[Federal Register Volume 84, Number 188 (Friday, September 27, 2019)]
[Notices]
[Pages 51160-51162]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20985]


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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 plans to ask the Office of Management and Budget (OMB) 
to extend for an additional three years the current Paperwork Reduction 
Act (PRA) clearance for information collection requirements contained 
in the FTC's 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 generally 
shares enforcement of Regulation N with the Consumer Financial 
Protection Bureau (``CFPB''). The current clearance expires on January 
31, 2020.

DATES: Comments must be received on or before November 26, 2019.

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; PRA 
Comment: FTC File No. P072108'' 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: 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 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 generally 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.
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    \1\ The OMB Control Number is 3085-0156 and the existing 
clearance expires on January 31, 2020. As background, the FTC's 
Mortgage Acts and Practices--Advertising Rule, 16 CFR 321, was 
issued by the FTC in July 2011, 76 FR 43826 (July 22, 2011), and 
became effective on August 19, 2011. The Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010 (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, which was effective on 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.
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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.\2\ A failure to keep such records 
would be an independent violation of the Rule. Regulation N's 
recordkeeping requirements constitute a ``collection of information'' 
for purposes of the PRA.\3\ The Rule does not impose a disclosure 
requirement.
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    \2\ Section 1014.5 of the Rule sets forth the recordkeeping 
requirements.
    \3\ See 44 U.S.C. 3502(3)(A).
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    Commission staff believes the 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.\4\ 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.\5\ Certain other 
covered persons such as lead generators and rate aggregators may not 
currently maintain these records in the ordinary course of business.\6\ 
Thus, the recordkeeping requirements for those persons would constitute 
a ``collection of information.''
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    \4\ Some covered persons, particularly mortgage brokers and 
lenders, are subject to state recordkeeping requirements for 
mortgage advertisements. See, e.g., Fla. Stat. 494.00165 (2019); 
Ind. Code Ann. 23-2-5-18 (2018); Kan. Stat. Ann. 9-2208 (2018); 
Minn. Stat. 58.14 (2018); Wash. Rev. Code 19.146.060 (2018). 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 (2019); N.Y. Banking Law 597 (Consol. 2018); 
Tenn. Code Ann. 45-13-206 (2019). 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.
    \5\ See 44 U.S.C. 3502(3)(A); 5 CFR 1320.3(b)(2).
    \6\ 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.
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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

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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 \7\ 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.\8\ 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 generally shares enforcement authority with the 
CFPB for Regulation N, the FTC's allotted PRA burden is 1,500 annual 
hours.\9\
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    \7\ 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.
    \8\ 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.
    \9\ This estimate reflects the same 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 4. 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, 83 FR 61376 (Nov. 29, 2018), available at https://www.govinfo.gov/content/pkg/FR-2018-11-29/pdf/2018-25973.pdf.
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    Estimated labor costs: $24,375.
    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 $16.25.\10\ Based upon the above 
estimates and assumptions, the total annual labor cost to retain and 
file documents, for the FTC's allotted burden, is $24,375 (1,500 hours 
x $16.25 per hour).
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    \10\ 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 2018, table 1 (``National employment and wage data from the 
Occupational Employment Statistics survey by occupation''), released 
March 29, 2019, available at http://www.bls.gov/news.release/pdf/ocwage.pdf. See FTC Rule 4.9(c).
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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

    Pursuant to Section 3506(c)(2)(A) of the PRA, 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 November 26, 2019.
    You can file a comment online or on paper. For the FTC to consider 
your comment, we must receive it on or before November 26, 2019. Write 
``Regulation N; PRA Comment: FTC File No. P072108'' 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, or to send them to the Commission by courier or 
overnight service. 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. 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. As a matter of discretion, the Commission 
tries to remove individuals' home contact information from comments 
before placing them on www.regulations.gov.
    If you file your comment on paper, write ``Regulation N; PRA 
Comment: FTC File No. P072108'' 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 (Annex 
J), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
website at www.regulations.gov, 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 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.\11\ 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 publicly at 
www.regulations.gov, we cannot redact or remove your comment unless

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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.
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    \11\ See FTC Rule 4.9(c).
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    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. You can find more information, including routine uses permitted 
by the Privacy Act, in the Commission's privacy policy, at https://www.ftc.gov/site-information/privacy-policy.

Heather Hippsley,
Deputy General Counsel.
[FR Doc. 2019-20985 Filed 9-26-19; 8:45 am]
 BILLING CODE 6750-01-P