82 FR 18975 - Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z); Delay of Effective Date

BUREAU OF CONSUMER FINANCIAL PROTECTION

Federal Register Volume 82, Issue 78 (April 25, 2017)

The Bureau of Consumer Financial Protection (Bureau or CFPB) is issuing this final rule to delay the October 1, 2017 effective date of the rule governing Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) by six months, to April 1, 2018.

[Federal Register Volume 82, Number 78 (Tuesday, April 25, 2017)]
[Rules and Regulations]
[Pages 18975-18981]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-08341]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 82, No. 78 / Tuesday, April 25, 2017 / Rules 
and Regulations

[[Page 18975]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Parts 1005 and 1026

[Docket No. CFPB-2017-0008]
RIN 3170-AA69


Prepaid Accounts Under the Electronic Fund Transfer Act 
(Regulation E) and the Truth in Lending Act (Regulation Z); Delay of 
Effective Date

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official interpretation; delay of effective date.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau or CFPB) 
is issuing this final rule to delay the October 1, 2017 effective date 
of the rule governing Prepaid Accounts Under the Electronic Fund 
Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) 
by six months, to April 1, 2018.

DATES: The amendments in this final rule are effective on April 1, 
2018. The effective date of the final rule published on November 22, 
2016 (81 FR 83934) is delayed from October 1, 2017, to April 1, 2018. 
The effective date for the addition of Sec.  1005.19(b) remains October 
1, 2018.

FOR FURTHER INFORMATION CONTACT: Thomas L. Devlin and Yaritza Velez, 
Counsels, and Kristine M. Andreassen, Senior Counsel, Office of 
Regulations, at 202-435-7700.

SUPPLEMENTARY INFORMATION: 

I. Summary of the Final Rule

    On October 5, 2016, the Bureau released a final rule to create 
comprehensive consumer protections for prepaid accounts under 
Regulation E, which implements the Electronic Fund Transfer Act (EFTA), 
and Regulation Z, which implements the Truth in Lending Act (TILA) 
(Prepaid Accounts Final Rule).\1\ When it was issued, the Prepaid 
Accounts Final Rule had a general effective date of October 1, 2017. 
Through its efforts to support industry implementation of the Prepaid 
Accounts Final Rule, the Bureau learned that some industry participants 
believed that they would have difficulty complying with certain 
provisions of the Prepaid Accounts Final Rule that would have gone into 
effect on October 1, 2017. In order to facilitate compliance with the 
Prepaid Accounts Final Rule, and to allow an opportunity for the Bureau 
to assess whether any additional adjustments to the Rule are 
appropriate, the Bureau proposed to extend the general effective date 
of the Prepaid Accounts Final Rule by six months, to April 1, 2018 
(Effective Date NPRM).\2\
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    \1\ 81 FR 83934 (Nov. 22, 2016).
    \2\ 82 FR 13782 (Mar. 15, 2017).
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    Based on comments received, the Bureau is issuing this final rule 
to delay the October 1, 2017 effective date for the Prepaid Accounts 
Final Rule by six months, to April 1, 2018. The Bureau is also making 
conforming amendments to certain regulatory text and commentary adopted 
in the Prepaid Accounts Final Rule to reflect the effective date delay.
    The Bureau plans to release a notice of proposed rulemaking address 
at least two issues that have been identified as areas where the 
Prepaid Accounts Final Rule may be posing particular complexities for 
implementation. When the Bureau does so it will also seek comment on 
whether any further extension of the effective date is needed in light 
of the specific changes proposed.

II. Background

A. The Prepaid Accounts Rulemaking

    In the Prepaid Accounts Final Rule, the Bureau extended Regulation 
E coverage to prepaid accounts and adopted provisions specific to such 
accounts, and generally expanded Regulation Z's coverage to overdraft 
credit features that may be offered in conjunction with prepaid 
accounts.\3\ Upon issuing the Prepaid Accounts Final Rule, the Bureau 
initiated robust efforts to support industry implementation.\4\ 
Information regarding the Bureau's Prepaid Accounts Final Rule 
implementation initiatives and available resources can be found on the 
Bureau's regulatory implementation Web site at https://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/prepaid-rule/.
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    \3\ 81 FR 83934 (Nov. 22, 2016). The Bureau released a proposal 
regarding prepaid accounts under Regulations E and Z, including 
model and sample disclosure forms, for public comment on November 
13, 2014. 79 FR 77102 (Dec. 23, 2014) (Prepaid Accounts NPRM). The 
Bureau had previously issued an advance notice of proposed 
rulemaking that posed a series of questions for public comment about 
how the Bureau might consider regulating general purpose reloadable 
cards and other prepaid products. 77 FR 30923 (May 24, 2012).
    \4\ These on-going efforts include: (1) The publication of a 
plain-language small entity compliance guide to help industry 
understand the Prepaid Accounts Final Rule; (2) the publication of 
various other implementation tools regarding the Prepaid Accounts 
Final Rule, including an executive summary of the rule, summaries of 
key changes for payroll card accounts and government benefit 
accounts, a prepaid account coverage chart, a summary of the rule's 
effective date provisions, and a guide to preparing the short form 
disclosure; (3) the release of native design files for print and 
source code for web-based disclosures for all of the model and 
sample disclosure forms included in the Prepaid Accounts Final Rule; 
(4) meetings with industry, including trade associations and 
individual industry participants, to discuss and support their 
implementation efforts; and (5) participation in conferences and 
forums.
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B. Effective Date Delay

    As published, the Prepaid Accounts Final Rule had a general 
effective date of October 1, 2017. As discussed in the Effective Date 
NPRM, as part of its efforts to support industry implementation, the 
Bureau has discussed implementation efforts with a number of industry 
participants. As a result of those discussions, the Bureau learned that 
some industry participants were concerned for a variety of reasons that 
they would have difficulty in complying with certain aspects of the 
Prepaid Accounts Final Rule by October 1, 2017 while also ensuring 
continued availability of their prepaid products and with minimal 
disruption to consumers. For example, although the Bureau put in place 
an exception in Regulation E Sec.  1005.18(h)(2) pursuant to which 
financial institutions are not required to pull and replace prepaid 
account access devices and packaging materials with non-compliant 
disclosures that were produced in the normal course of business prior 
to October 1, 2017, some industry participants indicated that they 
believed that they should in fact pull and replace non-compliant 
packaging due to concerns about legal and regulatory

[[Page 18976]]

exposure at both the Federal and State level, and in particular due to 
developments following release of the Prepaid Accounts Final Rule. 
Industry had also raised related concerns regarding the constrained 
production capacity of packaging manufacturers and other supply chain 
limitations resulting from increased industry demand leading up to the 
October 1, 2017 effective date.
    In addition, in the course of working to implement the Prepaid 
Accounts Final Rule, some industry participants raised concerns about 
what they describe as unanticipated complexities arising from the 
interaction of certain aspects of the rule with certain business models 
and practices, including those newly adopted, that they did not fully 
address in their comment letters on the Prepaid Accounts NPRM, which 
may complicate implementation and affect consumers.
    Based on its initial outreach to industry before issuing the 
Effective Date NPRM, the Bureau believed that a six-month delay would 
be sufficient for industry participants to ensure that they can comply 
with the Prepaid Accounts Final Rule with minimal disruption to 
consumers. The Bureau explained that, in particular, a six-month 
extension would both allow more time for package printing and allow 
pull-and-replace processes at retail locations to occur after the 
winter holiday season, which is a particularly busy time for retailers. 
Indeed, the Bureau understands that industry often effectuates pull-
and-replace processes in the spring for precisely this reason. The 
Bureau also believed that a six-month delay would allow the Bureau 
adequate opportunity to consider possible additional amendments to the 
Prepaid Accounts Final Rule, and for industry to implement any such 
changes, without unnecessary disruption to consumers' access to, and 
use of, prepaid accounts.
    The Bureau did not propose to delay the effective date of the 
requirement to submit prepaid account agreements to the Bureau in 
Regulation E Sec.  1005.19(f)(2), which is October 1, 2018. The Bureau 
expected to have its agreement submission process in place by October 
1, 2018, and, as discussed in the Effective Date NPRM, the Bureau's 
pre-proposal outreach had not indicated that industry participants were 
concerned that they would not be able to meet the agreement submission 
effective date.
    In the Effective Date NPRM, the Bureau did not propose to amend any 
other substantive requirements of the Prepaid Accounts Final Rule. The 
purpose of that notice was not to seek comment generally on policy 
decisions made in the Prepaid Accounts Final Rule that industry or 
other stakeholders might wish the Bureau to reconsider. Rather, the 
Bureau stated that it would continue its outreach to industry and other 
stakeholders to understand their experiences in implementing the 
Prepaid Accounts Final Rule.

III. Summary of the Rulemaking Process, Comments Received, and the 
Final Rule

A. Summary of the Rulemaking Process

    On March 9, 2017, the Bureau released the Effective Date NPRM with 
a request for public comment. It was published in the Federal Register 
on March 15, 2017.\5\ The Bureau solicited comment on all aspects of 
the Effective Date NPRM. In particular, the Bureau asked commenters to 
provide specific detail and any available data regarding current and 
planned practices, as well as relevant knowledge and specific facts 
about any benefits, costs, or other impacts on industry, consumers, and 
other stakeholders of the Effective Date NPRM. The Bureau also 
solicited comment about the impact of the Effective Date NPRM on 
consumers who use prepaid accounts. The Bureau solicited comment 
regarding the proposed extension of the general effective date to April 
1, 2018, as well as alternative dates for extension.
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    \5\ 82 FR 13782 (Mar. 15, 2017).
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B. Comments Received

    The comment period for the Effective Date NPRM closed on April 5, 
2017. The Bureau received 28 comment letters from consumer advocacy 
groups; national and regional trade associations; members of the 
prepaid industry, including issuing banks and credit unions, program 
managers, and a digital wallet provider; several think tanks; an 
association of State financial regulators; a group of State attorneys 
general; and several commenters who did not identify their 
affiliations.\6\
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    \6\ These comment letters are publicly available at https://www.regulations.gov/.
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    Industry and trade association commenters all supported the 
Bureau's proposal to delay the effective date of most provisions of the 
Prepaid Accounts Final Rule; many expressly supported the Bureau's 
proposed six-month delay. A number of commenters cited the Bureau's 
concerns that some industry participants may need additional time to 
comply with the rule, in particular stating that providers might need 
to pull and replace non-compliant packaging notwithstanding the 
exception in the Prepaid Accounts Final Rule for prepaid account access 
devices and packaging materials with non-compliant disclosures that 
were produced in the normal course of business prior to the effective 
date of the rule.
    A prepaid issuer, a digital wallet provider, and a trade 
association each expressed support for a six-month delay of the 
effective date, contingent on the Bureau also revisiting the Prepaid 
Accounts Final Rule to address certain substantive provisions of the 
rule that they argued required changes to disclosures and business 
models that could not be implemented by April 1, 2018. The provisions 
that they cited relate to the linking of credit cards with digital 
wallets that are capable of storing funds and to error resolution and 
limitations on liability for prepaid accounts where the financial 
institution has not completed its consumer identification and 
verification process with respect to the account. These commenters 
requested a 12-month delay to the Prepaid Accounts Final Rule's general 
effective date if the Bureau were unwilling to revisit those issues.
    Some industry and trade association commenters argued that the 
Bureau should delay the effective date further by 12 months; two trade 
associations advocated for an 18-month delay. The commenters who 
requested a delay longer than six months cited a variety of reasons, 
including, for example, the time needed to develop and review new and 
updated disclosures and related materials; time required to retool J-
hook card packaging to accommodate disclosures required by the rule; 
limitations in production capacity to print new prepaid card 
collateral; and the time needed to coordinate system updates with 
processors, vendors, and other service providers. A few commenters 
cited other reasons as well, such as the need to develop new systems 
and operational processes related to providing longer account 
transaction histories and calculating summary totals of fees. One trade 
association stated that providers need to develop an automated process 
to track cardholder agreements for purposes of submitting those 
agreements to the Bureau, which it stated would need to be in place as 
of the October 1, 2017 effective date in order to adequately track 
agreements. Another trade association commenter urged the Bureau to 
delay the effective date for longer than six months so that the Bureau 
could conduct a comprehensive study on the effects that the Prepaid 
Accounts Final Rule will have on consumers, specifically related to 
availability of prepaid accounts and their costs to consumers.

[[Page 18977]]

    One credit union trade association commenter, requesting an 18-
month extension, cited concerns that the proposed delayed effective 
date would coincide with the effective date of other regulations 
promulgated by the Bureau, in particular the provisions of the Bureau's 
mortgage servicing rule pertaining to successors-in-interest and the 
provision of periodic statements to consumers who have filed for 
bankruptcy. An association of State financial regulators also stated 
the compliance investments necessitated by other regulations such as 
the increased data collection/reporting requirements under the Home 
Mortgage Disclosure Act and additional identification requirements 
under the Bank Secrecy Act/Customer Due Diligence rule promulgated by 
another federal agency as a reason for its support of a six-month 
delay.
    A coalition of 27 consumer advocacy groups urged the Bureau to 
implement the Prepaid Accounts Final Rule as soon as possible, citing 
the benefits of the rule for consumers who use prepaid accounts, and 
expressing concern that further delays in the effective date would 
cause harm to consumers. They stated that, if an extension is 
warranted, the Bureau should give the minimum extension necessary--
which in their view would be no longer than the proposed six months--
and not provide any further extensions. Another consumer advocacy group 
supported the Bureau's proposal to delay the rule's effective date by 
six months while reiterating that expeditious implementation of the 
Prepaid Accounts Final Rule remains essential to providing 
comprehensive consumer protections to users of prepaid accounts.
    Two think tanks urged the Bureau to consider the possible negative 
effects on consumers of any delay in the effective date of the rule. 
Another think tank supported the six-month delay, stating that 
otherwise there is a risk that providers might pull cards without 
replacing them, thus hampering consumers' access to those products.
    The commenters who did not identify their affiliation varied in 
their comments, either expressing support for the proposed delay in 
effective date or arguing that the effective date should not be 
extended to ensure that consumers receive the protections of the 
Prepaid Accounts Final Rule. A group of State attorneys general 
expressed support for the rule generally but did not comment 
specifically on the effective date of the rule.
    Safe harbor for early compliance. Two trade association commenters 
urged the Bureau to establish a safe harbor for prepaid providers that 
comply with the Prepaid Accounts Final Rule (or portions of it) prior 
to the rule's effective date. These commenters expressed concerns that 
prepaid providers may be exposed to potential liability if they comply 
with the rule prior to the effective date, as they suggested the 
possibility that there may be some conflict between the Prepaid 
Accounts Final Rule and current requirements for payroll card accounts 
and government benefit accounts, though they did not provide any 
specific examples. One commenter stated that early compliance would 
benefit consumers and should not be discouraged.
    Section 1005.19(f)(2). The Bureau did not propose to delay the 
October 1, 2018 effective date of the requirement that prepaid account 
issuers submit prepaid account agreements to the Bureau, which is set 
forth in Regulation E Sec.  1005.19(f)(2). The Bureau did, however, 
solicit comment on whether it should also delay that effective date. 
Commenters generally did not express concerns that the October 1, 2018 
agreement submission effective date would create compliance issues. One 
of the trade association commenters advocating for an 18-month delay of 
the Prepaid Accounts Final Rule's general effective date suggested that 
the Bureau contemplate a proportional delay for Sec.  1005.19(f)(2), 
stating that it would help relieve pressure on credit unions that may 
need to submit credit card agreements pursuant to Regulation Z Sec.  
1026.58 for covered separate credit features accessible by hybrid 
prepaid-credit cards. Another trade association expressed concerns 
pertaining to general compliance with the requirement to submit prepaid 
account agreements to the Bureau, but did not suggest a delay to the 
effective date in Sec.  1005.19(f)(2).
    A program manager expressed concerns about the challenges it is 
facing in complying with the agreement posting requirement in Sec.  
1005.19, which appears to be due, at least in part, to the number of 
prepaid account agreements it manages. This commenter suggested making 
the effective dates set forth in Sec.  1005.19(f)(1) and (2) 
consistent, but did not request that the Bureau delay the effective 
date for the agreement submission requirement. A commenter who did not 
identify his or her affiliation supported the Bureau's proposal not to 
delay the effective date of the agreement submission requirement, but 
suggested that the Bureau revisit that decision six months in advance 
of the effective date.
    Substantive changes to the Prepaid Accounts Final Rule. As noted 
above, the Bureau did not propose in the Effective Date NPRM to amend 
any other substantive provisions of the Prepaid Accounts Final Rule, 
nor was the purpose of the Effective Date NPRM to seek comment 
generally on policy decisions made in the Prepaid Accounts Final Rule 
that industry or other stakeholders might wish the Bureau to 
reconsider. Nonetheless, many commenters used their comment letters to 
advocate for retaining, modifying, or eliminating various provisions of 
the rule. Commenters also suggested that the Bureau could use the 
additional time provided by delaying the effective date of the Prepaid 
Accounts Final Rule to revisit these issues.

C. The Final Rule

    For the reasons set forth herein, the Bureau is finalizing as 
proposed a six-month delay of the October 1, 2017 effective date of the 
Prepaid Accounts Final Rule. In order to effect this change, the Bureau 
is also amending Regulation E Sec. Sec.  1005.18(b)(2)(ix) and (h), and 
1005.19(f)(1), and related commentary, to reflect the delayed effective 
date.
    The Bureau continues to believe that the Prepaid Accounts Final 
Rule will provide significant benefits to consumers and that, 
therefore, expeditious implementation remains essential to provide 
comprehensive consumer protections to users of prepaid accounts. Having 
reviewed the comments received, the Bureau continues to believe that a 
six-month delay of the effective date, when added to the nearly 12 
months previously provided for in the Prepaid Accounts Final Rule, 
allows sufficient time for industry to implement the rule and provides 
for an appropriate balance between the interests of the consumers who 
will receive the benefits of the rule and the needs of industry for an 
adequate implementation period. The Bureau appreciates the issues 
raised by commenters advocating for a longer delay to the Prepaid 
Accounts Final Rule's effective date, but does not believe that a 
longer delay is in fact warranted at this time.
    Based on industry outreach efforts and the comments received in 
response to the Effective Date NPRM, the Bureau has determined that it 
should revisit at least two substantive issues through a separate 
notice and comment rulemaking process. Those issues relate to the 
linking of credit cards into digital wallets that are capable of 
storing funds and to error resolution and limitations on liability for 
prepaid accounts that

[[Page 18978]]

cannot be registered, have not yet been registered, or for which 
consumers have attempted but have not successfully completed the 
registration process. The Bureau is continuing to evaluate other 
concerns raised by industry and other stakeholders, including those 
discussed in comments on the Effective Date NPRM, and may address a 
limited number of other topics as well in its forthcoming proposal. The 
Bureau also will seek comment on whether any further extension of the 
effective date is needed in light of the specific changes proposed.
    Safe harbor for early compliance. The Bureau agrees with commenters 
that early compliance with the Prepaid Accounts Final Rule could 
benefit both industry and consumers. The Bureau is not aware of any 
conflicts between the requirements of the Prepaid Accounts Final Rule 
and the current regulations applying to accounts that will be covered 
by the rule, nor were any specified by commenters. To the extent that 
financial institutions are engaged in consumer-friendly practices that 
are not specifically required under current regulations, the Bureau 
encourages those institutions to continue those practices, whether or 
not those practices are required by the Prepaid Accounts Final Rule. 
For example, financial institutions that already provide access to more 
than 60 days of account history to all current accountholders, or that 
provide full Regulation E error resolution and limited liability 
protections to their accountholders, are encouraged to continue to do 
so in advance of the effective date. However, financial institutions 
should ensure that their disclosures do not suggest to consumers that 
they are engaged in a consumer-friendly practice that they have not yet 
implemented.
    The Bureau notes that the Prepaid Accounts Final Rule already 
contemplates that some aspects of the rule will be phased in, 
particularly with respect to the exception that does not require 
financial institutions to pull and replace non-compliant packaging that 
was manufactured, printed, or otherwise produced in the normal course 
of business prior to the effective date of the rule. Thus, the Bureau 
is not adding an explicit safe harbor for early compliance, although 
the Bureau does not believe that the absence of one will prevent 
financial institutions from implementing practices that are required by 
the Prepaid Accounts Final Rule prior to the effective date. The Bureau 
will seek comment in its forthcoming proposal on whether there are in 
fact any conflicts between requirements of the Prepaid Accounts Final 
Rule and the current regulations applying to accounts that will be 
covered by the rule that would merit a more formal safe harbor.
    Section 1005.19(f)(2). The Bureau is maintaining the October 1, 
2018 effective date set forth in Regulation E Sec.  1005.19(f)(2) for 
the agreement submission requirement, as proposed. In the Effective 
Date NPRM, the Bureau indicated that its industry outreach had not 
indicated that the effective date of this provision was causing 
significant compliance concerns in and of itself, and the comments to 
the Effective Date NPRM support that conclusion. The Bureau does not 
believe that the few concerns raised by commenters warrant a delay to 
the October 1, 2018 effective date.

IV. Legal Authority

    The Bureau is exercising its rulemaking authority pursuant to EFTA 
section 904(a) and (c), Dodd-Frank Act sections 1022(b)(1) and 1032(a), 
and TILA section 105(a) to delay the effective date of the Prepaid 
Accounts Final Rule.
    The legal authority for the Prepaid Accounts Final Rule is 
described in detail in the Prepaid Accounts Final Rule's Supplementary 
Information.\7\ As amended by the Dodd-Frank Act, EFTA section 904(a) 
and (c) \8\ authorizes the Bureau to prescribe regulations to carry out 
the purposes of EFTA and provide that such regulations may contain such 
classifications, differentiations, or other provisions, and may provide 
for such adjustments and exceptions, for any class of electronic fund 
transfers or remittance transfers as in the judgment of the Bureau are 
necessary or proper to effectuate the purposes of EFTA, to prevent 
circumvention or evasion thereof, or to facilitate compliance 
therewith. As amended by the Dodd-Frank Act, TILA section 105(a) \9\ 
directs the Bureau to prescribe regulations to carry out the purposes 
of TILA and provides that such regulations may contain such additional 
requirements, classifications, differentiations, or other provisions, 
and may provide for such adjustments and exceptions for all or any 
class of transactions as in the judgment of the Bureau are necessary or 
proper to effectuate the purposes of TILA, to prevent circumvention or 
evasion thereof, or to facilitate compliance therewith.\10\ Section 
1032(a) of the Dodd-Frank Act\11\ provides that the Bureau may 
prescribe rules to ensure that the features of any consumer financial 
product or service, both initially and over the term of the product or 
service, are fully, accurately, and effectively disclosed to consumers 
in a manner that permits consumers to understand the costs, benefits, 
and risks associated with the product or service, in light of the facts 
and circumstances. Additionally, under Dodd-Frank Act section 
1022(b)(1),\12\ the Bureau has general authority to prescribe rules as 
may be necessary or appropriate to enable the Bureau to administer and 
carry out the purposes and objectives of the Federal consumer financial 
laws, and to prevent evasions thereof.
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    \7\ See, e.g., 81 FR 83934, 83958-60 (Nov. 22, 2016).
    \8\ 15 U.S.C. 1593b(a).
    \9\ 15 U.S.C. 1604(a).
    \10\ TILA section 105(d) generally provides that a regulation 
requiring any disclosure that differs from the disclosures 
previously required by parts A, D, or E of TILA shall have an 
effective date ``of that October 1 which follows by at least six 
months the date of promulgation.'' Section 105(d) further provides 
that the Bureau ``may at its discretion take interim action by 
regulation, amendment, or interpretation to lengthen the period of 
time permitted for creditors or lessors to adjust their forms to 
accommodate new requirements.'' Although the Bureau desires to have 
the rule take effect as soon as feasible given its value for 
consumers, the Bureau is using its discretion under TILA section 
105(d) to lengthen the period in this instance. The Bureau believes 
that the changes the Prepaid Accounts Final Rule will require to 
disclosures pursuant to Regulation Z warrant a delayed effective 
date that conforms to the rest of the rule.
    \11\ 12 U.S.C. 5532(a).
    \12\ 12 U.S.C. 5512(b)(1).
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    EFTA, TILA, and Title X of the Dodd-Frank Act are Federal consumer 
financial laws. Accordingly, in finalizing this rule, the Bureau is 
exercising its authority under Dodd-Frank Act section 1022(b) \13\ to 
prescribe rules under EFTA, TILA, and Title X of the Dodd-Frank Act 
that carry out the purposes and objectives and prevent evasion of those 
laws. Section 1022(b)(2) of the Dodd-Frank Act \14\ prescribes certain 
standards for rulemaking that the Bureau must follow in exercising its 
authority under section 1022(b)(1).
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    \13\ 12 U.S.C. 5512(b).
    \14\ 12 U.S.C. 5512(b)(2).
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V. Provisions Affected by the Final Rule

1005.18 Requirements for Financial Institutions Offering Prepaid 
Accounts

18(b) Pre-Acquisition Disclosure Requirements
18(b)(2) Short Form Disclosure Content
18(b)(2)(ix) Disclosure of Additional Fee Types
    Regulation E Sec.  1005.18(b)(2) describes the short form 
disclosure content requirements for prepaid accounts. Section 
1005.18(b)(2)(ix) contains requirements specifically regarding 
additional fee types. Section

[[Page 18979]]

1005.18(b)(2)(ix)(D) describes the timing requirements for the initial 
assessment of an additional fee types disclosure, and Sec.  
1005.18(b)(2)(ix)(E) describes the timing for the periodic reassessment 
and update of additional fee types disclosures. The Bureau is revising 
the dates in the regulatory text and headings in Sec.  
1005.18(b)(2)(ix)(D)(1) through (3) and in comments 18(b)(2)(ix)(D)(1)-
1, 18(b)(2)(ix)(D)(2)-1, 18(b)(2)(ix)(E)(2)-1.i through iii, and 
18(b)(2)(ix)(E)(3)-1 to reflect the new April 1, 2018 effective date. 
The Bureau is not, however, changing the October 1, 2014 date in Sec.  
1005.18(b)(2)(ix)(D)(1) and related commentary, which is the beginning 
of the time frame for which financial institutions may calculate 
additional fee types to disclose, so as not to inconvenience financial 
institutions that have already prepared their additional fee types 
calculations in reliance on that date.
18(h) Effective Date and Special Transition Rules for Disclosure 
Provisions
    Regulation E Sec.  1005.18(h) sets forth several provisions to make 
clearer the Prepaid Accounts Final Rule's general October 1, 2017 
effective date. The Bureau is revising the dates in the regulatory text 
and headings throughout Sec.  1005.18(h) and in comments 18(h)-1, 2, 
6.i and 6.ii to reflect the new April 1, 2018 effective date.

1005.19 Internet Posting of Prepaid Account Agreements

19(f) Effective Date
19(f)(1) Effective Date
    Regulation E Sec.  1005.19(f)(1) sets forth the general effective 
date for the prepaid account agreement posting requirements in Sec.  
1005.19, other than the delayed requirement to submit prepaid account 
agreements to the Bureau pursuant to Sec.  1005.19(b), as addressed in 
Sec.  1005.19(f)(2). The Bureau is revising the date in the regulatory 
text of Sec.  1005.19(f)(1) to reflect the new April 1, 2018 effective 
date. As discussed above, the Bureau is not delaying the October 1, 
2018 date for submission of agreements to the Bureau.

VI. Effective Date

    The Bureau is delaying the October 1, 2017 effective date of the 
Prepaid Accounts Final Rule by six months, to April 1, 2018. 
Additionally, the Bureau is making conforming amendments to Regulation 
E Sec. Sec.  1005.18(b)(2)(ix) and (h) and 1005.19(f)(1), and related 
commentary, as described above, which will also become effective April 
1, 2018. This final rule with respect to the effective date of the 
Prepaid Accounts Final Rule will become effective 30 days after 
publication in the Federal Register, as required under section 553(d) 
of the Administrative Procedure Act.\15\
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    \15\ 5 U.S.C. 553(d).
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VII. Dodd-Frank Act Section 1022(b) Analysis

    In developing the final rule, the Bureau has considered the 
potential benefits, costs, and impacts required by section 1022(b)(2) 
of the Dodd-Frank Act. Specifically, section 1022(b)(2) calls for the 
Bureau to consider the potential benefits and costs of a regulation to 
consumers and covered persons, including the potential reduction of 
consumer access to consumer financial products or services, the impact 
on depository institutions and credit unions with $10 billion or less 
in total assets as described in section 1026 of the Dodd-Frank Act, and 
the impact on consumers in rural areas. In addition, 12 U.S.C. 
5512(b)(2)(B) directs the Bureau to consult, before and during the 
rulemaking, with appropriate prudential regulators or other Federal 
agencies, regarding consistency with the objectives those agencies 
administer. The Bureau consulted, or offered to consult with, the 
prudential regulators, the Department of the Treasury, the Securities 
and Exchange Commission, and the Federal Trade Commission regarding 
consistency with any prudential, market, or systemic objectives 
administered by these agencies.
    The Bureau previously considered the benefits, costs, and impacts 
of the Prepaid Accounts Final Rule's major provisions.\16\ The Bureau 
also previously considered the benefits, costs, and impacts of delaying 
the effective date in the Effective Date NPRM and solicited comment 
regarding that discussion.\17\ Where comments discuss the benefits or 
costs of delaying the effective date in the context of commenting on 
the merits of the provision, the Bureau has addressed those comments 
above. In this respect, the Bureau's section 1022(b)(2) discussion is 
not limited to the discussion in this part of the final rule.
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    \16\ 81 FR 83934, 84269 (Nov. 22, 2016).
    \17\ 82 FR 13782, 13785 (Mar. 15, 2017).
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    In considering the relevant potential benefits, costs, and impacts, 
the Bureau has applied its knowledge and expertise concerning consumer 
financial markets and information received in response to its request 
for comment. Compared to the baseline established by the Prepaid 
Accounts Final Rule,\18\ the delay of the effective date of the Prepaid 
Accounts Final Rule will generally benefit covered persons by 
facilitating initial compliance with the Prepaid Accounts Final Rule's 
requirements and delaying the start of ongoing compliance costs. 
Because covered persons retain the option of complying with the Prepaid 
Accounts Final Rule's original effective date, any delay in the 
effective date will not increase costs to providers.
---------------------------------------------------------------------------

    \18\ The Bureau has discretion in any rulemaking to choose an 
appropriate scope of analysis with respect to potential benefits, 
costs, and impacts and an appropriate baseline.
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    Consumers may experience both benefits and costs from a delay in 
the effective date. If a delay in the effective date helps to preserve 
consumer access to covered products by minimizing industry disruption, 
both consumers and covered persons will benefit. However, the Bureau 
believes that delaying the effective date may also delay consumers' 
realization of benefits arising from the protections provided by the 
Prepaid Accounts Final Rule, thereby potentially imposing a cost on 
consumers. One think tank commenter stated that, although prepaid 
providers often offer some protections voluntarily, providers may alter 
or remove protections so long as the rule is not in effect. Another 
think tank commenter stated that the primary cost of the delay would be 
that consumers would not have the information needed to make 
appropriate choices among card products. However, the commenter also 
stated that providers have made improvements with respect to disclosure 
recently and that it believed that the risk of consumers not having 
adequate information for decision-making during the intervening period 
was low.
    The Bureau does not expect the final rule to have a differential 
impact on depository institutions and credit unions with $10 billion or 
less in total assets, as described in section 1026 of the Dodd-Frank 
Act, or on consumers in rural areas. The Bureau does not believe that 
the delay in the effective date will reduce consumer access to consumer 
financial products and services, and it may increase consumer access by 
decreasing the possibility of industry disruption arising from the 
Prepaid Accounts Final Rule's implementation.

VIII. Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act \19\ as amended by the Small 
Business Regulatory Enforcement Fairness Act of

[[Page 18980]]

1996 \20\ (RFA) requires each agency to consider the potential impact 
of its regulations on small entities, including small businesses, small 
governmental units, and small not-for-profit organizations.\21\ The RFA 
defines a ``small business'' as a business that meets the size standard 
developed by the Small Business Administration (SBA) pursuant to the 
Small Business Act.\22\
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    \19\ Public Law 96-354, 94 Stat. 1164 (1980).
    \20\ Public Law 104-21, section 241, 110 Stat. 847, 864-65 
(1996).
    \21\ 5 U.S.C. 601 through 612. The term `` `small organization' 
means any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field, unless an agency 
establishes [an alternative definition under notice and comment].'' 
5 U.S.C. 601(4). The term `` `small governmental jurisdiction' means 
governments of cities, counties, towns, townships, villages, school 
districts, or special districts, with a population of less than 
fifty thousand, unless an agency establishes [an alternative 
definition after notice and comment].'' 5 U.S.C. 601(5).
    \22\ 5 U.S.C. 601(3). The Bureau may establish an alternative 
definition after consulting with the SBA and providing an 
opportunity for public comment. Id.
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    The RFA generally requires an agency to conduct an initial 
regulatory flexibility analysis (IRFA) and a final regulatory 
flexibility analysis (FRFA) of any rule subject to notice-and-comment 
rulemaking requirements, unless the agency certifies that the rule 
would not have a significant economic impact on a substantial number of 
small entities.\23\ The Bureau also is subject to certain additional 
procedures under the RFA involving the convening of a panel to consult 
with small entity representatives prior to proposing a rule for which 
an IRFA is required.\24\
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    \23\ 5 U.S.C. 601 through 612.
    \24\ 5 U.S.C. 609.
---------------------------------------------------------------------------

    The undersigned certified that the Effective Date NPRM would not 
have a significant economic impact on a substantial number of small 
entities and that an IRFA was therefore not required. The Bureau 
arrived at this conclusion because the Effective Date NPRM would delay 
the effective date of the Prepaid Accounts Final Rule, which itself 
would not have a significant economic impact on a substantial number of 
small entities.\25\ Upon considering relevant comments, the Bureau's 
conclusion that the rule will not have a significant economic impact on 
a substantial number of small entities is unchanged. Therefore, a FRFA 
is not required.\26\
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    \25\ 81 FR 83934, 84308 (Nov. 22, 2016).
    \26\5 U.S.C. 605(b).
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    As discussed above, this final rule delays the effective date of 
the Prepaid Accounts Final Rule to April 1, 2018. The six-month delay 
in the effective date will benefit small entities by providing 
additional flexibility with respect to the timing of the Prepaid 
Accounts Final Rule's implementation. In addition to generally 
providing increased flexibility, the delay in the effective date will 
permit small entities to delay the commencement of any ongoing costs 
that result from complying with the Prepaid Accounts Final Rule. 
Because small entities retain the option of complying with the Prepaid 
Accounts Final Rule's original effective date, the final rule's delay 
of the effective date will not increase costs incurred by small 
entities relative to the baseline established by the Prepaid Accounts 
Final Rule.
    Accordingly, the undersigned hereby certifies that this final rule 
will not have a significant economic impact on a substantial number of 
small entities.

IX. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA),\27\ Federal 
agencies are generally required to seek Office of Management and Budget 
(OMB) approval for information collection requirements prior to 
implementation. The collections of information related to the Prepaid 
Accounts Final Rule have been previously reviewed and approved by OMB 
in accordance with the PRA and assigned OMB Control Number 3170-0014 
(Regulation E) and 3170-0015 (Regulation Z). Under the PRA, the Bureau 
may not conduct or sponsor and, notwithstanding any other provision of 
law, a person is not required to respond to an information collection 
unless the information collection displays a valid control number 
assigned by OMB.
---------------------------------------------------------------------------

    \27\ 44 U.S.C. 3501 et seq.
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    The Bureau has determined that this final rule will not have any 
new or revised information collection requirements (recordkeeping, 
reporting, or disclosure requirements) on covered entities or members 
of the public that would constitute collections of information 
requiring OMB approval under the PRA.

List of Subjects in 12 CFR Part 1005

    Banking, Banks, Consumer protection, Credit unions, Electronic fund 
transfers, National banks, Remittance transfers, Reporting and 
recordkeeping requirements, Savings Associations.

Authority and Issuance

    For the reasons set forth above, Regulation E, 12 CFR part 1005, as 
amended November 22, 2016, at 81 FR 83934, is further amended as 
follows:

PART 1005--ELECTRONIC FUND TRANSFERS (REGULATION E)

0
1. The authority citation for part 1005 continues to read as follows:

    Authority:  12 U.S.C. 5512, 5581; 15 U.S.C. 1693b. Subpart B is 
also issued under 12 U.S.C. 5601 and 15 U.S.C. 1693o-1.

Subpart A--General


Sec.  1005.18  Requirements for financial institutions offering prepaid 
accounts.

0
2. Section 1005.18 is amended by revising all references to ``October 
1, 2017'' to read ``April 1, 2018'' in paragraphs (b)(2)(ix)(D)(1) 
through (3) and (h).


Sec.  1005.19  Internet posting of prepaid account agreements.

0
3. Section 1005.19 is amended by revising the reference to ``October 1, 
2017'' to read ``April 1, 2018'' in paragraph (f)(1).

0
4. In Supplement I to part 1005:
0
a. Under Section 1005.18--Requirements for Financial Institutions 
Offering Prepaid Accounts:
0
i. In subsection 18(b)(2)(ix)(D)(1) Existing Prepaid Account Programs 
as of October 1, 2017, the subsection heading and paragraph 1 are 
amended by revising all references to ``October 1, 2017'' to read 
``April 1, 2018''.
0
ii. In subsection 18(b)(2)(ix)(D)(2) Existing Prepaid Account Programs 
as of October 1, 2017 with Unavailable Data, the subsection heading and 
paragraph 1 are amended by revising all references to ``October 1, 
2017'' to read ``April 1, 2018''.
0
iii. In subsection 18(b)(2)(ix)(E)(2) Periodic Reassessment, paragraphs 
1.i through iii are amended by:
0
A. Revising all references to ``October 1, 2017'' to read ``April 1, 
2018''.
0
B. Revising all references to ``October 1, 2019'' to read ``April 1, 
2020''.
0
C. Revising the reference to ``January 1, 2020'' to read ``July 1, 
2020''.
0
iv. In subsection 18(b)(2)(ix)(E)(3) Fee Schedule Change, paragraph 1 
is amended by revising the reference to ``October 1, 2017'' to read 
``April 1, 2018''.
0
v. In subsection 18(h) Effective Date and Special Transition Rules for 
Disclosure Provisions, paragraphs 1 and 2 are amended by revising all 
references to ``October 1, 2017'' to read ``April 1, 2018''.
0
vi. In subsection 18(h) Effective Date and Special Transition Rules for 
Disclosure Provisions, paragraph 6 introductory text and paragraph 6.i 
are amended by:
0
A. Revising all references to ``October 1, 2017'' to read ``April 1, 
2018''.

[[Page 18981]]

0
B. Revising the reference to ``November 1, 2017'' to read ``May 1, 
2018''.
0
C. Revising the reference to ``October 1, 2018'' to read ``April 1, 
2019''.
0
D. Revising the reference to ``October 1, 2019'' to read ``April 1, 
2020''.
0
vii. In subsection 18(h) Effective Date and Special Transition Rules 
for Disclosure Provisions, paragraph 6.ii is revised to read as 
follows:

Supplement I to Part 1005--Official Interpretations

* * * * *

Section 1005.18--Requirements for Financial Institutions Offering 
Prepaid Accounts

* * * * *
18(h) Effective Date and Special Transition Rules for Disclosure 
Provisions
* * * * *

0
6. Account information not available on April 1, 2018. * * *
    ii. Summary totals of fees. A financial institution must display a 
summary total of the amount of all fees assessed by the financial 
institution on the consumer's prepaid account for the prior calendar 
month and for the calendar year to date pursuant to Sec.  1005.18(c)(5) 
beginning April 1, 2018. If, on April 1, 2018, the financial 
institution does not have readily accessible the data necessary to 
calculate the summary totals of fees for the prior calendar month or 
the calendar year to date, the financial institution may provide the 
summary totals using the data it has until the financial institution 
has accumulated the data necessary to display the summary totals as 
required by Sec.  1005.18(c)(5). That is, the financial institution 
would first display the monthly fee total beginning on May 1, 2018 for 
the month of April, and the year-to-date fee total beginning on April 
1, 2018, provided the financial institution discloses that it is 
displaying the year-to-date total beginning on April 1, 2018 rather 
than for the entire calendar year 2018. On January 1, 2019, financial 
institutions must begin displaying year-to-date fee totals for calendar 
year 2019.
* * * * *

    Dated: April 19, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-08341 Filed 4-24-17; 8:45 am]
 BILLING CODE 4810-AM-P