(a) Each participant shall pay for his deposit and subsequent payments comprising the charter participant's tariff fare only by check or money order payable to such bank which shall maintain a separate accounting for each flight: Provided, however, That if the participant makes a cash deposit, the charter operator who receives such cash deposit shall forthwith remit to the designated bank a check for the full amount of the deposit;

(b) The bank shall not pay the air carrier or foreign air carrier the charter price for the transportation earlier than 60 days (including day of departure) prior to the scheduled day of departure of the originating or returning flight, upon certification of the departure date and price by the charter operator;

(c) The bank shall reimburse the charter operator for refunds made by the latter to the participants upon written notification from the charter operator;

(d) If the charter operator notifies the bank that a flight has been canceled, the bank shall make the applicable refunds directly to the participants;

(e) Except as provided in item (c) of this subdivision, the bank shall not pay any funds from the account to the charter operator prior to 2 banking days after completion of each flight when the balance in the account shall be paid to the charter operator upon certification of the completion date by the charter operator and direct air carrier;

Notwithstanding any provisions above, the amount of total cash deposits required to be maintained in the depository account of the bank may be reduced by one or both of the following: The amount of surety bond in the form prescribed herein in excess of the minimum bond required by paragraph (a)(2)(i) of this section; an escrow with the designated bank of Federal, State, or municipal bonds or other securities, consisting of certificates of deposit issued by banks having a stated policy of redeeming such certificates before maturity at the request of the holder (subject only to such interest penalties or other conditions as may be required

by law), or negotiable securities which are publicly traded on a securities exchange, all such securities to be made payable to the escrow account: Provided, That such other securities shall be substituted in an amount no greater than 80 percent of the total market value of the escrow account at the time of such substitution: And provided, further, That should the market value of such other securities subsequently decrease, from time to time, then additional cash or securities qualified for investment hereunder shall promptly be added to the escrow account, in an amount equal to the amount of such decreased value; or (3) The charter operator shall:

(i) Furnish and file with the Board a surety bond in the amount of $100,000 for the protection of the charter participants: Provided, however, That the liability of the surety to any charter participant shall not exceed the charter operator's applicable tariff fare; and

(ii) Enter into an agreement with a bank, the terms of which shall include the following:

(a) Whenever the gross amount of customers' deposits exceeds 25 percent of the charter operator's net worth, as computed under generally accepted accounting principles, the charter operator shall, on or before the 30th day of the succeeding month, place in escrow or in trust with the bank cash in an amount at least equal to the amount by which such deposits exceed 25 percent of its net worth: Provided, That negotiable securities may be substituted for cash, but the market value thereof shall at all times be not less than the amount of cash for which they are substituted;

(b) The escrow agreement or the trust agreement between the bank and the operator shall not be effective until approved by the Board. Claims against the escrow or trust may be made only with respect to the nonperformance of air transportation.

(b) As used in this section, the term "bank" means a bank, savings and loan association, or other financial institution insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.

(c) Any bond furnished under this section shall insure the financial responsibility of the charter operator and the supplying of the air transportation in accordance with the contract between the charter operator and the charter participants, and shall be in the form set forth as Appendix B1 attached to this Part 372. Such bond shall be issued by a bonding or surety company (1) whose surety bonds are accepted by the Interstate Commerce Commission under 49 CFR 1084.6; or (2) which is listed in Best's Insurance Reports (fire and casualty) with a general policyholders' rating of "A" or better. The bonding or surety company shall be one legally authorized to issue bonds of that type in the State in which the charter originates or in which the charter operator is incorporated. For purposes of this section, the term "State" includes any territory or possession of the United States, or the District of Columbia. The bond shall be specifically identified by the issuing surety with a company bond numbering system so that the Board may identify the bond with the specific charter or charters to which it relates: Provided, however, That these data may be set forth in an addendum attached to the bond which addendum must be signed by the charter operator and the surety company. It shall be effective on or before the date the operating authorization becomes effective. If the bond does not comply with the requirements of this section, or for any reason fails to provide satisfactory or adequate protection for the public, the Board will notify the direct air carrier and the charter operator, by registered or certified mail, stating the deficiencies of the bond. Unless such deficiencies are corrected within the time set forth in such notification, the subject charters shall in no event be operated.

(d) Any bond furnished under this section shall provide that unless the charter participant files a claim with the charter operator, or, if he is unavailable, with the surety, within sixty (60) days after termination of the charter, the surety shall be released

'Appendix B, filed as part of original document.

from all liability under the bond to such charter participant. The contract between the charter operator and the charter participants shall contain notice of this provision.

(Secs. 101(3), 204(a), 401, and 402 of the Federal Aviation Act of 1958, as amended, 72 Stat. 737, 743, 754, and 757, as amended, 49 U.S.C. 1301, 1324, 1371 and 1372)

[SPR-54, 37 FR 11163, June 3, 1972, as amended by SPR-60, 37 FR 19122, Sept. 19, 1972; SPR-63, 37 FR 22849, Oct. 26, 1972; SPR-95, 40 FR 52355, Nov. 10, 1975]

2Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device, a material fact, or makes any false, fictitious, or fraudulent statements or representations, or makes or uses any false writing of document knowing the same to contain any false, fictitious, or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than 5 years, or both. Title 18, U.S.C. sec. 1001.

tion of the charter or series of charters true copies of the following documents at its principal or general office in the United States:

(1) All documents which evidence or reflect deposits made by, and refunds made to, each charter participant;

(2) All statements, invoices, bills, and receipts from suppliers or furnishers of goods and services in connection with the charter or series of charters.

(b) Every charter operator shall make the documents listed in this section available upon request by an authorized representative of the Board and shall permit such representative to make such notes and copies thereof as he deems appropriate.

Subpart D-Operating Authorization

§ 372.30 Application.

(a) Application form. Any person desiring to operate as an overseas military personnel charter operator may apply to the Board for an appropriate operating authorization. Such an applicant shall execute in duplicate an "Application for Operating Authorization as an Overseas Military Personnel Charter Operator" (CAB Form 372). The application shall be certified by a responsible official of such person and shall contain the following information:3 (1) Date; (2) name of applicant, trade names, and name in which authorization is to be issued; (3) address of principal office and mailing address; (4) form of organization (i.e., corporation, partnership, etc.), State under whose laws company is authorized to operate and date company was formed; (5) a list containing the names of each officer, director, partner, owner, or member of applicant, and holder of more than 5 percent of outstanding stock if a corporation, or owner of more than a 5-percent interest if other than a corporation; an in

3 NOTE: Any person who claims to have been engaged in operations as an overseas military personnel charter operator on Aug. 27, 1971, and who has filed an application within 45 days after the effective date of this part shall also include certification as to the periods during which it has been continuously engaged in such operations. (See § 372.20.)

dication as to whether or not 75 percent or more of the voting interest is owned or controlled by citizens of the United States or one of its possessions; if more than 5 percent of applicant's stock is held by a corporation, an indication must be made as to whether or not 75 percent or more of the voting interest in such corporation is owned or controlled by citizens of the United States or one of its possessions; (6) a description of current business activities and of former business experience in, or related to, the transportation field; (7) description of operating authority granted applicant by agencies of the U.S. Government (such as customs broker, surface or air freight forwarder, motor carrier, ocean freight forwarder, etc.), and, if applicable, reasons for revocation or other termination; (8) list of names of the officers, owners, etc., of applicants who have at any time applied for any type of authority or registration from the Civil Aeronautics Board and, if applicable, reasons for revocation or other termination; (9) list of officers, owners, etc., of applicant who have at any time been employed by or associated with any air carrier authorized to operate by the Civil Aeronautics Board indicating dates of employment and capacity in which employed; (10) any additional information in support of application; (11) balance sheet as of a date not more than 3 months prior to application and profit and loss statement for the full year ending as of date of balance sheet; (12) brief account of any arrangement by which applicant will have available financial sources and facilities of other companies or individuals; (13) the charter operator's surety bond and, where applicable, a copy of the depository, escrow or trust agreement with a bank as provided in § 372.24.4

(b) Additional information. The applicant shall also submit such other additional information pertinent to its

4 The surety bond and, where applicable, a copy of the depository escrow, or trust agreement with the bank should not be filed with the Board until the applicant is notified by the Board to do so. See instructions to CAB Form 372, Appendix A, filed as part of the original document.

(a) If, after the filing of an application for an operating authorization, it appears that the applicant is capable of performing the air transportation authorized by this part as an overseas military personnel charter operator and of conforming to the provisions of the Act and all rules and requirements thereunder, and that the conduct of such operations by the applicant will not be inconsistent with the public interest, the applicant will be notified by letter. Such notification will advise the applicant that, upon the filing of a valid tariff pursuant to § 372.25, an operating authorization will be issued to the applicant.

(b) If, after the filing of an application for an operating authorization, it appears that the applicant has not made a due showing of capability or that the conduct of operations by the applicant might otherwise be inconsistent with the public interest, the Board shall by letter notify the applicant of its findings to that effect. The Board may dismiss any such application unless within 30 days of the date of the mailing of such letter, the applicant has in writing requested reconsideration and submitted such additional information as it believes will make the necessary showing, or requested that the application be assigned for hearing, in which case the applicant shall outline the evidence to be presented at such hearing and shall show the need for hearing in order properly to present its case.

(c) In the event that reconsideration or hearing is requested, the Board may, without notice or hearing, enter an order of approval or of disapproval in accordance without notice or hearing, enter an order of approval or of disapproval in accordance with its determination of the public interest upon the showing made, or on its own initiative may assign the application for hearing.

§ 372.32 Effective period.

Each operating authorization shall be effective upon the date specified

§ 372.33 Nontransferability.

(a) An operating authorization shall be nontransferable and shall be effective only with respect to the person named therein or his successor by operation of law, subject to the provisions of this section. The following persons may temporarily continue operations under an operating authorization issued in the name of another person, for a maximum period of 6 months from the effective date of succession, by giving written notice of such succession to the Board within 60 days after the succession:

(1) Administrators or executors of deceased persons;

(2) Guardians of incapacitated persons;

(3) Surviving partner or partners collectively of dissolved partnerships; and (4) Trustees, receivers, conservators, assignees, or other such persons who are authorized by law to collect and preserve the property of financially disabled persons.

(b) All operations by successors, as above authorized, shall be performed in the name or names of the prior holder of the operating authorization and the name of the successor, whose capacity shall also be designated. Any successor desiring to continue operations after the expiration of the 6month period above authorized must file an application for a new operating authorization within 120 days after such succession. If a timely application is filed, such successor may continue operations until final disposition of the application by the Board.

NOTE: The record-retention and reporting requirements herein have been approved by the Office of Management and Budget in accordance with the Federal Reports Act of 1942.

AUTHORITY: Sec. 204(a), Federal Aviation Act of 1958 as amended, 72 Stat. 743 (49 U.S.C. 1324(a), Title I (the Truth in Lending Act as supplemented by the Fair Credit Billing Act) Title V (General Provisions), Title VI (Fair Credit Reporting Act), and Title VII (Equal Credit Opportunity Act) of the Consumer Credit Protection Act, 82 Stat. 146 et seq. 84 Stat. 1127 et seq., 88 Stat. 1511 et seq. (15 U.S.C. 1601-1666j, 1681-1681t, 1691-1691e) and Regulations B and Z of the Board of Governors of the Federal Reserve System 12 CFR Parts 202 and 226.

SOURCE: SPR-101, 41 FR 9304, Mar. 4, 1976, unless otherwise noted.

§ 374.1 Purpose.

The purpose of this part is to state the Civil Aeronautics Board's responsibilities with respect to Titles I, VI and VII of the Consumer Credit Protection Act, and Regulations B and Z of the Board of Governors of the Federal Reserve System insofar as applicable to the Board's responsibility thereunder.

§ 374.2 Applicability.

This regulation is applicable to all air carriers and foreign air carriers as defined in section 101 of the Federal Aviation Act of 1958, as amended, including, without limitation, direct carriers, air taxi operators authorized under Part 298, indirect air carriers authorized under Part 296, tour operators authorized under Parts 372, 372a, 373, 378, and 378a and foreign air carriers holding permits pursuant to section 402 of the Act to engage in indirect foreign air transportation.

§ 374.3 Compliance with the Consumer Credit Protection Act and regulations. (a) Title I of the Consumer Credit Protection Act (the Truth in Lending Act as supplemented by the Fair

Credit Billing Act)' sets forth certain requirements concerning billing information and dispute procedures. Section 108(a)(4) of that title provides that the Civil Aeronautics Board shall have the duty of ensuring compliance with the requirements of Title I "with respect to any air carrier of foreign air carrier subject to" the Federal Aviation Act of 1958. In addition, section 108(b) thereof provides that "[f]or the purpose of the exercise by any agency referred to in subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act."

(b) Title VI of the Consumer Credit Protection Act (the Fair Credit Reporting Act)2 sets forth certain requirements concerning consumer credit reporting agencies and persons who use consumer credit reports. Section 621(b)(5) of that title provides that the Civil Aeronautics Board shall have the duty of ensuring compliance with the requirements of Title VI with respect to air carriers and foreign air carriers. In addition, section 621(c) thereof provides that "[f]or the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act."

(c) Title VII of the Consumer Credit Protection Act (the Equal Credit Opportunity Act)' sets forth certain requirements regarding discrimination in consumer credit transactions on the basis of sex or marital status. Section 704(a)(5) of that title provides that the Civil Aeronautics Board shall have the duty of ensuring compliance with the requirements of Title VII with respect to air carriers and foreign air carriers. In addition, section 704(b)

'PL 90-321; 82 Stat. 146 et seq., as amended by PL 93-495, 88 Stat. 1511 et seq., 15 U.S.C. 1601-1665, 1666-1666j (Supp. IV, 1975).

2PL 91-508, 84 Stat. 1127 et seq., 15 U.S.C. 1681-1681t.

3PL 93-495, 88 Stat. 1521 et seq., 15 U.S.C. 1691-1691e (Supp. IV, 1975).