[Federal Register Volume 77, Number 161 (Monday, August 20, 2012)]
[Notices]
[Pages 50106-50109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20389]
=======================================================================
-----------------------------------------------------------------------
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 through November 30, 2015, the current Paperwork
Reduction Act (``PRA'') clearance for the FTC's shared enforcement with
the Consumer Financial Protection Bureau (``CFPB'') of the information
collection requirements in subpart N of Regulation V. That clearance
expires on November 30, 2012.
DATES: Comments must be filed by October 19, 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 ``Subpart N of
Regulation V, PRA Comment, P125403,'' on your comment and file your
comment online at https://ftcpublic.commentworks.com/ftc/SubpartNRegulationVPRA 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: Tiffany George, Attorney, Division of
Privacy and Identity Protection, Bureau of Consumer Protection, (202)
326-3040, 600 Pennsylvania Ave. NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Title X of the Dodd-Frank Wall Street Reform
and
[[Page 50107]]
Consumer Protection Act \1\ transferred rulemaking authority for
several consumer financial protection laws to the CFPB. Accordingly,
the Commission rescinded several rules under the Fair Credit Reporting
Act, including the FTC's Free Annual File Disclosures Rule that
appeared under 16 CFR parts 610 and 698.
---------------------------------------------------------------------------
\1\ Public Law 111-203, 124 Stat. 1376 (2010). Title X comprises
sections 1001-1100H (collectively, the ``Consumer Financial
Protection Act of 2010'').
---------------------------------------------------------------------------
On December 21, 2011, the CFPB issued an interim final rule,
Regulation V (Fair Credit Reporting), 12 CFR part 1022, which
incorporated within its subpart N (Duties of Consumer Reporting
Agencies Regarding Disclosures to Consumers), with only minor changes
(non-substantive, technical, formatting, and stylistic), the former
Free Annual File Disclosures Rule, and in Appendix L to Part 1022, the
associated model notice.\2\ Subpart N of Regulation V continues the
disclosure requirements that had existed under the Free Annual File
Disclosures Rule. Because the FTC shares enforcement authority with the
CFPB for subpart N, the two agencies have split between them the
related estimate of PRA burden for firms under their co-enforcement
jurisdiction.
---------------------------------------------------------------------------
\2\ 76 FR 79830, 79309 (Dec. 21, 2011).
---------------------------------------------------------------------------
Subpart N requires nationwide consumer reporting agencies and
nationwide consumer specialty reporting agencies to provide to
consumers, upon request, one free file disclosure within any 12-month
period. Generally, it requires the nationwide consumer reporting
agencies, as defined in Section 603(p) of the FCRA, 15 U.S.C. 1681a(p),
to create and operate a centralized source that provides consumers with
the ability to request their free annual file disclosures from each of
the nationwide consumer reporting agencies through a centralized
Internet Web site, toll-free telephone number, and postal address.
Subpart N also requires the nationwide consumer reporting agencies to
establish a standardized form for Internet and mail requests for annual
file disclosures, and provides a model standardized form that may be
used to comply with that requirement. It additionally requires
nationwide specialty consumer reporting agencies, as defined in Section
603(w) of the FCRA, 15 U.S.C. 1681a(w), to establish a streamlined
process for consumers to request annual file disclosures. This
streamlined process must include a toll-free telephone number for
consumers to make such requests.
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. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). The FTC is seeking clearance
for its assumed share of the estimated PRA burden regarding the
disclosure requirements under subpart N of Regulation V.
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 valid; (3) how to improve the quality, utility,
and clarity of the disclosure requirements; and (4) how to minimize the
burden of providing the required information to consumers. All comments
should be filed as prescribed in the ADDRESSES section above, and must
be received on or before October 19, 2012.
Burden statement: On February 3, 2012, OMB cleared the FTC's
adjusting entries to split PRA burden with the CFPB regarding the
formerly designated Free Annual File Disclosures Rule. The FTC's
currently cleared burden totals are 155,512 hours and $4,195,000 in
non-labor/capital costs.\3\ Associated labor costs are $2,595,710.
These figures represent a halving of the FTC's prior burden estimates,
including the incremental effects of the FTC's 2010 final amendments
\4\ to the Free Annual File Disclosures Rule.
---------------------------------------------------------------------------
\3\ OMB Control No. 3084-0128.
\4\ 77 FR 9726 (Mar. 3, 2010). These amendments have been
incorporated into Regulation V subpart N. As explained below,
however, there is no longer any incremental PRA burden presented by
those amendments.
---------------------------------------------------------------------------
The FTC's updated estimates, excluding the halving (to be shown at
the conclusion of this analysis), are as follows:
A. Requests Per Year From Consumers for Free Annual File Disclosures
The Consumer Data Industry Association has stated that between
December 2004 and December 2006, the nationwide consumer reporting
agencies provided over 52 million free annual file disclosures through
the centralized Internet Web site, toll-free telephone number, and
postal address required to be established by the FACT Act and the
Rule,\5\ an annual rate of about 26 million requests per year. Because
the prospective clearance renewal would run through November 30, 2015,
by that time, nine years will have passed since the Commission received
the data informing its past estimate of the yearly volume of requests
for free credit reports. We expect that the number of requests for free
annual credit reports has increased since 2006, both because of
increases in the population and because consumers will have become more
aware that they are entitled to a free annual report. As a proxy, we
will use an estimate of 30 million requests per year as a
representative average year to estimate PRA burden for purposes of the
instant analysis.
---------------------------------------------------------------------------
\5\ Letter from Stuart K. Pratt, President & CEO, Consumer Data
Industry Association, to Rep. Barney Frank, Committee on Financial
Services, U.S. House of Representatives (Dec. 1, 2006).
---------------------------------------------------------------------------
The Commission, however, seeks more recent estimates of the number
of requests consumers are making for free annual credit reports. In
addition to data on the number of requests, data on how the number of
requests has changed over time, and how these requests are being
received--by Internet, phone, or by mail--would be most helpful.
B. Annual File Disclosures Provided Through the Internet
Both nationwide and nationwide specialty consumer reporting
agencies will likely handle the overwhelming majority of consumer
requests through Internet Web sites. The annual file disclosure
requests processed through the Internet will not impose any hours
burden per request on the nationwide and nationwide specialty consumer
reporting agencies, even though consumer reporting agencies
periodically will be required to adjust the Internet capacity needed to
handle the changing request volume. Consumer reporting agencies likely
will make such adjustments by negotiating or renegotiating outsourcing
service contracts annually or as conditions change. Trained personnel
will need to spend time negotiating and renegotiating such contracts.
Commission staff estimates that negotiating such contracts will require
a cumulative total of 8,320 hours and $502,611 in setup and/or
maintenance costs.\6\ Such activity is treated as an
[[Page 50108]]
annual burden of maintaining and adjusting the changing Internet
capacity requirements.
---------------------------------------------------------------------------
\6\ Based on the time necessary for similar activity in the
federal government (including at the FTC), staff estimates that such
contracting and administration will require approximately 4 full-
time equivalent employees (``FTE'') for the web service contracts.
Thus, staff estimates that administering the contract will require 4
FTE, which is 8,320 hours per year (4 FTE x 2,080 hours/year). The
cost is based on the reported May 2011 Bureau of Labor Statistics
(BLS) rate ($60.41) for computer and information systems managers.
See National Occupational and Wages--May 2011, Table 1, available at
http://www.bls.gov/news.release/archives/ocwage_03272012.pdf. Thus,
the estimated setup and maintenance cost for an Internet system is
$502,611 per year (8,320 hours x $60.41/hour).
---------------------------------------------------------------------------
C. Annual File Disclosures Requested Over the Telephone
Most of the telephone requests for annual file disclosures will
also be handled in an automated fashion, without any additional
personnel needed to process the requests. As with the Internet,
consumer reporting agencies will require additional time and investment
to increase and administer the automated telephone capacity for the
expected increase in request volume. The nationwide and nationwide
specialty consumer reporting agencies will likely make such adjustments
by negotiating or renegotiating outsourcing service contracts annually
or as conditions change. Staff estimates that this will require a total
of 6,240 hours at a cost of $376,958 in setup and/or maintenance
costs.\7\ This activity also is treated as an annual recurring burden
necessary to obtain, maintain, and adjust automated call center
capacity.
---------------------------------------------------------------------------
\7\ Staff estimates that recurring contracting for automated
telephone capacity will require approximately 3 FTE, a total of
6,240 hours (3 x 2,080 hours). Applying an hourly wage rate of
$60.41 based on May 2011 BLS data for computer and information
systems managers, the estimate for setup and maintenance cost is
$376,958 (6,240 x $60.41) per year. See http://www.bls.gov/news.release/archives/ocwage_03272012.pdf.
---------------------------------------------------------------------------
D. Annual File Disclosures Requiring Processing by Mail
Based on their knowledge of the industry, staff believes that no
more than 1% of consumers (1% x 30 million, or 300,000) will request an
annual file disclosure through U.S. postal service mail. Staff
estimates that clerical personnel will require 10 minutes per request
to handle these requests, thereby totaling 50,000 hours of time.
[(300,000 x 10 minutes)/60 minutes = 50,000 hours]
In addition, whenever the requesting consumer cannot be identified
using an automated method (a Web site or automated telephone service),
it will be necessary to redirect that consumer to send identifying
material along with the request by mail. Staff estimates that this will
occur in about 5% of the new requests (or 1,485,000)\8\ that were
originally placed over the Internet or telephone. Staff estimates that
clerical personnel will require approximately 10 minutes per request to
input and process those redirected requests for a cumulative total of
247,500 clerical hours. [(1,485,000 x 10 minutes)/60 minutes = 247,500
hours]
---------------------------------------------------------------------------
\8\ This figure reflects 5 percent of all requests, net of the
estimated 1 percent of all requests that might initially be made by
mail. That is, .05 x (30,000,000 - 300,000) = 1,485,000.
---------------------------------------------------------------------------
E. Instructions to Consumers
The Rule also requires that certain instructions be provided to
consumers. See Rule sections 1022.136(b)(2)(iv)(A, B),
1022.137(a)(2)(iii)(A, B). Minimal associated time or cost is involved,
however. Internet instructions to consumers are embedded in the
centralized source Web site and do not require additional time or cost
for the nationwide consumer reporting agencies. Similarly, for
telephone requests, the automated phone systems provide the requisite
instructions when consumers select certain options. Some consumers who
request their credit reports by mail might additionally request printed
instructions from the nationwide and nationwide specialty consumer
reporting agencies. Staff estimates that there will be a total of
1,785,000 requests each year for free annual file disclosures by
mail.\9\ Based on their knowledge of the industry, staff estimates
that, of the predicted 1,785,000 mail requests, 10% (or 178,500) will
request instructions by mail. If printed instructions are sent to each
of these consumers by mail, requiring 10 minutes of clerical time per
consumer, this will total 29,750 hours. [(178,500 instructions x 10
minutes)/60 minutes per hour].
---------------------------------------------------------------------------
\9\ This figure includes both the estimated 1% of 30 million
requests that will be made by mail each year (300,000), and the
estimated 1,485,000 requests initially made over the Internet or
telephone that will be redirected to the mail process (see supra
note 8).
---------------------------------------------------------------------------
F. 2010 FTC Final Amendments \10\
---------------------------------------------------------------------------
\10\ As noted above, the 2010 FTC amendments have been
incorporated into what is now Regulation V, subpart N.
---------------------------------------------------------------------------
There is no further incremental PRA burden tied to the 2010
amendments. Previously FTC staff had estimated that administrative
amendments to former section 610.2 (designed to prevent interference
with consumers' ability to obtain their free annual file disclosures
through the centralized source) would impose no more than a minimal,
one-time burden for the nationwide consumer reporting agency to
reconfigure the centralized source and their own proprietary Web sites.
Those amendments, however, became effective April 2, 2010, so the
implementation should now be complete. Moreover, the other amendments,
which were to former section 610.4, did not constitute a PRA
``collection of information'' as defined by OMB's regulations that
implement the PRA. The section 610.4 amendment required that all
advertisements for ``free credit reports'' contain certain prescribed
disclosures tailored to the medium used. OMB excludes from the
definition of ``collection of information'' the ``public disclosure of
information originally supplied by the Federal government to the
recipient for the purpose of disclosure to the public.'' 5 CFR
1320.3(c)(2).
G. Labor Costs
Labor costs are derived by applying hourly cost figures to the
burden hours described above. Accordingly, staff estimates that
processing of requests for annual file disclosures and instructions
will be performed by clerical personnel, which will require 327,250
hours at a cost of $5,258,908. [(50,000 hours for handling initial mail
request + 247,500 hours for handling requests redirected to mail +
29,750 hours for handling instructions mailed to consumers) x $16.07
per hour.\11\
---------------------------------------------------------------------------
\11\ See National Occupational and Wages--May 2011, Table 1,
available at http://www.bls.gov/news.release/archives/ocwage_03272012.pdf (Office and administrative support workers, general).
---------------------------------------------------------------------------
H. Capital/Non-Labor Costs
As in the previous PRA clearance analysis, FTC staff believes it is
likely that consumer reporting agencies will use third-party
contractors (instead of their own employees) to increase the capacity
of their systems. Because of the way these contracts are typically
established, these costs will likely be incurred on a continuing basis,
and will be calculated based on the number of requests handled by the
systems. Staff estimates that the total annual amount to be paid for
services delivered under these contracts is $12.22 million.\12\
---------------------------------------------------------------------------
\12\ This consists of an estimated $8.19 million for automated
telephone cost ($1.82 per request x 4.5 million requests) and an
estimated $4.03 million ($0.16 per request x 25.2 million requests)
for Internet web service cost. Per unit cost estimates are based on
staff's knowledge of the industry.
---------------------------------------------------------------------------
I. Net Burden for FTC, After 50:50 Split
After halving the updated estimates to split the PRA burden with
the CFPB regarding the formerly designated Free Annual File Disclosures
Rule, the FTC's burden totals are 170,905 hours and $6,111,000 in non-
labor/capital costs. Associated labor costs are $3,069,239.
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 October 19, 2012. Write ``Subpart N of Regulation V, PRA
Comment, P125403''
[[Page 50109]]
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 your 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 * * * 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), 16 CFR
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 your 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).\13\ Your comment will be kept confidential only if
the FTC General Counsel, in his or her sole discretion, grants your
request in accordance with the law and the public interest.
---------------------------------------------------------------------------
\13\ 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), 16 CFR 4.9(c).
---------------------------------------------------------------------------
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/SubpartNRegulationVPRA, 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 ``Subpart N of Regulation
V, PRA Comment, P125403'' 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 www.ftc.gov 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 October 19, 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. 2012-20389 Filed 8-17-12; 8:45 am]
BILLING CODE 6750-01-P