[Federal Register Volume 87, Number 163 (Wednesday, August 24, 2022)]
[Notices]
[Pages 51982-51984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18281]


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

FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission.

ACTION: Notice.

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

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 
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, 2023.

DATES: Comments must be received on or before October 24, 2022.

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 ``Paperwork Reduction 
Act 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: 
    Title: Mortgage Acts and Practices--Advertising (Regulation N), 12 
CFR part 1014.
    OMB Control Number: 3084-0156.
    Type of Review: Extension of a currently approved collection.
    Abstract: The FTC and the CFPB generally share enforcement 
authority for Regulation N and thus the two agencies share burden 
estimates for Regulation N.\1\ Regulation N's recordkeeping 
requirements constitute a ``collection of information'' \2\ for 
purposes of the PRA.\3\ The Rule does not impose a disclosure 
requirement.
---------------------------------------------------------------------------

    \1\ As background, the FTC's Mortgage Acts and Practices--
Advertising Rule, 16 CFR part 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 part 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.
    \2\ Section 1014.5 of the Rule sets forth the recordkeeping 
requirements.
    \3\ 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.\4\ A failure to keep such records 
would be an independent violation of the Rule.
---------------------------------------------------------------------------

    \4\ Section 1014.5 of the Rule sets forth the recordkeeping 
requirements.
---------------------------------------------------------------------------

    Commission staff believes the recordkeeping requirements pertain to

[[Page 51983]]

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.\5\ 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.\6\ Certain other 
covered persons such as lead generators and rate aggregators may not 
currently maintain these records in the ordinary course of business.\7\ 
Thus, the recordkeeping requirements for those persons would constitute 
a ``collection of information.''
---------------------------------------------------------------------------

    \5\ Some covered persons, particularly mortgage brokers and 
lenders, are subject to state recordkeeping requirements for 
mortgage advertisements. See, e.g., Fla. Stat. 494.00165 (2021); 
Ind. Code Ann. 23-2.5-8.5 (2021; Kan. Stat. Ann. 9-2208 (2022); 
Minn. Stat. 58.14 (2021); Wash. Rev. Code 19.146.060 (2021), and WAC 
208-660-450 (2022). 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 (2022); N.Y. Banking Law 597 
(Consol. 2021); Tenn. Code Ann. 45-13-206 (2021). 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 part 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.
    \6\ See 44 U.S.C. 3502(3)(A); 5 CFR 1320.3(b)(2).
    \7\ 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.
    Likely Respondents: Lead generators and rate aggregators.
    Estimated Annual Hours Burden: 1,500 hours.
     Derived from 1,000 likely respondents x approximately 3 
hours for each respondent per year to do these tasks = 3,000 hours.
     Since the FTC shares enforcement authority with the CFPB 
for Regulation N, the FTC's allotted PRA burden is 1,500 annual hours.
    Estimated Annual Labor Cost Burden: $26,550, which is derived from 
1,500 hours x $17.70 per hour.\8\
---------------------------------------------------------------------------

    \8\ 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 2021 table 1 (``National employment and wage data from the 
Occupational Employment Statistics survey by occupation''), released 
March 31, 2022, available at http://www.bls.gov/news.release/pdf/ocwage.pdf.
---------------------------------------------------------------------------

    As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C. 
3506(c)(2)(A), the FTC is providing this opportunity for public comment 
before requesting that OMB extend the existing clearance for the 
information collection requirements contained in Regulation N.

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 \9\ 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.\10\ 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.\11\
---------------------------------------------------------------------------

    \9\ 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.
    \10\ 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.
    \11\ 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, 87 FR 40513 (July 7, 
2022), available at 2022-14474.pdf (govinfo.gov).
---------------------------------------------------------------------------

    Estimated labor costs: $26,550.
    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 $17.70.\12\ Based upon the above 
estimates and assumptions, the total annual labor cost to retain and 
file documents, for the FTC's allotted burden, is $26,550 (1,500 hours 
x $17.70 per hour).
---------------------------------------------------------------------------

    \12\ 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 2021, table 1 (``National employment and wage data from the 
Occupational Employment Statistics survey by occupation''), released 
March 31, 2022, 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

    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 maintaining records and providing disclosures to 
consumers. All comments must be received on or before October 24, 2022.
    You can file a comment online or on paper. For the FTC to consider 
your comment, we must receive it on or before October 24, 2022. Write 
``Paperwork Reduction Act Comment: FTC File No. P072108'' 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.
    Due to the public health emergency in response to the COVID-19 
outbreak and

[[Page 51984]]

the agency's heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We encourage you to submit 
your comments online through the https://www.regulations.gov website.
    If you prefer to file your comment on paper, write ``Paperwork 
Reduction Act 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 become publicly available at 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 
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 publicly at www.regulations.gov, we cannot redact or remove 
your comment 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 October 24, 
2022. 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.

Josephine Liu,
Assistant General Counsel for Legal Counsel.
[FR Doc. 2022-18281 Filed 8-23-22; 8:45 am]
BILLING CODE 6750-01-P