Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension

Federal RegisterJul 26, 2018

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FEDERAL TRADE COMMISSION

Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension

AGENCY:

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

ACTION:

Notice.

SUMMARY:

In compliance with the Paperwork Reduction Act (PRA) of 1995, the FTC is seeking public comments on its request to the Office of Management and Budget (“OMB”) to extend for three years the current PRA clearances for the information collection requirements in four consumer financial regulations that the Commission enforces. Those clearances expire on July 31, 2018.

DATES:

Comments must be filed by August 27, 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/RegsBEMZpra2

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:

On April 3, 2018, the FTC sought public comment on the information collection requirements associated with the four consumer financial regulations at issue. 83 FR 14273. No relevant comments were received. The four regulations covered by that and this Notice were and are, respectively:

(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 that these laws cover unless the 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 Bureau of Consumer Financial Protection (BCFP) on July 21, 2011 (“transfer date”). To implement this transferred authority, the BCFP 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 BCFP, the Board retained rulemaking authority for certain motor vehicle dealers

under 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 BCFP generally share the authority to enforce Regulations B, E, M, and Z for entities for which the FTC had enforcement authority before the Act.

For certain motor vehicle dealers and for certain state-chartered credit unions, the FTC generally has exclusive enforcement jurisdiction.

The division

of PRA burden hours not attributable to motor vehicle dealers and, when appropriate, to state-chartered credit unions, is reflected in the BCFP's PRA clearance requests to OMB, as well as in the FTC's burden estimates below. The burden estimates associated with all motor vehicle dealers and now, when appropriate, the estimated burden estimates associated with state-chartered credit unions, are reflected in the burden summaries below as a “carve-out.”

This covers a myriad of entities that provide credit to consumers, as well as BCFP retaining concurrent jurisdiction over certain types of motor vehicle dealers.

See

Dodd-Frank Act § 1029(a), as limited by subsection (b) as to motor vehicle dealers. Subsection (b) does not preclude BCFP 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 to consumers, where the contract is not routinely assigned to unaffiliated third parties.

See

Dodd-Frank Act § 1029(a)-(c) regarding motor vehicle dealers, as limited by subsection (b)

concerning motor vehicle dealers engaged in direct financing for vehicles they sell, lease, or service. Subsection (c) recognizes the FTC's ongoing enforcement authority over motor vehicle dealers predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both, including those that, among other things, assign their contracts to unaffiliated third parties.

The FTC's enforcement authority also includes state-chartered credit unions. In varying ways, other federal agencies also have enforcement authority over state-chartered credit unions. For example, for large credit unions (exceeding $10 billion in assets), the BCFP 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 state-chartered credit unions for various purposes.

See generally

Dodd-Frank Act, §§ 1061, 1025, 1026.

As of the third quarter of 2017, there was 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 agency authority (

see supra

note 5), the FTC's estimates include PRA burden for all state-chartered credit unions (rounded to 2,300). Similarly, because it is not practicable for PRA purposes to estimate the portion of motor vehicle dealers that engage in one form of financing versus another (and that would or would not be subject to BCFP oversight), the FTC staff's “carve-out” for this PRA burden analysis reflects a general estimated volume of motor vehicle dealers. These attributions of burden estimation for motor vehicle dealers and state-chartered credit unions do not bear on actual enforcement authority.

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).

The required recordkeeping and disclosures do not impose PRA burden on some covered entities because they make those disclosures and maintain records 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 recordkeeping and disclosures.

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).

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.

Covered entities, 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).

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 less magnitude than “monitoring” (or “setup”) burden. The FTC's estimates of transaction time and volume are intended as averages.

Calculating the burden associated with the regulations' 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 7 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”).

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 BCFP 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 BCFP 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.

Regulation B also requires that for accounts that 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 BCFP, and is thus not a “collection of information” for PRA purposes.

See

5 CFR 1320.3(c)(2). 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, which helps to reduce burden.

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

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)

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. Given market changes, the estimated number of these entities is decreased slightly while the estimated number of entities affected by credit history, adverse action and self-test burden is increased slightly from the most recently cleared FTC burden estimates.

Applicable transactions have increased for appraisal reports; however, credit history, adverse action and self-test transactions have decreased, based on market changes.

Regulation B—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

($)

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:

7,184,905 hours (7,165,931 + 18,974 carve-out); $311,824,884 ($310,999,818 + $825,066 carve-out), associated labor costs

Regulation E—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)

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

40 × 10

220,000

2,750,000,000

.02

916,667

1,136,667

Disclosures—updates

138

1 × 10

1,380

N/A

1,380

Access to account information

550

20 × 10

110,000

1,100,000

.01

183

110,183

Error resolution

300

4 × 4

4,800

275,000

9,167

13,967

Error resolution—followup

N/A

1,380

690

Submission of agreements

138

2 × 1

276

690

288

Updates to agreements

N/A

690

Total

7,184,905

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 B—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

259

10,878

12,502

Updates to agreements

336

2,184

2,520

Total Disclosures

311,824,884

Total Recordkeeping and Disclosures

316,720,410

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.

On May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (Act), Public Law 115-174. Among other things, the Act amends the TILA in several respects, and will be implemented by the BCFP through amendments to Regulation Z. The Commission will address PRA burden for its enforcement of the requirements after the BCFP has issued the associated final rules.

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 BCFP. 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

4 × 1

3 × 78,667

.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

4 × 1

3 × 78,667

.0625

246

258

Periodic statements

23,650

.75

17,738

788,325,450

.0938

1,232,415

1,250,153

Periodic statements—prepaid accounts

40 × 1

120

3 × 944,000

.03125

1,475

1,595

Error resolution

23,650

.75

17,738

2,104,850

210,485

228,223

Error resolution—prepaid accounts followup

4 × 1

3 × 1,180

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

4 × 1

3 × 12

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

.75 × 1

3 × 5

2.5

Advertising

38,650

.75

28,988

115,950

.75

1,449

30,437

Advertising—prepaid accounts

20 × 1

N/A

Advertising—prepaid accounts Updates

0.2 × 5

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). For most disclosure types listed in this table, FTC staff has reduced prior PRA burden estimates due to business shifts and other market changes. In the case of mortgage servicing (open- and closed-credit), however, staff has increased burden estimates per respondent due to amendments to Regulation Z. In addition, due to Regulation Z's new requirements for prepaid accounts with certain credit aspects, staff has added burden estimates for these items. However, the overall effect of these competing factors 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.