandatory survey-based approach to collecting payments industry data on 
retail payment volumes and trends.
    The FR 3066a currently collects information on the national volume 
(number and value) of major categories and subcategories of established 
and emerging methods of payment from a nationally representative 
stratified random sample of depository institutions.\1\ Most questions 
in the surveys consist of payment and related transactions organized as 
number-value pairs. The FR 3066b currently comprises 15 different 
surveys, each specific to a particular payment instrument and/or 
respondent type (respondents only answer surveys that apply to their 
organizations). It collects information from a census of payment 
networks, processors, and issuers. The FR 3066c currently collects data 
from samples of individual checks obtained from a set of depository 
institutions. The FR 3066d is an ad-hoc supplement to the other FR 3066 
surveys.
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    \1\ To obtain comprehensive coverage of total national volumes 
the survey may also include non-depository financial institutions.
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    Current Actions: On November 25, 2015 the Federal Reserve published 
a notice in the Federal Register (80 FR 73760) requesting public 
comment for 60 days on the extension, with revision, of the FR 3066a, 
b, c, and d. The comment period for this notice expired on January 25, 
2016. The Federal Reserve received four comment letters addressing this 
information collection, which are summarized and addressed below.

Summary Discussion of Public Comments and Responses

    The Federal Reserve received written comments from one payment 
industry association, one merchant trade association, one payment card 
network, and one private citizen. 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 comments on 
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. Specific questions were not included in the initial request for 
public comment.
    A variety of revisions to the surveys resulted from outreach 
discussions with participants as well, and generally involved 
clarifications or restatements of questions in order to address issues 
brought up in these discussions. The detailed discussion below 
addresses the specific substantive issues that arose from the written 
comments and outreach efforts, and the Federal Reserve's modifications 
to the surveys in response to the comments. In addition to these 
modifications, minor clarifications would be made to the surveys in 
response to the comments.

[[Page 11272]]

Detailed Discussion of Public Comments and Responses

Depository and Financial Institution Payments Survey (FR 3066a)

    The Federal Reserve proposed to collect annual 2015 data instead of 
one month as in the 2013 version, as the resulting data can be more 
easily compared with data collected in the FR 3066b, and avoid concerns 
about seasonal effects. While some institutions noted an inability to 
report a full calendar year of information for some items, others 
reported no difficulty or even a reduction in burden. The survey will 
provide instructions on how to respond when annual data is difficult to 
report, and will accommodate the reporting of best available 
information from institutions experiencing difficulty reporting the 
full year. For example, the survey will accommodate the reporting of an 
alternative time period, indicated via a notes field provided at the 
end of each section.
    Substantial clarifications have been added throughout the surveys, 
based on discussions with outreach participants. These discussions led 
to a comprehensive set of revisions specifically made to clarify the 
surveys, and thereby reduce the burden of response. A glossary of 
terms, frequently asked questions document, user-friendly Web tools, 
and an 800-number help line will be provided to ease response. 
Materials will continue to be developed and clarified as necessary to 
help facilitate response.
    Written comments directed at the 3066a primarily discussed the ACH 
and the Unauthorized Third-Party Payment Fraud sections. In particular, 
one comment argued that the institution originating the payment is ``in 
the best position to monitor and report on transaction volume, value, 
and returns.'' This argument suggested that questions about ACH debit 
payments should be collected from the perspective of the originating 
depository financial institution (ODFI), or the payee's depository 
institution. In order to be responsive to this concern, questions were 
added to collect ACH debits from this perspective. In addition, to 
address concerns with the reporting of unauthorized third-party fraud 
payments, questions on the number of returned ACH debits, along with a 
breakdown of various categories of returns were also added from the 
ODFI perspective.
    Consistent with the design of the sampling and estimation methods, 
past surveys collected ACH debit payments and related information from 
the perspective of the receiving depository financial institution 
(RDFI). In order to preserve comparability with past surveys and 
compatibility with the sampling and estimation methods, these questions 
were retained. One comment suggested that surveying RDFIs would not 
generate reliable data. Collecting information from both parties to the 
transaction should shed light on these concerns and help to improve 
understanding of the ACH data overall.
    One comment requested that a ``near real-time'' line item be added 
to the ACH section. Meanwhile, as discussed above, concerns about the 
ability of depository institutions to respond to ACH questions resulted 
in additional questions in the ACH section. Also, the related ``same-
day'' settlement question was removed given the de minimis amount of 
such activity known to have occurred through ACH operators in 2015. The 
Federal Reserve believes that, for the 2015 version of the survey, 
questions regarding new payment initiation methods remain in other 
parts of the surveys. While settlement speed is not currently addressed 
in the surveys, some alternative payment initiation methods, such as 
account-to-account products that may post relatively quickly and often 
settle through the ACH, are measured in other sections in 3066a and 
3066b.
    Additional comments expressed concerns with some ACH definitions in 
the survey that may appear confusing. These definitions have been used 
in past surveys, however, and participants have generally found them 
clear. In part, confusion about these questions may have stemmed from 
the omission of some descriptive information from the posted surveys. A 
glossary and fuller descriptive information on these terms are 
published in the detailed report and surveys from 2013. As in past 
surveys, the glossary and fuller descriptions of the questions, revised 
appropriately, will be provided in the complete survey distributed to 
participants.
    One comment suggested adding questions about mobile debit card 
routing options provided on debit cards. These questions were not added 
in the present survey, in part because the materiality of the question 
has not been established. Questions about the provisioning of mobile 
wallets are new to the survey, and additional questions may be added in 
the future if a baseline can be established.

Networks, Processors, and Issuers Payments Surveys (FR 3066b)

    Substantial clarifications have been added to the surveys, based on 
discussions with outreach participants. In addition, some questions 
were deleted and some added based on feedback received.
    In a sweeping change affecting most surveys, a new question 
allowing the option to select the preferred basis to use for 
allocations of detailed payments data and, separately, fraud data was 
added. In the previous version of the survey, participants were asked 
to allocate details on the basis of Net, Authorized and Settled 
transactions (NAST). NAST will remain the default selection, but 
participants may choose Total authorized transactions, or Net Purchase 
Transactions as the basis instead. This change is expected to 
substantially reduce the burden of providing details for some 
respondents.
    Allocations between contact and contactless payments were dropped, 
based on comments suggesting such allocations would be difficult or 
impossible to provide.
    Revisions to the general-purpose prepaid card surveys were made to 
make the data and terminology more consistent with the FR 3063a 
Government-Administered, General Use Prepaid Card Survey.
    Some comments addressed specific concerns with the ability to 
distinguish or report certain requested items in the survey. Our survey 
process is designed to accommodate such concerns, and we will work with 
participants to collect those data participants can report.
    The deferred payment processor survey was discontinued.
General-Purpose Cards
    One comment requested that a question be designed to capture net 
chargebacks from the general-purpose card networks. The Federal Reserve 
believes that the current question ``chargebacks (issuer-initiated)'' 
is equivalent to the requested item, and could be contrasted with the 
question ``adjustments and returns (acquirer-initiated).'' A more 
detailed examination of chargebacks is beyond the scope of the current 
surveys.
    Another comment suggested the omission of the question to identify 
the volumes of ``3-D secure'' authentication, which is typically 
provided by the card networks. As an alternative, the comment suggested 
including a variety of other types of authentication that might not be 
tracked by or reported to the networks. Discussions with card networks 
suggested that the ability to report the use of alternative 
authentication methods was not possible. The Federal Reserve will 
retain this question, but notes that the ``Online Payment 
Authentication Methods Processor'' survey (formerly the ``Secure Online 
Payment Processor

[[Page 11273]]

survey) is designed to collect information on such other authentication 
methods.
    Another comment addressed concerns about the collection of 
information on the ``tokenization'' of payments from card networks. 
Such solutions can be implemented in various ways by parties to the 
transaction. It would be difficult to comprehensively measure the 
variety of tokenization schemes being used. The Federal Reserve 
believes it is important to collect information from survey respondents 
that is feasible, even when the universe of competing methods cannot be 
measured in the survey. Given that the surveys sometimes collect 
partial information, it is important to recognize any limitations on 
new and emerging trends, especially at the analysis and reporting 
stages.
    A comment suggested collecting ``counterfeit'' fraud for remote 
payments. The survey collects counterfeit card fraud, which, according 
to card network definitions, means that a fake version of the card is 
created and used at a merchant's point-of-sale card terminal, an in-
person situation. Remote payment fraud is classified by the card 
networks as an ``unauthorized use of account number.'' The Federal 
Reserve believes this definition will capture the type of fraud 
requested in the comment.
    A comment requested some detail on mobile wallet provisioning. As 
mobile wallet questions are new for this survey, the Federal Reserve 
will not expand mobile wallet questions until a baseline can be 
established.
Private-Label Cards
    One comment requested the addition of questions on the number of 
cards in force with multi-factor authentication mechanisms. The revised 
survey includes a question on the use of chips for private-label cards 
for the first time. Additional questions may be considered once a 
baseline is established.
EBT
    A comment suggested collecting additional detail on authentication 
methods used for EBT payments. The Federal Reserve believes that EBT 
payments are almost exclusively PIN authenticated. Past survey efforts 
have not been successful in obtaining much detail underlying EBT 
payments, and the survey detail already requested may be difficult to 
obtain. No additional questions concerning authentication methods will 
be added at this time. If the situation improves, the Federal Reserve 
will seek to collect additional relevant detail in the future.
Mobile Wallet
    A comment requested clarity with respect to the definition of a 
remote mobile transaction. Across all surveys, a remote payment is one 
in which the payment transaction is performed remotely, regardless of 
where or how the good or service is obtained. In an example with a 
remote card preauthorization, but with a payment made in person, the 
survey definition is that the payment is an in-person payment.
    A comment suggested breaking out fraudulent mobile wallet 
transactions into person-present and remote categories. This requested 
breakout was added to the final proposed survey.
    A comment suggested tracking the number of fraudulently provisioned 
cards to mobile wallets. The Federal Reserve does not know how such a 
question should fit into the present survey framework at this time, but 
believes that information on the number of fraudulent mobile wallet 
transactions may serve as a useful alternative measure.

    Board of Governors of the Federal Reserve System, February 29, 
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-04654 Filed 3-2-16; 8:45 am]
BILLING CODE 6210-01-P