[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Notices]
[Pages 46583-46585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18455]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

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, 2016, 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 Regulation N (Mortgage Acts and Practices--
Advertising). That clearance expires on November 30, 2013. The FTC's 
current PRA clearance (OMB Control Number 3084-0156) for Regulation N 
is under the FTC's Mortgage Acts and Practices--Advertising Rule, which 
was republished by the CFPB as Regulation N on December 16, 2011, and 
became effective December 30, 2011. The

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Commission rescinded the Mortgage Acts and Practices--Advertising Rule 
on, and effective, April 13, 2012.

DATES: Comments must be received by September 30, 2013.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comments part of the 
SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Carole L. Reynolds, Attorney, Division of 
Financial Practices, Bureau of Consumer Protection, Federal Trade 
Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580, (202) 
326-3230.

SUPPLEMENTARY INFORMATION:

Proposed Information Collection Activities

    Under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520, 
federal agencies must get OMB approval for each collection of 
information they conduct, sponsor, or require. ``Collection of 
information'' means agency requests or requirements to submit reports, 
keep records, or provide information to a third party. 44 USC 3502(3); 
5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the 
FTC is providing this opportunity for public comment before requesting 
that OMB extend the existing PRA clearance for the information 
collection requirements associated with the CFPB's Regulation N 
(Mortgage Acts and Practices--Advertising), 12 CFR 1014.
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond. All comments must be received on or before September 
30, 2013.
    The FTC's Mortgage Acts and Practices--Advertising Rule, 16 CFR 
321, was issued by the FTC on July 19, 2011, at www.ftc.gov, published 
in the Federal Register, 76 FR 43845, and became effective on August 
19, 2011.
    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 
2010 (Dodd-Frank Act) \1\ substantially changed the federal legal 
framework for financial services providers. Among the changes, the 
Dodd-Frank Act transferred to the CFPB the Commission's rulemaking 
authority under section 626 of the 2009 Omnibus Appropriations Act on 
July 21, 2011. As a result, the CFPB republished the Mortgage Acts and 
Practices--Advertising Rule, at 12 CFR 1014, which became effective 
December 30, 2011. 76 FR 78130. Thereafter, the Commission rescinded 
its Rule, on and effective April 13, 2012. 77 FR 22200. Under the Dodd-
Frank Act, the FTC retains its authority to bring law enforcement 
actions to enforce Regulation N.\2\ The FTC and the CFPB share 
enforcement authority for Regulation N and thus the CFPB has 
incorporated into its recently approved burden estimates \3\ for 
Regulation N one half of the FTC's pre-existing cleared burden 
estimates.
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ The Commission also retained its authority to enforce the 
Mortgage Acts and Practices--Advertising Rule from the Rule's 
issuance in July 2011 until the CFPB's republished rule, Regulation 
N, became effective on December 30, 2011. See infra note 10.
    \3\ The CFPB clearance for their information collections 
associated with Regulation N was approved by the OMB on July 25, 
2012 (OMB Control Number 3170-0009) through July 31, 2015.
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    Regulation N's recordkeeping requirements constitute a ``collection 
of information'' \4\ for purposes of the PRA.\5\ The Rule does not 
impose a disclosure requirement.
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    \4\ Section 1014.5 of the Rule sets forth the recordkeeping 
requirements.
    \5\ See 44 U.S.C. 3502(3)(A).
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    Regulation N requires covered persons to retain: (1) Copies of 
materially different commercial communications and related materials, 
regarding any term of any mortgage credit product, that the person made 
or disseminated during the relevant time period; (2) documents 
describing or evidencing all mortgage credit products available to 
consumers during the relevant time period; and (3) documents describing 
or evidencing all additional products or services (such as credit 
insurance or credit disability insurance) that are or may be offered or 
provided with the mortgage credit products available to consumers 
during the relevant time period. A failure to keep such records would 
be an independent violation of the Rule.
    Commission staff believes these recordkeeping requirements pertain 
to records that are usual and customary and kept in the ordinary course 
of business for many covered persons, such as mortgage brokers, 
lenders, and servicers.\6\ As to these persons, the retention of these 
documents does not constitute a ``collection of information,'' as 
defined by OMB's regulations that implement the PRA.\7\ Other covered 
persons, however, such as real estate agents and brokers, advertising 
agencies, home builders, lead generators, rate aggregators, and others, 
may not currently maintain these records in the ordinary course of 
business. Thus, the recordkeeping requirements for those persons would 
constitute a ``collection of information.''
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    \6\ Some covered persons, particularly mortgage brokers and 
lenders, are subject to state recordkeeping requirements for 
mortgage advertisements. See, e.g., Fla. Stat. 494.00165 (2012); 
Ind. Code Ann. 23-2-5-18 (2012); Kan. Stat. Ann. 9-2208 (2012); 
Minn. Stat. 58.14 (2012); Wash. Rev. Code 19.146.060 (2013). Many 
mortgage brokers, lenders, and servicers are also subject to state 
recordkeeping requirements for mortgage transactions and related 
documents, and these may include descriptions of mortgage credit 
products. See, e.g., Mich. Comp. Laws Serv. 445.1671 (2013); N.Y. 
Banking Law 597 (Consol. 2012); Tenn. Code Ann. 45-13-206 (2013). In 
addition, lenders and mortgagees approved by the FHA must retain 
copies of all print and electronic advertisements and promotional 
materials for a period of two years from the date the materials are 
circulated or used to advertise. See 24 CFR 202.
    \7\ See 44 U.S.C. 3502(3)(A); 5 CFR 1320.3(b)(2).
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    The information retained under the Rule's recordkeeping 
requirements is used by the Commission to substantiate compliance with 
the Rule and may also provide a basis for the Commission to bring an 
enforcement action. Without the required records, it would be difficult 
either to ensure that entities are complying with the Rule's 
requirements or to bring enforcement actions based on violations of the 
Rule.

Burden Statement

    Estimated total annual hours burden: 1,800,000 hours (for the FTC).
    Commission staff estimates that the Rule's recordkeeping 
requirements will affect approximately 1.2 million persons \8\ who 
would not otherwise retain such records in the ordinary

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course of business. As noted, this estimate includes real estate agents 
and brokers, advertising agencies, home builders, lead generators, rate 
aggregators, and others that may provide commercial communications 
regarding mortgage credit product terms.\9\ Although the Commission 
cannot estimate with precision the time required to gather and file the 
required records, it is reasonable to assume that covered persons will 
each spend approximately 3 hours per year to do these tasks, for a 
total of 3.6 million hours (1.2 million persons x 3 hours). Since the 
FTC shares enforcement authority with the CFPB for Regulation N, the 
FTC's allotted PRA burden is 1,800,000 annual hours.\10\
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    \8\ No general source provides precise numbers of the various 
categories of covered persons. Commission staff, therefore, has used 
the following sources and inputs to arrive at this estimated total: 
(1) 1 million real estate brokers and agents--from the National 
Association of Realtors, see http://www.realtor.org (last visited 
June 24, 2013); (2) 140,000 home builders--from the National 
Association of Home Builders, see http://www.NAHB.org (last visited 
June 24, 2013); (3) 350 finance companies--from the American 
Financial Services Association, see http://www.afsaonline.org (last 
visited June 24, 2013); (4) 29,770 advertising agencies--from the 
North American Industry Classification System Association's database 
of U.S. businesses, see http://www.naics.com (last visited June 24, 
2013); (5) 1,000 lead generators and rate aggregators--based on 
staff's administrative experience. These inputs add to 1,171,120; 
for rounding, and to account further for potentially unspecified 
other covered persons, however, staff has increased the resulting 
total to 1.2 million.
    \9\ The Commission does not know what percentage of these 
persons are, in fact, engaged in covered conduct under the Rule, 
i.e., providing commercial communications about mortgage credit 
product terms. For purposes of these estimates, the Commission has 
assumed all of them are covered by the recordkeeping provisions and 
are not retaining these records in the ordinary course of business.
    \10\ This burden estimate includes recordkeeping requirements of 
the FTC's Mortgage Acts and Practices Rule for the period from 
December 1, 2013-December 29, 2013. The Commission retained its 
authority to enforce the Mortgage Acts and Practices--Advertising 
Rule from the Rule's issuance in July 2011 until the CFPB's 
republished rule, Regulation N, became effective on December 30, 
2011. Thus, the Commission's Rule had a correlative two-year 
recordkeeping for the above period concluding on December 29, 2013. 
Burden imposed on covered entities after that time are covered by 
the same recordkeeping requirements under Regulation N, which 
commenced December 30, 2011.
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    Estimated labor costs: $24,264,000 (rounded to the nearest 
thousand).
    Commission staff derived labor costs by applying appropriate hourly 
cost figures to the burden hours described above. Staff further assumes 
that office support file clerks will handle the Rule's record retention 
requirements at an hourly rate of $13.48.\11\ Based upon the above 
estimates and assumptions, the total annual labor cost to retain and 
file documents, for the FTC's allotted burden, is $24,264,000 (1.8 
million hours x $13.48 per hour).
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    \11\ This estimate is based on mean hourly wages for office 
support file clerks provided by the Bureau of Labor Statistics. See 
U.S. Bureau of Labor Statistics, Occupational Employment and Wages--
May 2012, table 1 (``National employment and wage data from the 
Occupational Employment Statistics survey by occupation,'' released 
Mar. 29, 2013, available at http://www.bls.gov/news.release/pdf/ocwage.pdf.
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    Absent information to the contrary, staff anticipates that existing 
storage media and equipment that covered persons use in the ordinary 
course of business will satisfactorily accommodate incremental 
recordkeeping under the Rule. Accordingly, staff does not anticipate 
that the Rule will require any new capital or other non-labor 
expenditures.

Request for Comments

    You can file a comment online or on paper. Write ``Regulation N: 
FTC File No. P134811; K05'' 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 ``[t]rade secret or any commercial or financial information 
which is . . . privileged or confidential,'' as discussed 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), 16 CFR 4.9(c). 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.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, the Commission encourages 
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/regulationnpra, by following the 
instructions on the web-based form. If this Notice appears at http://www.regulations.gov, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Regulation N: FTC File 
No. P134811; K05'' 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 http://www.ftc.gov to read this 
Notice. 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 September 30, 
2013. 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.

David C. Shonka,
Principal Deputy General Counsel.
[FR Doc. 2013-18455 Filed 7-31-13; 8:45 am]
BILLING CODE 6750-01-P