[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Notices]
[Pages 46583-46585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18455]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Proposed Collection;
Comment Request
AGENCY: Federal Trade Commission (FTC or Commission).
ACTION: Notice.
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SUMMARY: The FTC intends to ask the Office of Management and Budget
(OMB) to extend through November 30, 2016, 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 Regulation N (Mortgage Acts and Practices--
Advertising). That clearance expires on November 30, 2013. The FTC's
current PRA clearance (OMB Control Number 3084-0156) for Regulation N
is under the FTC's Mortgage Acts and Practices--Advertising Rule, which
was republished by the CFPB as Regulation N on December 16, 2011, and
became effective December 30, 2011. The
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Commission rescinded the Mortgage Acts and Practices--Advertising Rule
on, and effective, April 13, 2012.
DATES: Comments must be received by September 30, 2013.
ADDRESSES: Interested parties may file a comment online or on paper by
following the instructions in the Request for Comments part of the
SUPPLEMENTARY INFORMATION section below.
FOR FURTHER INFORMATION CONTACT: Requests for additional information
should be addressed to Carole L. Reynolds, Attorney, Division of
Financial Practices, Bureau of Consumer Protection, Federal Trade
Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580, (202)
326-3230.
SUPPLEMENTARY INFORMATION:
Proposed Information Collection Activities
Under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520,
federal agencies must get OMB approval for each collection of
information they conduct, sponsor, or require. ``Collection of
information'' means agency requests or requirements to submit reports,
keep records, or provide information to a third party. 44 USC 3502(3);
5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the
FTC is providing this opportunity for public comment before requesting
that OMB extend the existing PRA clearance for the information
collection requirements associated with the CFPB's Regulation N
(Mortgage Acts and Practices--Advertising), 12 CFR 1014.
The FTC invites comments on: (1) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on those who
are to respond. All comments must be received on or before September
30, 2013.
The FTC's Mortgage Acts and Practices--Advertising Rule, 16 CFR
321, was issued by the FTC on July 19, 2011, at www.ftc.gov, published
in the Federal Register, 76 FR 43845, and became effective on August
19, 2011.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (Dodd-Frank Act) \1\ substantially changed the federal legal
framework for financial services providers. Among the changes, the
Dodd-Frank Act transferred to the CFPB the Commission's rulemaking
authority under section 626 of the 2009 Omnibus Appropriations Act on
July 21, 2011. As a result, the CFPB republished the Mortgage Acts and
Practices--Advertising Rule, at 12 CFR 1014, which became effective
December 30, 2011. 76 FR 78130. Thereafter, the Commission rescinded
its Rule, on and effective April 13, 2012. 77 FR 22200. Under the Dodd-
Frank Act, the FTC retains its authority to bring law enforcement
actions to enforce Regulation N.\2\ The FTC and the CFPB share
enforcement authority for Regulation N and thus the CFPB has
incorporated into its recently approved burden estimates \3\ for
Regulation N one half of the FTC's pre-existing cleared burden
estimates.
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\1\ Public Law 111-203, 124 Stat. 1376 (2010).
\2\ The Commission also retained its authority to enforce the
Mortgage Acts and Practices--Advertising Rule from the Rule's
issuance in July 2011 until the CFPB's republished rule, Regulation
N, became effective on December 30, 2011. See infra note 10.
\3\ The CFPB clearance for their information collections
associated with Regulation N was approved by the OMB on July 25,
2012 (OMB Control Number 3170-0009) through July 31, 2015.
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Regulation N's recordkeeping requirements constitute a ``collection
of information'' \4\ for purposes of the PRA.\5\ The Rule does not
impose a disclosure requirement.
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\4\ Section 1014.5 of the Rule sets forth the recordkeeping
requirements.
\5\ See 44 U.S.C. 3502(3)(A).
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Regulation N requires covered persons to retain: (1) Copies of
materially different commercial communications and related materials,
regarding any term of any mortgage credit product, that the person made
or disseminated during the relevant time period; (2) documents
describing or evidencing all mortgage credit products available to
consumers during the relevant time period; and (3) documents describing
or evidencing all additional products or services (such as credit
insurance or credit disability insurance) that are or may be offered or
provided with the mortgage credit products available to consumers
during the relevant time period. A failure to keep such records would
be an independent violation of the Rule.
Commission staff believes these recordkeeping requirements pertain
to records that are usual and customary and kept in the ordinary course
of business for many covered persons, such as mortgage brokers,
lenders, and servicers.\6\ As to these persons, the retention of these
documents does not constitute a ``collection of information,'' as
defined by OMB's regulations that implement the PRA.\7\ Other covered
persons, however, such as real estate agents and brokers, advertising
agencies, home builders, lead generators, rate aggregators, and others,
may not currently maintain these records in the ordinary course of
business. Thus, the recordkeeping requirements for those persons would
constitute a ``collection of information.''
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\6\ Some covered persons, particularly mortgage brokers and
lenders, are subject to state recordkeeping requirements for
mortgage advertisements. See, e.g., Fla. Stat. 494.00165 (2012);
Ind. Code Ann. 23-2-5-18 (2012); Kan. Stat. Ann. 9-2208 (2012);
Minn. Stat. 58.14 (2012); Wash. Rev. Code 19.146.060 (2013). Many
mortgage brokers, lenders, and servicers are also subject to state
recordkeeping requirements for mortgage transactions and related
documents, and these may include descriptions of mortgage credit
products. See, e.g., Mich. Comp. Laws Serv. 445.1671 (2013); N.Y.
Banking Law 597 (Consol. 2012); Tenn. Code Ann. 45-13-206 (2013). In
addition, lenders and mortgagees approved by the FHA must retain
copies of all print and electronic advertisements and promotional
materials for a period of two years from the date the materials are
circulated or used to advertise. See 24 CFR 202.
\7\ See 44 U.S.C. 3502(3)(A); 5 CFR 1320.3(b)(2).
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The information retained under the Rule's recordkeeping
requirements is used by the Commission to substantiate compliance with
the Rule and may also provide a basis for the Commission to bring an
enforcement action. Without the required records, it would be difficult
either to ensure that entities are complying with the Rule's
requirements or to bring enforcement actions based on violations of the
Rule.
Burden Statement
Estimated total annual hours burden: 1,800,000 hours (for the FTC).
Commission staff estimates that the Rule's recordkeeping
requirements will affect approximately 1.2 million persons \8\ who
would not otherwise retain such records in the ordinary
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course of business. As noted, this estimate includes real estate agents
and brokers, advertising agencies, home builders, lead generators, rate
aggregators, and others that may provide commercial communications
regarding mortgage credit product terms.\9\ Although the Commission
cannot estimate with precision the time required to gather and file the
required records, it is reasonable to assume that covered persons will
each spend approximately 3 hours per year to do these tasks, for a
total of 3.6 million hours (1.2 million persons x 3 hours). Since the
FTC shares enforcement authority with the CFPB for Regulation N, the
FTC's allotted PRA burden is 1,800,000 annual hours.\10\
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\8\ No general source provides precise numbers of the various
categories of covered persons. Commission staff, therefore, has used
the following sources and inputs to arrive at this estimated total:
(1) 1 million real estate brokers and agents--from the National
Association of Realtors, see http://www.realtor.org (last visited
June 24, 2013); (2) 140,000 home builders--from the National
Association of Home Builders, see http://www.NAHB.org (last visited
June 24, 2013); (3) 350 finance companies--from the American
Financial Services Association, see http://www.afsaonline.org (last
visited June 24, 2013); (4) 29,770 advertising agencies--from the
North American Industry Classification System Association's database
of U.S. businesses, see http://www.naics.com (last visited June 24,
2013); (5) 1,000 lead generators and rate aggregators--based on
staff's administrative experience. These inputs add to 1,171,120;
for rounding, and to account further for potentially unspecified
other covered persons, however, staff has increased the resulting
total to 1.2 million.
\9\ The Commission does not know what percentage of these
persons are, in fact, engaged in covered conduct under the Rule,
i.e., providing commercial communications about mortgage credit
product terms. For purposes of these estimates, the Commission has
assumed all of them are covered by the recordkeeping provisions and
are not retaining these records in the ordinary course of business.
\10\ This burden estimate includes recordkeeping requirements of
the FTC's Mortgage Acts and Practices Rule for the period from
December 1, 2013-December 29, 2013. The Commission retained its
authority to enforce the Mortgage Acts and Practices--Advertising
Rule from the Rule's issuance in July 2011 until the CFPB's
republished rule, Regulation N, became effective on December 30,
2011. Thus, the Commission's Rule had a correlative two-year
recordkeeping for the above period concluding on December 29, 2013.
Burden imposed on covered entities after that time are covered by
the same recordkeeping requirements under Regulation N, which
commenced December 30, 2011.
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Estimated labor costs: $24,264,000 (rounded to the nearest
thousand).
Commission staff derived labor costs by applying appropriate hourly
cost figures to the burden hours described above. Staff further assumes
that office support file clerks will handle the Rule's record retention
requirements at an hourly rate of $13.48.\11\ Based upon the above
estimates and assumptions, the total annual labor cost to retain and
file documents, for the FTC's allotted burden, is $24,264,000 (1.8
million hours x $13.48 per hour).
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\11\ This estimate is based on mean hourly wages for office
support file clerks provided by the Bureau of Labor Statistics. See
U.S. Bureau of Labor Statistics, Occupational Employment and Wages--
May 2012, table 1 (``National employment and wage data from the
Occupational Employment Statistics survey by occupation,'' released
Mar. 29, 2013, available at http://www.bls.gov/news.release/pdf/ocwage.pdf.
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Absent information to the contrary, staff anticipates that existing
storage media and equipment that covered persons use in the ordinary
course of business will satisfactorily accommodate incremental
recordkeeping under the Rule. Accordingly, staff does not anticipate
that the Rule will require any new capital or other non-labor
expenditures.
Request for Comments
You can file a comment online or on paper. Write ``Regulation N:
FTC File No. P134811; K05'' 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 ``[t]rade secret or any commercial or financial information
which is . . . privileged or confidential,'' as discussed 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), 16 CFR 4.9(c). 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.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, the Commission encourages
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/regulationnpra, by following the
instructions on the web-based form. If this Notice appears at http://www.regulations.gov, you also may file a comment through that Web site.
If you file your comment on paper, write ``Regulation N: FTC File
No. P134811; K05'' 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 http://www.ftc.gov to read this
Notice. The FTC Act and other laws that the Commission administers
permit the collection of public comments to consider and use in this
proceeding as appropriate. The Commission will consider all timely and
responsive public comments that it receives on or before September 30,
2013. 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.
David C. Shonka,
Principal Deputy General Counsel.
[FR Doc. 2013-18455 Filed 7-31-13; 8:45 am]
BILLING CODE 6750-01-P