[Federal Register Volume 77, Number 161 (Monday, August 20, 2012)]
[Notices]
[Pages 50106-50109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20389]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The FTC intends to ask the Office of Management and Budget 
(``OMB'') to extend through November 30, 2015, the current Paperwork 
Reduction Act (``PRA'') clearance for the FTC's shared enforcement with 
the Consumer Financial Protection Bureau (``CFPB'') of the information 
collection requirements in subpart N of Regulation V. That clearance 
expires on November 30, 2012.

DATES: Comments must be filed by October 19, 2012.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Subpart N of 
Regulation V, PRA Comment, P125403,'' on your comment and file your 
comment online at https://ftcpublic.commentworks.com/ftc/SubpartNRegulationVPRA by following the instructions on the web-based 
form. If you prefer to file your comment on paper, mail or deliver your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, Room H-113 (Annex J), 600 Pennsylvania Avenue NW., 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Tiffany George, Attorney, Division of 
Privacy and Identity Protection, Bureau of Consumer Protection, (202) 
326-3040, 600 Pennsylvania Ave. NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Title X of the Dodd-Frank Wall Street Reform 
and

[[Page 50107]]

Consumer Protection Act \1\ transferred rulemaking authority for 
several consumer financial protection laws to the CFPB. Accordingly, 
the Commission rescinded several rules under the Fair Credit Reporting 
Act, including the FTC's Free Annual File Disclosures Rule that 
appeared under 16 CFR parts 610 and 698.
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010). Title X comprises 
sections 1001-1100H (collectively, the ``Consumer Financial 
Protection Act of 2010'').
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    On December 21, 2011, the CFPB issued an interim final rule, 
Regulation V (Fair Credit Reporting), 12 CFR part 1022, which 
incorporated within its subpart N (Duties of Consumer Reporting 
Agencies Regarding Disclosures to Consumers), with only minor changes 
(non-substantive, technical, formatting, and stylistic), the former 
Free Annual File Disclosures Rule, and in Appendix L to Part 1022, the 
associated model notice.\2\ Subpart N of Regulation V continues the 
disclosure requirements that had existed under the Free Annual File 
Disclosures Rule. Because the FTC shares enforcement authority with the 
CFPB for subpart N, the two agencies have split between them the 
related estimate of PRA burden for firms under their co-enforcement 
jurisdiction.
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    \2\ 76 FR 79830, 79309 (Dec. 21, 2011).
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    Subpart N requires nationwide consumer reporting agencies and 
nationwide consumer specialty reporting agencies to provide to 
consumers, upon request, one free file disclosure within any 12-month 
period. Generally, it requires the nationwide consumer reporting 
agencies, as defined in Section 603(p) of the FCRA, 15 U.S.C. 1681a(p), 
to create and operate a centralized source that provides consumers with 
the ability to request their free annual file disclosures from each of 
the nationwide consumer reporting agencies through a centralized 
Internet Web site, toll-free telephone number, and postal address. 
Subpart N also requires the nationwide consumer reporting agencies to 
establish a standardized form for Internet and mail requests for annual 
file disclosures, and provides a model standardized form that may be 
used to comply with that requirement. It additionally requires 
nationwide specialty consumer reporting agencies, as defined in Section 
603(w) of the FCRA, 15 U.S.C. 1681a(w), to establish a streamlined 
process for consumers to request annual file disclosures. This 
streamlined process must include a toll-free telephone number for 
consumers to make such requests.
    Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must get OMB 
approval for each collection of information they conduct or sponsor. 
``Collection of information'' includes agency requests or requirements 
to submit reports, keep records, or provide information to a third 
party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). The FTC is seeking clearance 
for its assumed share of the estimated PRA burden regarding the 
disclosure requirements under subpart N of Regulation V.
    Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites 
comments on: (1) Whether the disclosure requirements are necessary, 
including whether the information will be practically useful; (2) the 
accuracy of our burden estimates, including whether the methodology and 
assumptions used are valid; (3) how to improve the quality, utility, 
and clarity of the disclosure requirements; and (4) how to minimize the 
burden of providing the required information to consumers. All comments 
should be filed as prescribed in the ADDRESSES section above, and must 
be received on or before October 19, 2012.
    Burden statement: On February 3, 2012, OMB cleared the FTC's 
adjusting entries to split PRA burden with the CFPB regarding the 
formerly designated Free Annual File Disclosures Rule. The FTC's 
currently cleared burden totals are 155,512 hours and $4,195,000 in 
non-labor/capital costs.\3\ Associated labor costs are $2,595,710. 
These figures represent a halving of the FTC's prior burden estimates, 
including the incremental effects of the FTC's 2010 final amendments 
\4\ to the Free Annual File Disclosures Rule.
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    \3\ OMB Control No. 3084-0128.
    \4\ 77 FR 9726 (Mar. 3, 2010). These amendments have been 
incorporated into Regulation V subpart N. As explained below, 
however, there is no longer any incremental PRA burden presented by 
those amendments.
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    The FTC's updated estimates, excluding the halving (to be shown at 
the conclusion of this analysis), are as follows:

A. Requests Per Year From Consumers for Free Annual File Disclosures

    The Consumer Data Industry Association has stated that between 
December 2004 and December 2006, the nationwide consumer reporting 
agencies provided over 52 million free annual file disclosures through 
the centralized Internet Web site, toll-free telephone number, and 
postal address required to be established by the FACT Act and the 
Rule,\5\ an annual rate of about 26 million requests per year. Because 
the prospective clearance renewal would run through November 30, 2015, 
by that time, nine years will have passed since the Commission received 
the data informing its past estimate of the yearly volume of requests 
for free credit reports. We expect that the number of requests for free 
annual credit reports has increased since 2006, both because of 
increases in the population and because consumers will have become more 
aware that they are entitled to a free annual report. As a proxy, we 
will use an estimate of 30 million requests per year as a 
representative average year to estimate PRA burden for purposes of the 
instant analysis.
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    \5\ Letter from Stuart K. Pratt, President & CEO, Consumer Data 
Industry Association, to Rep. Barney Frank, Committee on Financial 
Services, U.S. House of Representatives (Dec. 1, 2006).
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    The Commission, however, seeks more recent estimates of the number 
of requests consumers are making for free annual credit reports. In 
addition to data on the number of requests, data on how the number of 
requests has changed over time, and how these requests are being 
received--by Internet, phone, or by mail--would be most helpful.

B. Annual File Disclosures Provided Through the Internet

    Both nationwide and nationwide specialty consumer reporting 
agencies will likely handle the overwhelming majority of consumer 
requests through Internet Web sites. The annual file disclosure 
requests processed through the Internet will not impose any hours 
burden per request on the nationwide and nationwide specialty consumer 
reporting agencies, even though consumer reporting agencies 
periodically will be required to adjust the Internet capacity needed to 
handle the changing request volume. Consumer reporting agencies likely 
will make such adjustments by negotiating or renegotiating outsourcing 
service contracts annually or as conditions change. Trained personnel 
will need to spend time negotiating and renegotiating such contracts. 
Commission staff estimates that negotiating such contracts will require 
a cumulative total of 8,320 hours and $502,611 in setup and/or 
maintenance costs.\6\ Such activity is treated as an

[[Page 50108]]

annual burden of maintaining and adjusting the changing Internet 
capacity requirements.
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    \6\ Based on the time necessary for similar activity in the 
federal government (including at the FTC), staff estimates that such 
contracting and administration will require approximately 4 full-
time equivalent employees (``FTE'') for the web service contracts. 
Thus, staff estimates that administering the contract will require 4 
FTE, which is 8,320 hours per year (4 FTE x 2,080 hours/year). The 
cost is based on the reported May 2011 Bureau of Labor Statistics 
(BLS) rate ($60.41) for computer and information systems managers. 
See National Occupational and Wages--May 2011, Table 1, available at 
http://www.bls.gov/news.release/archives/ocwage_03272012.pdf. Thus, 
the estimated setup and maintenance cost for an Internet system is 
$502,611 per year (8,320 hours x $60.41/hour).
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C. Annual File Disclosures Requested Over the Telephone

    Most of the telephone requests for annual file disclosures will 
also be handled in an automated fashion, without any additional 
personnel needed to process the requests. As with the Internet, 
consumer reporting agencies will require additional time and investment 
to increase and administer the automated telephone capacity for the 
expected increase in request volume. The nationwide and nationwide 
specialty consumer reporting agencies will likely make such adjustments 
by negotiating or renegotiating outsourcing service contracts annually 
or as conditions change. Staff estimates that this will require a total 
of 6,240 hours at a cost of $376,958 in setup and/or maintenance 
costs.\7\ This activity also is treated as an annual recurring burden 
necessary to obtain, maintain, and adjust automated call center 
capacity.
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    \7\ Staff estimates that recurring contracting for automated 
telephone capacity will require approximately 3 FTE, a total of 
6,240 hours (3 x 2,080 hours). Applying an hourly wage rate of 
$60.41 based on May 2011 BLS data for computer and information 
systems managers, the estimate for setup and maintenance cost is 
$376,958 (6,240 x $60.41) per year. See http://www.bls.gov/news.release/archives/ocwage_03272012.pdf.
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D. Annual File Disclosures Requiring Processing by Mail

    Based on their knowledge of the industry, staff believes that no 
more than 1% of consumers (1% x 30 million, or 300,000) will request an 
annual file disclosure through U.S. postal service mail. Staff 
estimates that clerical personnel will require 10 minutes per request 
to handle these requests, thereby totaling 50,000 hours of time. 
[(300,000 x 10 minutes)/60 minutes = 50,000 hours]
    In addition, whenever the requesting consumer cannot be identified 
using an automated method (a Web site or automated telephone service), 
it will be necessary to redirect that consumer to send identifying 
material along with the request by mail. Staff estimates that this will 
occur in about 5% of the new requests (or 1,485,000)\8\ that were 
originally placed over the Internet or telephone. Staff estimates that 
clerical personnel will require approximately 10 minutes per request to 
input and process those redirected requests for a cumulative total of 
247,500 clerical hours. [(1,485,000 x 10 minutes)/60 minutes = 247,500 
hours]
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    \8\ This figure reflects 5 percent of all requests, net of the 
estimated 1 percent of all requests that might initially be made by 
mail. That is, .05 x (30,000,000 - 300,000) = 1,485,000.
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E. Instructions to Consumers

    The Rule also requires that certain instructions be provided to 
consumers. See Rule sections 1022.136(b)(2)(iv)(A, B), 
1022.137(a)(2)(iii)(A, B). Minimal associated time or cost is involved, 
however. Internet instructions to consumers are embedded in the 
centralized source Web site and do not require additional time or cost 
for the nationwide consumer reporting agencies. Similarly, for 
telephone requests, the automated phone systems provide the requisite 
instructions when consumers select certain options. Some consumers who 
request their credit reports by mail might additionally request printed 
instructions from the nationwide and nationwide specialty consumer 
reporting agencies. Staff estimates that there will be a total of 
1,785,000 requests each year for free annual file disclosures by 
mail.\9\ Based on their knowledge of the industry, staff estimates 
that, of the predicted 1,785,000 mail requests, 10% (or 178,500) will 
request instructions by mail. If printed instructions are sent to each 
of these consumers by mail, requiring 10 minutes of clerical time per 
consumer, this will total 29,750 hours. [(178,500 instructions x 10 
minutes)/60 minutes per hour].
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    \9\ This figure includes both the estimated 1% of 30 million 
requests that will be made by mail each year (300,000), and the 
estimated 1,485,000 requests initially made over the Internet or 
telephone that will be redirected to the mail process (see supra 
note 8).
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F. 2010 FTC Final Amendments \10\
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    \10\ As noted above, the 2010 FTC amendments have been 
incorporated into what is now Regulation V, subpart N.
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    There is no further incremental PRA burden tied to the 2010 
amendments. Previously FTC staff had estimated that administrative 
amendments to former section 610.2 (designed to prevent interference 
with consumers' ability to obtain their free annual file disclosures 
through the centralized source) would impose no more than a minimal, 
one-time burden for the nationwide consumer reporting agency to 
reconfigure the centralized source and their own proprietary Web sites. 
Those amendments, however, became effective April 2, 2010, so the 
implementation should now be complete. Moreover, the other amendments, 
which were to former section 610.4, did not constitute a PRA 
``collection of information'' as defined by OMB's regulations that 
implement the PRA. The section 610.4 amendment required that all 
advertisements for ``free credit reports'' contain certain prescribed 
disclosures tailored to the medium used. OMB excludes from the 
definition of ``collection of information'' the ``public disclosure of 
information originally supplied by the Federal government to the 
recipient for the purpose of disclosure to the public.'' 5 CFR 
1320.3(c)(2).

G. Labor Costs

    Labor costs are derived by applying hourly cost figures to the 
burden hours described above. Accordingly, staff estimates that 
processing of requests for annual file disclosures and instructions 
will be performed by clerical personnel, which will require 327,250 
hours at a cost of $5,258,908. [(50,000 hours for handling initial mail 
request + 247,500 hours for handling requests redirected to mail + 
29,750 hours for handling instructions mailed to consumers) x $16.07 
per hour.\11\
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    \11\ See National Occupational and Wages--May 2011, Table 1, 
available at http://www.bls.gov/news.release/archives/ocwage_03272012.pdf (Office and administrative support workers, general).
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H. Capital/Non-Labor Costs

    As in the previous PRA clearance analysis, FTC staff believes it is 
likely that consumer reporting agencies will use third-party 
contractors (instead of their own employees) to increase the capacity 
of their systems. Because of the way these contracts are typically 
established, these costs will likely be incurred on a continuing basis, 
and will be calculated based on the number of requests handled by the 
systems. Staff estimates that the total annual amount to be paid for 
services delivered under these contracts is $12.22 million.\12\
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    \12\ This consists of an estimated $8.19 million for automated 
telephone cost ($1.82 per request x 4.5 million requests) and an 
estimated $4.03 million ($0.16 per request x 25.2 million requests) 
for Internet web service cost. Per unit cost estimates are based on 
staff's knowledge of the industry.
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I. Net Burden for FTC, After 50:50 Split

    After halving the updated estimates to split the PRA burden with 
the CFPB regarding the formerly designated Free Annual File Disclosures 
Rule, the FTC's burden totals are 170,905 hours and $6,111,000 in non-
labor/capital costs. Associated labor costs are $3,069,239.
    Request for Comment: You can file a comment online or on paper. For 
the Commission to consider your comment, we must receive it on or 
before October 19, 2012. Write ``Subpart N of Regulation V, PRA 
Comment, P125403''

[[Page 50109]]

on your comment. Your comment--including your name and your state--will 
be placed on the public record of this proceeding, including to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is * * * privileged or confidential'' as provided in Section 6(f) 
of the FTC Act 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c).\13\ Your comment will be kept confidential only if 
the FTC General Counsel, in his or her sole discretion, grants your 
request in accordance with the law and the public interest.
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    \13\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/SubpartNRegulationVPRA, by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Subpart N of Regulation 
V, PRA Comment, P125403'' on your comment and on the envelope, and mail 
or deliver it to the following address: Federal Trade Commission, 
Office of the Secretary, Room H-113 (Annex J) 600 Pennsylvania Avenue 
NW., Washington, DC 20580. If possible, submit your paper comment to 
the Commission by courier or overnight service.
    Visit the Commission Web site at www.ftc.gov to read this Notice 
and the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives on 
or before October 19, 2012. You can find more information, including 
routine uses permitted by the Privacy Act, in the Commission's privacy 
policy, at http://www.ftc.gov/ftc/privacy.htm.

Willard K. Tom,
General Counsel.
[FR Doc. 2012-20389 Filed 8-17-12; 8:45 am]
BILLING CODE 6750-01-P