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

Federal RegisterApr 3, 2018

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FEDERAL TRADE COMMISSION

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

AGENCY:

Federal Trade Commission (“FTC” or “Commission”).

ACTION:

Notice.

SUMMARY:

The FTC intends to ask the Office of Management and Budget (“OMB”) to extend for an additional three years the current Paperwork Reduction Act (“PRA”) clearance for the FTC's enforcement of the information collection requirements in four consumer financial regulations enforced by the Commission. Those clearances expire on July 31, 2018.

DATES:

Comments must be filed by June 4, 2018.

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://ftcpublic.commentworks.com/ftc/RegsBEMZpra

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:

Requests for additional information or copies of the proposed information requirements should be addressed to 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).

The FTC enforces these statutes as to all businesses engaged in conduct these laws cover unless these businesses (such as federally chartered or insured depository institutions) are subject to the regulatory authority of another federal agency.

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 interim final rules for new regulations in 12 CFR part 1002 (Regulation B), 12 CFR part 1005 (Regulation E), 12 CFR part 1013 (Regulation M), and 12 CFR 1026 (Regulation Z) for those entities under its rulemaking jurisdiction, which were issued as final rules thereafter.

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

under all of these statutes and also for certain interchange-related requirements under EFTA.

12 CFR 1002 (Reg. B) (76 FR 79442, Dec. 21, 2011) (81 FR 25323, Apr. 28, 2016); 12 CFR 1005 (Reg. E) (76 FR 81020, Dec. 27, 2011); (81 FR 25323, Apr. 28, 2016) 12 CFR 1013 (Reg. M) (76 FR 78500, Dec. 19, 2011) (81 FR 25323, Apr. 28, 2016); 12 CFR 1026 (Reg. Z) (76 FR 79768, Dec. 22, 2011) (81 FR 25323, Apr. 28, 2016).

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, § 1029(a), -(c).

See

Dodd-Frank Act, § 1075 (these requirements are implemented through Board Regulation II, 12 CFR 235, rather than EFTA's implementing Regulation E).

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.

Because of the generally shared enforcement jurisdiction, the two agencies have divided the FTC's previously-cleared PRA burden

estimates between them,

except that the FTC has assumed all of the burden estimates associated with motor vehicle dealers

and now is also doing the same regarding estimated burden for state-chartered credit unions (both reflected in the burden summaries below as a “carve-out”). The division of PRA burden hours not attributable to motor vehicle dealers and, as appropriate, to 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.

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 third quarter of 2017, there were approximately the following number of state-chartered credit unions: 2,347 state-chartered credit unions—2,106 federally insured, 125 privately insured, and 116 in Puerto Rico 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 (rounded to 2,300). As noted above, the CFPB's figures as to state chartered credit unions include burden for those entities exceeding $10 billion in assets (approximately 3 entities).

See generally

Dodd-Frank Act, §§ 1061, 1025, 1026. This attribution does not change actual enforcement authority.

The CFPB also factors into its burden estimates respondents over which it has jurisdiction but the FTC does not.

See

Dodd-Frank Act § 1029 (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 “carve-out” for this PRA burden analysis reflects a general estimated volume of motor vehicle dealers. This attribution does not change actual enforcement authority.

Through 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.

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 is including for itself the entire PRA burden for all motor vehicle dealers in the burden estimates below.

See

Dodd-Frank Act, § 1029(a), -(c).

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.

Covered entities, however, may incur some burden associated with ensuring that they do not prematurely dispose of relevant records (

i.e.,

during the time span they must retain records under the applicable regulation).

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).

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 their 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 “monitoring” (or “setup”) 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 their normal course of activities. For other covered entities that do not, their compliance burden will vary widely depending on the extent to which they have developed effective computer-based or electronic systems and procedures to communicate and document required disclosures.

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.

Calculating the burden associated with the four regulations' disclosure requirements is very difficult because of the highly diverse group of affected entities. 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.

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.

The Commission generally does not have jurisdiction over banks, thrifts, and federal credit unions under the applicable regulations.

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 $56 for managerial oversight, $42 for skilled technical services, and $17 for clerical work. These figures are averages drawn from Bureau of Labor Statistics data.

Further, the FTC 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.

These inputs are based broadly on mean hourly data found within the “Bureau of Labor Statistics, Economic News Release,” March 31, 2017, Table 1, “National employment and wage data from the Occupational Employment Statistics survey by occupation, May 2016.”

http://www.bls.gov/news.release/ocwage.t01.htm.

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 FTC estimates under the PRA of recordkeeping and disclosure average

time and labor costs, excluding that which the FTC believes entities incur customarily in the normal course of business

and information compiled and produced in response to FTC law enforcement investigations or prosecutions.

See supra

note 8 and accompanying text.

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”).

FTC enforcement initiatives are based on diverse statutory and regulatory requirements. Some actions are brought in partnership with other federal and state agencies and encompass matters enforced by those agencies, not solely issues related to Regulations M and Z. Further, even where Regulations M and Z matters also are involved in FTC actions, or are in the broader initiative or enforcement sweep of automobile actions, the actions frequently include charges of unfair and/or deceptive practices under Section 5 of the FTC Act, 15 U.S.C. 45(a), and/or may involve warranty violations under the Magnuson Moss Warranty Act, 15 U.S.C. 2301-2312, and other issues not pertinent to this PRA submission.

See, e.g.,

FTC, Press Release,

FTC, Multiple Law Enforcement Partners Announce Crackdown on Deception, Fraud in Auto Sales, Financing and Leasing,

Mar. 26, 2015,

available at https://www.ftc.gov/news-events/press-releases/2015/03/ftc-multiple-law-enforcement-partners-announce-crackdown.

The FTC also frequently issues business “blog” guidance with its enforcement initiatives to guide and facilitate compliance.

See, e.g.,

Lesley Fair, “

FTC says car dealer took consumers for a ride—again,

FTC BUSINESS CENTER BLOG (Aug. 18, 2016),

available at https://www.ftc.gov/news-events/blogs/business-blog/2016/08/ftc-says-car-dealer-took-consumers-ride-again;

Lesley Fair,

Operation Ruse Control: Six tips if cars are up your alley,

FTC BUSINESS CENTER BLOG (Mar. 26, 2015),

available at https://www.ftc.gov/news-events/blogs/business-blog/2015/03/operation-ruse-control-6-tips-if-cars-are-your-alley.

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.

Recordkeeping

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.

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.

Keeping associated records of race/national origin, sex, age, and marital status requires an estimated one minute of skilled technical time.

Section 1071 of the Dodd-Frank Act amended the ECOA to require financial institutions to collect and report information concerning credit applications by women- or minority-owned businesses and small businesses, effective on the July 21, 2011 transfer date. Both the CFPB and the Board have exempted affected entities from complying with this requirement until a date set by the prospective final rules these agencies issue to implement it. The Commission will address PRA burden for its enforcement of the requirement after the CFPB and the Board have issued the associated final rules.

Regulation B contains model forms that creditors may use to gather and retain the required information.

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.

Disclosure

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.

Finally, Regulation B also requires that for accounts which spouses may use or for 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.

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.

The disclosure may be provided orally or in writing. The model form provided by Regulation B assists creditors in providing the written disclosure.

Burden Totals

Recordkeeping:

708,886 hours (631,281 + 77,605 carve-out); $14,845,512 ($13,316,477 + $1,529,035 carve-out), associated labor costs.

Disclosures:

1,088,912 hours (961,224 + 127,688 carve-out); $47,258,792 ($41,717,144 + $5,541,648 carve-out), associated labor costs.

Regulation B—Disclosures—Burden Hours

Disclosures

Respondents

Setup/Monitoring

Average

burden per

respondent

(hours)

Total setup/

monitoring

burden

(hours)

Number of

transactions

Transaction-related

Average

burden per

transaction

(minutes)

Total

transaction

burden

(hours)

Total

burden

(hours)

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

1,725,150

.50

14,376

19,026

Self-test disclosures

1,500

750

60,000

.25

250

1,000

Total

1,088,912

The estimates assume that all applicable entities would be affected, with respect to appraisal reports and other written valuations. These entities have decreased slightly, while credit history, adverse action and self-test entities have increased slightly, from prior FTC estimates, based on market changes.

Applicable transactions have increased for appraisal reports; however, credit history, adverse action and self-test transactions have decreased, based on market changes. Taken together, the overall total disclosure burden has decreased.

Regulation B—Recordkeeping and Disclosures—Cost

Required Task

Managerial

Time

(hours)

Cost

($56/hr.)

Skilled Technical

Time

(hours)

Cost

($47/hr.)

Clerical

Time

(hours)

Cost

($17/hr.)

Total cost

($)

General recordkeeping

66,345

$2,786,490

597,108

$10,150,836

$12,937,326

Other recordkeeping

43,333

1,819,986

Recordkeeping of self-test

1,500

63,000

Recordkeeping of corrective action

600

25,200

Total Recordkeeping

14,845,512

Disclosures:

Credit history reporting

28,380

1,589,280

255,420

10,727,640

12,316,920

Adverse action notices

78,509

4,396,504

706,577

29,676,234

34,072,738

Appraisal reports

1,903

106,568

17,123

719,166

825,734

Self-test disclosure

100

5,600

900

37,800

43,400

Total Disclosures

47,258,792

Total Recordkeeping and Disclosures

62,104,304

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. This represents a decrease from prior figures, reflecting a decrease in entities under FTC jurisdiction engaged in applicable activities.

Burden Totals

Recordkeeping:

251,053 hours (233,947 + 17,106 carve-out); $4,895,526 ($4,561,949 + $333,577 carve-out), associated labor costs.

Disclosures:

7,184,903 hours (7,165,929 + 18,974 carve-out); $311,824,800 ($310,999,734 + $825,066 carve-out), associated labor costs.

Regulation E—Disclosures—Burden Hours

Disclosures

Setup/Monitoring

Respondents

Average

burden per

respondent

Total setup/monitoring burden

(hours)

Transaction-related

Number of Transactions

Average

burden per

transaction

(minutes)

Total

transaction

burden

(hours)

Total

burden

(hours)

Initial terms

27,300

13,650

273,000

.02

13,741

Change in terms

8,550

4,275

11,286,000

.02

3,762

8,037

Periodic statements

27,300

13,650

327,600,000

.02

109,200

122,850

Error resolution

27,300

13,650

273,000

22,750

36,400

Transaction receipts

27,300

13,650

1,375,000,000

.02

458,333

471,983

Preauthorized transfers

258,553

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

25,000,000

.25

104,167

104,198

Electronic check conversion

48,553

24,277

728,295

.02

243

24,520

Overdraft services

15,000

7,500

1,500,000

.02

500

8,000

Gift cards

15,000

7,500

750,000,000

.02

250,000

257,500

Remittance transfers:

Disclosures

4,800

1.25

6,000

96,000,000

1,440,000

1,446,000

Error resolution

4,800

1.25

6,000

120,960,000

1,814,400

1,820,400

Agent compliance

4,800

1.25

6,000

96,000,000

1,440,000

1,446,000

Prepaid accounts and gov't benefits:

Disclosures

550

40x10

220,000

2,750,000,000

.02

916,667

1,136,667

Disclosures—updates

138

1x10

1,380

N/A

1,380

Access to account information

550

20x10

110,000

1,100,000

.01

183

110,183

Error resolution

300

4x4

4,800

275,000

9,167

13,967

Error resolution—followup

N/A

1,380

690

Submission of agreements

138

2x1

276

690

287

Updates to agreements

N/A

690

Total

7,184,903

Except as noted below, most respondent tallies in this table have decreased due to business shifts and other market changes that result in fewer entities under FTC jurisdiction. Accordingly, related transactions under FTC jurisdiction have also decreased.

Preauthorized transfers rules apply to “persons” and entities. The number of respondents and transactions by such persons have increased, as these preauthorized transfers are used more commonly than previously.

The total number of electronic check conversion respondents and transactions has decreased, particularly due to declining check usage.

Prepaid accounts are now covered by Regulation E (and payroll cards are included in this area). Government benefit notices are included also in this area, although some separate requirements for government benefits remain; these factors are accounted for in the estimates. The number of government benefit entities also have declined given business shifts that have reduced the number of entities under FTC jurisdiction (and prepaid entities under FTC jurisdiction are also few in number).

Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.

This reflects prepaid accounts' updates of additional fee type disclosures. Individual burden hours are listed first, followed by the number of programs.

Burden hours are on a per program basis; individual burden hours are listed first, followed by the number of programs.

This pertains to prepaid accounts.

This pertains to prepaid accounts' agreements.

Regulation E—Recordkeeping and Disclosures—Cost

Required task

Managerial

Time

(hours)

Cost

($56/hr.)

Skilled Technical

Time

(hours)

Cost

($42/hr.)

Clerical

Time

(hours)

Cost

($17/hr.)

Total cost

($)

Recordkeeping

25,105

$1,054,410

225,948

$3,841,116

$4,895,526

Disclosures:

Initial terms

1,374

76,944

12,367

519,414

596,358

Change in terms

804

45,024

7,233

303,786

348,810

Periodic statements

12,285

687,960

110,565

4,643,730

5,331,690

Error resolution

3,640

203,840

32,760

1,375,920

1,579,760

Transaction receipts

47,198

2,643,088

424,785

17,840,970

20,484,058

Preauthorized transfers

15,621

874,776

140,589

5,904,738

6,779,514

Service provider notices

583

32,648

5,250

220,500

253,148

ATM notices

10,420

583,520

93,778

3,938,676

4,522,196

Electronic check conversion

2,452

137,312

22,068

926,856

1,064,168

Overdraft services

800

44,800

7,200

302,400

347,200

Gift cards

25,750

1,442,000

231,750

9,733,500

11,175,500

Remittance transfers:

Disclosures

144,600

8,097,600

1,301,400

54,658,800

62,756,400

Error resolution

182,040

10,194,240

1,638,360

68,811,120

79,005,360

Agent compliance

144,600

8,097,600

1,301,400

54,658,800

62,756,400

Prepaid accounts and gov't. benefits:

Disclosures

113,667

6,365,352

1,023,000

42,966,000

49,331,352

Disclosures—updates

138

7,728

1,242

52,164

59,892

Access to account information

11,018

617,008

99,165

4,164,930

4,781,938

Error resolution

1,397

78,232

12,570

527,940

606,172

Error resolution—followup

3,864

621

26,082

29,946

Submission of agreements

1,624

258

10,836

12,460

Updates to agreements

336

2,142

2,478

Total Disclosures

311,824,800

Total Recordkeeping and Disclosures

316,720,326

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 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 Totals

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.

Recordkeeping:

30,203 hours (3,513 + 26,690 carve-out); $1,649,088 ($191,814 + $1,457,274 carve-out), associated labor costs.

Disclosures:

71,750 hours (2,094 + 69,656 carve-out); $3,917,550 ($114,394 + $3,803,156 carve-out), associated labor costs.

Regulation M—Disclosures—Burden Hours

Disclosures

Setup/Monitoring

Respondents

Average

burden per

respondent

(hours)

Total setup/

monitoring

burden

(hours)

Transaction-related

Number of

transactions

Average

burden per

transaction

(minutes)

Total

transaction

burden

(hours)

Total

burden

(hours)

Motor Vehicle Leases

26,690

4,000,000

.50

33,333

60,023

Other Leases

3,513

.50

1,757

60,000

.25

250

2,007

Advertising

14,615

.50

7,308

578,960

.25

2,412

9,720

Total

71,750

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). While the number of respondents for vehicle leases has decreased with market changes, the number of vehicle lease transactions has remained about the same, compared to past FTC estimates. Leases up to $55,800 plus an annual adjustment are now covered. The resulting total burden has decreased.

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). The number of respondents has decreased, based on market changes in companies and types of transactions they offer; the number of such transactions has also declined, based on types of transactions offered that are covered by the CLA. Leases up to $55,800 plus an annual adjustment are now covered. The resulting total burden has decreased.

Respondents for advertising have decreased as have lease advertisements, based on market changes, from past FTC estimates. The resulting total burden has decreased.

Regulation M—Recordkeeping and Disclosures—Cost

Required task

Managerial

Time

(hours)

Cost

($56/hr.)

Skilled Technical

Time

(hours)

Cost

($42/hr.)

Clerical

Time

(hours)

Cost

($17/hr.)

Total cost

($)

Recordkeeping

27,183

$1,522,248

3,020

$126,840

$1,649,088

Disclosures:

Motor Vehicle Leases

54,021

3,025,176

6,002

252,084

3,277,260

Other Leases

1,806

101,136

201

8,442

109,578

Advertising

8,748

489,888

972

40,824

530,712

Total Disclosures

3,917,550

Total Recordkeeping and Disclosures

5,566,638

4. Regulation Z

The TILA was enacted to foster comparison credit shopping and informed credit decision making 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,

ability to pay of mortgage consumers, mortgage servicing, loan originators, and certain integrated mortgage disclosures.

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.

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).

Burden Totals

Recordkeeping:

561,866 hours (484,961 + 76,905 carve-out); $10,956,397 ($9,456,749 + $1,499,648 carve-out), associated labor costs.

Disclosures:

7,854,575 hours ($6,838,256 + 1,016,319 carve-out; $318,601,732 ($274,493,500 + $44,108,232 carve-out), associated labor costs.

Regulation Z—Disclosures—Burden Hours

Disclosures

Setup/Monitoring

Respondents

Average

burden per

respondent

(hours)

Total setup/

monitoring

burden

(hours)

Transaction-related

Number of

transactions

Average

burden per

transaction

(minutes)

Total

transaction

burden

(hours)

Total

burden

(hours)

Open-end credit:

Initial terms

23,650

.75

17,738

10,500,600

.375

65,629

83,367

Initial terms—prepaid accounts

4x1

3x78,667

.125

492

504

Rescission notices

750

375

3,750

.25

391

Subsequent disclosures

4,650

.75

3,488

23,250,000

.188

72,850

76,338

Subsequent disclosures—prepaid accounts

4x1

3x78,667

.0625

246

258

Periodic statements

23,650

.75

17,738

788,325,450

.0938

1,232,415

1,250,153

Periodic statements—prepaid accounts

40x1

120

3x944,000

.03125

1,475

1,595

Error resolution

23,650

.75

17,738

2,104,850

210,485

228,223

Error resolution—prepaid accounts followup

4x1

3x1,180

885

897

Credit and charge card accounts

10,250

.75

7,688

5,125,000

.375

32,031

39,719

Credit and charge card accounts—prepaid accounts

4x1

3x12

240

144

156

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

375

5,250

.25

397

Home equity lines of credit high-cost mortgages

250

500

1,500

550

College student credit card marketing—ed. institutions

1,350

675

81,000

.25

338

1,013

College student credit card marketing—card issuer reports

150

.75

113

4,500

.75

169

Posting and reporting of credit card agreements

10,250

.75

7,688

5,125,000

.375

32,031

39,719

Posting and reporting of prepaid account agreements

.75x1

3x5

2.5

Advertising

38,650

.75

28,988

115,950

.75

1,449

30,437

Advertising—prepaid accounts

20x1

N/A

Advertising—prepaid accounts Updates

0.2x5

N/A

Sale, transfer, or assignment of mortgages

500

250

500,000

.25

2,083

2,333

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

1,250

2,375

Loan originators

2,250

4,500

22,500

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

1,825

5,475,000

91,250

93,075

Redisclosures

101,150

50,575

505,750

2.25

18,966

69,541

Integrated mortgage disclosures

3,650

36,500

10,950,000

3.5

638,750

675,250

Variable rate mortgages

3,650

365,000

1.75

10,646

14,296

High cost mortgages

1,750

43,750

1,458

3,208

Higher priced mortgages

1,750

14,000

467

2,217

Reverse mortgages

3,025

1,513

15,125

252

1,765

Advertising

205,762

102,881

2,057,620

34,294

137,175

Private education loans

30,000

1.5

750

788

Sale, transfer, or assignment of mortgages

48,850

24,425

2,442,500

.25

10,177

34,602

Ability to pay/qualified mortgage

3,650

.75

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

4,500

22,500

1,875

6,375

Total open-end credit

2,089,103

Total closed-end credit

5,765,472

Total credit

7,854,575

Regulation Z requires disclosures for closed-end and open-end credit. TILA and Regulation Z now cover credit up to $55,800 plus an annual adjustment (except that real estate credit and private education loans are covered regardless of amount). In most instances noted below, business shifts and other market changes have reduced estimated PRA burden. In a few instances noted below, changes to Regulation Z have increased estimated PRA burden. This is particularly due to the inclusion of burden for prepaid accounts with certain credit aspects, as applicable, due to new rules. However, the overall effect of these competing factors, combined with the FTC sharing with the CFPB estimated PRA burden (for all but motor vehicle dealers and certain credit unions) yields a net decrease from the FTC's prior reported estimate for open-end credit and for closed-end credit.

Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.

This figure lists the number of entities followed by the number of responses or programs each.