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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2018-06669

## Record

- **Collection:** Federal Register
- **Document type:** Notice
- **Published:** April 3, 2018
- **Citation:** 83 FR 14273

## Text

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.
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

1
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).

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, § 1029(a), -(c).

3

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.
4

Because of the generally 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 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.

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 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.

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

7

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

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).

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.
9

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.

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.
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.

10
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.
11

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.

11
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
12

and information compiled and produced in response to FTC law enforcement investigations or prosecutions.
13

12

See supra
note 8 and accompanying text.

13

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.
14

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.
15

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.
16

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

14
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.

15
Regulation B contains model forms that creditors may use to gather and retain the required information.

16
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.
17

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.
18

17
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.

18
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
1

Average
burden per
respondent
(hours)

Total setup/
monitoring
burden
(hours)

Number of
transactions

Transaction-related
2

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
4,650
1,725,150
.50
14,376
19,026

Self-test disclosures
1,500
.5
750
60,000
.25
250
1,000

Total

1,088,912

1
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.

2
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
0
$0
66,345
$2,786,490
597,108
$10,150,836
$12,937,326

Other recordkeeping
0
0
43,333
1,819,986
0
0
1,819,986

Recordkeeping of self-test
0
0
1,500
63,000
0
0
63,000

Recordkeeping of corrective action
0
0
600
25,200
0
0
25,200

Total Recordkeeping

14,845,512

Disclosures:

Credit history reporting
28,380
1,589,280
255,420
10,727,640
0
0
12,316,920

Adverse action notices
78,509
4,396,504
706,577
29,676,234
0
0
34,072,738

Appraisal reports
1,903
106,568
17,123
719,166
0
0
825,734

Self-test disclosure
100
5,600
900
37,800
0
0
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
1

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
.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

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
2

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
3

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:
4

Disclosures
550

40x10
5

220,000
2,750,000,000
.02
916,667
1,136,667

Disclosures—updates
138
1x10

1,380
6

N/A

1,380

Access to account information
550

20x10
7

110,000
1,100,000
.01
183
110,183

Error resolution
300
4x4
4,800
275,000
2
9,167
13,967

Error resolution—followup
8

N/A

1,380
30
690
690

Submission of agreements
138
2x1
276
690
1
11
287

Updates to agreements
9

N/A

690
5
57
57

Total

7,184,903

1
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.

2
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.

3
The total number of electronic check conversion respondents and transactions has decreased, particularly due to declining check usage.

4
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).

5
Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.

6
This reflects prepaid accounts' updates of additional fee type disclosures. Individual burden hours are listed first, followed by the number of programs.

7
Burden hours are on a per program basis; individual burden hours are listed first, followed by the number of programs.

8
This pertains to prepaid accounts.

9
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
0
$0
25,105
$1,054,410
225,948
$3,841,116
$4,895,526

Disclosures:

Initial terms
1,374
76,944
12,367
519,414
0
0
596,358

Change in terms
804
45,024
7,233
303,786
0
0
348,810

Periodic statements
12,285
687,960
110,565
4,643,730
0
0
5,331,690

Error resolution
3,640
203,840
32,760
1,375,920
0
0
1,579,760

Transaction receipts
47,198
2,643,088
424,785
17,840,970
0
0
20,484,058

Preauthorized transfers
15,621
874,776
140,589
5,904,738
0
0
6,779,514

Service provider notices
583
32,648
5,250
220,500
0
0
253,148

ATM notices
10,420
583,520
93,778
3,938,676
0
0
4,522,196

Electronic check conversion
2,452
137,312
22,068
926,856
0
0
1,064,168

Overdraft services
800
44,800
7,200
302,400
0
0
347,200

Gift cards
25,750
1,442,000
231,750
9,733,500
0
0
11,175,500

Remittance transfers:

Disclosures
144,600
8,097,600
1,301,400
54,658,800
0
0
62,756,400

Error resolution
182,040
10,194,240
1,638,360
68,811,120
0
0
79,005,360

Agent compliance
144,600
8,097,600
1,301,400
54,658,800
0
0
62,756,400

Prepaid accounts and gov't. benefits:

Disclosures
113,667
6,365,352
1,023,000
42,966,000
0
0
49,331,352

Disclosures—updates
138
7,728
1,242
52,164
0
0
59,892

Access to account information
11,018
617,008
99,165
4,164,930
0
0
4,781,938

Error resolution
1,397
78,232
12,570
527,940
0
0
606,172

Error resolution—followup
69
3,864
621
26,082
0
0
29,946

Submission of agreements
29
1,624
258
10,836
0
0
12,460

Updates to agreements
6
336
51
2,142
0
0
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
19

19
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
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
3

14,615
.50
7,308
578,960
.25
2,412
9,720

Total

71,750

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). 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.

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). 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.

3
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
0
0
$1,649,088

Disclosures:

Motor Vehicle Leases
54,021
3,025,176
6,002
252,084
0
0
3,277,260

Other Leases
1,806
101,136
201
8,442
0
0
109,578

Advertising
8,748
489,888
972
40,824
0
0
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,
20

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

20
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
1

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
3

2
4x1

12

3
3x78,667

.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 accounts
3

4
4x1

12

5
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
3

6
40x1

120

7
3x944,000

.03125
1,475
1,595

Error resolution
23,650
.75
17,738
2,104,850
6
210,485
228,223

Error resolution—prepaid accounts followup
3

8
4x1

12

9
3x1,180

15
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
3

10
4x1

12

11
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
.5
375
5,250
.25
22
397

Home equity lines of credit high-cost mortgages
250
2
500
1,500
2
50
550

College student credit card marketing—ed. institutions
1,350
.5
675
81,000
.25
338
1,013

College student credit card marketing—card issuer reports
150
.75
113
4,500
.75
56
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
3

12
.75x1

2

13
3x5

2.5
1
3

Advertising
38,650
.75
28,988
115,950
.75
1,449
30,437

Advertising—prepaid accounts
3

14
20x1

60
N/A

60

Advertising—prepaid accounts Updates
3

15
0.2x5

3
N/A

3

Sale, transfer, or assignment of mortgages
500
.5
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
16

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 mortgages
48,850
.5
24,425
2,442,500
.25
10,177
34,602

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
17

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 $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.

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.

16
Regulation Z has expanded various mortgage servicing requirements for successors-in-interest, which in some instances can affect open-end credit, increasing burden. However, the number of entities and transactions under FTC jurisdiction have decreased, reducing overall burden compared to prior FTC estimates.

17
Regulation Z has expanded various mortgage servicing requirements for successors-in-interest, and periodic statement requirements including for consumers in bankruptcy, among other things, affecting closed-end credit, increasing burden. However, the number of entities and transactions under FTC jurisdiction have decreased, reducing overall burden compared to prior FTC estimates.

Regulation Z—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
0
$0
56,187
$2,359,854
505,679
$8,596,543
$10,956,397

Open-end credit Disclosures:

Initial terms
8,337
466,872
75,030
3,151,260
0
0
3,618,132

Initial terms—prepaid accounts
50
2,800
454
19,068
0
0
21,868

Rescission notices
39
2,184
352
14,784
0
0
16,968

Subsequent disclosures
7,634
427,504
68,704
2,885,568
0
0
3,313,072

Subsequent disclosures—prepaid accounts
26
1.456
232
9,744
0
0
11,200

Periodic statements
125,015
7,000,840
1,125,138
47,255,796
0
0
54,256,636

Periodic statements—prepaid accounts
159
8,904
1436
60,312
0
0
69.216

Error resolution
22,822
1,278,032
205,401
8,626,842
0
0
9,904,874

Error resolution—prepaid accounts followup
90
5,040
807
33.894
0
0
38,934

Credit and charge card accounts
3,972
222,432
35,747
1,501,374
0
0
1,723,806

Credit and charge card accounts-prepaid accounts
16
896
140
5,880
0
0
6,776

Settlement of estate debts
2,084
116,704
18,758
787,836
0
0
904,540

Special credit card requirements
3,972
222,432
35,747
1,501,374
0
0
1,723,806

Home equity lines of credit
40
2,240
357
14,994
0
0
17,234

Home equity lines of credit—high cost mortgages
55
3,080
495
20,790
0
0
23,870

College student credit card marketing—ed institutions
101
5,656
912
38,304
0
0
43,960

College student credit card marketing—card issuer reports
17
952
152
6,384
0
0
7,336

Posting and reporting of credit card agreements
3,972
222,432
35,747
1,501,374
0
0
1,723,806

Posting and reporting of prepaid accounts
1
56
2
84
0
0
140

Advertising
3,044
170,464
27,393
1,150,506
0
0
1,320,970

Advertising—prepaid accounts
6
336
54
2,268
0
0
2,604

Advertising—prepaid accounts Updates
1
56
2
84
0
0
140

Sale, transfer, or assignment of mortgages
233
13,048
2,100
88,200
0
0
101,248

Appraiser misconduct reporting
26,351
1,475,656
237,156
9,960,552
0
0
11,436,208

Mortgage servicing
238
13,328
2,137
89,754
0
0
103,082

Loan originators
638
35,728
5,737
240,954
0
0
276,682

Total open-end credit

90,667,108

Closed-end credit Disclosures:

Credit disclosures
442,200
2,476,300
3,979,802
167,151,684
0
0
169,627,984

Rescission notices
9,308
521,248
83,767
3,518,214
0
0
4,039,462

Redisclosures
6,954
389,424
62,587
2,628,654
0
0
3,018,078

Integrated mortgage disclosures
67,525
3,781,400
607,725
25,524,450
0
0
29,305,850

Variable rate mortgages
1,430
80,080
12,866
540,372
0
0
620,452

High cost mortgages
321
17,976
2,887
121,254
0
0
139,230

Higher priced mortgages
222
12,432
1,995
83,790
0
0
96,222

Reverse mortgages
177
9,912
1,588
66,696
0
0
76,608

Advertising
13,718
768,208
123,457
5,185,194
0
0
5,953,402

Private education loans
79
4,424
709
29,778
0
0
34,202

Sale, transfer, or assignment of mortgages
3,460
193,760
31,142
1,307,964
0
0
1,501,724

Ability to pay/qualified mortgage
274
15,344
2,464
103,488
0
0
118,832

Appraiser misconduct reporting
26,351
1,475,656
237,156
9,960,552
0
0
11,436,208

Mortgage servicing
3,893
218,008
35,040
1,471,680
0
0
1,689,688

Loan originators
638
35,728
5,737
240,954
0
0
276,682

Total closed-end credit

227,934,624

Total Disclosures

318,601,732

Total Recordkeeping and Disclosures

329,558,129

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 FTC to consider your comment, we must receive it on or before June 4, 2018. 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, to the extent practicable, on the public FTC website, at
https://www.ftc.gov/policy/public-comments.

Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
https://ftcpublic.commentworks.com/ftc/RegsBEMZpra,
by following the instructions on the web-based form. If this Notice appears at
https://www.regulations.gov/#!home,
you also may file a comment through that website.

If you file your comment on paper, write “Regs BEMZ, PRA Comments, P084812” on your comment and on the envelope, and mail it to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.

Because your comment will be placed on the publicly accessible FTC website at
https://www.ftc.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 on the public FTC website—as legally required by FTC Rule 4.9(b)—we cannot redact or remove your comment from the FTC website, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request.

Visit the FTC website to read this Notice. 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 June 4, 2018. 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.

David C. Shonka,
Acting General Counsel.

[FR Doc. 2018-06669 Filed 4-2-18; 8:45 am]
BILLING CODE 6750-01-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2018-06669. Public record. Not legal advice.