[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Notices]
[Pages 46988-46990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19378]


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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 for an additional three years the current Paperwork 
Reduction Act (``PRA'') clearance \1\ for the FTC's shared enforcement 
with the Consumer Financial Protection Bureau (``CFPB'') of the 
information collection requirements in subpart N of Regulation V 
(``Rule''). That clearance expires on December 31, 2015.
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    \1\ OMB Control No. 3084-0128.

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DATES: Comments must be filed by October 5, 2015.

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/regulationVsubpartNpra 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, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex J), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW., 5th Floor, Suite 5610 (Annex J), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Ryan Mehm, Attorney, Bureau of Consumer 
Protection, (202) 326-2918, Federal Trade Commission, 600 Pennsylvania 
Ave. NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Overview of the Rule

    The FTC shares enforcement authority with the CFPB for subpart N of 
Regulation V.\2\ 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 Fair Credit 
Reporting Act (``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.
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    \2\ Subpart N sets forth the former FTC's Free Annual File 
Disclosures Rule that appeared under 16 CFR parts 610 and 698. 
Rulemaking authority for this and several other FCRA rules was 
transferred to the CFBP under title X of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act, Public Law 111-203, 124 Stat. 
1376 (2010). Title X comprises sections 1001-100H (collectively, the 
``Consumer Financial Protection Act of 2010'').
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II. Burden Statement

    Because the FTC shares enforcement authority with the CFPB for 
subpart N, the two agencies split between them the related estimate of 
PRA burden for firms under their co-enforcement jurisdiction. Estimated 
PRA burden, 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 had once stated that between 
December 2004 and December

[[Page 46989]]

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 subpart N,\3\ an annual rate of about 
26 million requests per year. When it last sought clearance renewal for 
the Rule, the FTC had been unable to obtain, through public comment or 
otherwise, updated information on request volume. As a proxy, it then 
assumed a volume of 30 million requests per year. We expect that the 
number of requests for free annual credit reports will rise over the 
next three years because of increases in the population and consumer 
awareness that they are entitled to a free annual report. As a proxy, 
we will now use an estimate of 35 million requests per year as a 
representative average year to estimate PRA burden for purposes of the 
instant analysis.
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    \3\ 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. However, 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 $545,126 in labor costs.\4\ Such 
activity is treated as an annual burden of maintaining and adjusting 
the changing Internet capacity requirements.
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    \4\ 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 2014 Bureau of Labor Statistics 
(BLS) rate ($65.52) for computer and information systems managers. 
See Occupational Employment and Wages--May 2014, Table 1, available 
at http://www.bls.gov/news.release/ocwage.nr0.htm. Thus, the 
estimated setup and maintenance cost for an Internet system is 
$545,126 per year (8,320 hours x $65.52/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 $408,845 in labor costs.\5\ This activity 
also is treated as an annual recurring burden necessary to obtain, 
maintain, and adjust automated call center capacity.
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    \5\ 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 
$65.52 (see supra note 4), estimated setup and maintenance cost is 
$408,845 (6,240 x $65.52) per year.
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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 35 million, or 350,000) 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 58,333 hours of time. 
[(350,000 x 10 minutes)/60 minutes = 58,333 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 1,732,500 \6\) 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 
288,750 clerical hours. [(1,732,500 x 10 minutes)/60 minutes = 288,750 
hours]
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    \6\ This figure reflects five percent of all requests, net of 
the estimated one percent of all requests that might initially be 
made by mail. That is, .05 x (35,000,000 - 350,000) = 1,732,500.
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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 
2,082,500 requests each year for free annual file disclosures by 
mail.\7\ Based on their knowledge of the industry, staff estimates 
that, of the predicted 2,082,500 mail requests, 10% (or 208,250) 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 34,708 hours. [(208,250 instructions x 10 
minutes)/60 minutes per hour].
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    \7\ This figure includes both the estimated 1% of 35 million 
requests that will be made by mail each year (350,000), and the 
estimated 1,732,500 requests initially made over the Internet or 
telephone that will be redirected to the mail process (see supra 
note 6).
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F. Labor Costs

    Labor costs are derived by applying hourly cost figures to the 
burden hours described above. Staff anticipates that processing of 
requests for annual file disclosures and instructions will be performed 
by clerical personnel, and estimates that the processing will require 
327,250 hours at a cost of $6,322,459. [(58,333 hours for handling 
initial mail request + 288,750 hours for handling requests redirected 
to mail + 34,708 hours for handling instructions

[[Page 46990]]

mailed to consumers) x $16.56 per hour.\8\]
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    \8\ See Occupational Employment and Wages--May 2014, Table 1, 
available at http://www.bls.gov/news.release/ocwage.nr0.htm (Office 
and administrative support workers, general).
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    As elaborated on above, staff estimates that a total of 14,560 
labor hours will be needed to negotiate or renegotiate outsourced 
service contracts annually (or as conditions otherwise change) to 
increase internet (8,320 hours) and telephone (6,240 hours) capacity 
requirements for internet web services and the automated telephone call 
center. This will result in approximately $953,971 per year in labor 
costs. [14,560 hours x $65.52 per hour \9\]
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    \9\ See supra notes 4 and 5.
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    Thus, estimated cumulative labor will costs are $7,276,430.

G. 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 $11,931,500.\10\
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    \10\ This consists of an estimated $7,913,500 for automated 
telephone cost ($1.33 per request x 5.95 million requests) and an 
estimated $4,018,000 ($0.14 per request x 28.7 million requests) for 
Internet web service cost. Per unit cost estimates are based on 
staff's knowledge of the industry.
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H. Net Burden for FTC, After 50:50 Split

    After halving the updated estimates to split the PRA burden with 
the CFPB regarding the Rule, the FTC's burden totals are 198,176 hours, 
$3,638,215 in associated labor costs, and $5,965,750 in non-labor/
capital costs.

III. 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 5, 2015. 
Write ``Subpart N of Regulation V, PRA Comment, P125403'' 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).\11\ Your comment will be kept confidential only if 
the FTC General Counsel grants your request in accordance with the law 
and the public interest.
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    \11\ 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/regulationVsubpartNpra, 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, Constitution Center, 400 7th Street, SW. 5th 
Floor, Suite 5610 (Annex J), Washington, DC 20024. If possible, submit 
your paper comment to the Commission by courier or overnight service.
    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 5, 
2015. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see http://www.ftc.gov/ftc/privacy.htm.

David C. Shonka,
Principal Deputy General Counsel.
[FR Doc. 2015-19378 Filed 8-5-15; 8:45 am]
BILLING CODE 6750-01-P