[Federal Register Volume 84, Number 188 (Friday, September 27, 2019)]
[Notices]
[Pages 51163-51165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20967]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission.

ACTION: Notice and request for comment.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 
(``PRA''), the Federal Trade Commission (``FTC'' or ``Commission'') is 
seeking public comment on its proposal to extend for an additional 
three years the Office of Management and Budget clearance for 
information collection requirements of its Affiliate Marketing Rule, 
which applies to certain motor vehicle dealers, and its shared 
enforcement with the Consumer Financial Protection Bureau (``CFPB'') of 
the provisions (subpart C) of the CFPB's Regulation V regarding other 
entities (``CFPB Rule''). The current clearance expires on January 31, 
2020.

DATES: Comments must be filed by November 26, 2019.

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 ``Affiliate Marketing 
Disclosure Rule, PRA Comment: FTC File No. P0105411'' on your comment, 
and file your comment online at https://www.regulations.gov, by 
following the instructions on the web-based form. If you prefer to file 
your comment on paper, mail 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: Katherine McCarron, Attorney, Division 
of Privacy and Identity Protection, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue NW, Room CC-8232, 
Washington, DC 20580, (202) 326-2333.

SUPPLEMENTARY INFORMATION: The Dodd-Frank Wall Street Reform and 
Consumer Protection Act (``Dodd-Frank Act'') was enacted on July 21, 
2010.\1\ The Dodd-Frank Act transferred to the CFPB most of the FTC's 
rulemaking authority for the Affiliate Marketing provisions of the Fair 
Credit Reporting Act (``FCRA'').\2\ The FTC retained rulemaking 
authority for its Affiliate Marketing Rule (16 CFR 680) solely for 
motor vehicle dealers described in section 1029(a) of the Dodd-Frank 
Act as predominantly engaged in the sale and servicing of motor 
vehicles, the leasing and servicing of motor vehicles, or both.\3\ 
Additionally, the FTC shares enforcement authority with the CFPB for 
provisions of Regulation V subpart C (12 CFR 1022.21) that apply to 
entities other than those specified above.
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 15 U.S.C. 1681 et seq.
    \3\ See Dodd-Frank Act, at section 1029 (a), (c).
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    As mandated by section 214 of the Fair and Accurate Credit 
Transactions Act (``FACT Act''), Public Law 108-159 (Dec. 6, 2003), the 
Affiliate Marketing Rule (``Rule'') requires covered entities to 
provide consumers with notice and an opportunity to opt out of the use 
of certain information before sending marketing solicitations. The Rule 
generally provides that, if a company communicates certain information 
about a consumer (eligibility information) to an affiliate, the 
affiliate may not use it to make or send solicitations to the consumer 
unless the consumer is given notice and a reasonable opportunity to opt 
out of such use of the information and does not opt out.
    To minimize compliance costs and burdens for entities, particularly 
any small businesses that may be affected, the Rule contains model 
disclosures and opt-out notices that may be used to satisfy the 
statutory requirements. The Rule also gives covered entities 
flexibility to satisfy the notice and opt-out requirement. Covered 
entities may send the consumer a free-standing opt-out notice to 
satisfy the Rule's requirements or add the opt-out notice to privacy 
notices already provided to consumers, such as those provided in 
accordance with the provisions of Title V, subtitle A of the Gramm 
Leach Bliley Act (``GLBA'').\4\ As a result, the time necessary to 
prepare or incorporate an opt-out notice is likely to be minimal 
because covered entities may either use the model disclosure verbatim 
or base their own disclosures upon it. Moreover, verbatim adoption of 
the model notice does not constitute a PRA ``collection of 
information.'' \5\ The Rule also provides that affiliated companies may 
send a joint disclosure to consumers, thereby eliminating the need for 
each affiliate to send a separate disclosure. Staff anticipates that 
affiliated entities will choose to send a joint notice, which will 
reduce the number of notices required under the Rule.
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    \4\ 15 U.S.C. 6801 et seq.
    \5\ ``The public disclosure of information originally supplied 
by the Federal government to the recipient for purpose of disclosure 
to the public is not included within [the definition of collection 
of information].'' 5 CFR 1320.3(c)(2).
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Burden Statement

    Under the PRA, 44 U.S.C. 3501-3521, the FTC is requesting that OMB 
renew the clearance (OMB Control Number 3084-0131) for the information 
collection burden associated with the Rule.\6\ Staff estimates that 
there are approximately 54,753 franchise/new car and independent/used 
car dealers in the U.S.\7\ Applying an estimated rate of affiliation of 
16.75%, staff estimates that there are approximately 9,171 motor 
vehicle dealerships in affiliated families that may be subject to the 
Rule's affiliate sharing obligations. Staff further estimates an 
average of five businesses per family or affiliated relationship, and 
anticipates that affiliated entities will choose to send a joint notice 
as permitted by the Rule. Therefore, staff estimates that approximately 
1,834 business families would be subject to the Rule.
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    \6\ While the FTC shares enforcement authority with the Federal 
Reserve System, Commodity Futures Trading Commission, National 
Credit Union Administration, Office of the Comptroller of the 
Currency, and the Federal Deposit Insurance Corporation, for the 
Consumer Financial Protection Bureau's counterpart affiliate sharing 
rule, Regulation V (Subpart C), 12 CFR 1022.21, the CFPB has assumed 
95% of the burden associated with its affiliate sharing rule. See 
Consumer Financial Protection Bureau, Agency Information Collection 
Activities: Submission for OMB Review; Comment Request, 82 FR 32,686 
(2017); CFPB Supporting Statement, Fair Credit Reporting Act 
(Regulation V) 12 CFR 1022, OMB Control Number: 3170-0002 (2017). In 
addition, the CFPB has estimated that the burden associated with 
Regulation V's affiliate sharing provisions is de minimis.
    \7\ This figure is based on estimates by the National Automobile 
Dealers Association and the National Independent Automobile Dealers 
Association. See, e.g., NADA Data 2018: Annual Report; NIADA.com.
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    Staff assumes that all or nearly all motor vehicles subject to the 
Rule's provisions are also subject to the Commission's Privacy of 
Consumer Financial Information Rule under the Gramm-Leach-Bliley Act 
(16 CFR 313) (``Privacy Rule''). Entities that are subject to the 
Commission's GLBA

[[Page 51164]]

privacy notice regulation already provide privacy notices to their 
customers. Absent an exception, financial institutions must provide an 
initial privacy notice at the time the customer relationship is 
established and then annually so long as the relationship continues. 15 
U.S.C. 6803. Staff's estimates assume that in all or nearly all cases 
covered institutions will choose to incorporate the affiliate marketing 
opt-out notice into the initial and annual GLBA privacy notices. In 
2015, Congress, as part of the FAST Act, amended the GLBA to provide an 
exception under which financial institutions that meet certain 
conditions are not required to provide annual notices to customers.\8\ 
Staff seeks comment on how the use of this exception by institutions 
that are required to provide an affiliate marketing notice will impact 
the burden estimates for these entities. Institutions that claim the 
FAST Act exemption and forego sending required annual privacy notices 
in some years will nonetheless be required to send a separate affiliate 
marketing notice to comply with their obligations under the Rule.
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    \8\ Fixing America's Surface Transportation Act (``FAST Act''), 
Public Law 114-94, 129 Stat. 1312, Section 75001 (Dec. 4, 2015) 
(amending 15 U.S.C. 6803 to exempt financial institutions from the 
annual notice requirement if they meet certain criteria, and if they 
have not changed their policies and practices with regard to 
disclosing nonpublic personal information from the policies and 
practices that were disclosed in the most recent disclosure sent to 
consumers).
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    Staff estimates that the 1,834 covered motor vehicle business 
families will spend on average about 5 hours per year to comply with 
the Affiliate Sharing Rule beyond their separate obligations under the 
Privacy Rule, yielding a total annual hours burden of 9,170 hours. 
Staff's estimates take into account the time necessary to determine 
compliance obligations; create the notice and opt-out, in either paper 
or electronic form; and disseminate the notice and opt-out. Staff's 
estimates presume that the availability of model disclosures and opt-
out notices will simplify the compliance review and implementation 
processes, thereby significantly reducing the compliance burden.
    Staff estimates the associated labor cost by adding the hourly mean 
private sector wages for managerial, technical, and clerical work and 
multiplying that sum by the estimated number of hours. The private 
sector hourly wages for these classifications are $50.11, $41.51, and 
$17.19, respectively.\9\ Estimated hours spent for each category are 2, 
2, and 1, respectively. Multiplying each occupation's hourly wage by 
the associated time estimate, yields the annual labor cost burden per 
respondent which is then multiplied by the estimated number of 
respondents to determine the cumulative annual labor cost burden: 
$367,588 per year.
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    \9\ The classifications used are ``Management Occupations'' for 
managerial employees, ``Computer and Mathematical Science 
Occupations'' for technical staff, and ``Office and Administrative 
Support'' for clerical workers. See OCCUPATIONAL EMPLOYMENT AND 
WAGES --MAY 2018, U.S. Department of Labor, released March 29, 2019, 
Table 1 (``National employment and wage data from the Occupational 
Employment Statistics survey by occupation, May 2018''): http://www.bls.gov/news.release/ocwage.htm.

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                                                                                                  Approx.  total
         Hourly wage and  labor category             Hours per     Total hourly      Number of     annual  labor
                                                    respondent      labor cost      respondents        costs
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$50.11 Management Employees.....................               2         $100.22           1,834        $183,803
41.51 Technical Staff...........................               2           83.02  ..............         152,259
17.19 Clerical Workers..........................               1           17.19  ..............          31,526
                                                 ---------------------------------------------------------------
                                                  ..............  ..............  ..............         367,588
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    Because the FACT Act and the Rule contemplate that the affiliate 
marketing notice can be included in the GLBA notices, the capital and 
non-labor cost burden on regulated entities would be greatly reduced. 
Covered entities typically already provide notices to their customers 
so there are no new capital or non-labor costs, as the Affiliate 
Marketing notice may be consolidated into their annual privacy notice. 
Thus, Staff estimates that any capital or non-labor costs associated 
with compliance for these entities are de minimis.

Request for Comment

    Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites 
comments on: (1) Whether the disclosure, recordkeeping, and reporting 
requirements are necessary, including whether the resulting 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. In addition, staff seeks comment on 
how the FAST Act exception that exempts certain institutions that are 
required to provide an affiliate marketing notice from sending annual 
privacy notices will impact the burden estimates for these entities.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 26, 
2019. Write ``Affiliate Marketing Disclosure Rule, PRA Comment: FTC 
File No. P0105411'' on your comment. 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 
through the https://www.regulations.gov website by following the 
instructions on the web-based form provided. Your comment, including 
your name and your state--will be placed on the public record of this 
proceeding, including the https://www.regulations.gov website.
    If you file your comment on paper, write ``Affiliate Marketing 
Disclosure Rule, PRA Comment: FTC File No. P0105411'' on your comment 
and on the envelope, and mail 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, Washington, DC 20024. If possible, please submit your paper 
comment to the Commission by courier or overnight service.
    Because your comment will be placed on the public record, you are 
solely responsible for making sure that your comment does not include 
any sensitive or confidential information. In particular, your comment 
should not include any sensitive personal information, such as your or 
anyone else's Social Security number; date of birth; driver's license 
number or other

[[Page 51165]]

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, your 
comment should not include any ``trade secret or any commercial or 
financial information which . . . is privileged or confidential''--as 
provided by 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)--including in particular competitively 
sensitive information such as costs, sales statistics, inventories, 
formulas, patterns, devices, manufacturing processes, or customer 
names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). 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). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    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 November 26, 
2019. For information on the Commission's privacy policy, including 
routine uses permitted by the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Heather Hippsley,
Deputy General Counsel.
[FR Doc. 2019-20967 Filed 9-26-19; 8:45 am]
 BILLING CODE 6750-01-P