E6-8672. Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB

AGENCY:

Board of Governors of the Federal Reserve System.

SUMMARY:

Background.

Notice is hereby given of the final approval of proposed information collections by the Board of Governors of the Federal Reserve System under OMB delegated authority, as per 5 CFR 1320.16 (OMB Regulations on Controlling Paperwork Burdens on the Public). Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the OMB 83-Is and supporting statements and approved collection of information instrument(s) are placed into OMB's public docket files. The Federal Reserve may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.

FOR FURTHER INFORMATION CONTACT:

Federal Reserve Board Clearance Officer Michelle Long--Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202-452-3829)

OMB Desk Officer Mark Menchik--Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, Washington, DC 20503, or email to [e-mail]

Final approval under OMB delegated authority the implementation of the following collection of information:

Report title: Studies to Develop and Test Consumer Regulatory Disclosures

Agency form number: FR 1380

OMB control number: 7100-0312

Frequency: Consumer surveys: qualitative testing, 4; quantitative testing, 4; Institution surveys: quantitative testing, 5.

Reporters: Consumers and financial institutions that engage in consumer lending and provide other financial products

Estimated annual reporting hours: 25,434 hours

Estimated average hours per response: Consumer surveys: qualitative testing, 1.5 hours; quantitative testing, .33 hours; Institution surveys: quantitative testing, 15 hours.

Estimated number of respondents: Consumer surveys: qualitative testing, 225; quantitative testing, 1,200; Institution surveys: quantitative testing, 300.

General description of report: This information collection is authorized pursuant to the: Home Mortgage Section 806 (12 U.S.C. § 2804(a)); Community Reinvestment Act, Section 806 (12 U.S.C. § 2905); Competitive Equality Banking Act, Section 1204 (12 U.S.C. § 3806) (adjustable rate mortgage caps); Expedited Funds Availability Act, Section 609 (12 U.S.C. § 4008); Truth in Saving Act, Section 269 (12 U.S.C. § 4308); Federal Trade Commission Act, Section 18(f) (15 U.S.C. § 57a(f)); Truth in Lending Act, Section 105 (15 U.S.C. § 1604); Fair Credit Reporting Act, Section 621 (15 U.S.C. § 1681s(e)); Equal Credit Opportunity Act, Section 703 (15 U.S.C. § 1691b(a)); Electronic Funds Transfer Act, Section 904 (15 U.S.C. § 1693b) and Gramm-Leach-Bliley Act, Section 504 (15 U.S.C. § 6804). Respondent participation in the survey is voluntary. If the Federal Reserve contracts with an outside firm, no issue of confidentiality would arise because names and any other characteristics that would permit personal identification of respondents would not be included in any reports submitted to the Federal Reserve. However, if there is no contractual agreement between the Federal Reserve and the outside firm regarding the reporting of respondent identifying data, or if the Federal Reserve conducts the survey itself, then the information would likely be considered an agency record subject to the Freedom of Information Act (FOIA). Nevertheless, confidential treatment for consumer identifying data would be warranted under subsection (b)(6) of the FOIA. The confidentiality of the information obtained from financial institutions will be determined on a case-by-case basis when the specific questions to be asked on each particular survey are formulated, but before respondents are contacted. Depending upon the survey questions, confidential treatment could be warranted under subsection (b)(4) of the FOIA. 5 U.S.C. § 552(b)(4) and (6).

Abstract: The Congress has assigned to the Federal Reserve the duty of implementing a number of Federal laws intended to protect consumers in credit and other financial transactions and to ensure that consumers receive comprehensive information and fair treatment. The Federal Reserve is responsible for drafting regulations and interpretations to carry out the purposes of these consumer protection laws.

The Federal Reserve seeks to develop and implement regulatory policies based on information garnered from both consumers and industry entities that would enable consumers to make better financial decisions based on sound information and a clear understanding of how to use that information to meet their personal needs. Accordingly, the Federal Reserve periodically surveys consumers and financial institutions to identify key issues and review and evaluate consumer disclosures for effectiveness. Direct information about consumer knowledge and use of disclosure statements would best be obtained through studies of individuals and financial institutions that engage in consumer lending and provide other financial products.

In order to better understand consumer attitudes and knowledge of the Federal Reserve's consumer regulations and to make disclosure statements more comprehensible and usable, the Federal Reserve will conduct studies of consumers and financial institutions. These studies could take the format of focus group discussions, face-to-face interviews, telephone interviews, mall intercept testing, written questionnaires (paper or web based), or controlled experiments. The size of consumer focus groups will vary depending on the topics being discussed and the format of the sessions. Experience has shown that focused discussions of not more than twelve to fifteen participants are most productive.

Written surveys or questionnaires could include categorical questions, yes-no questions, ordinal scale (such as Likert scale) or ranking scale questions (which ascertain respondent's views on the degree to which something fits a particular criterion; for example, on a scale of 1, “strongly agree” to 5, “strongly disagree”), and open-ended questions.

The studies could be conducted through a private firm, which would be chosen in a competitive bidding process. The research instruments could be developed by the Federal Reserve alone or jointly with the firm selected by the Federal Reserve. The firm would be responsible for following the sampling protocol established by the Federal Reserve, conducting the study, preparing a data file containing the responses, computing analysis weights, and documenting all study procedures. Data editing and analysis of survey results would be conducted solely by the Federal Reserve or jointly with the firm.

In the subject areas covered by the studies, much of the information needs to be obtained via surveys of consumers, either because (1) personal attitudes, opinions or evidence of understanding are sought, or (2) the desired information is not compiled by financial institutions, or the information is compiled and is proprietary. In addition, the studies could survey financial institutions to obtain information about their consumer product offerings and disclosure and marketing practices with respect to those products.

Current action: On March 15, 2006, the Federal Reserve published a notice soliciting comment on the proposal to implement FR 1380 (71 FR 13397). The comment period ended on May 15, 2006. The Federal Reserve received two comment letters; however, the proposal is unchanged from the one the Board initially approved.

The comment letters, from a banking trade association and a financial holding company, strongly support the Federal Reserve's proposal to conduct these studies to enable the use of consumer feedback to create more meaningful and useful disclosure statements. One of the commenters also suggested using a staged approach for conducting these studies. The suggested approach is substantially similar to the approach that will be employed by the Federal Reserve.

Board of Governors of the Federal Reserve System, May 31, 2006.

Jennifer J. Johnson

Secretary of the Board.