[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Notices]
[Pages 60001-60003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20933]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (OMB) for review, 
as required by the Paperwork Reduction Act (PRA). The FTC seeks public 
comments on its proposal to extend, for three years, the current PRA 
clearance for its portion of the information collection requirements 
contained in the Consumer Financial Protection Bureau's Regulation N 
(the Mortgage Acts and Practices--Advertising Rule). The FTC shares 
enforcement of Regulation N with the Consumer Financial Protection 
Bureau (``CFPB''). This clearance expires on December 31, 2016.

DATES: Comments must be received on or before October 31, 2016.

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. Write ``Regulation N: FTC File 
No. P134811; K05'' on your comment, and file your comment online at 
https://ftcpublic.commentworks.com/ftc/regulationnpra 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 copies of the collection 
of information and supporting documentation should be addressed to 
Carole L. Reynolds, Attorney, Division of Financial Practices, Bureau 
of Consumer Protection, Federal Trade Commission, 600 Pennsylvania 
Avenue NW., CC-10232, 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

[[Page 60002]]

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 U.S.C. 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 FTC's existing PRA 
clearance for the information collection requirements associated with 
the CFPB's Regulation N (Mortgage Acts and Practices--Advertising), 12 
CFR 1014.\1\ The FTC and the CFPB share enforcement authority for 
Regulation N and thus the CFPB has incorporated into its recently 
approved burden estimates for Regulation N one half of its burden 
estimates.\2\
---------------------------------------------------------------------------

    \1\ The OMB Control Number for the FTC's existing PRA clearance 
associated with Regulation N is 3084-0156.
    \2\ The CFPB clearance for their information collections 
associated with Regulation N was approved by the OMB on September 
30, 2015 (OMB Control Number 3170-0009) through September 30, 2018.
---------------------------------------------------------------------------

    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 October 31, 
2016.
    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) \3\ 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.\4\ Regulation N's recordkeeping 
requirements constitute a ``collection of information'' \5\ for 
purposes of the PRA.\6\ The Rule does not impose a disclosure 
requirement.
---------------------------------------------------------------------------

    \3\ Public Law 111-203, 124 Stat. 1376 (2010).
    \4\ 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.
    \5\ Section 1014.5 of the Rule sets forth the recordkeeping 
requirements.
    \6\ See 44 U.S.C. 3502(3)(A).
---------------------------------------------------------------------------

    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; real estate brokers and agents; home builders, 
and advertising agencies.\7\ 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.\8\ Certain other 
covered persons such as lead generators and rate aggregators may not 
currently maintain these records in the ordinary course of business.\9\ 
Thus, the recordkeeping requirements for those persons would constitute 
a ``collection of information.''
---------------------------------------------------------------------------

    \7\ Some covered persons, particularly mortgage brokers and 
lenders, are subject to state recordkeeping requirements for 
mortgage advertisements. See, e.g., Fla. Stat. 494.00165 (2016); 
Ind. Code Ann. 23-2-5-18 (2016); Kan. Stat. Ann. 9-2208 (2015); 
Minn. Stat. 58.14 (2015); Wash. Rev. Code 19.146.060 (2015). Many 
mortgage brokers, lenders (including finance companies), and 
servicers are 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 (2016); N.Y. Banking Law 597 (Consol. 2015); 
Tenn. Code Ann. 45-13-206 (2015). Lenders and mortgagees approved by 
the Federal Housing Administration 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. Various other entities, such as real 
estate brokers and agents, home builders, and advertising agencies 
can be indirectly covered by state recordkeeping requirements for 
mortgage advertisements and/or retain ads to demonstrate compliance 
with state law. See, e.g., 76 Del. Laws, c. 421, Sec.  1.
    \8\ See 44 U.S.C. 3502(3)(A); 5 CFR 1320.3(b)(2).
    \9\ See, e.g., United States v. Intermundo Media, LLC, dba Delta 
Prime Refinance, No. 1:14-cv-2529 (D. Colo. filed Sept. 12, 2014) 
(D. Colo. Oct.7, 2014) (stipulated order for permanent injunction 
and civil penalty judgment), available at https://www.ftc.gov/system/files/documents/cases/140912deltaprimestiporder.pdf. The 
complaint charged this lead generator with numerous violations of 
Regulation N, including recordkeeping, and of other federal mortgage 
advertising mandates.
---------------------------------------------------------------------------

    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: 1,500 hours (for the FTC).
    Commission staff estimates that the Rule's recordkeeping 
requirements will affect approximately 1,000 persons \10\ who would not 
otherwise retain such records in the ordinary course of business. As 
noted, this estimate includes lead generators and rate aggregators that 
may provide commercial communications regarding mortgage credit product 
terms.\11\ 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 3,000 hours (1,000 persons x 
3 hours). Since the FTC shares enforcement authority with the CFPB for 
Regulation N, the FTC's allotted PRA burden is 1,500 annual hours.\12\
---------------------------------------------------------------------------

    \10\ 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: 
1,000 lead generators and rate aggregators, based on staff's 
administrative experience.
    \11\ 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.
    \12\ This estimate reflects a decrease in burden compared to 
prior FTC estimates, because many entities can be indirectly covered 
by state recordkeeping requirements for mortgage advertisements and/
or retain ads to demonstrate compliance with state law, as discussed 
above. See supra note 6. The FTC notes that the CFPB's recent 
information collection filing with OMB for Regulation N also 
reflects the view that, in large part, most entities either retain 
records in the ordinary course of business or to demonstrate 
compliance with other laws. See generally Bureau of Consumer 
Financial Protection, Agency Information Collection Activities: 
Submission for OMB Review; Comment Review, 80 FR 45645 (July 31, 
2015), available at https://www.gpo.gov/fdsys/pkg/FR-2015-07-31/pdf/2015-18809.pdf.

---------------------------------------------------------------------------

[[Page 60003]]

    Estimated labor costs: $21,570.
    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 $14.38.\13\ Based upon the above 
estimates and assumptions, the total annual labor cost to retain and 
file documents, for the FTC's allotted burden, is $21,570 (1,500 hours 
x $14.38 per hour).
---------------------------------------------------------------------------

    \13\ 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 2015, table 1 (``National employment and wage data from the 
Occupational Employment Statistics survey by occupation''), released 
Mar. 30, 2016, available at http://www.bls.gov/news.release/pdf/ocwage.pdf.
---------------------------------------------------------------------------

    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, such as a 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, such as 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 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 must 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 it 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. 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 31, 
2016. 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,
Acting General Counsel.
[FR Doc. 2016-20933 Filed 8-30-16; 8:45 am]
 BILLING CODE 6750-01-P