[Federal Register Volume 77, Number 25 (Tuesday, February 7, 2012)]
[Notices]
[Pages 6114-6122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-2665]
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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.
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SUMMARY: The information collection requirements described below will
be submitted to the Office of Management and Budget (``OMB'') for
review, as required by the Paperwork Reduction Act (``PRA''). The FTC
is seeking public comments on its proposal to extend through April 30,
2015, the current PRA clearances for information collection
requirements contained in four consumer financial regulations enforced
by the Commission. Those clearances expire on April 30, 2012.
DATES: Comments must be filed by April 9, 2012.
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 or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex
J), 600 Pennsylvania Avenue NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Requests for additional information or
copies of the proposed information requirements should be addressed to
Carole Reynolds or Soyong Cho, 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
has published for public comment 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.\1\
Although the Dodd-Frank Act transferred most rulemaking authority under
ECOA, EFTA, CLA, and TILA to the CFPB, the Board retained rulemaking
authority for certain motor vehicle dealers \2\ under all of these
statutes and also for certain interchange-related requirements under
EFTA.\3\
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\1\ 12 CFR part 1002 (Reg. B) (76 FR 79442, Dec. 21, 2011); 12
CFR 1005 (Reg. E) (76 FR 81020, Dec. 27, 2011); 12 CFR part 1013
(Reg. M) (76 FR 78500, Dec. 19, 2011); 12 CFR part 1026 (Reg. Z) (76
FR 79768, Dec. 22, 2011).
\2\ Generally, these are dealers ``predominantly engaged in the
sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both.'' See Dodd-Frank Act, Sec. 1029(a)-(c).
\3\ See Dodd-Frank Act, Sec. 1075 (these requirements are
implemented through Board Regulation II, 12 CFR part 235, rather
than EFTA's implementing Regulation E).
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As a result of the Dodd-Frank Act, the FTC and the CFPB now 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 this shared enforcement
jurisdiction, the two agencies have divided the FTC's previously-
cleared PRA burden between them,\4\ except that the FTC retained all of
the part of that burden associated with certain motor vehicle dealers
(for brevity, referred to in the burden summaries below as a ``carve-
out'').\5\ The division of PRA
[[Page 6115]]
burden hours not attributable to certain motor vehicle dealers is
reflected in the CFPB's recent PRA clearance requests to OMB,\6\ as
well as in the FTC's burden estimates below.
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\4\ The CFPB also factored into its burden estimates respondents
over which it has jurisdiction but the FTC does not.
\5\ These are dealers specified by the Dodd-Frank Act under
Sec. 1029(a), but as limited by subsection (b). 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.
\6\ OMB Control Numbers 3170-0013 (Regulation B), 3170-0014
(Regulation E), 3170-0008 (Regulation M), and 3170-0015 (Regulation
Z)
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As a result of the Dodd-Frank Act, the FTC generally has sole
authority to enforce Regulations B, E, M, and Z regarding motor vehicle
dealers predominantly engaged in the sale and servicing of motor
vehicles, the leasing and servicing of motor vehicles, or both.\7\
Because the FTC has exclusive jurisdiction to enforce these rules for
such motor vehicle dealers, it is including the entire PRA burden for
them in the burden estimates below.
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\7\ See Dodd-Frank Act, Sec. 1029(a)-(c).
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The regulations impose certain recordkeeping and disclosure
requirements associated with providing credit or with other financial
transactions. Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must
get OMB approval for each collection of information they conduct or
sponsor. ``Collection of information'' includes agency requests or
requirements to 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).
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\8\ PRA ``burden'' does not include effort expended in the
ordinary course of business, regardless of any regulatory
requirement. 5 CFR 1320.3(b)(2).
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The regulations also require covered entities to make disclosures
to third-parties. Related compliance involves set-up/monitoring and
transaction-specific costs. ``Set-up'' burden, incurred only by covered
new entrants, includes 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. While this burden varies with the number of transactions,
the figures shown for transaction-related burden in the tables that
follow are estimated averages.
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\
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\9\ For example, large companies may use computer-based and/or
electronic means to provide required disclosures, including issuing
some disclosures en masse, e.g., notices of changes in terms.
Smaller companies may have less automated compliance systems but may
nonetheless rely on electronic mechanisms for disclosures and
recordkeeping. Regardless of size, some entities may utilize
compliance systems that are fully integrated into their general
business operational system; if so, they may have minimal additional
burden. Other entities may have incorporated fewer of these
approaches into their systems and thus may have a higher burden.
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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. Staff considered the wide variations in
covered entities' (1) size and location; (2) credit or lease products
offered, extended, or advertised, and their particular terms; (3) EFT
types used; (4) types and frequency of adverse actions taken; (5) types
of appraisal reports utilized; and (6) computer systems and electronic
features of compliance operations.
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\10\ The Commission generally does not have jurisdiction over
banks, thrifts, and federal credit unions under the applicable
regulations.
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The cost estimates that follow relate solely to labor costs, and
they include the time necessary to train employees how to comply with
the regulations. Staff calculated labor costs by multiplying
appropriate hourly wage rates by the burden hours described above. The
hourly rates used were $49 for managerial oversight, $30 for skilled
technical services, and $16 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.
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\11\ These inputs are based broadly on mean hourly data found
within the National Compensation Survey: Occupational Earnings in
the United States, 2010, Bulletin 2753 (May 2011), Table 3 (http://www.bls.gov/ncs/ocs/sp/nctb1477.pdf).
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The applicable PRA requirements impose minimal capital or other
non-labor costs. Affected entities generally already have the necessary
equipment for other business purposes. Similarly, FTC staff estimates
that compliance with these rules entails minimal printing and copying
costs beyond that associated with documenting financial transactions in
the ordinary course of business.
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 530,479 credit firms subject to the Commission's
jurisdiction, at an average annual burden of 1.25 hours per firm for a
total of 663,099 hours.\12\ Staff also
[[Page 6116]]
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 2.25 million credit applications (based on industry
data regarding the approximate number of mortgage purchase and
refinance originations), for a total of 37,500 hours.\13\ Staff also
estimates that recordkeeping of self-testing subject to the regulation
would affect 1,375 firms, with an average annual burden of one hour (of
skilled technical time) per firm, for a total of 1,375 hours, and that
recordkeeping of any corrective action as a result of self-testing
would affect 10% of them, i.e., 138 firms, with an average annual
burden of four hours (of skilled technical time) per firm, for a total
of 552 hours.\14\ Keeping records of race/national origin, sex, age,
and marital status requires an estimated one minute of skilled
technical time. Recordkeeping for the self-test responsibility and of
any corrective actions requires an estimated one hour and four hours,
respectively, of skilled technical time.
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\12\ Section 1071 of the Dodd-Frank Act amends 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 the
Dodd-Frank Act's requirements. The Commission will address PRA
burden for its enforcement of these requirements after the CFPB and
the Board have issued the associated final rules.
\13\ Regulation B contains model forms that creditors may use to
gather and retain the required information.
\14\ In contrast to banks, for example, entities under FTC
jurisdiction are not subject to audits for compliance with
Regulation B; rather they may be subject to FTC investigations and
enforcement actions. This may impact the level of self-testing (as
specifically defined by Regulation B) in a given year, and staff has
sought to address such factors in its burden estimates.
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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 various types of
mortgage credit to provide a copy of the appraisal report to applicants
or to notify them of their right to a copy of the report (and
thereafter provide a copy of the report, upon the applicant's request).
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.\15\
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\15\ The disclosure may be provided orally or in writing. The
model form provided by Regulation B assists creditors in providing
the written disclosure.
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Burden Totals
Recordkeeping: 702,526 hours (625,977 + 76,549 carve-out for motor
vehicles); $12,720,734 ($11,384,370 + $1,336,364 carve-out for motor
vehicles), associated labor costs
Disclosures: 1,164,458 hours (1,032,206 + 132,252 carve-out for motor
vehicles); $37,146,184 ($32,927,330 + $4,218,854 carve-out for motor
vehicles), associated labor costs
Regulation B--Disclosures--Burden Hours
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Setup/monitoring \1\ Transaction-related \2\
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Average burden
Disclosures Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
(hours) burden (hours) (minutes) burden (hours)
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Credit history reporting............... 133,000 .25 33,250 66,309,750 .25 276,291 309,541
Adverse action notices................. 530,000 .75 397,500 106,096,000 .25 442,067 839,567
Appraisal notices...................... 5,000 .5 2,500 1,125,000 .25 4,688 7,188
Appraisal reports...................... 5,000 .5 2,500 1,125,000 .25 4,688 7,188
Self-test disclosures.................. 1,375 .5 688 68,750 .25 286 974
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Total.............................. .............. .............. .............. ............... .............. .............. 1,164,458
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\1\ The estimates shown reflect a decrease in applicable mortgage entities regarding appraisal notices and appraisal reports. The figures assume that
approximately half of mortgage entities (.5 x 10,000, or 5,000 businesses) would not otherwise provide this information and thus would be affected.
The figures also assume that all applicable entities would provide notices first and thereafter provide the reports upon request.
\2\ The above figures reflect a decrease in mortgage transactions, compared to prior FTC estimates. They also assume that half of applicable mortgage
transactions (.5 x 2,250,000, or 1,125,000) would not otherwise provide the appraisal notices and reports and thus would be affected.
Regulation B--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------- Total cost ($)
Time (hours) Cost ($49/hr.) Time (hours) Cost ($30/hr.) Time (hours) Cost ($16/hr.)
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General recordkeeping.................. 0 $0 66,310 $1,989,300 596,789 $9,548,624 $11,537,924
Other recordkeeping.................... 0 0 37,500 1,125,000 0 0 1,125,000
Recordkeeping of test.................. 0 0 1,375 41,250 0 0 41,250
Recordkeeping of corrective action..... 0 0 552 16,560 0 0 16,650
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Total Recordkeeping............ .............. .............. .............. ............... .............. .............. 12,720,734
Disclosures:
Credit history reporting........... 30,954 1,516,746 278,587 8,357,610 0 0 9,874,356
[[Page 6117]]
Adverse action notices............. 83,957 4,113,893 755,610 22,668,300 0 0 26,782,193
Appraisal notices.................. 719 35,231 6,469 194,070 0 0 229,301
Appraisal reports.................. 719 35,231 6,469 194,070 0 0 229,301
Self-test disclosure............... 97 4,753 877 26,310 0 0 31,063
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Total Disclosures.............. .............. .............. .............. ............... .............. .............. 37,146,214
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Total Recordkeeping and .............. .............. .............. ............... .............. .............. 49,866,948
Disclosures...................
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2. Regulation E
The EFTA requires that covered entities provide consumers with
accurate disclosure of the costs, terms, and rights relating to EFT and
certain other services. Regulation E implements the EFTA, establishing
disclosure and other requirements to aid consumers and recordkeeping
requirements to assist agencies with enforcement. It applies to
financial institutions, retailers, gift card issuers and others that
provide gift cards, service providers, various federal and state
agencies offering EFTs, etc. Staff estimates that Regulation E's
recordkeeping requirements affect 391,120 firms offering EFT 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 391,120
hours.
Burden Totals
Recordkeeping: 391,120 hours (375,881 + 15,239 carve-out); $6,805,488
($6,540,328 + $265,160 carve-out), associated labor costs
Disclosures: 4,019,797 hours (4,002,868 + 16,929 carve-out);
$128,236,961 ($127,696,924 + $540,037 carve-out), associated labor
costs
Regulation E: Disclosures --Burden Hours
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Setup/monitoring Transaction-related
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Average burden
Disclosures Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
(hours) burden (hours) (minutes) burden (hours)
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Initial terms.......................... 50,000 .5 25,000 500,000 .02 167 25,167
Change in terms........................ 12,500 .5 6,250 16,500,000 .02 5,500 11,750
Periodic statements.................... 50,000 .5 25,000 600,000,000 .02 200,000 225,000
Error resolution....................... 50,000 .5 25,000 500,000 5 41,667 66,667
Transaction receipts................... 50,000 .5 25,000 2,500,000,000 .02 833,333 858,333
Preauthorized transfers \1\............ 257,620 .5 128,810 6,440,500 .25 26,835 155,645
Service provider notices............... 50,000 .25 12,500 500,000 .25 2,083 14,583
Govt. benefit notices.................. 5,000 .5 2,500 50,000,000 .25 208,333 210,833
ATM notices \2\........................ 250 .25 63 50,000,000 .25 208,333 208,396
Electronic check conversion \3\........ 57,620 .5 28,810 1,152,400 .02 384 29,194
Payroll cards \4\...................... 125 .5 63 500,000 3 25,000 25,063
Overdraft services \5\................. 50,000 .5 25,000 2,500,000 .02 833 25,833
Gift cards \6\......................... 50,000 .5 25,000 2,500,000,000 .02 833,333 858,333
Remittance transfers \7\
Disclosures........................ 35,000 1 35,000 18,000,000 1 300,000 335,000
Error resolution................... 35,000 1 35,000 36,000,000 1 600,000 635,000
Agent compliance................... 35,000 1 35,000 18,000,000 1 300,000 335,000
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Total.......................... .............. .............. .............. ............... .............. .............. 4,019,797
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\1\ Estimated preauthorized transfers have increased from the FTC's previously cleared estimate.
\2\ Estimated ATM transactions have increased from the FTC's previously cleared estimate.
\3\ Estimated electronic check conversion has decreased from the FTC's previously cleared estimate.
\4\ Payroll card entities and transactions have increased greatly over the years, in large part due to the evolving economy as well as companies seeking
ways to cut costs and reduce the amount of paper used in daily operations.
\5\ Regulation E now covers overdraft services.
\6\ Regulation E now, in part, covers gift cards.
\7\ Regulation E now covers remittance transfers.
[[Page 6118]]
Regulation E: Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
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Required task Time Cost ($49/ Time Time Total cost ($)
(hours) hr.) (hours) Cost ($30/hr.) (hours) Cost ($16/hr.)
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Recordkeeping........................................... 0 0 35,762 1,072,860 321,858 5,149,728 6,222,588
Disclosures:
Initial terms....................................... 2,517 123,333 22,650 679,500 0 0 802,833
Change in terms..................................... 1,175 57,575 10,750 322,500 0 0 380,075
Periodic statements................................. 22,500 1,102,500 202,500 6,075,000 0 0 7,177,500
Error resolution.................................... 6,667 326,883 60,000 1,800,000 0 0 2,126,883
Transaction receipts................................ 85,833 4,205,817 772,500 23,175,000 0 0 27,380,817
Preauthorized transfers............................. 15,565 762,685 140,080 4,202,400 0 0 4,965,085
Service provider notices............................ 1,458 71,442 13,125 393,750 0 0 465,192
Govt. benefit notices............................... 21,083 1,033,067 189,750 5,692,500 0 0 6,725,567
ATM notices......................................... 20,840 1,021,160 187,556 5,626,680 0 0 6,647,840
Electronic check conversion......................... 2,919 143,031 26,275 788,250 0 0 931,281
Payroll cards....................................... 2,506 122,794 22,557 676,710 0 0 799,504
Overdraft services.................................. 2,583 126,567 23,250 697,500 0 0 824,067
Gift cards.......................................... 85,833 4,205,817 772,500 23,175,000 0 0 27,380,817
Remittance transfers:
Disclosures......................................... 33,500 1,641,500 301,500 9,045,000 0 0 10,686,500
Error resolution.................................... 63,500 3,111,500 571,500 17,145,000 0 0 20,256,500
Agent compliance.................................... 33,500 1,641,500 301,500 9,045,000 0 0 10,686,500
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Total Disclosures............................... ......... ........... ........... .............. ......... .............. 128,236,961
Total Recordkeeping and Disclosures............. ......... ........... ........... .............. ......... .............. $135,042,449
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3. Regulation M
The CLA requires that covered entities provide consumers with
accurate disclosure of the costs and terms of leases. Regulation M
implements the CLA, establishing disclosure requirements to help
consumers comparison shop and understand the terms of leases and
recordkeeping requirements. It applies to vehicle lessors (such as auto
dealers, independent leasing companies, and manufacturers' captive
finance companies), computer lessors (such as computer dealers and
other retailers), furniture lessors, various electronic commerce
lessors, diverse types of lease advertisers, and others.
Staff estimates that Regulation M's recordkeeping requirements
affect approximately 54,442 firms within the FTC's jurisdiction leasing
products to consumers at an average annual burden of one hour per firm,
for a total of 54,442 hours.
Burden Totals
Recordkeeping: 54,442 hours (40,558 + 13,884 carve-out);
$947,288 ($705,712 + $241,576 carve-out), associated labor costs
Disclosures: 68,403 hours (42,139 + 26,264 carve-out);
$2,182,050 ($1,344,217 + $837,833 carve-out), associated labor
costs
Regulation M: Disclosures--Burden Hours
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Disclosures Setup/monitoring Transaction-related
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Total setup/ Average burden
Average burden monitoring Number of per Total Total burden
Respondents per respondent burden transactions transaction transaction (hours)
(hours) (minutes) (minutes) burden (hours)
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Motor Vehicle Leases\1\...................... 29,442 1 29,442 1,972,614 .50 16,438 45,880
Other Leases\2\.............................. 25,000 .50 12,500 250,000 .25 1,042 13,542
Advertising.................................. 13,471 .50 6,736 538,840 .25 2,245 8,981
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Total.................................... .............. .............. .............. .............. .............. .............. 68,403
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\1\ This category focuses on consumer vehicle leases. Vehicle leases are subject to more lease disclosure requirements (pertaining to computation of
payment obligations) than other lease transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. Sec. 1667(1); 12 CFR
Sec. 1013.2(e)(1). Leases up to $50,000 (plus an annual adjustment) are now covered, which increases the breadth of transactions subject to the
FTC's jurisdiction under Regulation M. This increase, however, is more than offset by the FTC now sharing PRA burden with the CFPB, which thus yields
a net decrease from past FTC estimates of the number of transactions.
\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. Sec. 1667(1); 12 CFR Sec.
1013.2(e)(1). The figures shown for respondents and transactions reflect a net decrease from prior FTC estimates, given current market conditions
and the new PRA burden sharing with the CFPB while also recognizing that the CLA and Regulation M now cover leases up to $50,000 (plus an annual
adjustment).
[[Page 6119]]
Regulation M: Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical Total
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Required task Time Cost ($49/ Time Cost ($30/ Time Cost ($16/
(hours) hr.) (hours) hr.) (hours) hr.) Cost ($)
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Recordkeeping................ 0 0 5,444 163,320 48,998 783,968 947,288
Disclosures:
Motor Vehicle Leases..... 4,588 224,812 41,292 1,238,760 0 0 1,463,572
Other Leases............. 1,354 66,346 12,188 365,640 0 0 431,986
Advertising.............. 898 44,002 8,083 242,490 0 $0 286,492
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Total Disclosures.... ......... ......... ......... ........... ......... ........... 2,182,050
Total Recordkeeping ......... ......... ......... ........... ......... ........... 3,123,338
and Disclosures.....
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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.
FTC staff estimates that Regulation Z's recordkeeping requirements
affect approximately 530,479 entities subject to the Commission's
jurisdiction, at an average annual burden of 1.25 hours per entity, for
a total of 663,099 hours.
Burden Totals
Recordkeeping: 663,099 hours (586,900 + 76,199 carve-out); $11,537,924
($10,212,060 + $1,325,864 carve-out), associated labor costs
Disclosures: 12,000,274 hours (10,957,621 + 1,042,653 carve-out);
$382,858,568 ($349,597,924 + $33,260,644 carve-out), associated labor
costs
Regulation Z: Disclosures--Burden Hours
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Setup/monitoring Transaction-related
----------------------------------------------------------------------------------------------------------------
Average burden
Disclosures \1\ Average burden Total setup/ Number of per Total Total burden
Respondents per respondent monitoring transactions transaction transaction (hours)
\2\ (hours) burden (hours) \3\ (minutes) burden (hours)
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Open-end credit:
Initial terms...................... 45,000 .75 33,750 20,000,000 .375 125,000 158,750
Rescission notices \4\............. 1,875 .5 938 100,000 .25 417 1,355
Subsequent disclosures............. 10,000 .75 7,500 62,500,000 .188 195,833 203,333
Periodic statements................ 45,000 .75 33,750 1,750,000,000 .0938 2,735,833 2,769,583
Error resolution................... 45,000 .75 33,750 4,000,000 6 400,000 433,750
Credit and charge card accounts.... 25,000 .75 18,750 12,500,000 .375 78,125 96,875
Settlement of estate debts \5\..... 45,000 .75 33,750 1,000,000 .375 6,250 40,000
Special credit card requirements 25,000 .75 18,750 12,500,000 .375 78,125 96,875
\6\...............................
Home equity lines of credit \7\.... 1,875 .5 938 875,000 .25 3,646 4,584
College student credit card 2,500 .5 1,250 250,000 .25 1,042 2,292
marketing--ed. institutions \8\...
College student credit card 300 .75 225 18,000 .75 225 450
marketing--card issuer reports \9\
Posting and reporting of credit 25,000 .75 18,750 12,500,000 .375 78,125 96,875
card agreements \10\..............
Advertising........................ 100,000 .75 75,000 300,000 .75 3,750 78,750
Sale, transfer, or assignment of 1,875 .5 938 1,750,000 .25 7,292 8,230
mortgages \11\....................
[[Page 6120]]
Appraiser misconduct reporting \12\ 625,000 .75 468,750 12,500,000 .375 78,125 546,875
Closed-end credit:
Credit disclosures................. 380,480 .75 285,360 163,225,920 2.25 6,120,972 6,406,332
Rescission notices \13\............ 18,750 .5 9,375 7,500,000 1 125,000 134,375
Redisclosures \14\................. 200,000 .5 100,000 1,000,000 2.25 37,500 137,500
Variable rate mortgages \15\....... 17,500 .5 8,750 500,000 1.5 12,500 21,250
High rate/high-fee mortgages and 10,000 .5 5,000 125,000 1.5 3,125 8,125
higher priced mortgages \16\......
Reverse mortgages \17\............. 12,500 .5 6,250 43,750 1 729 6,979
Advertising........................ 240,240 .5 120,120 480,480 1 8,008 128,128
Private education loans \18\....... 100 .5 50 50,000 1.5 1,250 1,300
Sale, transfer, or assignment of 100,000 .5 50,000 5,000,000 .25 20,833 70,833
mortgages \19\....................
Appraiser misconduct reporting \20\ 625,000 .75 468,750 12,500,000 .375 78,125 546,875
----------------------------------------------------------------------------------------------------------------
Total open-end credit.......... .............. .............. .............. ............... .............. .............. 4,538,577
----------------------------------------------------------------------------------------------------------------
Total closed-end credit........ .............. .............. .............. ............... .............. .............. 7,461,697
----------------------------------------------------------------------------------------------------------------
Total credit................... .............. .............. .............. ............... .............. .............. 12,000,274
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\1\ Regulation Z requires disclosures for closed-end and open-end credit. TILA and Regulation Z now cover credit up to $50,000 plus an annual adjustment
(except that real estate credit and private education loans are covered regardless of amount), generally causing an increase in transactions. In some
instances noted below, market changes have reduced estimated PRA burden. In other instances noted below, changes to Regulation Z have increased
estimated PRA burden. The overall effect of these competing factors, combined with the FTC now sharing with the CFPB estimated PRA burden (for all but
certain motor vehicle dealers) yields a net decrease from the FTC's prior reported estimate for open-end credit and a net increase from the FTC's
prior burden estimate for closed-end credit.
\2\ Burden per respondent in many categories has increased compared to prior FTC estimates, due to changes in rules.
\3\ Burden per transaction in many categories has increased compared to prior FTC estimates, due to changes in rules.
\4\ Mortgages have decreased.
\5\ Regulation Z now requires disclosures for timely settlement of estate debts.
\6\ Regulation Z now has special credit card requirements.
\7\ Home equity lines of credit have decreased.
\8\ Regulation Z now requires higher education institutions to disclose credit card marketing agreements.
\9\ Regulation Z now requires card issuers to submit reports on college student credit card marketing.
\10\ Regulation Z now requires card issuers to post and report general credit card agreements.
\11\ Regulation Z now requires certain acquirers of legal title to disclose the sale, transfer, or assignment of mortgages.
\12\ Regulation Z now requires reporting of appraiser misconduct.
\13\ Mortgages have decreased.
\14\ Regulation Z now has substantial redisclosure requirements. Previously, redisclosures were generally provided in the ordinary course of business.
Rule changes since set numerous procedures and circumstances for redisclosures.
\15\ Variable rate mortgages have decreased.
\16\ Mortgages have decreased.
\17\ Reverse mortgages have decreased.
\18\ Regulation Z now requires disclosures for private education loans.
\19\ Regulation Z now requires certain acquirers of legal title to disclose the sale, transfer, or assignment of mortgages.
\20\ Regulation Z now requires reporting of appraiser misconduct.
Regulation Z: Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
---------------------------------------------------------------------------------
Required task Time Cost ($49/ Time Time Cost ($16/ Total cost ($)
(hours) hr.) (hours) Cost ($30/hr.) (hours) hr.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping.......................................... 0 $0 66,310 $1,989,300 596,789 $9,548,624 $11,537,924
Open-end credit Disclosures:
Initial terms...................................... 15,875 777,875 142,875 4,286,250 0 0 5,064,125
[[Page 6121]]
Rescission notices................................. 135 6,615 1,220 36,600 0 0 43,215
Subsequent disclosures............................. 20,333 996,317 183,000 5,490,000 0 0 6,486,317
Periodic statements................................ 276,958 13,570,942 2,492,625 74,778,750 0 0 88,349,692
Error resolution................................... 43,375 2,125,375 390,375 11,711,250 0 0 13,836,625
Credit and charge card accounts.................... 9,688 474,712 87,187 2,615,610 0 0 3,090,322
Settlement of estate debts......................... 4,000 196,000 36,000 1,080,000 0 0 1,276,000
Special credit card requirements................... 9,688 474,712 87,187 2,615,610 0 0 3,090,322
Home equity lines of credit........................ 458 22,442 4,126 123,780 0 0 146,222
College student credit card marketing--ed 229 11,221 2,063 61,890 0 0 73,111
institutions......................................
College student credit card marketing--card issuer 45 2,205 405 12,150 0 0 14,355
reports...........................................
Posting and reporting of credit card agreements.... 9,688 474,712 87,187 2,615,610 0 0 3,090,322
Advertising........................................ 7,875 385,875 70,875 2,126,250 0 0 2,512,125
Sale, transfer, or assignment of mortgages......... 823 40,327 7,407 222,210 0 0 262,537
Appraiser misconduct reporting..................... 54,687 2,679,663 492,188 14,765,640 0 0 17,445,303
------------------------------------------------------------------------------------------------
Total open-end credit.......................... ........... ........... ........... .............. ........... ........... 144,780,593
--------------------------------------------------------------------------------------------------------------------------------------------------------
Closed-end credit Disclosures:
Credit disclosures................................. 640,633 31,391,017 5,765,699 172,970,970 0 0 204,361,987
Rescission notices................................. 13,437 658,413 120,938 3,628,140 0 0 4,286,553
Redisclosures...................................... 13,750 673,750 123,750 3,712,500 0 0 4,386,250
Variable rate mortgages............................ 2,125 104,125 19,125 573,750 0 0 677,875
High-rate/high-fee mortgages and higher priced 969 47,481 8,719 261,570 0 0 309,051
mortgages.........................................
Reverse mortgages.................................. 698 34,202 6,281 188,430 0 0 222,632
Advertising........................................ 12,813 627,837 115,315 3,459,450 0 0 4,087,287
Private education loans............................ 130 6,370 1,170 35,100 0 0 41,470
Sale, transfer, or assignment of mortgages......... 7,083 347,067 63,750 1,912,500 0 0 2,259,567
Appraiser misconduct reporting..................... 54,687 2,679,663 492,188 14,765,640 0 0 17,445,303
------------------------------------------------------------------------------------------------
Total closed-end credit........................ ........... ........... ........... .............. ........... ........... 238,077,975
------------------------------------------------------------------------------------------------
Total Disclosures.............................. ........... ........... ........... .............. ........... ........... 382,858,568
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Recordkeeping and Disclosures............ ........... ........... ........... .............. ........... ........... 394,396,492
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Request for Comment: You can file a comment online or on paper. For
the Commission to consider your comment, we must receive it on or
before April 9, 2012. 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 Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries
to remove individuals' home contact information from comments before
placing them on the Commission Web site.
Because you comment will be made public, you are solely responsible
for making sure that your comment does not include any sensitive
personal information, like anyone'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, like medical records or other individually identifiable
health information. In addition, do not include any ``[t]rade secret or
any commercial or financial information which is obtained from any
person and which is privileged or confidential'' as provided in Section
6(f) of the FTC Act 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns devices, manufacturing processes, or customer names.
If you want the Commission to give you comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c)).\16\ Your comment will be kept confidential only if
the FTC General Counsel, in his or her sole discretion, grants your
request in
[[Page 6122]]
accordance with the law and the public interest.
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\16\ 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), CFR 4.9(c), 16 CFR 4.9(c).
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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 http://www.regulations.gov/#!home, you also
may file a comment through that Web site.
If you file your comment on paper, write ``Regs BEMZ, PRA Comments,
P084812'' on your comment and on the envelope, and mail or deliver it
to the following address: Federal Trade Commission, Office of the
Secretary, Room H-113 (Annex J) 600 Pennsylvania Avenue NW.,
Washington, DC 20580. If possible, submit your paper comment to the
Commission by courier or overnight service.
Visit the Commission Web site at to read this Notice and the news
release describing it. 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
April 9, 2012. You can find more information, including routine uses
permitted by the Privacy Act, in the Commission's privacy policy, at
http://www.ftc.gov/ftc/privacy.htm.
Willard K. Tom,
General Counsel.
[FR Doc. 2012-2665 Filed 2-6-12; 8:45 am]
BILLING CODE 6750-01-P