82 FR 32762 - Final Format and Summary of Responses to Request for Information Regarding Disclosures for Student Financial Accounts; Announcement of Applicable Dates
DEPARTMENT OF EDUCATION Federal Register Volume 82, Issue 136 (July 18, 2017)
Federal Register Volume 82, Issue 136 (July 18, 2017)
| Page Range | 32762-32766 | |
| FR Document | 2017-15077 |
[Federal Register Volume 82, Number 136 (Tuesday, July 18, 2017)] [Rules and Regulations] [Pages 32762-32766] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-15077] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION 34 CFR Part 668 RIN 1840-AD14 [Docket ID ED-2015-OPE-0020] Final Format and Summary of Responses to Request for Information Regarding Disclosures for Student Financial Accounts; Announcement of Applicable Dates AGENCY: Office of Postsecondary Education, Department of Education. [[Page 32763]] ACTION: Responses to request for information. ----------------------------------------------------------------------- SUMMARY: On May 9, 2017, the Department of Education (Department) published in the Federal Register a Request for Information (RFI) to solicit ideas and information related to the major features and types of commonly assessed fees that postsecondary institutions (institutions) must disclose under Department regulations with regard to each of the institution's Tier 1 (T1) or Tier 2 (T2) arrangements. The Department announces the final format for these disclosures. To allow institutions sufficient time to adopt the final format, if they elect to do so, the Department is allowing additional time--until January 1, 2018--for institutions to comply with the applicable disclosure requirements. DATES: The Department is allowing additional time--until January 1, 2018--for institutions to comply with the requirements in 34 CFR 668.164(d)(4)(i)(B)(2). FOR FURTHER INFORMATION CONTACT: Ashley Higgins, U.S. Department of Education, 400 Maryland Avenue SW., Room 6W234, Washington, DC 20202. Telephone: (202) 453-6097 or by email: [email protected]. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1- 800-877-8339. SUPPLEMENTARY INFORMATION: The Secretary received 10 written responses to the RFI and is using this feedback to announce the final format, content, and update requirements that institutions may choose to follow to satisfy the requirements of Sec. 668.164(d)(4)(i)(B)(2) with respect to the major features and assessed fees associated with their T1 and T2 arrangements. The Secretary thanks the commenters for their suggestions to improve the information presented to students. Furthermore, due to the delay in releasing the final format and update requirements, we are allowing institutions additional time--until January 1, 2018--to comply with the requirements in Sec. 668.164(d)(4)(i)(B)(2). We also remind institutions that the Consumer Financial Protection Bureau's (CFPB's) short-form template was not drafted to implement the Department's cash management regulations; accordingly, institutions using that template should not regard it as authorizing T1 or T2 arrangements that impose any fees otherwise prohibited under Sec. [thinsp]668.164(e) or (f), as applicable. Analysis of Comments and Changes: An analysis of the comments and of any changes to the format, content, and update requirements since publication of the RFI follows. General Comments Comments: Several commenters suggested that the disclosure should read ``ask your school (or school's business office) about other ways to receive federal student aid'' instead of ``ask the financial aid office about other ways to receive your money.'' The commenters indicated that this is because the financial aid office is not responsible for disbursing aid. Discussion: We thank the commenters for noting this distinction. While we do not intend to change the wording of the message on the example disclosure, we note that an institution is free to replace the wording ``the financial aid office'' with more appropriate contact information, as long as the contact information provided corresponds to someone directly employed by the school. Changes: None. Comments: One commenter indicated that simply stating that students have other ways to receive their money at the top of the form is insufficient and that the examples of a paper check and direct deposit should also be included in the example disclosure. The commenter also suggested that more specific contact information for the institution be included in the statement and that the language be bolded. Discussion: We note that, under Sec. 668.164(d)(4)(i)(B)(2), the institution is required to list the major features and commonly assessed fees associated with each T1 and T2 account as part of the selection menu. Section 668.164(d)(4)(i)(A)(2) requires that the student's options for receiving direct payments are described and presented in a clear, fact-based, and neutral manner. Section 668.164(d)(4)(i)(B)(1) requires that institutions must present prominently as the first option, the ability to receive student aid funds via direct deposit to a preexisting financial account belonging to the student. Because all of these items are required to be a part of the selection menu, we believe it is unnecessary to add them to the disclosures. We do not believe that more specific contact information for an institution is necessary, since it is highly likely that the student will be able to find such information on their own once they understand which office they need to speak to within their institution. We also do not believe it is necessary to bold the message at the top of the disclosures because the format makes the relevant information sufficiently clear. Changes: None. Comments: Several commenters expressed concerns that having institutions maintain the account disclosures in their selection menus will be administratively burdensome and instead suggested that it would be less burdensome to simply include a link to the disclosures in the selection menu. One commenter noted that there is a risk that schools will lack the capacity to update their disclosures in a timely manner should the fee schedule change. That same commenter also pointed out that, should students choose to open a bank account through the selection process, they will be directed to a disclosure page during the account-opening process. Discussion: We disagree with the commenter. Under Sec. 668.164(d)(4)(i)(B)(2), an institution must list the major features and commonly assessed fees associated with each T1 and T2 account as part of the selection menu (80 FR 67125, 67160). We believe that this approach is a more effective way of delivering important consumer information at the time a choice is being made, rather than simply including a link to a set of disclosures. Therefore, we require the disclosures to be visible within the selection menu. Changes: None. Comments: One commenter took issue with the phrase ``[y]our funds are/are not eligible for Federal Deposit Insurance Corporation/National Credit Union Administration (FDIC or NCUA) insurance,'' included on the disclosure. The commenter indicated that such a statement is incomplete, and could put institutions and financial account providers at risk since there are limits to FDIC and NCUA coverage, using the example that funds are only insured up to a certain amount and there are certain other limitations. Discussion: We disagree that including a binary indicator of whether an account carries FDIC or NCUA insurance creates risk for either an institution or its partner financial account provider. The extent to which such coverage insures an accountholder's funds is immaterial to whether such coverage exists. In the RFI, we proposed that this statement be included because some types of accounts, especially prepaid accounts, do not have any FDIC or NCUA insurance. We continue to believe that this information is critical for students prior to opening an account and believe its inclusion will not create confusion for students or risk to institutions and financial account providers. However, [[Page 32764]] we are clarifying the disclosure language by replacing the phrase ``funds are/are not'' and with ``account is/is not.'' Changes: We are removing the phrase ``funds are/are not'' from the section of the disclosures addressing FDIC and NCUA insurance and replacing it with ``account is/is not.'' Comments: Several commenters suggested that the Department place more emphasis on overdraft fees, with some asking that overdraft fees be included in the top-line disclosure items. Some commenters also suggested the use of bold font for a proposed top-line overdraft disclosure. One commenter argued that this will help students who may be comparing fees between two programs if a campus offers both T1 and T2 accounts. One commenter also argued that giving more prominence to overdraft fees is important, since data show that students remain particularly vulnerable to incurring overdraft fees. Another commenter suggested that the statement on overdrafts be more expansive, arguing that a more prominent display of these fees will help institutions to compare financial programs in connection with their contracting decisions. Another commenter suggested that the disclosures include a statement that overdraft features are optional on T2 accounts, stating that accountholders who choose overdraft features are more likely to incur high fees. Discussion: In the process of drafting the RFI, we considered including overdraft fees as a top-line disclosure item. However, we determined that it would be unnecessary to include overdraft fees in such a manner because financial account providers under T1 arrangements are unable to charge such fees and because, in the event that they are charged by T2 providers, they would almost certainly be included in the additional two fees listed in the disclosures. However, after reviewing the comments, we are concerned that this approach may result in a disclosure that unintentionally downplays a fee that is not only typically expensive compared to other fees that students may be charged, but can quickly compound itself when an account is in a negative balance. We are persuaded by the comments arguing that overdraft fees should result in a more prominent display on the disclosures. We also agree that such a placement may help students who are comparing two different types of accounts, even if the fee is not charged. However, we decline to add a statement that overdraft features are optional as we believe it may confuse students. We also believe that bold font for the top-line item is unnecessary, given its already prominent placement in the revised disclosure template. Changes: We have added ``overdraft'' fees as a top-line disclosure item. Financial account providers operating under T1 arrangements (and any other account providers that do not charge an overdraft fee) can simply place an ``N/A'' in that box. As a result of this change, we have also removed the language that states ``[y]ou may be offered overdraft features. Fees could apply. *OR* No overdraft/credit feature'' from the disclosures. Comments: A few commenters stated that institutions should also disclose the number and location of surcharge-free ATMs. Discussion: While we thank the commenters for their interest in making sure that students are well informed about their account options, we disagree. The short-form disclosures are meant to be easily understandable by students, and adding the number and locations of each networked ATM is likely to greatly increase the length and complexity of the disclosures. We are also concerned that adding this feature may increase the burden on institutions and financial account providers without a commensurate benefit to students. Changes: None. Comments: One commenter suggested including money transfer or account closing fees associated with a student account, stating that this could disproportionally impact students who are dissatisfied with their accounts. Discussion: The disclosures cannot capture every fee charged by a financial institution, and the fees specifically identified by the commenter have not been a significant source of complaint during or since the rulemaking. However, should any money transfer or account closing fee result in a significant share of revenue for a financial institution, this will be captured in the section listing additional fees. Because of this, we believe that it is unnecessary to add these types of fees to the disclosures. Changes: None. Comments: One commenter suggested removing some of the top-line disclosure items and replacing them with the high-revenue fees listed later in the disclosures, arguing that because some of these fees have been disallowed through regulation, they should not be included in the short-form disclosures. Discussion: We disagree. Leaving fees that have been disallowed by regulation, such as overdraft fees for T1 accounts, in the short-form disclosures allows students to more easily compare T1 and T2 accounts with other bank accounts. Changes: None. Comments: In the RFI, we asked commenters to tell us whether there is a preferred start date for the requirement to include the two additional fee types that generated the highest revenue from account holders during the previous 24 months. One commenter responded that there is no need to delay the disclosure of the high-revenue fees and that financial account providers can furnish this information as soon as they begin using the disclosure template. Discussion: We agree with the commenter. If an institution chooses to use this format, it must include all required elements no later than January 1, 2018 (or earlier at the institution's discretion). Because this was a requirement already proposed as part of the RFI, we are not making any changes as a result of this comment. Changes: None. Comments: One commenter suggested that account providers include the average or median annual cost for students who choose a particular financial account in the disclosures. Discussion: Sections 668.164(e)(2)(vii)(B) and (f)(4)(iv)(B) already provide for the release of the average and median costs incurred by students who choose to use an account offered under a T1 or T2 arrangement. We do not believe that the value of adding this item to the template outweighs the costs of requiring institutions to meet duplicative requirements and of making the template more complicated. Changes: None. Comments: One commenter suggested that the form should include the relationship between the institution and financial account provider. Discussion: Sections 668.164(e)(2)(vi), (e)(2)(vii)(A), (f)(4)(iii)(A), and (f)(4)(iv)(A) already provide for the release of the complete contract between the parties and information regarding the total consideration for the most recently completed award year, monetary and nonmonetary, paid or received by the parties under the terms of the contract. We do not believe that the value of adding this item to the template outweighs the costs of requiring institutions to meet duplicative requirements and of making the template more complicated. Changes: None. Comments: One commenter suggested that we add a statement to the disclosures to clarify that the fee schedule only applies as long as the account holders are enrolled students at [[Page 32765]] the institution at which they initially opened the financial account. Discussion: We thank the commenter for the suggestion. However, the disclosure describes only fees and other information for enrolled students, so we do not believe this additional statement provides necessary information. Changes: None. Comments: Several commenters suggested using the format developed by the Pew Charitable Trusts for bank accounts, while using the proposed format only for prepaid accounts. Commenters argued that since this format has already been widely adopted by banks, it would be easy for institutions to comply with the regulations. Commenters also expressed their belief that the proposed disclosure format is more appropriate for standard checking accounts. One commenter stated that it may be confusing for students if the disclosures use terms common to prepaid cards to describe checking accounts. Discussion: We agree with the commenter that the format developed by the Pew Charitable Trusts may be an appropriate format to use within the student choice menu. Nothing in the format set forth in this document prevents institutions from using these types of disclosures if they wish. However, institutions that choose to use Pew's format must ensure that they comply with the additional specific requirements for accounts offered under T1 and T2 arrangements. For example, under Sec. 668.164(d)(4)(i)(A)(1) schools must include a written statement that students do not have to accept the account and may recommend that students ask about other ways to receive their Federal student aid. Another example is the requirement that, for accounts offered under T1 arrangements, the institution must also state that a student accountholder may access his or her title IV, HEA program funds in whole or in part up to the account balance via domestic withdrawals and transfers free of charge, during the student's entire period of enrollment following the date that such title IV, HEA program funds are deposited or transferred to the financial account, as required under Sec. [thinsp]668.164(e)(2)(v)(C). Changes: None. Comments: Several commenters requested a delay of the deadline for compliance. Suggested dates included December 31, 2017, and January 1, 2018. Discussion: We agree with the commenters that July 1, 2017, is impracticable for institutions to adapt their selection menu to include this format. As a result, the Secretary is allowing additional time-- until January 1, 2018--for institutions to comply with the requirements in Sec. 668.164(d)(4)(i)(B)(2) regarding disclosures of an account's fees and major features. Changes: Institutions now have until January 1, 2018, to include in their selection menu the disclosures regarding major features and fees required by Sec. 668.164(d)(4)(i)(B)(2), whether through use of the disclosure template described in this document or in another manner. Final Format of the Disclosures: The final suggested format of the disclosures is as follows: [GRAPHIC] [TIFF OMITTED] TR18JY17.005 [[Page 32766]] DescriptionThe institution's disclosures must list the following fees: Periodic fees, per purchase fees (including point-of-sale fees), ATM withdrawal fees, cash reload fees, overdraft fees, ATM balance inquiry fees, customer service fees, and inactivity fees. These fees are referred to as ``static fees'' because all institutions using the Secretary's format must list these fees in the disclosures, even if the amount of the fee is zero or the fee relates to a feature that is not offered as part of the specific account. In cases where the amount of any fee could vary, the disclosures must show the highest amount the account provider may charge for that fee, followed by a symbol, such as an asterisk, linked to a statement explaining that the fee could be lower depending on how and where the account is used. The asterisk would be included, for example, if point-of-sale fees differ depending on whether the cardholder is required to provide a PIN or signature. In cases where a static fee is not imposed, the institution may demonstrate that the fee is not applicable by placing ``N/A'' or an equivalent designation in the appropriate field. The disclosures must include the number of fee types the accountholder may be charged under the specific account program, excluding those fees that are either disclosed on the form or in close proximity as described below. The disclosures must also list the two additional fee types, if any, that generated the highest revenue from account holders during the previous 24 months excluding static fees, any purchase price, any activation fees and any fee types that generated less than five percent of the total revenue from accountholders, as well as the amounts of such additional fees. The two additional fee types would be determined for the specific financial account program or across programs with the same fee schedule. Institutions must ensure that the financial account provider reviews their fee revenue periodically and that they assist the institution in updating the disclosures if needed. The disclosures must include statements regarding FDIC/ NCUA insurance and a link to the terms and conditions of the account. The disclosures must include a written statement that students do not have to accept the account offered under a T1 or T2 arrangement and may recommend that students ask about other ways to receive their Federal student aid. In close proximity to the disclosures, though not necessarily within the disclosures, the institution must disclose the financial account provider's name; the name of the account; for T2 accounts, any purchase price for the account (such as a fee for acquiring an access device or a replacement for an access device); and any fee for activating the account. If the financial account is a T1 account, the institution must also use this space to disclose that a student account holder may access his or her title IV, HEA program funds in part and in full up to the account balance via domestic withdrawals and transfers free of charge, during the student's entire period of enrollment following the date that such title IV, HEA program funds are deposited or transferred to the financial account, as required under Sec. [thinsp]668.164(e)(2)(v)(C). We also remind institutions that T1 accounts may not charge fees for opening or activating the financial account or initially receiving or activating an access device, nor for overdrafts or fees assessed on point-of-sale transactions. Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT. Electronic Access to This Document: The official version of this document is the document published in the Federal Register. Free internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site. You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department. Dated: July 13, 2017. Betsy DeVos, Secretary of Education. [FR Doc. 2017-15077 Filed 7-17-17; 8:45 am] BILLING CODE 4000-01-P
![32762 Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Rules and Regulations
evening hours over the course of the D. Federalism and Indian Tribal G. Protest Activities
winter, during which time vessel traffic Government The Coast Guard respects the First
is infrequent. A rule has implications for federalism Amendment rights of protesters.
B. Impact on Small Entities under Executive Order 13132, Protesters are asked to contact the
Federalism, if it has a substantial direct person listed in the FOR FURTHER
The Regulatory Flexibility Act of 1980 effect on the States, on the relationship INFORMATION CONTACT section to
(RFA), 5 U.S.C. 601–612, as amended, between the national government and coordinate protest activities so that your
requires federal agencies to consider the the States, or on the distribution of message can be received without
potential impact of regulations on small power and responsibilities among the jeopardizing the safety or security of
entities during rulemaking. The term various levels of government. We have people, places or vessels.
‘‘small entities’’ comprises small analyzed this rule under that Order and List of Subjects in 33 CFR Part 117
businesses, not-for-profit organizations have determined that it is consistent
that are independently owned and with the fundamental federalism Bridges.
operated and are not dominant in their principles and preemption requirements For the reasons discussed in the
fields, and governmental jurisdictions described in Executive Order 13132. preamble, the Coast Guard amends 33
with populations of less than 50,000. Also, this rule does not have tribal CFR part 117 as follows:
The Coast Guard received no comments implications under Executive Order
13175, Consultation and Coordination PART 117—DRAWBRIDGE
from the Small Business Administration OPERATION REGULATIONS
on this rule. The Coast Guard certifies with Indian Tribal Governments,
under 5 U.S.C. 605(b) that this rule will because it does not have a substantial ■ 1. The authority citation for part 117
not have a significant economic impact direct effect on one or more Indian continues to read as follows:
on a substantial number of small tribes, on the relationship between the
Federal Government and Indian tribes, Authority: 33 U.S.C. 499; 33 CFR 1.05–1;
entities. Department of Homeland Security Delegation
or on the distribution of power and No. 0170.1.
While some owners or operators of responsibilities between the Federal
vessels intending to transit the bridge Government and Indian tribes. ■ 2. Amend § 117.205 by revising
may be small entities, for the reasons paragraph (c) to read as follows:
stated in section V.A above, this rule E. Unfunded Mandates Reform Act
§ 117.205 Connecticut River.
will not have a significant economic The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires * * * * *
impact on any vessel owner or operator. (c) The draw of the Route 82 Bridge,
Under section 213(a) of the Small Federal agencies to assess the effects of
mile 16.8, at East Haddam, shall operate
Business Regulatory Enforcement their discretionary regulatory actions. In
as follows:
Fairness Act of 1996 (Pub. L. 104–121), particular, the Act addresses actions (1) From May 1 through October 31:
we want to assist small entities in that may result in the expenditure by a The draw shall open on signal for
State, local, or tribal government, in the commercial vessels. For recreational
understanding this rule. If the rule
aggregate, or by the private sector of vessels, the draw shall open on signal,
would affect your small business,
$100,000,000 (adjusted for inflation) or except that from 6 a.m. to 8 p.m., the
organization, or governmental
more in any one year. Though this rule draw need open for recreational vessels
jurisdiction and you have questions will not result in such expenditure, we
concerning its provisions or options for on the hour only.
do discuss the effects of this rule (2) From November 1 through April
compliance, please contact the person elsewhere in this preamble.
listed in the FOR FURTHER INFORMATION 30: The draw shall open on signal for all
CONTACT, above. F. Environment vessels, except that from 8 p.m. to 4
a.m., the draw shall open on signal if at
Small businesses may send comments We have analyzed this rule under least six-hours notice is given by calling
on the actions of Federal employees Department of Homeland Security the number posted at the bridge.
who enforce, or otherwise determine Management Directive 023–01 and
Commandant Instruction M16475.l Dated: June 30, 2017.
compliance with, Federal regulations to
(series), which guides the Coast Guard S.D. Poulin,
the Small Business and Agriculture
Regulatory Enforcement Ombudsman in complying with the National Rear Admiral, U.S. Coast Guard, Commander,
Environmental Policy Act of 1969 First Coast Guard District.
and the Regional Small Business
Regulatory Fairness Boards. The (NEPA) (42 U.S.C. 4321–4370f), and [FR Doc. 2017–15055 Filed 7–17–17; 8:45 am]
Ombudsman evaluates these actions have made a preliminary determination BILLING CODE 9110–04–P
annually and rates each agency’s that this action is one of a category of
responsiveness to small business. If you actions which do not individually or
wish to comment on actions by cumulatively have a significant effect on DEPARTMENT OF EDUCATION
the human environment. This rule
employees of the Coast Guard, call 1– 34 CFR Part 668
simply promulgates the operating
888–REG–FAIR (1–888–734–3247). The
regulations or procedures for RIN 1840–AD14
Coast Guard will not retaliate against
drawbridges. Normally such actions are
small entities that question or complain categorically excluded from further [Docket ID ED–2015–OPE–0020]
about this rule or any policy or action review, under figure 2–1, paragraph
pmangrum on DSK3GDR082PROD with RULES
of the Coast Guard. Final Format and Summary of
(32)(e), of the Instruction. A preliminary
Responses to Request for Information
C. Collection of Information Record of Environmental Consideration
Regarding Disclosures for Student
and a Memorandum for the Record are
This rule calls for no new collection Financial Accounts; Announcement of
not required for this rule. We seek any
Applicable Dates
of information under the Paperwork comments or information that may lead
Reduction Act of 1995 (44 U.S.C. 3501– to the discovery of a significant AGENCY: Office of Postsecondary
3520). environmental impact from this rule. Education, Department of Education.
VerDate Sep<11>2014 14:57 Jul 17, 2017 Jkt 241001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\18JYR1.SGM 18JYR1](https://thefederalregister.org/doc/82_FR_32898/page/1.svg)
![Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Rules and Regulations 32763
ACTION:Responses to request for Analysis of Comments and Changes: makes the relevant information
information. An analysis of the comments and of any sufficiently clear.
changes to the format, content, and Changes: None.
SUMMARY: On May 9, 2017, the update requirements since publication Comments: Several commenters
Department of Education (Department) of the RFI follows. expressed concerns that having
published in the Federal Register a institutions maintain the account
Request for Information (RFI) to solicit General Comments disclosures in their selection menus will
ideas and information related to the Comments: Several commenters be administratively burdensome and
major features and types of commonly suggested that the disclosure should instead suggested that it would be less
assessed fees that postsecondary read ‘‘ask your school (or school’s burdensome to simply include a link to
institutions (institutions) must disclose business office) about other ways to the disclosures in the selection menu.
under Department regulations with receive federal student aid’’ instead of One commenter noted that there is a
regard to each of the institution’s Tier 1 ‘‘ask the financial aid office about other risk that schools will lack the capacity
(T1) or Tier 2 (T2) arrangements. The ways to receive your money.’’ The to update their disclosures in a timely
Department announces the final format commenters indicated that this is manner should the fee schedule change.
for these disclosures. To allow because the financial aid office is not That same commenter also pointed out
institutions sufficient time to adopt the responsible for disbursing aid. that, should students choose to open a
final format, if they elect to do so, the Discussion: We thank the commenters bank account through the selection
Department is allowing additional for noting this distinction. While we do process, they will be directed to a
time—until January 1, 2018—for not intend to change the wording of the disclosure page during the account-
institutions to comply with the message on the example disclosure, we opening process.
applicable disclosure requirements. note that an institution is free to replace Discussion: We disagree with the
the wording ‘‘the financial aid office’’ commenter. Under
DATES: The Department is allowing
with more appropriate contact § 668.164(d)(4)(i)(B)(2), an institution
additional time—until January 1, 2018— information, as long as the contact must list the major features and
for institutions to comply with the information provided corresponds to commonly assessed fees associated with
requirements in 34 CFR someone directly employed by the each T1 and T2 account as part of the
668.164(d)(4)(i)(B)(2). school. selection menu (80 FR 67125, 67160).
FOR FURTHER INFORMATION CONTACT: Changes: None. We believe that this approach is a more
Ashley Higgins, U.S. Department of Comments: One commenter indicated effective way of delivering important
Education, 400 Maryland Avenue SW., that simply stating that students have consumer information at the time a
Room 6W234, Washington, DC 20202. other ways to receive their money at the choice is being made, rather than simply
Telephone: (202) 453–6097 or by email: top of the form is insufficient and that including a link to a set of disclosures.
Ashley.Higgins@ed.gov. the examples of a paper check and Therefore, we require the disclosures to
If you use a telecommunications direct deposit should also be included be visible within the selection menu.
device for the deaf (TDD) or a text in the example disclosure. The Changes: None.
telephone (TTY), call the Federal Relay commenter also suggested that more Comments: One commenter took issue
Service (FRS), toll free, at 1–800–877– specific contact information for the with the phrase ‘‘[y]our funds are/are
8339. institution be included in the statement not eligible for Federal Deposit
and that the language be bolded. Insurance Corporation/National Credit
SUPPLEMENTARY INFORMATION: The Discussion: We note that, under Union Administration (FDIC or NCUA)
Secretary received 10 written responses § 668.164(d)(4)(i)(B)(2), the institution is insurance,’’ included on the disclosure.
to the RFI and is using this feedback to required to list the major features and The commenter indicated that such a
announce the final format, content, and commonly assessed fees associated with statement is incomplete, and could put
update requirements that institutions each T1 and T2 account as part of the institutions and financial account
may choose to follow to satisfy the selection menu. Section providers at risk since there are limits
requirements of § 668.164(d)(4)(i)(B)(2) 668.164(d)(4)(i)(A)(2) requires that the to FDIC and NCUA coverage, using the
with respect to the major features and student’s options for receiving direct example that funds are only insured up
assessed fees associated with their T1 payments are described and presented to a certain amount and there are certain
and T2 arrangements. The Secretary in a clear, fact-based, and neutral other limitations.
thanks the commenters for their manner. Section 668.164(d)(4)(i)(B)(1) Discussion: We disagree that
suggestions to improve the information requires that institutions must present including a binary indicator of whether
presented to students. Furthermore, due prominently as the first option, the an account carries FDIC or NCUA
to the delay in releasing the final format ability to receive student aid funds via insurance creates risk for either an
and update requirements, we are direct deposit to a preexisting financial institution or its partner financial
allowing institutions additional time— account belonging to the student. account provider. The extent to which
until January 1, 2018—to comply with Because all of these items are required such coverage insures an
the requirements in to be a part of the selection menu, we accountholder’s funds is immaterial to
§ 668.164(d)(4)(i)(B)(2). believe it is unnecessary to add them to whether such coverage exists. In the
We also remind institutions that the the disclosures. We do not believe that RFI, we proposed that this statement be
Consumer Financial Protection Bureau’s more specific contact information for an included because some types of
(CFPB’s) short-form template was not institution is necessary, since it is accounts, especially prepaid accounts,
pmangrum on DSK3GDR082PROD with RULES
drafted to implement the Department’s highly likely that the student will be do not have any FDIC or NCUA
cash management regulations; able to find such information on their insurance. We continue to believe that
accordingly, institutions using that own once they understand which office this information is critical for students
template should not regard it as they need to speak to within their prior to opening an account and believe
authorizing T1 or T2 arrangements that institution. We also do not believe it is its inclusion will not create confusion
impose any fees otherwise prohibited necessary to bold the message at the top for students or risk to institutions and
under § 668.164(e) or (f), as applicable. of the disclosures because the format financial account providers. However,
VerDate Sep<11>2014 14:57 Jul 17, 2017 Jkt 241001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\18JYR1.SGM 18JYR1](https://thefederalregister.org/doc/82_FR_32898/page/2.svg)
![32764 Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Rules and Regulations
we are clarifying the disclosure may confuse students. We also believe students to more easily compare T1 and
language by replacing the phrase ‘‘funds that bold font for the top-line item is T2 accounts with other bank accounts.
are/are not’’ and with ‘‘account is/is unnecessary, given its already Changes: None.
not.’’ prominent placement in the revised Comments: In the RFI, we asked
Changes: We are removing the phrase disclosure template. commenters to tell us whether there is
‘‘funds are/are not’’ from the section of Changes: We have added ‘‘overdraft’’ a preferred start date for the requirement
the disclosures addressing FDIC and fees as a top-line disclosure item. to include the two additional fee types
NCUA insurance and replacing it with Financial account providers operating that generated the highest revenue from
‘‘account is/is not.’’ under T1 arrangements (and any other account holders during the previous 24
Comments: Several commenters account providers that do not charge an months. One commenter responded that
suggested that the Department place overdraft fee) can simply place an ‘‘N/ there is no need to delay the disclosure
more emphasis on overdraft fees, with A’’ in that box. As a result of this of the high-revenue fees and that
some asking that overdraft fees be change, we have also removed the financial account providers can furnish
included in the top-line disclosure language that states ‘‘[y]ou may be this information as soon as they begin
items. Some commenters also suggested offered overdraft features. Fees could using the disclosure template.
the use of bold font for a proposed top- apply. *OR* No overdraft/credit Discussion: We agree with the
line overdraft disclosure. One feature’’ from the disclosures. commenter. If an institution chooses to
commenter argued that this will help Comments: A few commenters stated use this format, it must include all
students who may be comparing fees that institutions should also disclose the required elements no later than January
between two programs if a campus number and location of surcharge-free 1, 2018 (or earlier at the institution’s
offers both T1 and T2 accounts. One ATMs. discretion). Because this was a
commenter also argued that giving more Discussion: While we thank the requirement already proposed as part of
prominence to overdraft fees is commenters for their interest in making the RFI, we are not making any changes
important, since data show that students sure that students are well informed as a result of this comment.
remain particularly vulnerable to about their account options, we Changes: None.
incurring overdraft fees. Another disagree. The short-form disclosures are Comments: One commenter suggested
commenter suggested that the statement meant to be easily understandable by that account providers include the
on overdrafts be more expansive, students, and adding the number and average or median annual cost for
arguing that a more prominent display locations of each networked ATM is students who choose a particular
of these fees will help institutions to likely to greatly increase the length and financial account in the disclosures.
compare financial programs in complexity of the disclosures. We are
connection with their contracting Discussion: Sections
also concerned that adding this feature 668.164(e)(2)(vii)(B) and (f)(4)(iv)(B)
decisions. Another commenter may increase the burden on institutions
suggested that the disclosures include a already provide for the release of the
and financial account providers without average and median costs incurred by
statement that overdraft features are a commensurate benefit to students.
optional on T2 accounts, stating that students who choose to use an account
Changes: None.
accountholders who choose overdraft Comments: One commenter suggested offered under a T1 or T2 arrangement.
features are more likely to incur high including money transfer or account We do not believe that the value of
fees. closing fees associated with a student adding this item to the template
Discussion: In the process of drafting account, stating that this could outweighs the costs of requiring
the RFI, we considered including disproportionally impact students who institutions to meet duplicative
overdraft fees as a top-line disclosure are dissatisfied with their accounts. requirements and of making the
item. However, we determined that it Discussion: The disclosures cannot template more complicated.
would be unnecessary to include capture every fee charged by a financial Changes: None.
overdraft fees in such a manner because institution, and the fees specifically Comments: One commenter suggested
financial account providers under T1 identified by the commenter have not that the form should include the
arrangements are unable to charge such been a significant source of complaint relationship between the institution and
fees and because, in the event that they during or since the rulemaking. financial account provider.
are charged by T2 providers, they would However, should any money transfer or Discussion: Sections 668.164(e)(2)(vi),
almost certainly be included in the account closing fee result in a (e)(2)(vii)(A), (f)(4)(iii)(A), and
additional two fees listed in the significant share of revenue for a (f)(4)(iv)(A) already provide for the
disclosures. However, after reviewing financial institution, this will be release of the complete contract between
the comments, we are concerned that captured in the section listing the parties and information regarding
this approach may result in a disclosure additional fees. Because of this, we the total consideration for the most
that unintentionally downplays a fee believe that it is unnecessary to add recently completed award year,
that is not only typically expensive these types of fees to the disclosures. monetary and nonmonetary, paid or
compared to other fees that students Changes: None. received by the parties under the terms
may be charged, but can quickly Comments: One commenter suggested of the contract. We do not believe that
compound itself when an account is in removing some of the top-line the value of adding this item to the
a negative balance. We are persuaded by disclosure items and replacing them template outweighs the costs of
the comments arguing that overdraft with the high-revenue fees listed later in requiring institutions to meet
fees should result in a more prominent the disclosures, arguing that because duplicative requirements and of making
pmangrum on DSK3GDR082PROD with RULES
display on the disclosures. We also some of these fees have been disallowed the template more complicated.
agree that such a placement may help through regulation, they should not be Changes: None.
students who are comparing two included in the short-form disclosures. Comments: One commenter suggested
different types of accounts, even if the Discussion: We disagree. Leaving fees that we add a statement to the
fee is not charged. However, we decline that have been disallowed by regulation, disclosures to clarify that the fee
to add a statement that overdraft such as overdraft fees for T1 accounts, schedule only applies as long as the
features are optional as we believe it in the short-form disclosures allows account holders are enrolled students at
VerDate Sep<11>2014 14:57 Jul 17, 2017 Jkt 241001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\18JYR1.SGM 18JYR1](https://thefederalregister.org/doc/82_FR_32898/page/3.svg)
![32766 Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Rules and Regulations
Description • In close proximity to the POSTAL SERVICE
disclosures, though not necessarily
• The institution’s disclosures must 39 CFR Part 265
within the disclosures, the institution
list the following fees: Periodic fees, per
purchase fees (including point-of-sale must disclose the financial account
Production or Disclosure of Material or
fees), ATM withdrawal fees, cash reload provider’s name; the name of the
Information; Adding the Definition of a
fees, overdraft fees, ATM balance account; for T2 accounts, any purchase
Record and Clarifying Language
inquiry fees, customer service fees, and price for the account (such as a fee for
Concerning the Timing of Responses
inactivity fees. These fees are referred to acquiring an access device or a to Requests and Specific Categories of
as ‘‘static fees’’ because all institutions replacement for an access device); and Records
using the Secretary’s format must list any fee for activating the account. If the
these fees in the disclosures, even if the financial account is a T1 account, the AGENCY: Postal ServiceTM.
amount of the fee is zero or the fee institution must also use this space to ACTION: Final rule.
relates to a feature that is not offered as disclose that a student account holder
SUMMARY: The Postal Service is adding
part of the specific account. In cases may access his or her title IV, HEA
the definition of a record to its
where the amount of any fee could vary, program funds in part and in full up to
regulations concerning the Freedom of
the disclosures must show the highest the account balance via domestic Information Act. The Postal Service is
amount the account provider may withdrawals and transfers free of charge, deleting language in order to clarify the
charge for that fee, followed by a during the student’s entire period of timing of responses to requests. The
symbol, such as an asterisk, linked to a enrollment following the date that such Postal Service is also adding two words
statement explaining that the fee could title IV, HEA program funds are to two provisions in its Freedom of
be lower depending on how and where deposited or transferred to the financial Information Act regulations concerning
the account is used. The asterisk would account, as required under special categories of records, for
be included, for example, if point-of- § 668.164(e)(2)(v)(C). We also remind clarification purposes.
sale fees differ depending on whether institutions that T1 accounts may not DATES: Effective date: July 18, 2017.
the cardholder is required to provide a charge fees for opening or activating the
PIN or signature. In cases where a static FOR FURTHER INFORMATION CONTACT:
financial account or initially receiving Natalie A. Bonanno, Chief Counsel,
fee is not imposed, the institution may
or activating an access device, nor for Federal Compliance,
demonstrate that the fee is not
overdrafts or fees assessed on point-of- natalie.a.bonanno@usps.gov, 202–268–
applicable by placing ‘‘N/A’’ or an
equivalent designation in the sale transactions. 2944.
appropriate field. Accessible Format: Individuals with SUPPLEMENTARY INFORMATION: On
• The disclosures must include the disabilities can obtain this document in November 30, 2016 (81 FR 86270), the
number of fee types the accountholder an accessible format (e.g., braille, large Postal Service published its revised
may be charged under the specific print, audiotape, or compact disc) on Freedom of Information Act (FOIA)
account program, excluding those fees request to the program contact person regulations to comply with the FOIA
that are either disclosed on the form or listed under FOR FURTHER INFORMATION Improvement Act of 2016 (FOIAIA),
in close proximity as described below. CONTACT. effective December 27, 2016. In
• The disclosures must also list the Electronic Access to This Document: response to public comments, the Postal
two additional fee types, if any, that The official version of this document is Service published an additional change
generated the highest revenue from to these regulations on January 10, 2017
the document published in the Federal
account holders during the previous 24 (82 FR 2896). After further review, the
Register. Free internet access to the
months excluding static fees, any Postal Service published miscellaneous
official edition of the Federal Register technical corrections to its regulations
purchase price, any activation fees and and the Code of Federal Regulations is
any fee types that generated less than on March 8, 2017 (82 FR 12921). The
available via the Federal Digital System Postal Service is now adding a record
five percent of the total revenue from at: www.gpo.gov/fdsys. At this site you
accountholders, as well as the amounts definition, deleting language from the
can view this document, as well as all timing of responses to requests, and
of such additional fees. The two
other documents of this Department adding two words to two provisions in
additional fee types would be
published in the Federal Register, in its Freedom of Information Act
determined for the specific financial
account program or across programs text or Portable Document Format regulations concerning records relating
with the same fee schedule. Institutions (PDF). To use PDF you must have to specifically identified customers, for
must ensure that the financial account Adobe Acrobat Reader, which is clarification purposes.
provider reviews their fee revenue available free at the site.
List of Subjects in 39 CFR Part 265
periodically and that they assist the You may also access documents of the
institution in updating the disclosures if Administrative practice and
Department published in the Federal
needed. procedure, Courts, Freedom of
Register by using the article search
information, Government employees.
• The disclosures must include feature at: www.federalregister.gov.
For the reasons stated in the
statements regarding FDIC/NCUA Specifically, through the advanced
preamble, the Postal Service amends 39
insurance and a link to the terms and search feature at this site, you can limit
CFR chapter I as follows:
conditions of the account. your search to documents published by
pmangrum on DSK3GDR082PROD with RULES
• The disclosures must include a the Department. PART 265—[AMENDED]
written statement that students do not Dated: July 13, 2017.
have to accept the account offered under ■ 1. The authority citation for 39 CFR
Betsy DeVos, part 265 continues to read as follows:
a T1 or T2 arrangement and may
recommend that students ask about Secretary of Education.
Authority: 5 U.S.C. 552; 5 U.S.C. App. 3;
other ways to receive their Federal [FR Doc. 2017–15077 Filed 7–17–17; 8:45 am] 39 U.S.C. 401, 403, 410, 1001, 2601; Pub. L.
student aid. BILLING CODE 4000–01–P 114–185.
VerDate Sep<11>2014 14:57 Jul 17, 2017 Jkt 241001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\18JYR1.SGM 18JYR1](https://thefederalregister.org/doc/82_FR_32898/page/5.svg)
Document Created: 2018-10-24 11:24:34
Document Modified: 2018-10-24 11:24:34
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Responses to request for information. | |
| Dates | The Department is allowing additional time--until January 1, 2018--for institutions to comply with the requirements in 34 CFR 668.164(d)(4)(i)(B)(2). | |
| Contact | Ashley Higgins, U.S. Department of Education, 400 Maryland Avenue SW., Room 6W234, Washington, DC 20202. Telephone: (202) 453-6097 or by email: [email protected] | |
| FR Citation | 82 FR 32762 | |
| RIN Number | 1840-AD14 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR