2015-07552. 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 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, [phone].

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]

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 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.

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.

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).

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]

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.

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.

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 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.

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]

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

Disclosures	Setup/Monitoring 1			Transaction-related 2			Total burden (hours)
	Respondents	Average burden per respondent (hours)	Total setup/monitoring burden (hours)	Number of transactions	Average burden per transaction (minutes)	Total transaction burden (hours)
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
Total							1,166,563
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 × 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

Required task	Managerial		Skilled technical		Clerical		Total Cost ($)
	Time (hours)	Cost ($56/hr.)	Time (hours)	Cost ($42/hr.)	Time (hours)	Cost ($17/hr.)
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
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
Total Disclosures							50,628,816
Total Recordkeeping and Disclosures							65,660,436

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

Disclosures	Setup/Monitoring			Transaction-related			Total burden (hours)
	Respondents	Average burden per respondent (hours)	Total setup/monitoring burden (hours)	Number of transactions	Average burden per transaction (minutes)	Total transaction burden (hours)
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
Total							7,179,271
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.

Regulation E—Recordkeeping and Disclosures—Cost

Required task	Managerial		Skilled technical		Clerical		Total cost ($)
	Time (hours)	Cost ($56/hr.)	Time (hours)	Cost ($42/hr.)	Time (hours)	Cost ($17/hr.)
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
Total Disclosures							311,588,696
Total Recordkeeping and Disclosures							317,974,166

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]

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

Disclosures	Setup/Monitoring			Transaction-related			Total burden (hours)
	Respondents	Average burder per respondent (hours)	Total setup/monitoring burden (hours)	Number of transactions	Average burdern per transaction	Total transaction burden (hours)
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
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.
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

Required task	Managerial		Skilled technical		Clerical		Total cost ($)
	Time (hours)	Cost ($56/hr.)	Time (hours)	Cost ($42/hr.)	Time (hours)	Cost ($17/hr.)
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

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.

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

Disclosures 1	Setup/monitoring			Transaction-related			Total burden (hours)
	Respondents	Average burden per respondent 2 (hours)	Total setup/monitoring burden (hours)	Number of transactions	Average burden per transaction 3	Total transaction burden (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 cost mortgages 6	500	2	1,000	5,000	2	167	1,167
College student credit card marketing—ed. institutions	2,500	.5	1,250	250,000	.25	1,042	2,292
College student credit card marketing—card issuer reports	300	.75	225	18,000	.75	225	450
Posting and reporting of credit card agreements	25,000	.75	18,750	12,500,000	.375	78,125	96,875
Advertising	100,000	.75	75,000	300,000	.75	3,750	78,750
Sale, transfer, or assignment of mortgages 7	1,500	.5	750	1,750,000	.25	7,292	8,042
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 mortgages	100,000	.5	50,000	5,000,000	.25	20,833	70,833
Ability to pay/qualified mortgage 18	5,000	.75	3,750	0	0	0	3,750
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
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

Required task	Managerial		Skilled technical		Clerical		Total cost ($)
	Time (hours)	Cost ($56/hr.)	Time (hours)	Cost ($42/hr.)	Time (hours)	Cost ($17/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 cost mortgages	117	6,552	1,050	44,100	0	0	50,662
College student credit card marketing—ed institutions	229	11,221	2,063	61,890	0	0	73,111
College student credit card marketing—card issuer reports	45	2,205	405	12,150	0	0	14,355
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
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 mortgages	7,083	396,648	63,750	2,677,500	0	0	3,074,148
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 Disclosures							566,996,336

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.

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 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.

Footnotes

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, § 1029(a), -(c).

3.  See Dodd-Frank Act, § 1075 (these requirements are implemented through Board Regulation II, 12 CFR 235, rather than EFTA's implementing Regulation E).

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 § 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.

6.  See Dodd-Frank Act, § 1029(a), -(c).

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).

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.

9.  The Commission generally does not have jurisdiction over banks, thrifts, and federal credit unions under the applicable regulations.

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.

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.

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.

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.

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).

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).