Alert August 19, 2008

FRB Proposes Changes to Regulation S

The FRB proposed changes (the “Proposed Amendments”) to Subpart A of Regulation S (12 CFR Part 219, issued under Section 1115 of the Right to Financial Privacy Act) which sets the rates at which government agencies must reimburse financial institutions for costs incurred in producing customer financial records.  Regulation S has not been updated since 1996, when document productions were generally made on paper.  The FRB said that the Proposed Amendments are intended to encourage electronic document production by eliminating the $.25 per page fee for printing electronically-stored information (other than if the governmental agency specifically requires a paper copy or if the original records are available only in paper form).  The Proposed Amendments also increase the fees that financial institutions may charge for the time of personnel needed to research and process document requests.  The Proposed Amendments include use of an automated mechanism for periodically updating labor rates in Regulation S based on changes in Bureau of Labor Statistics survey data.  Comments on the Proposed Amendments are due by September 29, 2008.