[Federal Register Volume 80, Number 63 (Thursday, April 2, 2015)]
[Notices]
[Pages 17749-17757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-07552]
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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 FTC intends to ask the Office of Management and Budget
(``OMB'') to extend for an additional three years the current Paperwork
Reduction Act (``PRA'') clearance for the FTC's enforcement of the
information collection requirements in four consumer financial
regulations enforced by the Commission. Those clearances expire on June
30, 2015.
DATES: Comments must be filed by June 1, 2015.
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, 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 Thomas Kane, Attorneys, Division of Financial
Practices, Bureau of Consumer Protection, Federal Trade Commission, 600
Pennsylvania Ave. NW., Washington, DC 20580, (202) 326-3224.
SUPPLEMENTARY INFORMATION: The four regulations covered by this notice
are:
(1) Regulations promulgated under the Equal Credit Opportunity Act,
15 U.S.C. 1691 et seq. (``ECOA'') (``Regulation B'') (OMB Control
Number: 3084-0087);
(2) Regulations promulgated under the Electronic Fund Transfer Act,
15 U.S.C. 1693 et seq. (``EFTA'') (``Regulation E'') (OMB Control
Number: 3084-0085);
(3) Regulations promulgated under the Consumer Leasing Act, 15
U.S.C. 1667 et seq. (``CLA'') (``Regulation M'') (OMB Control Number:
3084-0086); and
(4) Regulations promulgated under the Truth-In-Lending Act, 15
U.S.C. 1601 et seq. (``TILA'') (``Regulation Z'') (OMB Control Number:
3084-0088).
The FTC enforces these statutes as to all businesses engaged in
conduct these laws cover unless these businesses (such as federally
chartered or insured depository institutions) are subject to the
regulatory authority of another federal agency.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
(``Dodd-Frank Act''), Public Law 111-203, 124 Stat. 1376 (2010), almost
all rulemaking authority for the ECOA, EFTA, CLA, and TILA transferred
from the Board of Governors of the Federal Reserve System (Board) to
the Consumer Financial Protection Bureau (CFPB) on July 21, 2011
(``transfer date''). To implement this transferred authority, the CFPB
published for public comment and issued 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 1002 (Reg. B) (76 FR 79442, Dec. 21, 2011); 12 CFR
1005 (Reg. E) (76 FR 81020, Dec. 27, 2011); 12 CFR 1013 (Reg. M) (76
FR 78500, Dec. 19, 2011); 12 CFR 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 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 motor vehicle dealers (for
brevity, referred to in the burden summaries below as a ``carve-
out'').\5\ The division of PRA burden
[[Page 17750]]
hours not attributable to motor vehicle dealers is reflected in the
CFPB's PRA clearance requests to OMB, 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\ See Dodd-Frank Act Sec. 1029 (a), 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.
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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 certain motor
vehicle dealers predominantly engaged in the sale and servicing of
motor vehicles, the leasing and servicing of motor vehicles, or both,
that, among other things, assign their contracts to unaffiliated third
parties.\6\ Because the FTC has exclusive jurisdiction to enforce these
rules for such motor vehicle dealers and retains its concurrent
authority with the CFPB for other types of motor vehicle dealers, and
in view of the different types of motor vehicle dealers, the FTC is
including for itself the entire PRA burden for all motor vehicle
dealers in the burden estimates below.
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\6\ 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 submit reports, keep records, or provide information to
a third party. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
All four of these regulations require covered entities to keep
certain records, but FTC staff believes these records are kept in the
normal course of business even absent the particular recordkeeping
requirements.\7\ 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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\7\ 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.\8\
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\8\ 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.\9\ 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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\9\ 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 $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.\10\ 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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\10\ These inputs are based broadly on mean hourly data found
within the ``Bureau of Labor Statistics, Economic News Release,''
April 1, 2014, Table 1, ``National employment and wage data from the
Occupational Employment Statistics survey by occupation, May 2013.''
http://www.bls.gov/news.release/ocwage.t01.htm.
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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 530,080 credit firms subject to the Commission's
jurisdiction, at an average annual burden of 1.25 hours per firm for a
total of 662,600 hours.\11\ 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
[[Page 17751]]
technical time) for approximately 2.9 million credit applications
(based on industry data regarding the approximate number of mortgage
purchase and refinance originations), for a total of 48,333 hours.\12\
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.\13\ 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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\11\ 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.
\12\ Regulation B contains model forms that creditors may use to
gather and retain the required information.
\13\ 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 mortgage credit
with first liens to provide a copy of the appraisal report or other
written valuation to applicants.\14\ 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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\14\ While the rule also requires the creditor to provide a
short written disclosure regarding the appraisal process, the
disclosure is now provided by the CFPB, and may be classified as a
warning label supplied by the Federal government. As a result, it is
not a ``collection of information'' for PRA purposes; it is not,
therefore, included in burden estimates below. See 5 CFR
1320.3(c)(2), and CFPB, Final Rule, Disclosure and Delivery
Requirements for Copies of Appraisals and Other Written Valuations
Under the Equal Credit Opportunity Act (Regulation B), 78 FR 7216,
7247 (Jan. 31, 2013).
\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: 712,860 hours (637,310 + 75,550 carve-out for motor
vehicles); $15,031,620 ($13,550,520 + $1,481,100 carve-out for motor
vehicles), associated labor costs.
Disclosures: 1,166,563 hours (1,036,040 + 130,523 carve-out for
motor vehicles); $50,628,816 ($44,964,122 + $5,664,694 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 Total burden
Disclosures Average burden Total setup/ Number of per Total (hours)
Respondents per respondent monitoring transactions transaction transaction
(hours) burden (hours) (minutes) burden (hours)
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Credit history reporting................ 132,520 .25 33,130 66,260,000 .25 276,083 309,213
Adverse action notices.................. 530,000 .75 397,500 106,016,000 .25 441,733 839,293
Appraisal reports/written valuations.... 5,000 1 5,000 1,450,000 .50 12,083 17,083
Self-test disclosures................... 1,375 .5 688 68,750 .25 286 974
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Total............................... .............. .............. .............. .............. .............. .............. 1,166,563
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\1\ The estimates assume that all applicable entities would be affected, with respect to appraisal reports and other written valuations (with the FTC
having approximately one-half of that amount). An increase in burden is noted due to changed rules requiring provision of appraisals reports as well
as other written valuations, for first lien mortgages. The former ``Appraisal disclosure'' item was deleted; the information is now supplied by the
rule.
\2\ The transaction-related figures reflect a decrease in mortgage transactions, compared to prior FTC estimates. The figures assume that approximately
three-quarters of applicable mortgage transactions (.75 x 2,900,000, or 2,175,000) would not otherwise provide this information, and that another
725,000 transactions (not closed, etc.) would be affected; the FTC would have one-half of the total, or 1,450,000.
Regulation B--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical Total
Required task ------------------------------------------------------------------------------------------------ Total Cost ($) Cost
Time (hours) Cost ($56/hr.) Time (hours) Cost ($42/hr.) Time (hours) Cost ($17/hr.) ($)
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General recordkeeping.............. 0 $0 66,260 $2,782,920 596,340 $10,137,780 $12,920,700
Other recordkeeping................ 0 0 48,333 2,029,986 0 0 2,029,986
Recordkeeping of self-test......... 0 0 1,375 57,750 0 0 57,750
Recordkeeping of corrective action. 0 0 552 23,184 0 0 23,184
Total Recordkeeping............ .............. .............. .............. .............. .............. .............. 15,031,620
Disclosures:
Credit history reporting........... 30,921 1,731,576 278,292 11,688,264 0 0 13,419,840
Adverse action notices............. 83,929 4,700,024 755,364 31,725,288 0 0 36,425,312
[[Page 17752]]
Appraisal reports.................. 1708 95,648 15,375 645,750 0 0 741,398
Self-test disclosure............... 97 5,432 877 36,834 0 0 42,266
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Total Disclosures.............. .............. .............. .............. .............. .............. .............. 50,628,816
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Total Recordkeeping and .............. .............. .............. .............. .............. .............. 65,660,436
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 327,460 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 327,460
hours.
Burden Totals
Recordkeeping: 327,460 hours (312,500 + 15,040 carve-out);
$6,385,470 ($6,092,190 + $293,280 carve-out), associated labor costs.
Disclosures: 7,179,271 hours (7,162,564 + 16,707 carve-out);
$311,588,696 ($310,863,608 + $725,088 carve-out), associated labor
costs.
Regulation E--Disclosures--Burden Hours
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Setup/Monitoring Transaction-related
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Average burden Total burden
Disclosures Average burden Total setup/ Number of per Total (hours)
Respondents per respondent monitoring transactions transaction transaction
(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\............. 257,520 .5 128,760 6,438,000 .25 26,825 155,585
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............................. 250 .25 63 50,000,000 .25 208,333 208,396
Electronic check conversion \2\......... 57,520 .5 28,760 1,150,400 .02 383 29,144
Payroll cards........................... 125 .5 63 500,000 3 25,000 25,063
Overdraft services...................... 50,000 .5 25,000 2,500,000 .02 833 25,833
Gift cards \3\.......................... 25,000 .5 12,500 1,250,000,000 .02 416,667 429,167
Remittance transfers: \4\
Disclosures......................... 5,000 1.25 6,250 100,000,000 .9 1,500,000 1,506,250
Error resolution.................... 5,000 1.25 6,250 125,000,000 .9 1,875,000 1,881,250
Agent compliance.................... 5,000 1.25 6,250 100,000,000 .9 1,500,000 1,506,250
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Total........................... .............. .............. .............. .............. .............. .............. 7,179,271
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\1\ Preauthorized transfer respondents and transactions have decreased slightly.
\2\ Electronic check conversion respondents and transactions have decreased slightly.
\3\ Gift card entities and transactions under FTC jurisdiction (which excludes banks and bank transactions) have decreased.
\4\ Remittance transfer respondents now focus primarily on those that may offer services and are responsible for legal requirements (not separate
inclusion of their offices). Legal changes have eased compliance, but they require system changes causing an increase in setup burden and a decrease
in transaction burden. Remittance transfers have increased substantially but error resolutions have increased to a smaller degree due to changes in
legal requirements. The resulting transaction burden in each category for remittance transfers has increased due to the upswing in transaction volume.
[[Page 17753]]
Regulation E--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------ Total cost ($)
Time (hours) Cost ($56/hr.) Time (hours) Cost ($42/hr.) Time (hours) Cost ($17/hr.)
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Recordkeeping........................... 0 $0 32,746 $1,375,332 294,714 $5,010,138 $6,385,470
Disclosures:
Initial terms........................... 2,517 140,952 22,650 951,300 0 0 1,092,252
Change in terms......................... 1,175 65,800 10,750 451,500 0 0 517,300
Periodic statements..................... 22,500 1,260,000 202,500 8,505,000 0 0 9,765,000
Error resolution........................ 6,667 373,352 60,000 2,520,000 0 0 2,893,352
Transaction receipts.................... 85,833 4,806,648 772,500 32,445,000 0 0 37,251,648
Preauthorized transfers................. 15,565 871,248 140,027 5,881,134 0 0 6,752,382
Service provider notices................ 1,458 81,648 13,125 551,250 0 0 632,898
Govt. benefit notices................... 21,083 1,180,648 189,750 7,969,500 0 0 9,150,148
ATM notices............................. 20,840 1,167,040 187,556 7,877,352 0 0 9,044,392
Electronic check conversion............. 2,919 163,184 26,230 1,101,660 0 0 1,264,844
Payroll cards........................... 2,506 140,336 22,557 947,394 0 0 1,087,730
Overdraft services...................... 2,583 144,648 23,250 976,500 0 0 1,121,148
Gift cards.............................. 85,833 2,403,352 386,250 16,222,500 0 0 18,626,852
Remittance transfers:
Disclosures......................... 150,625 8,435,000 1,355,625 56,936,250 0 0 65,371,250
Error resolution.................... 188,125 10,535,000 1,693,125 71,111,250 0 0 81,646,250
Agent compliance.................... 150,625 8,435,000 1,355,625 56,936,250 0 0 65,371,250
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Total Disclosures............... .............. .............. .............. .............. .............. .............. 311,588,696
===============
Total Recordkeeping and .............. .............. .............. .............. .............. .............. 317,974,166
Disclosures....................
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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 32,577 firms within the FTC's jurisdiction leasing
products to consumers at an average annual burden of one hour per firm,
for a total of 32,577 hours.
Burden Totals \16\
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\16\ 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. As noted above, for purposes of
burden calculations, and in view of the different types of motor
vehicle dealers, the FTC is including for itself the entire PRA
burden for all motor vehicle dealers in the burden estimates below.
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Recordkeeping: 32,577 hours (5,000 + 27,577 carve-out); $635,259
($97,500 + $537,759 carve-out), associated labor costs.
Disclosures: 73,933 hours (2,986 + 70,947 carve-out); $3,208,702
($129,598 + $3,079,104 carve-out), associated labor costs.
Regulation M--Disclosures--Burden Hours
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Setup/Monitoring Transaction-related
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Disclosures Average burder Total setup/ Average Total Total burden
Respondents per respondent monitoring Number of burdern per transaction (hours)
(hours) burden (hours) transactions transaction burden (hours)
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Motor Vehicle Leases \1\................ 27,577 1 27,577 4,000,000 .50 33,333 60,910
Other Leases \2\........................ 5,000 .50 2,500 100,000 .25 417 2,917
Advertising \3\......................... 15,181 .50 7,591 603,490 .25 2,515 10,106
Total............................... .............. .............. .............. .............. .............. .............. 73,933
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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. 1667(1); 12 CFR
1013.2(e)(1). While the number of respondents for vehicle leases has decreased, the number of vehicle lease transactions has increased, with market
changes, from past FTC estimates. Additionally, leases up to $54,600 (plus an annual adjustment) are now covered. The resulting total burden has
increased.
[[Page 17754]]
\2\ This category focuses on all types of consumer leases other than vehicle leases. It includes leases for computers, other electronics, small
appliances, furniture, and other transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
1013.2(e)(1). The number of respondents has decreased, based on market changes in companies and types of transactions they offer, and the PRA burden
sharing with the CFPB; the number of such transactions has also declined, based on types of transactions offered that are covered by the CLA. Leases
up to $54,600 (plus an annual adjustment) are now covered. The resulting total burden has decreased.
\3\ Respondents for advertising have increased as have lease advertisements, based on market changes, from past FTC estimates. More types of lease
advertisements are occurring. The resulting total burden has increased.
Regulation M--Recordkeeping and Disclosures--Cost
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Managerial Skilled technical Clerical
Required task ------------------------------------------------------------------------------------------------ Total cost ($)
Time (hours) Cost ($56/hr.) Time (hours) Cost ($42/hr.) Time (hours) Cost ($17/hr.)
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Recordkeeping........................... 0 $0 3,258 $136,836 29,319 $498,423 $635,259
Disclosures:
Motor Vehicle Leases.................... 6,091 341,096 58,419 2,302,398 0 0 2,643,494
Other Leases............................ 292 16,352 2,625 110,250 0 0 126,602
Advertising............................. 1,011 56,616 9,095 381,990 0 0 438,606
---------------
Total Disclosures................... .............. .............. .............. .............. .............. .............. 3,208,702
===============
Total Recordkeeping and Disclosures. .............. .............. .............. .............. .............. .............. 3,843,961
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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.
New requirements have been established in the mortgage area, including
for high cost mortgages, higher-priced mortgage loans,\17\ ability to
pay of mortgage consumers, mortgage servicing, loan originators, and
certain integrated mortgage disclosures.
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\17\ 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 now provided by the CFPB,
and may be classified as a label supplied by the Federal government.
As a result, it is not a ``collection of information'' for PRA
purposes; it is not, therefore, included in burden estimates below.
See 5 CFR 1320.3(c)(2), and CFPB, Final Rule, Appraisals for Higher-
Priced Mortgage Loans, 78 FR 10368, 10430 (Feb. 13, 2013), and
Supplemental Final Rule, Appraisals for Higher-Priced Mortgage
Loans, 78 FR 78520, 78575 (Dec. 26, 2013).
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FTC staff estimates that Regulation Z's recordkeeping requirements
affect approximately 530,080 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 5,000 entities (ability to pay),
and 5 additional hours per entity for 5,000 entities (loan
originators).
Burden Totals
Recordkeeping: 688,850 hours (613,650 + 75,200 carve-out);
$13,432,575 ($11,966,175 + $1,466,400 carve-out), associated labor
costs.
Disclosures: 13,008,452 hours (11,964,361 + 1,044,091 carve-out);
$553,563,761 ($508,250,213 + $45,313,548 carve-out), associated labor
costs.
Regulation Z--Disclosures--Burden Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Setup/monitoring Transaction-related
------------------------------------------------------------------------------------------------
Average burden Total setup/ Average burden Total Total burden
Disclosures \1\ per monitoring Number of per transaction (hours)
Respondents respondent \2\ burden transactions transaction burden
(hours) (hours) \3\ (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Open-end credit:
Initial terms....................... 45,000 .75 33,750 20,000,000 .375 125,000 158,750
Rescission notices \4\.............. 1,500 .5 750 8,000 .25 33 783
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.......... 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
Home equity lines of credit \5\..... 1,500 .5 750 10,000 .25 42 792
Home equity lines of credit-high 500 2 1,000 5,000 2 167 1,167
cost mortgages \6\.................
College student credit card 2,500 .5 1,250 250,000 .25 1,042 2,292
marketing--ed. institutions........
College student credit card 300 .75 225 18,000 .75 225 450
marketing--card issuer reports.....
Posting and reporting of credit card 25,000 .75 18,750 12,500,000 .375 78,125 96,875
agreements.........................
Advertising......................... 100,000 .75 75,000 300,000 .75 3,750 78,750
[[Page 17755]]
Sale, transfer, or assignment of 1,500 .5 750 1,750,000 .25 7,292 8,042
mortgages \7\......................
Appraiser misconduct reporting...... 625,000 .75 468,750 12,500,000 .375 78,125 546,875
Mortgage servicing \8\.............. 2,500 .5 1,250 500,000 .5 4,167 5,417
Loan originators \9\................ 2,500 2 5,000 25,000 5 2,083 7,083
Closed-end credit:
Credit disclosures \10\............. 380,080 .75 285,060 163,054,320 2.25 6,108,912 6,399,597
Rescission notices \11\............. 5,000 .5 2,500 7,500,000 1 125,000 127,500
Redisclosures....................... 200,000 .5 100,000 1,000,000 2.25 37,500 137,500
Integrated mortgage disclosures \12\ 5,000 10 50,000 15,000,000 3.5 875,000 925,000
Variable rate mortgages \13\........ 5,000 1 5,000 500,000 1.75 14,583 19,583
High cost mortgages \14\............ 3,000 1 3,000 75,000 2 2,500 5,500
Higher priced mortgages \15\........ 3,000 1 3,000 25,000 2 833 3,833
Reverse mortgages \16\.............. 7,500 .5 3,750 35,000 1 583 4,333
Advertising \17\.................... 248,360 .5 124,180 2,483,600 1 41,393 165,573
Private education loans............. 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..........................
Ability to pay/qualified mortgage 5,000 .75 3,750 0 0 0 3,750
\18\...............................
Appraiser misconduct reporting...... 625,000 .75 468,750 12,500,000 .375 78,125 546,875
Mortgage servicing \19\............. 5,000 1 5,000 1,000,000 2.25 37,500 42,500
Loan originators \20\............... 2,500 2 5,000 25,000 5 2,083 7,083
---------------
Total open-end credit........... .............. .............. .............. .............. .............. .............. 4,547,692
---------------
Total closed-end credit......... .............. .............. .............. .............. .............. .............. 8,460,760
===============
Total credit.................... .............. .............. .............. .............. .............. .............. 13,008,452
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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 $54,600 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 sharing with the CFPB estimated PRA burden (for all but
certain motor vehicle dealers) yields a net increase from the FTC's prior reported estimate for open-end credit and for closed-end credit.
\2\ Burden per respondent in some categories has increased compared to prior FTC estimates, due to changes in rules.
\3\ Burden per transaction in some categories has increased compared to prior FTC estimates, due to changes in rules.
\4\ Respondents for mortgages involving rescission have decreased, as have transactions.
\5\ Respondents for home equity lines of credit have decreased, as have transactions.
\6\ Regulation Z high cost mortgage rules now cover certain open-end mortgages, and a new counseling rule also applies.
\7\ Respondents for sale, transfer or assignment of mortgages have decreased.
\8\ Regulation Z has expanded various mortgage servicing requirements for prompt crediting and payoff responses.
\9\ Regulation Z includes new loan originator compensation requirements.
\10\ Respondents for credit disclosures have decreased, as have transactions.
\11\ Respondents for mortgages involving rescission have decreased.
\12\ Regulation Z now has integrated mortgage disclosure requirements for loan estimates and loan closing documents, with other requirements.
\13\ Respondents for variable rate mortgages have decreased but Regulation Z has expanded mortgage disclosure requirements affecting subsequent
disclosures, increasing burden.
\14\ Regulation Z high rate/high fee mortgages are now called high cost mortgages. Respondents in high cost mortgages have decreased, but the rules
cover more types of mortgages and include a counseling requirement, increasing burden. However, these types of transactions have decreased, reducing
total burden.
\15\ Respondents for higher priced mortgages have decreased. However, Regulation Z now has certain appraisal requirements for higher-priced mortgages,
increasing burden. However, these types of transactions have decreased, reducing total burden.
\16\ Reverse mortgage respondents and transactions have decreased.
\17\ Advertising respondents have increased, as have transactions, causing an increased total burden.
\18\ Regulation Z now includes ability to pay rules that affect setup costs.
\19\ Regulation Z has expanded various mortgage servicing requirements for prompt crediting and payoff responses. It also requires periodic statements
(or a coupon book, for fixed-rate mortgages).
\20\ Regulation Z includes new loan originator compensation requirements.
Regulation Z--Recordkeeping and Disclosures--Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Managerial Skilled technical Clerical
------------------------------------------------------------------------------------------------
Required task Cost ($56/ Cost ($42/ Cost ($17/ Total cost ($)
Time (hours) hr.) Time (hours) hr.) Time (hours) hr.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping........................... 0 $0 68,885 $2,893,170 619,965 $10,539,405 $13,432,575
Open-end credit Disclosures:
Initial terms....................... 15,875 889,000 142,875 6,000,750 0 0 6,889,750
Rescission notices.................. 78 4,368 705 29,610 0 0 33,978
Subsequent disclosures.............. 20,333 1,138,648 183,000 7,686,000 0 0 8,824,648
Periodic statements................. 276,958 15,509,648 2,492,625 104,690,250 0 0 120,199,898
Error resolution.................... 43,375 2,429,000 390,375 16,395,750 0 0 18,824,750
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
Home equity lines of credit-high 117 6,552 1,050 44,100 0 0 50,662
cost mortgages.....................
College student credit card 229 11,221 2,063 61,890 0 0 73,111
marketing--ed institutions.........
[[Page 17756]]
College student credit card 45 2,205 405 12,150 0 0 14,355
marketing--card issuer reports.....
Posting and reporting of credit card 9,688 474,712 87,187 2,615,610 0 0 3,090,322
agreements.........................
Advertising......................... 7,875 385,875 70,875 2,126,250 0 0 2,512,125
Sale, transfer, or assignment of 823 40,327 7,407 222,210 0 0 262,537
mortgages..........................
Appraiser misconduct reporting...... 54,687 2,679,663 492,188 14,765,640 0 0 17,445,303
Mortgage servicing.................. 542 30,352 4,875 204,750 0 0 235,102
Loan originators.................... 708 39,648 6,375 267,750 0 0 307,398
---------------------------------------------------------------------------------------------------------------
Total open-end credit........... .............. .............. .............. .............. .............. .............. 186,366,805
Closed-end credit Disclosures:
Credit disclosures.................. 639,960 35,837,760 5,759,637 241,904,754 0 0 277,742,514
Rescission notices.................. 12,750 714,000 114,750 4,819,500 0 0 5,533,500
Redisclosures....................... 13,750 770,000 123,750 5,197,500 0 0 5,967,500
Integrated mortgage disclosures..... 92,500 5,180,000 832,500 34,965,000 0 0 40,145,000
Variable rate mortgages............. 1,958 109,648 17,625 740,250 0 0 849,898
High cost mortgages................. 550 30,800 4,950 207,900 0 0 238,700
Higher priced mortgages............. 383 21,448 3,450 144,900 0 0 166,348
Reverse mortgages................... 433 24,248 3,900 163,800 0 0 188,048
Advertising......................... 16,557 927,192 149,016 6,258,672 0 0 7,185,864
Private education loans............. 130 7,280 1,170 49,140 0 0 56,420
Sale, transfer, or assignment of 7,083 396,648 63,750 2,677,500 0 0 3,074,148
mortgages..........................
Ability to pay/qualified mortgage... 375 21,000 3,375 141,750 0 0 162,750
Appraiser misconduct reporting...... 54,687 3,062,472 492,188 20,671,896 0 0 23,734,368
Mortgage servicing.................. 4,250 238,000 38,250 1,606,500 0 0 1,844,500
Loan originators.................... 708 39,648 6,375 267,750 0 0 307,398
---------------
Total closed-end credit......... .............. .............. .............. .............. .............. .............. 367,196,956
---------------
Total Disclosures............... .............. .............. .............. .............. .............. .............. 553,563,761
===============
Total Recordkeeping and .............. .............. .............. .............. .............. .............. 566,996,336
Disclosures....................
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Request for Comment: Pursuant to Section 3506(c)(2)(A) of the PRA,
the FTC invites comments on: (1) Whether the disclosure requirements
are necessary, including whether the information will be practically
useful; (2) the accuracy of our burden estimates, including whether the
methodology and assumptions used are useful; (3) ways to enhance the
quality, utility, and clarity of the information to be collected; and
(4) ways to minimize the burden of providing the required information
to consumers.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before June 1, 2015.
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 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 doesn't include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, don't
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, don't 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).\18\ 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.
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\18\ 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.
When 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
[[Page 17757]]
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite
CC-5610 (Annex J), or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW., 5th Floor, Suite 5610 (Annex J), Washington, DC
20024. If possible, submit your paper comment to the Commission by
courier or overnight service.
The FTC Act and other laws that the Commission administers permit
the collection of public comments to consider and use in this
proceeding as appropriate. The Commission will consider all timely and
responsive public comments that it receives on or before June 1, 2015.
For information on the Commission's privacy policy, including routine
uses permitted by the Privacy Act, see http://www.ftc.gov/ftc/privacy.htm.
David C. Shonka,
Principal Deputy General Counsel.
[FR Doc. 2015-07552 Filed 4-1-15; 8:45 am]
BILLING CODE 6750-01-P