May 24, 2004 News Archive

Board Seeks Comments for Study on Prescreened Solicitations for Credit or Insurance
The Board, as part of a study required by the Fair and Accurate Credit Transaction Act of 2003 (FACT Act), is seeking input from the public on prescreened solicitations for credit or insurance. This phase of the study will focus on the ability of consumers to avoid receiving unsolicited offers of credit or insurance, and the potential impact of implementing additional restrictions on providing consumers with prescreened solicitations.

Comments are due by July 23, 2004.

Board Requests Comment on Adequacy of Debit Card Fee Disclosures
Per a request from members of the Senate Banking, Housing, and Urban Affairs Committee, the Board is conducting a study on debit card fees. Committee members are concerned that consumers might be unaware, or inadequately informed, of the fees their financial institutions may impose when customers elect to use a PIN, rather than a signature, to authorize point-of-sale transactions.

As part of the study, the Board is solicitating comments from the public as to whether the existing debit card fees disclosures provide enough information for the consumer to understand the fees associated with using a PIN during a point-of-sale transaction. In addition, the Board is seeking input on the need for, and potential benefits of, requiring additional disclosures on periodic statements to reflect such debit card fees.

Comments are due by July 23, 2004.

GAO Final Report Released on Business-Owned Life Insurance
The Government Accounting Office (GAO) recently released its report to Congress on Business-Owned Life Insurance. GAO prepared the report because legislators had expressed concerns about the ability of employers to receive tax-favored treatment from insuring their employees' lives.

GAO was asked to discuss: 1) the prevalence and use of business-owned life insurance; 2) federal and state regulation and oversight of these policies; and 3) the potential usefulness of and costs associated with obtaining more comprehensive data on business-owned life insurance.

GAO reports that the federal bank regulators had reviewed the holdings of institutions with significant amounts of business-owned life insurance against their guidelines and concluded that no major supervisory concerns exist. See pages 25-27 for information on how the Federal Reserve responded to GAO's request for information.

GAO ultimately concluded that more data could be useful for Congress in making tax policy decisions and that Congress may wish to consider having SEC, Treasury or NAIC collect the data from businesses or insurance companies.