[Federal Register Volume 86, Number 93 (Monday, May 17, 2021)]
[Notices]
[Pages 26725-26733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10285]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request; Extension
AGENCY: Federal Trade Commission.
ACTION: Notice.
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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 clearances for
information collection requirements in Regulations B, E, M, and Z,
which are enforced by the Commission. These clearances expire on
September 30, 2021.
DATES: Comments must be filed by July 16, 2021.
[[Page 26726]]
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 ``Regs BEMZ, PRA
Comments, P084812'' 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 Reynolds or Stephanie
Rosenthal, Attorneys, Division of Financial Practices, Bureau of
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Ave.
NW, Washington, DC 20580, (202) 326-3224.
SUPPLEMENTARY INFORMATION: The four regulations covered by this notice
are:
(1) Regulations promulgated under the Equal Credit Opportunity Act,
15 U.S.C. 1691 et seq. (``ECOA'') (``Regulation B'') (OMB Control
Number: 3084-0087);
(2) Regulations promulgated under the Electronic Fund Transfer Act,
15 U.S.C. 1693 et seq. (``EFTA'') (``Regulation E'') (OMB Control
Number: 3084-0085);
(3) Regulations promulgated under the Consumer Leasing Act, 15
U.S.C. 1667 et seq. (``CLA'') (``Regulation M'') (OMB Control Number:
3084-0086); and
(4) Regulations promulgated under the Truth-In-Lending Act, 15
U.S.C. 1601 et seq. (``TILA'') (``Regulation Z'') (OMB Control Number:
3084-0088).
Type of Review: Extension without change of currently approved
collection.
Affected Public: Private Sector: Businesses and other for-profit
entities.
Discussion: Under the Dodd-Frank Wall Street Reform and Consumer
Protection Act (``Dodd-Frank Act''), Public Law 111-203, 124 Stat. 1376
(2010), almost all rulemaking authority for the ECOA, EFTA, CLA, and
TILA transferred from the Board of Governors of the Federal Reserve
System (Board) to the Consumer Financial Protection Bureau (CFPB) on
July 21, 2011 (``transfer date''). To implement this transferred
authority, the CFPB published new regulations in 12 CFR part 1002
(Regulation B), 12 CFR part 1005 (Regulation E), 12 CFR part 1013
(Regulation M), and 12 CFR part 1026 (Regulation Z) for those entities
under its rulemaking jurisdiction.\1\ Although the Dodd-Frank Act
transferred most rulemaking authority under ECOA, EFTA, CLA, and TILA
to the CFPB, the Board retained rulemaking authority for certain motor
vehicle dealers \2\ under all of these statutes and also for certain
interchange-related requirements under EFTA.\3\
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\1\ 12 CFR pt. 1002 (Reg. B) (81 FR 25323, Apr. 28, 2016); 12
CFR pt. 1005 (Reg. E) (81 FR 25323, Apr. 28, 2016) 12 CFR pt. 1013
(Reg. M) (81 FR 25323, Apr. 28, 2016); 12 CFR pt. 1026 (Reg. Z) (81
FR 25323, Apr. 28, 2016).
\2\ Generally, these are dealers ``predominantly engaged in the
sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both.'' See Dodd-Frank Act, Sec. 1029, 12 U.S.C.
5519(a), (c).
\3\ See Dodd-Frank Act, Sec. 1075, 15 U.S.C. 1693 (these
requirements are implemented through Board Regulation II, 12 CFR pt.
235, rather than EFTA's implementing Regulation E).
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As a result of the Dodd-Frank Act, the FTC and the CFPB generally
share the authority to enforce Regulations B, E, M, and Z for entities
for which the FTC had enforcement authority before the Act, except for
certain motor vehicle dealers.\4\ Because of this shared enforcement
jurisdiction, the two agencies have divided the FTC's previously-
cleared PRA burden estimates between them,\5\ except that the FTC has
assumed all of the burden estimates associated with motor vehicle
dealers \6\ and state-chartered credit unions. The division of PRA
burden hours not attributable to motor vehicle dealers and state-
chartered credit unions is reflected in the CFPB's PRA clearance
requests to OMB, as well as in the FTC's burden estimates below.
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\4\ The FTC's enforcement authority includes state-chartered
credit unions; other federal agencies also have various enforcement
authority over credit unions. For example, for large credit unions
(exceeding $10 billion in assets), the CFPB has certain authority.
The National Credit Union Administration also has certain authority
for state-chartered federally insured credit unions, and it
additionally provides insurance for certain state-chartered credit
unions through the National Credit Union Share Insurance Fund and
examines credit unions for various purposes. There are approximately
three state-chartered credit unions exceeding $10 billion in assets,
and the CFPB assumes PRA burden for those entities. As of the fourth
quarter of 2020, there were approximately 2,126 state-chartered
credit unions--1,914 which were federally insured, an estimated 112
or more which were privately insured, and an estimated 100 or more
in Puerto Rico which were insured by a quasi-governmental entity.
Because of the difficulty in parsing out PRA burden for such
entities in view of the overlapping authority, the FTC's figures
include PRA burden for all state-chartered credit unions. However,
in view of fluctuations due to COVID-19 and to avoid undercounting,
we have retained the prior estimate of 2,300 state-chartered credit
unions. As noted above, the CFPB's figures as to state-chartered
credit unions include burden for those entities exceeding $10
billion in assets. See generally Dodd-Frank Act, Sec. Sec. 1061,
1025, 1026. This attribution does not change actual enforcement
authority. We also have retained the prior burden hours generally in
the estimates below, in view of these considerations.
\5\ The CFPB also factors into its burden estimates respondents
over which it has jurisdiction but the FTC does not.
\6\ See Dodd-Frank Act Sec. 1029, 12 U.S.C. 5519(a), as limited
by subsection (b) as to motor vehicle dealers. Subsection (b) does
not preclude CFPB regulatory oversight regarding, among others,
businesses that extend retail credit or retail leases for motor
vehicles in which the credit or lease offered is provided directly
from those businesses, rather than unaffiliated third parties, to
consumers. It is not practicable, however, for PRA purposes, to
estimate the portion of dealers that engage in one form of financing
versus another (and that would or would not be subject to CFPB
oversight). Thus, FTC staff's PRA burden analysis reflects a general
estimated volume of motor vehicle dealers. This attribution does not
change actual enforcement authority.
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Pursuant to the Dodd-Frank Act, the FTC generally has sole
authority to enforce Regulations B, E, M, and Z regarding certain motor
vehicle dealers predominantly engaged in the sale and servicing of
motor vehicles, the leasing and servicing of motor vehicles, or both,
that, among other things, assign their contracts to unaffiliated third
parties.\7\ Because the FTC has exclusive jurisdiction to enforce these
rules for such motor vehicle dealers and retains its concurrent
authority with the CFPB for other types of motor vehicle dealers, and
in view of the different types of motor vehicle dealers, the FTC
retains the entire PRA burden for motor vehicle dealers in the burden
estimates below.
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\7\ See Dodd-Frank Act Sec. 1029, 12 U.S.C. 5519(a), (c).
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The regulations impose certain recordkeeping and disclosure
requirements associated with providing credit or with other financial
transactions. Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must
get OMB approval for each collection of information they conduct or
sponsor. ``Collection of information'' includes agency requests or
requirements to submit reports, keep records, or provide information to
a third party. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
All four of these regulations require covered entities to keep
certain records, but FTC staff believes these records are kept in the
normal course of business even absent the particular recordkeeping
requirements.\8\ Covered entities, however, may incur some burden
associated with ensuring that they do not prematurely dispose of
relevant records (i.e., during the time
[[Page 26727]]
span they must retain records under the applicable regulation).
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\8\ PRA ``burden'' does not include ``time, effort, and
financial resources'' expended in the normal course of business,
regardless of any regulatory requirement. See 5 CFR 1320.3(b)(2).
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The regulations also require covered entities to make disclosures
to third parties. Related compliance involves set-up/monitoring and
transaction-specific costs. ``Set-up'' burden, incurred only by covered
new entrants, includes identifying the applicable required disclosures,
determining how best to comply, and designing and developing compliance
systems and procedures. ``Monitoring'' burden, incurred by all covered
entities, includes their time and costs to review changes to regulatory
requirements, make necessary revisions to compliance systems and
procedures, and to monitor the ongoing operation of systems and
procedures to ensure continued compliance. ``Transaction-related''
burden refers to the time and cost associated with providing the
various required disclosures in individual transactions, thus,
generally, of much lesser magnitude than ``setup'' and ``monitoring''
burden. The FTC's estimates of transaction time and volume are intended
as averages. The population of affected motor vehicle dealers is one
component of a much larger universe of such entities.
The required disclosures do not impose PRA burden on some covered
entities because they make those disclosures in the normal course of
business. For other covered entities that do not, their compliance
burden will vary depending on the extent to which they have developed
effective computer-based or electronic systems and procedures to
communicate and document required disclosures.\9\
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\9\ For example, large companies may use computer-based and/or
electronic means to provide required disclosures, including issuing
some disclosures en masse, e.g., notice of changes in terms. Smaller
companies may have less automated compliance systems but may
nonetheless rely on electronic mechanisms for disclosures and
recordkeeping. Regardless of size, some entities may utilize
compliance systems that are fully integrated into their general
business operational system; if so, they may have minimal additional
burden. Other entities may have incorporated fewer of these
approaches into their systems and thus may have a higher burden.
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The respondents included in the following burden calculations
consist of, among others, credit and lease advertisers, creditors,
owners (such as purchasers and assignees) of credit obligations,
financial institutions, service providers, certain government agencies
and others involved in delivering electronic fund transfers (``EFTs'')
of government benefits, and lessors.\10\ The burden estimates represent
FTC staff's best assessment, based on its knowledge and expertise
relating to the financial services industry, of the average time to
complete the aforementioned tasks associated with recordkeeping and
disclosure. Staff considered the wide variations in covered entities'
(1) size and location; (2) credit or lease products offered, extended,
or advertised, and their particular terms; (3) EFT types used; (4)
types and frequency of adverse actions taken; (5) types of appraisal
reports utilized; and (6) computer systems and electronic features of
compliance operations.
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\10\ The Commission generally does not have jurisdiction over
banks, thrifts, and federal credit unions under the applicable
regulations.
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The cost estimates that follow relate solely to labor costs, and
they include the time necessary to train employees how to comply with
the regulations. Staff calculated labor costs by multiplying
appropriate hourly wages by the burden hours described above. The
hourly wages used were $60 for managerial oversight, $44 for skilled
technical services, and $18 for clerical work. These figures are
averages drawn from Bureau of Labor Statistics data.\11\ Further, these
cost estimates assume the following labor category apportionments,
except where otherwise indicated below: Recordkeeping--10% skilled
technical, 90% clerical; disclosure--10% managerial, 90% skilled
technical.
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\11\ These inputs are based broadly on mean hourly data found
within the ``Bureau of Labor Statistics, Economic News Release,''
March 31, 2021, Table 1, ``National employment and wage data from
the Occupational Employment and Wage Statistics survey by
occupation, May 2020.'' http://www.bls.gov/news.release/ocwage.t01.htm.
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The applicable PRA requirements impose minimal capital or other
non-labor costs. Affected entities generally already have the necessary
equipment for other business purposes. Similarly, FTC staff estimates
that compliance with these rules entails minimal printing and copying
costs beyond that associated with documenting financial transactions in
the normal course of business.
The following discussion and tables present estimates under the PRA
of recordkeeping and disclosure average time and labor costs, excluding
that which FTC staff believes entities incur customarily in the normal
course of business and information compiled and produced in response to
FTC law enforcement investigations or prosecutions.\12\
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\12\ See 5 CFR 1320.4(a) (excluding information collected in
response to, among other things, a federal civil action or ``during
the conduct of an administrative action, investigation, or audit
involving an agency against specific individuals or entities'').
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1. Regulation B
The ECOA prohibits discrimination in the extension of credit.
Regulation B implements the ECOA, establishing disclosure requirements
to assist customers in understanding their rights under the ECOA and
recordkeeping requirements to assist agencies in enforcement.
Regulation B applies to retailers, mortgage lenders, mortgage brokers,
finance companies, and others.
FTC staff estimates that Regulation B's general recordkeeping
requirements affect 530,762 credit firms subject to the Commission's
jurisdiction, at an average annual burden of 1.25 hours per firm for a
total of 663,453 hours. Staff also estimates that the requirement that
mortgage creditors monitor information about race/national origin, sex,
age, and marital status imposes a maximum burden of one minute each (of
skilled technical time) for approximately 2.6 million credit
applications (based on industry data regarding the approximate number
of mortgage purchase and refinance originations), for a total of 43,333
hours.\13\ Staff also estimates that recordkeeping of self-testing
subject to the regulation would affect 1,500 firms, with an average
annual burden of one hour (of skilled technical time) per firm, for a
total of 1,500 hours, and that recordkeeping of any corrective action
as a result of self-testing would affect 10% of them, i.e., 150 firms,
with an average annual burden of four hours (of skilled technical time)
per firm, for a total of 600 hours.\14\ This yields a total annual
recordkeeping burden of 708,886 hours.
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\13\ Regulation B contains model forms that creditors may use to
gather and retain the required information.
\14\ In contrast to banks, for example, entities under FTC
jurisdiction are not subject to audits by the FTC for compliance
with Regulation B; rather they may be subject to FTC investigations
and enforcement actions. This may impact the level of self-testing
(as specifically defined by Regulation B) in a given year, and staff
has sought to address such factors in its burden estimates.
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Regulation B requires that creditors (i.e., entities that regularly
participate in the decision whether to extend credit under Regulation
B) provide notices whenever they take adverse action, such as denial of
a credit application. It requires entities that extend mortgage credit
with first liens to provide a copy of the appraisal report or other
written valuation to applicants.\15\ Finally, Regulation B also
requires that for accounts that spouses may use or for
[[Page 26728]]
which they are contractually liable, creditors who report credit
history must do so in a manner reflecting both spouses' participation.
Further, it requires creditors that collect applicant characteristics
for purposes of conducting a self-test to disclose to those applicants
that: (1) Providing the information is optional; (2) the creditor will
not take the information into account in any aspect of the credit
transactions; and (3) if applicable, the information will be noted by
visual observation or surname if the applicant chooses not to provide
it.\16\ Burden estimates relating to the disclosures required under
Regulation B and labor cost estimates are provided in the tables below.
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\15\ While the rule also requires the creditor to provide a
short written disclosure regarding the appraisal process, the
disclosure is provided by the CFPB, and is thus not a ``collection
of information'' for PRA purposes. Accordingly, it is not included
in burden estimates below.
\16\ The disclosure may be provided orally or in writing. The
model form provided by Regulation B assists creditors in providing
the written disclosure.
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Burden Totals
Recordkeeping: 708,886 hours; $15,666,176, associated labor costs.
Disclosures: 1,088,912 hours; $49,654,400, associated labor costs.
Regulation B--Disclosures--Burden Hours
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Setup/monitoring \1\ Transaction-related
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Average burden
Disclosures Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
(hours) burden (hours) (minutes) burden (hours)
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Credit history reporting................ 133,553 .25 33,388 60,098,850 .25 250,412 283,800
Adverse action notices.................. 530,762 .75 398,072 92,883,350 .25 387,014 785,086
Appraisal reports/written valuations.... 4,650 1 4,650 1,725,150 .50 14,376 19,026
Self-test disclosures................... 1,500 .5 750 60,000 .25 250 1,000
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Total............................... .............. .............. .............. .............. .............. .............. 1,088,912
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\1\ The estimates assume that all applicable entities would be affected, with respect to appraisal reports and other written valuations.
Regulation B--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------ Total cost ($)
Time (hours) Cost ($60/hr.) Time (hours) Cost ($44/hr.) Time (hours) Cost ($18/hr.)
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General recordkeeping................... 0 $0 66,345 $2,919,180 597,108 $10,747,944 $13,667,124
Other recordkeeping..................... 0 0 43,333 1,906,652 0 0 1,906,652
Recordkeeping of self-test.............. 0 0 1,500 66,000 0 0 66,000
Recordkeeping of corrective action...... 0 0 600 26,400 0 0 26,400
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Total Recordkeeping................. .............. .............. .............. .............. .............. .............. 15,666,176
Disclosures:
Credit history reporting............ 28,380 1,702,800 255,420 11,238,480 0 0 12,941,280
Adverse action notices.............. 78,509 4,710,540 706,577 31,089,388 0 0 35,799,928
Appraisal reports................... 1,903 114,180 17,123 753,412 0 0 867,592
Self-test disclosure................ 100 6,0000 900 39,600 0 0 45,600
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Total Disclosures............... .............. .............. .............. .............. .............. .............. 49,654,400
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Total Recordkeeping and .............. .............. .............. .............. .............. .............. 65,320,576
Disclosures................
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2. Regulation E
The EFTA requires that covered entities provide consumers with
accurate disclosure of the costs, terms, and rights relating to EFT and
certain other services. Regulation E implements the EFTA, establishing
disclosure and other requirements to aid consumers and recordkeeping
requirements to assist agencies with enforcement. It applies to
financial institutions, retailers, gift card issuers and others that
provide gift cards, service providers, various federal and state
agencies offering EFTs, prepaid account entities, etc. Staff estimates
that Regulation E's recordkeeping requirements affect 251,053 firms
offering EFT and certain other services to consumers and that are
subject to the Commission's jurisdiction, at an average annual burden
of one hour per firm, for a total of 251,053 hours. Burden estimates
relating to the disclosures required under Regulation E and labor cost
estimates are provided in the tables below.
Burden Totals
Recordkeeping: 251,053 hours; $5,171,684, associated labor costs.
Disclosures: 7,184,903 hours; $327,631,676, associated labor costs.
Regulation E--Disclosures--Burden Hours
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Setup/monitoring Transaction-related
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Average burden
Disclosures Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
(hours) burden (hours) (minutes) burden (hours)
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Initial terms........................... 27,300 .5 13,650 273,000 .02 91 13,741
Change in terms......................... 8,550 .5 4,275 11,286,000 .02 3,762 8,037
[[Page 26729]]
Periodic statements..................... 27,300 .5 13,650 327,600,000 .02 109,200 122,850
Error resolution........................ 27,300 .5 13,650 273,000 5 22,750 36,400
Transaction receipts.................... 27,300 .5 13,650 1,375,000,000 .02 458,333 471,983
Preauthorized transfers................. 258,553 .5 129,277 6,463,825 .25 26,933 156,210
Service provider notices................ 20,000 .25 5,000 200,000 .25 833 5,833
ATM notices............................. 125 .25 31 25,000,000 .25 104,167 104,198
Electronic check conversion............. 48,553 .5 24,277 728,295 .02 243 24,520
Overdraft services...................... 15,000 .5 7,500 1,500,000 .02 500 8,000
Gift cards.............................. 15,000 .5 7,500 750,000,000 .02 250,000 257,500
Remittance transfers:
Disclosures......................... 4,800 1.25 6,000 96,000,000 .9 1,440,000 1,446,000
Error resolution.................... 4,800 1.25 6,000 120,960,000 .9 1,814,400 1,820,400
Agent compliance.................... 4,800 1.25 6,000 96,000,000 .9 1,440,000 1,446,000
Prepaid accounts and gov't benefits:
Disclosures......................... 550 \1\ 40 x 10 220,000 2,750,000,000 .02 916,667 1,136,667
Disclosures--updates................ 138 1 x 10 \2\ 1,380 N/A .............. .............. 1,380
Access to account information....... 550 \3\ 20 x10 110,000 1,100,000 .01 183 110,183
Error resolution.................... 300 4 x 4 4,800 275,000 2 9,167 13,967
Error resolution--followup \4\...... .............. N/A .............. 1,380 30 690 690
Submission of agreements............ 138 2 x 1 276 690 1 11 287
Updates to agreements \5\........... .............. N/A .............. 690 5 57 57
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Total........................... .............. .............. .............. .............. .............. .............. 7,184,903
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\1\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\2\ Individual burden hours are listed first, followed by the number of programs.
\3\ Burden hours are on a per program basis; individual burden hours are listed first, followed by the number of programs.
\4\ This pertains to prepaid accounts.
\5\ This pertains to prepaid accounts' agreements.
Regulation E--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------ Total cost ($)
Time (hours) Cost ($60/hr.) Time (hours) Cost ($44/hr.) Time (hours) Cost ($18/hr.)
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Recordkeeping........................... 0 $0 25,105 $1,104,620 225,948 $4,067,064 $5,171,684
Disclosures:
Initial terms....................... 1,374 82,440 12,367 544,148 0 0 626,588
Change in terms..................... 804 48,240 7,233 318,252 0 0 366,492
Periodic statements................. 12,285 737,100 110,565 4,864,860 0 0 5,601,960
Error resolution.................... 3,640 218,400 32,760 1,441,440 0 0 1,659,840
Transaction receipts................ 47,198 2,831,880 424,785 18,690,540 0 0 21.522,420
Preauthorized transfers............. 15,621 937,260 140,589 6,185,916 0 0 7,123,176
Service provider notices............ 583 34,980 5,250 231,000 0 0 265,980
ATM notices......................... 10,420 625,200 93,778 4,126,232 0 0 4,751,432
Electronic check conversion......... 2,452 147,120 22,068 970,992 0 0 1,118,112
Overdraft services.................. 800 48,000 7,200 316,800 0 0 364,800
Gift cards.......................... 25,750 1,545,000 231,750 10,197,000 0 0 11,742,000
Remittance transfers:
Disclosures......................... 144,600 8,676,000 1,301,400 57,261,600 0 0 65,937,600
Error resolution.................... 182,040 10,922,400 1,638,360 72,087,840 0 0 83,010,240
Agent compliance.................... 144,600 8,676,000 1,301,400 57,261,600 0 0 65,937,600
Prepaid accounts and gov't. benefits:
Disclosures......................... 113,667 6,820,020 1,023,000 45,012,000 0 0 51,832,020
Disclosures--updates................ 138 8,2808 1,242 54,648 0 0 62,928
Access to account information....... 11,018 661,080 99,165 4,363,260 0 0 5,024,340
Error resolution.................... 1,397 83,820 12,570 553,080 0 0 636,900
Error resolution--followup.......... 69 4,140 621 27,324 0 0 31,464
Submission of agreements............ 29 1,740 259 11,396 0 0 13,136
Updates to agreements............... 6 360 52 2,288 0 0 2,648
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Total Disclosures............... .............. .............. .............. .............. .............. .............. 327,631,676
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Total Recordkeeping and .............. .............. .............. .............. .............. .............. 332,803,360
Disclosures................
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3. Regulation M
The CLA requires that covered entities provide consumers with
accurate disclosure of the costs and terms of leases. Regulation M
implements the CLA, establishing disclosure requirements to help
consumers comparison shop and understand the terms of leases and
recordkeeping requirements. It applies to vehicle lessors (such as auto
dealers, independent leasing companies, and manufacturers' captive
finance companies), computer lessors (such as computer dealers and
other retailers), furniture lessors, various electronic commerce
lessors, diverse types of lease
[[Page 26730]]
advertisers, and others. Staff estimates that Regulation M's
recordkeeping requirements affect approximately 30,203 firms within the
FTC's jurisdiction leasing products to consumers at an average annual
burden of one hour per firm, for a total of 30,203 hours. Burden
estimates relating to the disclosures required under Regulation M and
labor cost estimates are provided in the tables below.
Burden Totals 17
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\17\ Recordkeeping and disclosure burden estimates for
Regulation M are more substantial for motor vehicle leases than for
other leases, including burden estimates based on market changes and
regulatory definitions of coverage. Based on industry information,
the estimates for recordkeeping and disclosure costs assume the
following: 90% managerial, and 10% skilled technical. As noted
above, for purposes of PRA burden calculations for Regulations B, E,
M, and Z, and given the different types of motor vehicle dealers,
the FTC is including in its estimates burden for all of them.
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Recordkeeping: 30,203 hours; $1,763,860, associated labor costs.
Disclosures: 71,750 hours; $4,190,200, associated labor costs.
Regulation M--Disclosures--Burden Hours
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Setup/monitoring Transaction-related
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Average burden
Disclosures Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
(hours) burden (hours) (minutes) burden (hours)
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Motor Vehicle Leases \1\................ 26,690 1 26,690 4,000,000 .50 33,333 60,023
Other Leases \2\........................ 3,513 .50 1,757 60,000 .25 250 2,007
Advertising............................. 14,615 .50 7,308 578,960 .25 2,412 9,720
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Total............................... .............. .............. .............. .............. .............. .............. 71,750
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\1\ This category focuses on consumer vehicle leases. Vehicle leases are subject to more lease disclosure requirements (pertaining to computation of
payment obligations) than other lease transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
1013.2(e)(1). CLA and Regulation M now cover leases up to $58,300 plus an annual adjustment.
\2\ This category focuses on all types of consumer leases other than vehicle leases. It includes leases for computers, other electronics, small
appliances, furniture, and other transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
1013.2(e)(1). CLA and Regulation M now cover leases up to $58,300 plus an annual adjustment.
Regulation M--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------ Total cost ($)
Time (hours) Cost ($60/hr.) Time (hours) Cost ($44/hr.) Time (hours) Cost ($18/hr.)
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Recordkeeping........................... 27,183 $1,630,980 3,020 $132,880 0 $0 $1,763,860
Disclosures:
Motor Vehicle Leases................ 54,021 3,241,260 6,002 264,088 0 0 3,505,348
Other Leases........................ 1,806 108,360 201 8,844 0 0 117,204
Advertising......................... 8,748 524,880 972 42,768 0 0 567,648
---------------------------------------------------------------------------------------------------------------
Total Disclosures............... .............. .............. .............. .............. .............. .............. 4,190,200
---------------------------------------------------------------------------------------------------------------
Total Recordkeeping and .............. .............. .............. .............. .............. .............. 5,954,060
Disclosures................
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. Regulation Z
The TILA was enacted to foster comparison credit shopping and
informed credit decisionmaking by requiring creditors and others to
provide accurate disclosures regarding the costs and terms of credit to
consumers. Regulation Z implements the TILA, establishing disclosure
requirements to assist consumers and recordkeeping requirements to
assist agencies with enforcement. These requirements pertain to open-
end and closed-end credit and apply to various types of entities,
including mortgage companies; finance companies; auto dealerships;
private education loan companies; merchants who extend credit for goods
or services; credit advertisers; acquirers of mortgages; and others.
Additional requirements also exist in the mortgage area, including for
high cost mortgages, higher-priced mortgage loans,\18\ ability to pay
of mortgage consumers, mortgage servicing, loan originators, and
certain integrated mortgage disclosures. FTC staff estimates that
Regulation Z's recordkeeping requirements affect approximately 430,762
entities subject to the Commission's jurisdiction, at an average annual
burden of 1.25 hours per entity with .25 additional hours per entity
for 3,650 entities (ability to pay), and 5 additional hours per entity
for 4,500 entities (loan originators). This yields a total annual
recordkeeping burden of 561,866 hours. Burden estimates relating to the
disclosures required under Regulation Z and labor cost estimates are
provided in the tables below.
---------------------------------------------------------------------------
\18\ While Regulation Z also requires the creditor to provide a
short written disclosure regarding the appraisal process for higher-
priced mortgage loans, the disclosure is provided by the CFPB. As a
result, it is not a ``collection of information'' for PRA purposes
(see 5 CFR 1320.3(c)(2)). It is thus excluded from the burden
estimates below.
---------------------------------------------------------------------------
Burden Totals
Recordkeeping: 561,866 hours; $11,574,450, associated labor costs.
Disclosures: 7,854,575 hours; $358,169,628, associated labor costs.
[[Page 26731]]
Regulation Z--Disclosures--Burden Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Setup/monitoring Transaction-related
---------------------------------------------------------------------------------------------------------------
Average burden
Disclosures \1\ Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
(hours) burden (hours) (minutes) burden (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Open-end credit:
Initial terms....................... 23,650 .75 17,738 10,500,600 .375 65,629 83,367
Initial terms--prepaid accounts..... 3 \2\ 4 x 1 12 \3\ 3 x 78,667 .125 492 504
Rescission notices.................. 750 .5 375 3,750 .25 16 391
Subsequent disclosures.............. 4,650 .75 3,488 23,250,000 .188 72,850 76,338
Subsequent disclosures--prepaid 3 \4\ 4 x 1 12 \5\ 3 x 78,667 .0625 246 258
accounts...........................
Periodic statements................. 23,650 .75 17,738 788,325,450 .0938 1,232,415 1,250,153
Periodic statements--prepaid 3 \6\ 40 x 1 120 \7\ 3 x .03125 1,475 1,595
accounts........................... 944,000
Error resolution.................... 23,650 .75 17,738 2,104,850 6 210,485 228,223
Error resolution--prepaid accounts 3 \8\ 4 x 1 12 \9\ 3 x 1,180 15 885 897
followup...........................
Credit and charge card accounts..... 10,250 .75 7,688 5,125,000 .375 32,031 39,719
Credit and charge card accounts-- 3 \10\ 4 x 1 12 \11\ 3 x 12 240 144 156
prepaid accounts...................
Settlement of estate debts.......... 23,650 .75 17,738 496,650 .375 3,104 20,842
Special credit card requirements.... 10,250 .75 7,688 5,125,000 .375 32,031 39,719
Home equity lines of credit......... 750 .5 375 5,250 .25 22 397
Home equity lines of credit high- 250 2 500 1,500 2 50 550
cost mortgages.....................
College student credit card 1,350 .5 675 81,000 .25 338 1,013
marketing--ed. institutions........
College student credit card 150 .75 113 4,500 .75 56 169
marketing--card issuer reports.....
Posting and reporting of credit card 10,250 .75 7,688 5,125,000 .375 32,031 39,719
agreements.........................
Posting and reporting of prepaid 3 \12\ .75 x 1 2 \13\ 3 x 5 2.5 1 3
account agreements.................
Advertising......................... 38,650 .75 28,988 115,950 .75 1,449 30,437
Advertising--prepaid accounts....... 3 \14\ 20 x 1 60 N/A .............. .............. 60
Advertising--prepaid accounts 3 \15\ 0.2 x 5 3 N/A .............. .............. 3
Updates............................
Sale, transfer, or assignment of 500 .5 250 500,000 .25 2,083 2,333
mortgages..........................
Appraiser misconduct reporting...... 301,150 .75 225,863 6,023,000 .375 37,644 263,507
Mortgage servicing.................. 1,500 .75 1,125 150,000 .5 1,250 2,375
Loan originators.................... 2,250 2 4,500 22,500 5 1,875 6,375
---------------------------------------------------------------------------------------------------------------
Closed-end credit:
Credit disclosures.................. 280,762 .75 210,572 112,304,800 2.25 4,211,430 4,422,002
Rescission notices.................. 3,650 .5 1,825 5,475,000 1 91,250 93,075
Redisclosures....................... 101,150 .5 50,575 505,750 2.25 18,966 69,541
Integrated mortgage disclosures..... 3,650 10 36,500 10,950,000 3.5 638,750 675,250
Variable rate mortgages............. 3,650 1 3,650 365,000 1.75 10,646 14,296
High cost mortgages................. 1,750 1 1,750 43,750 2 1,458 3,208
Higher priced mortgages............. 1,750 1 1,750 14,000 2 467 2,217
Reverse mortgages................... 3,025 .5 1,513 15,125 1 252 1,765
Advertising......................... 205,762 .5 102,881 2,057,620 1 34,294 137,175
Private education loans............. 75 .5 38 30,000 1.5 750 788
Sale, transfer, or assignment of 48,850 .5 24,425 2,442,500 .25 10,177 34,602
mortgages..........................
Ability to pay/qualified mortgage... 3,650 .75 2,738 0 0 0 2,738
Appraiser misconduct reporting...... 301,150 .75 225,863 6,023,000 .375 37,644 263,507
Mortgage servicing.................. 3,650 1.5 5,475 730,000 2.75 33,458 38,933
Loan originators.................... 2,250 2 4,500 22,500 5 1,875 6,375
---------------------------------------------------------------------------------------------------------------
Total open-end credit........... .............. .............. .............. .............. .............. .............. 2,089,103
---------------------------------------------------------------------------------------------------------------
Total closed-end credit......... .............. .............. .............. .............. .............. .............. 5,765,472
---------------------------------------------------------------------------------------------------------------
Total credit................ .............. .............. .............. .............. .............. .............. 7,854,575
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Regulation Z requires disclosures for closed-end and open-end credit. TILA and Regulation Z now cover credit up to $58,300 plus an annual adjustment
(except that real estate credit and private education loans are covered regardless of amount).
\2\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\3\ This figure lists the number of entities followed by the number of responses or programs each.
\4\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\5\ This figure lists the number of entities followed by the number of responses or programs each.
\6\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\7\ This figure lists the number of entities followed by the number of responses or programs each.
\8\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\9\ This figure lists the number of entities followed by the number of responses or programs each.
\10\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\11\ This figure lists the number of entities followed by the number of responses or programs each.
\12\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\13\ This figure lists the number of entities followed by the number of responses or programs each.
\14\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
\15\ Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
[[Page 26732]]
Regulation Z--Recordkeeping and Disclosures--Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------ Total cost ($)
Time (hours) Cost ($60/hr.) Time (hours) Cost ($44/hr.) Time (hours) Cost ($18/hr.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping........................... 0 $0 56,187 $2,472,228 505,679 $9,102,222 $11,574,450
Open-end credit Disclosures:
Initial terms....................... 8,337 500,220 75,030 3,301,220 0 0 3,301,540
Initial terms--prepaid accounts..... 50 3,000 454 19,776 0 0 22,976
Rescission notices.................. 39 2,340 352 15,488 0 0 17,828
Subsequent disclosures.............. 7,634 458,040 68,704 3,022,976 0 0 3,481,016
Subsequent disclosures--prepaid 26 1.560 232 10,208 0 0 11,768
accounts...........................
Periodic statements................. 125,015 7,500,900 1,125,138 49,506,072 0 0 57,006,972
Periodic statements--prepaid 159 9,540 1436 63,184 0 0 72,724
accounts...........................
Error resolution.................... 22,822 1,369,320 205,401 9,037,644 0 0 10,406,964
Error resolution--prepaid accounts 90 5,400 807 35,508 0 0 40,908
followup...........................
Credit and charge card accounts..... 3,972 238,320 35,747 1,572,868 0 0 1,811,188
Credit and charge card accounts-- 16 960 140 6,160 0 0 7,120
prepaid accounts...................
Settlement of estate debts.......... 2,084 125,040 18,758 825,352 0 0 950,392
Special credit card requirements.... 3,972 238,320 35,747 1,572,868 0 0 1,811,188
Home equity lines of credit......... 40 2,400 357 15,708 0 0 18,108
Home equity lines of credit--high 55 3,300 495 21,780 0 0 25,080
cost mortgages.....................
College student credit card 101 6,060 912 40,128 0 0 46,188
marketing--ed institutions.........
College student credit card 17 1,020 152 6,688 0 0 7,708
marketing--card issuer reports.....
Posting and reporting of credit card 3,972 238,320 35,747 1,572,868 0 0 1,811,188
agreements.........................
Posting and reporting of prepaid 1 60 2 88 0 0 148
accounts...........................
Advertising......................... 3,044 182,640 27,393 1,205,292 0 0 1,388,932
Advertising--prepaid accounts....... 6 360 54 2,376 0 0 2,736
Advertising--prepaid accounts 1 60 2 88 0 0 148
Updates............................
Sale, transfer, or assignment of 233 13,980 2,100 92,400 0 0 106,380
mortgages..........................
Appraiser misconduct reporting...... 26,351 1,581,060 237,156 10,434,864 0 0 12,015,924
Mortgage servicing.................. 238 14,280 2,137 94,028 0 0 108,308
Loan originators.................... 638 38,280 5,737 252,428 0 0 290,708
---------------------------------------------------------------------------------------------------------------
Total open-end credit........... .............. .............. .............. .............. .............. .............. 95,264,140
Closed-end credit Disclosures:
Credit disclosures.................. 442,200 26,532,000 3,979,802 175,111,288 0 0 201,643,208
Rescission notices.................. 9,308 558,480 83,767 3,685,748 0 0 4,244,228
Redisclosures....................... 6,954 417,240 62,587 2,753,828 0 0 3,171,068
Integrated mortgage disclosures..... 67,525 4,051,500 607,725 26,739,900 0 0 30,791,400
Variable rate mortgages............. 1,430 85,800 12,866 566,104 0 0 651,904
High cost mortgages................. 321 19,260 2,887 127,028 0 0 146,288
Higher priced mortgages............. 222 13,320 1,995 87,780 0 0 101,100
Reverse mortgages................... 177 10,620 1,588 69,872 0 0 80,492
Advertising......................... 13,718 823,080 123,457 5,432,108 0 0 6,255,188
Private education loans............. 79 4,740 709 31,196 0 0 35,936
Sale, transfer, or assignment of 3,460 207,600 31,142 1,370,248 0 0 1,577,848
mortgages..........................
Ability to pay/qualified mortgage... 274 16,440 2,464 108,416 0 0 124,856
Appraiser misconduct reporting...... 26,351 1,581,060 237,156 10,434,864 0 0 12,015,924
Mortgage servicing.................. 3,893 233,580 35,040 1,541,760 0 0 1,775,340
Loan originators.................... 638 38,280 5,737 252,428 0 0 290,708
---------------------------------------------------------------------------------------------------------------
Total closed-end credit......... .............. .............. .............. .............. .............. .............. 262,905,488
---------------------------------------------------------------------------------------------------------------
Total Disclosures............... .............. .............. .............. .............. .............. .............. 358,169,628
---------------------------------------------------------------------------------------------------------------
Total Recordkeeping and .............. .............. .............. .............. .............. .............. 369,744,078
Disclosures................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Request for Comment:
Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites
comments on: (1) Whether the disclosure requirements are necessary,
including whether the information will be practically useful; (2) the
accuracy of our burden estimates, including whether the methodology and
assumptions used are useful; (3) ways to enhance the quality, utility,
and clarity of the information to be collected; and (4) ways to
minimize the burden of providing the required information to consumers.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before July 16, 2021.
Write ``Regs BEMZ, PRA Comments, P084812'' on your comment. 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.
Because of the public health emergency in response to the COVID-19
outbreak and the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We strongly
encourage
[[Page 26733]]
you to submit your comment online through the https://www.regulations.gov website. To ensure the Commission considers your
online comment, please follow the instructions on the web-based form.
If you file your comment on paper, write ``Regs BEMZ, PRA Comments,
P084812'' 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, please submit your paper comment to the Commission
by courier or overnight service.
Because your comment will be placed on https://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 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. Your comment will be kept confidential only if the
FTC General Counsel grants your request in accordance with the law and
the public interest. Once your comment has been posted on https://www.regulations.gov, we cannot redact or remove your comment from that
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 July 16, 2021.
For information on the Commission's privacy policy, including routine
uses permitted by the Privacy Act, see https://www.ftc.gov/siteinformation/privacy-policy.
Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2021-10285 Filed 5-14-21; 8:45 am]
BILLING CODE 6750-01-P