[Federal Register: August 26, 2008 (Volume 73, Number 166)]
[
Notices]               
[Page 50400-50402]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au08-125]                         

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DEPARTMENT OF THE TREASURY



Office of the Comptroller of the Currency



 
Proposed Information Collection; Comment Request



AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.



ACTION: Notice and request for comment.



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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 

and respondent burden, invites the general public and other Federal 

agencies to take this opportunity to comment on a continuing 

information collection, as required by the Paperwork Reduction Act of 

1995. Currently, the OCC is soliciting comment concerning its 

extension, without change, of an information collection titled ``Debt 

Cancellation Contracts and Debt Suspension Agreements--12 CFR 37.''



DATES: You should submit written comments by: October 27, 2008.



ADDRESSES: Communications Division, Office of the Comptroller of the 

Currency, Public Information Room, Mail Stop 1-5, Attention: 1557-0224, 

250 E Street, SW., Washington, DC 20219. In addition, comments may be 

sent by fax to (202) 874-4448, or by electronic mail to 

regs.comments@occ.treas.gov. You may personally inspect and photocopy 

comments at the OCC's Public Information Room, 250 E Street, SW., 

Washington, DC. For security reasons, the OCC requires that visitors 

make an appointment to inspect comments. You may do so by calling (202) 

874-5043. Upon arrival, visitors will be required to present valid 

government-issued photo identification and submit to security screening 

in order to inspect and photocopy comments.

    Additionally, you should send a copy of your comments to OCC Desk 

Officer, 1557-0224, by mail to U.S. Office of Management and Budget, 

725 17th Street, NW., 10235, Washington, DC 20503, or by fax 

to (202) 395-6974.



FOR FURTHER INFORMATION CONTACT: You can request additional information 

or a copy of the collection from Mary Gottlieb, (202) 874-5090, 

Legislative and Regulatory Activities Division (1557-0202), Office of 

the Comptroller of the Currency, 250 E Street, SW., Washington, DC 

20219.



SUPPLEMENTARY INFORMATION: 

    The OCC is proposing to extend OMB approval of the following 

information collection:

    Title: Debt Cancellation Contracts and Debt Suspension Agreements.

    OMB Number: 1557-0224.



[[Page 50401]]



    Description: This submission covers an existing regulation and 

involves no change to the regulation or the information collection. The 

OCC requests that OMB approve its revised estimates and renew its 

approval of the information collection. The estimates have been revised 

to reflect the current number of national banks.

    The regulation requires national banks to disclose information 

about a Debt Cancellation Contract (DCC) or Debt Suspension Agreement 

(DSA). The short form disclosure is usually made orally and is issued 

at the time the bank firsts solicits the purchase of a contract. The 

long form disclosure is usually made in writing and is issued before 

the customer completes the purchase of the contract. There are special 

rules for transactions by telephone, solicitations using written mail 

inserts or ``take one'' applications, and electronic transactions. Part 

37 provides two forms of disclosure that serve as models for satisfying 

the requirements of the rule. Use of the forms is not mandatory. A bank 

may adjust the form and wording of its disclosures so long as the 

requirements of the regulation are met.

    12 U.S.C. 24 (Seventh) authorizes national banks to enter into DCCs 

and DSAs. The requirements of part 37 enhance consumer protections for 

customers who buy DCCs and DSAs from national banks and ensure that 

national banks provide these products on a safe and sound basis by 

requiring them to effectively manage their risk exposure.



Section 37.6



    Section 37.6 requires a bank to provide the following disclosures, 

as appropriate:

     Anti-tying--A bank must inform the customer that purchase 

of the product is optional and neither its decision whether to approve 

the loan nor the terms and conditions of the loan are conditioned on 

the purchase of a DCC or DSA.

     Explanation of debt suspension agreement--A bank must 

disclose that if a customer activates the agreement, the customer's 

duty to pay the loan principal and interest is only suspended and the 

customer must fully repay the loan after the period of suspension has 

expired.

     Amount of the fee--A bank must make disclosures regarding 

the amount of the fee. The disclosure must differ depending on whether 

the credit is open-end or closed-end. In the case of closed-end credit, 

the bank must disclose the total fee. In the case of open-end credit, 

the bank must either disclose that the periodic fee is based on the 

account balance multiplied by a unit cost and provide the unit cost, or 

disclose the formula used to compute the fee.

     Lump sum payment of fee--A bank must disclose, where 

appropriate, that a customer has the option to pay the fee in a single 

payment or in periodic payments. This disclosure is not appropriate in 

the case of a DCC or DSA provided in connection with a home mortgage 

loan since the option to pay the fee in a single payment is not 

available in that case. Banks are also required to disclose that adding 

the fee to the amount borrowed will increase the cost of the contract.

     Lump sum payment of fee with no refund--A bank must 

disclose that the customer has the option to choose a contract with or 

without a refund provision. This disclosure also states that prices of 

refund and no-refund products are likely to differ.

     Refund of fee paid in lump sum--If a bank permits a 

customer to pay the fee in a single payment and to add the fee to the 

amount borrowed, the bank must disclose the bank's cancellation policy. 

The disclosure informs the customer that the DCC or DSA may be canceled 

at any time for a refund, within a specified number of days for a full 

refund, or at any time with no refund.

     Whether use of credit line is restricted--A bank must 

inform a customer if the customer's activation of the contract would 

prohibit the customer from incurring additional charges or using the 

credit line.

     Termination of a DCC or DSA--A bank must explain the 

circumstances under which a customer or the bank could terminate the 

contract if termination is permitted during the life of the loan.

     Additional disclosures--A bank must inform consumers that 

it will provide additional information before the customer is required 

to pay for the product.

     Eligibility requirements, conditions, and exclusions--A 

bank must describe any material limitations relating to the DCC or DSA.

    The content of the short and long form may vary, depending on 

whether a bank elects to provide a summary of the conditions and 

exclusions in the long form disclosures or refer the customer to the 

pertinent paragraphs in the contract. The short form requires a bank to 

instruct the customer to read carefully both the long form disclosures 

and the contract for a full explanation of the terms of the contract. 

The long form gives a bank the option of either separately summarizing 

the limitations or advising the customer that a complete explanation of 

the eligibility requirements, conditions, and exclusions is available 

in the contract and identifying the paragraphs where a customer may 

find that information.



Section 37.7



    Section 37.7 requires a bank to obtain a customer's written 

affirmative election to purchase a contract and written acknowledgment 

of receipt of the disclosures required by Sec.  37.6. If the sale of 

the contract occurs by telephone, the customer's affirmative election 

to purchase and acknowledgment of receipt of the required short form 

may be made orally, provided the bank maintains certain documentation.

    If the contract is solicited through written materials such as mail 

inserts or ``take one'' applications and the bank provides only the 

short form disclosures in the written materials, then the bank shall 

mail the acknowledgment, together with the long form disclosures, to 

the customer. The bank may not obligate the customer to pay for the 

contract until after the bank has received the customer's written 

acknowledgment of receipt of disclosures unless the bank maintains 

certain documentation. The affirmative election and acknowledgment may 

also be made electronically.

    Type of Review: Regular.

    Affected Public: Businesses or other for-profit.

    Number of Respondents: 1,800.

    Total Annual Responses: 1,800.

    Frequency of Response: On occasion.

    Total Annual Burden Hours: 43,200.

    Comments submitted in response to this notice will be summarized 

and included in the request for OMB approval. All comments will become 

a matter of public record. Comments are invited on:

    (a) Whether the collection of information is necessary for the 

proper performance of the functions of the agency, including whether 

the information shall have practical utility;

    (b) The accuracy of the agency's estimate of the burden of the 

collection of information;

    (c) Ways to enhance the quality, utility, and clarity of the 

information to be collected;

    (d) Ways to minimize the burden of the collection on respondents, 

including through the use of automated collection techniques or other 

forms of information technology; and

    (e) Estimates of capital or startup costs and costs of operation, 

maintenance, and purchase of services to provide information.





[[Page 50402]]





    Dated: August 15, 2008.

Michele Meyer,

Assistant Director, Legislative & Regulatory Activities Division.

 [FR Doc. E8-19452 Filed 8-25-08; 8:45 am]

BILLING CODE 4810-33-P