Agency Information Collection Activities; Submission for OMB Review; Comment Request, 3295-3302 [E6-626]
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Federal Register / Vol. 71, No. 13 / Friday, January 20, 2006 / Notices
comprehensive review of FCC policies
and procedures.
Presentations will be made in three
panels:
Panel One will feature the Chiefs of
the Wireless Telecommunications
Bureau, the Office of Engineering and
Technology and the International
Bureau.
Panel Two will feature the Chief of
the Consumer & Governmental Affairs
Bureau and the Chief of the
Enforcement Bureau.
Panel Three will feature the Chief of
the Media Bureau and the Chief of the
Wireline Competition Bureau.
Additional information concerning
this meeting may be obtained from
Audrey Spivack or David Fiske, Office
of Media Relations, (202) 418–0500;
TTY 1–888–835–5322. Audio/Video
coverage of the meeting will be
broadcast live with open captioning
over the Internet from the FCC’s Audio/
Video Events Web page at https://
www.fcc.gov/realaudio.
For a fee this meeting can be viewed
live over George Mason University’s
Capitol Connection. The Capitol
Connection also will carry the meeting
live via the Internet. To purchase these
services call (703) 993–3100 or go to
https://www.capitolconnection.gmu.edu.
Copies of materials adopted at this
meeting can be purchased from the
FCC’s duplicating contractor, Best Copy
and Printing, Inc. (202) 488–5300; Fax
(202) 488–5563; TTY (202) 488–5562.
These copies are available in paper
format and alternative media, including
large print/type; digital disk; and audio
and video tape. Best Copy and Printing,
Inc. may be reached by e-mail at
FCC@BCPIWEB.com.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 06–573 Filed 1–18–06; 12:48 pm]
BILLING CODE 6712–01–P
FEDERAL RESERVE SYSTEM
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Change in Bank Control Notices;
Acquisition of Shares of Bank or Bank
Holding Companies
The notificants listed below have
applied under the Change in Bank
Control Act (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y (12
CFR 225.41) to acquire a bank or bank
holding company. The factors that are
considered in acting on the notices are
set forth in paragraph 7 of the Act (12
U.S.C. 1817(j)(7)).
The notices are available for
immediate inspection at the Federal
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Reserve Bank indicated. The notices
also will be available for inspection at
the office of the Board of Governors.
Interested persons may express their
views in writing to the Reserve Bank
indicated for that notice or to the offices
of the Board of Governors. Comments
must be received not later than February
6, 2006.
A. Federal Reserve Bank of San
Francisco (Tracy Basinger, Director,
Regional and Community Bank Group)
101 Market Street, San Francisco,
California 94105-1579:
1. Woosung (Edward) Park, Seattle,
Washington; to retain voting shares of
Pacific International Bancorp, Inc., and
thereby retain voting shares of Pacific
International Bank, both of Seattle,
Washington.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than February 16,
2006.
A. Federal Reserve Bank of Chicago
(Patrick M. Wilder, Assistant Vice
President) 230 South LaSalle Street,
Chicago, Illinois 60690-1414:
1. FBOP Corporation, Oak Park,
Illinois; to acquire at least 50 percent of
the voting shares of Community Bank of
Lemont, Illinois.
Board of Governors of the Federal Reserve
System, January 17, 2006.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. E6–643 Filed 1–19–06; 8:45 am]
BILLING CODE 6210–01–S
Board of Governors of the Federal Reserve
System, January 17, 2006.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. E6–642 Filed 1–19–06; 8:45 am]
FEDERAL TRADE COMMISSION
BILLING CODE 6210–01–S
Agency Information Collection
Activities; Submission for OMB
Review; Comment Request
FEDERAL RESERVE SYSTEM
AGENCY:
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The application also will be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Additional information on all bank
holding companies may be obtained
from the National Information Center
Web site at https://www.ffiec.gov/nic/.
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Federal Trade Commission
(‘‘FTC’’ or ‘‘Commission’’).
ACTION: Notice.
SUMMARY: The information collection
requirements described below will be
submitted to the Office of Management
and Budget (‘‘OMB’’) for review, as
required by the Paperwork Reduction
Act (‘‘PRA’’) (44 U.S.C. 3501–3520). The
FTC is seeking public comments on its
proposal to extend through January 31,
2009 the current PRA clearances for
information collection requirements
contained in four consumer financial
regulations enforced by the
Commission. Those clearances expire
on January 31, 2006.
DATES: Comments must be received on
or before February 21, 2006.
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to ‘‘Regs BEMZ:
FTC File No. P054803’’ to facilitate the
organization of comments. A comment
filed in paper form should include this
reference both in the text and on the
envelope and should be mailed or
delivered, with two complete copies, to
the following address: Federal Trade
Commission/Office of the Secretary,
Room H–135 (Annex J), 600
Pennsylvania, NW., Washington, DC
20580. Because paper mail in the
Washington area and at the Commission
is subject to delay, please consider
submitting your comments in electronic
form, (in ASCII format, WordPerfect, or
Microsoft Word) as part of or as an
attachment to e-mail messages directed
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to the following e-mail box:
paperworkcomment@ftc.gov. However,
if the comment contains any material for
which confidential treatment is
requested, it must be filed in paper
form, and the first page of the document
must be clearly labeled ‘‘Confidential.’’ 1
All comments should additionally be
submitted to: Office of Management and
Budget, Attention: Desk Officer for the
Federal Trade Commission. Comments
should be submitted via facsimile to
(202) 395–6974 because U.S. Postal Mail
is subject to lengthy delays due to
heightened security precautions.
The FTC Act and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. All timely and responsive
public comments will be considered by
the Commission and will be available to
the public on the FTC Web site, to the
extent practicable, at https://www.ftc.gov.
As a matter of discretion, the FTC makes
every effort to remove home contact
information for individuals from the
public comments it receives before
placing those comments on the FTC
Web site. More information, including
routine uses permitted by the Privacy
Act, may be found in the FTC’s privacy
policy at https://www.ftc.gov/ftc/
privacy.htm.
FOR FURTHER INFORMATION CONTACT:
Requests for additional information or
copies of the proposed information
requirements should be addressed to
Carole Reynolds, Attorney, Division of
Financial Practices, Bureau of Consumer
Protection, Federal Trade Commission,
600 Pennsylvania Ave., NW.,
Washington, DC 20580, (202) 326–3230.
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’’) (Control Number:
3084–0087);
(2) Regulations promulgated under
The Electronic Fund Transfer Act, 15
U.S.C. 1693 et seq. (‘‘EFTA’’)
(‘‘Regulation E’’) (Control Number:
3084–0085);
(3) Regulations promulgated under
The Consumer Leasing Act, 15 U.S.C.
1667 et seq. (‘‘CLA’’) (‘‘Regulation M’’)
(Control Number: 3084–0086);
1 Commission Rule 4.2(d), 16 CFR 4.2(d). The
comment must be accompanied by an explicit
request for confidential treatment, including the
factual and legal basis for the request, and must
identify the specific portions of the comment to be
withheld from the public record. The request will
be granted or denied by the Commission’s General
Counsel, consistent with applicable law and the
public interest. See Commission Rule 4.9(c), 16 CFR
4.9(c).
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(4) Regulations promulgated under
The Truth-In-Lending Act, 15 U.S.C.
1601 et seq. (‘‘TILA’’) (‘‘Regulation Z’’)
(Control Number: 3084–0088).
On September 28, 2005, the FTC
sought comment on the information
collection requirements associated with
the regulations discussed below. See 70
FR 56696. The Commission received
one comment from the National
Automobile Dealers Association
(‘‘NADA’’) pertaining to certain aspects
of regulatory burden affecting
Regulations B, M, and Z.2 The issues
raised in the NADA comment are
discussed under the applicable
regulation subheadings. As required by
the PRA, the FTC is providing this
second opportunity for public comment
before requesting that OMB extend the
existing paperwork clearance for the
regulations discussed herein. 44 U.S.C.
3506(c)(2)(A).
Each of these four rules impose
certain recordkeeping and disclosure
requirements associated with providing
credit or with other financial
transactions. As detailed below, FTC
staff has calculated the PRA burden for
each rule based on the compliance costs
of entities subject to enforcement by the
FTC. All of these rules require covered
entities to keep certain records. As
discussed below, in most instances, staff
believes that these entities would
generally retain these records in the
normal course of business even absent
the recordkeeping requirement in the
rules.3 There is also some burden
associated with ensuring that covered
entities do not prematurely dispose of
relevant records during the period of
time required by the applicable rule.
Disclosure requirements involve both
set-up and monitoring costs as well as
certain transaction-specific costs. ‘‘Setup’’ burden, incurred by new entrants
only, includes identifying the applicable
disclosure requirements, determining
compliance obligations, and designing
and developing compliance systems and
procedures. ‘‘Monitoring’’ burden,
incurred by all covered entities,
includes reviewing and obtaining
guidance on revisions to regulatory
requirements, revising compliance
2 NADA represents approximately 20,000
franchised automobile and truck dealers (‘‘auto
dealers’’) who sell new and used vehicles and
engage in service, repair and parts sales. NADA’s
comment is available at https://www.ftc.gov/os/
comments/pra-regsbemz/index.htm.
3 Because most records would be retained in the
ordinary course of business, entities can use
existing retention or storage facilities for any
particular records that might be maintained for
regulatory purposes. Additionally, as discussed
below, paper retention is not required under the
regulations; financial entities may use electronic or
other non-paper retention formats.
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systems and procedures as necessary,
and monitoring the ongoing operation of
systems and procedures to ensure
continued compliance. ‘‘Transactionrelated’’ burden refers to the effort
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 actual range of compliance
burden experienced by covered entities,
and reflected in those averages, varies
widely. Depending on the extent to
which covered entities have developed
computer-based systems and procedures
for providing the required disclosures
(and/or the extent which such entities
utilize electronic transactions,
communications, and/or electronic
recordkeeping), and the efficacy of those
systems and procedures, some entities
may have little burden, while others
may incur a higher burden.4
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 credit and lease advertisers,
creditors, financial institutions, service
providers, certain government agencies
and others involved in delivering
electronic fund transfers (EFTs) of
government benefits, and lessors.5 The
burden estimates represent staff’s best
assessment, based on its knowledge and
expertise relating to the financial
services industry. To derive these
estimates, 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) types of EFTs
used; (4) types and occurrences of
adverse actions; (5) types of appraisal
reports utilized; and (6) computer
systems and electronic features of
compliance operations.
The required disclosures do not
impose PRA burden on some covered
4 For example, large retailers may use computerbased and/or electronic means to provide required
disclosures, including issuing some disclosures en
masse, e.g., notices of changes in terms. Smaller
retailers or other creditors 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; as such, they may have minimal additional
burden. Other entities, including auto dealers, may
have incorporated fewer of these approaches into
their systems and may have a higher burden.
5 The Commission generally does not have
jurisdiction over banks under the applicable
regulations.
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entities because the entities make those
disclosures in the ordinary course of
business. In addition, as noted above,
some entities use computer-based and/
or electronic means of providing the
required disclosures, while others rely
on methods requiring more manual
effort.
The cost estimates shown below relate
to labor costs and include the time
necessary to train employees to be in
compliance with the regulations.6 The
applicable PRA requirements generally
impose minimal capital or other nonlabor costs, as affected entities usually
have the necessary equipment and
storage for other business purposes.
Similarly, staff estimates that
compliance with these rules generally
entails minimal printing and copying
costs beyond that associated with
documenting financial transactions in
the ordinary course of business.7
1. Regulation B
The ECOA prohibits discrimination in
the extension of credit. Regulation B, 12
CFR 202, promulgated by the Board of
Governors of the Federal Reserve
System (‘‘FRB’’), establishes both
recordkeeping and disclosure
requirements to assist consumers in
understanding their rights under the
ECOA and to assist in detecting
unlawful discrimination. The FTC
enforces the ECOA as to all creditors
except those that are subject to the
regulatory authority of another federal
agency (such as federally chartered or
insured depository institutions).8
Estimated annual hours burden:
3,689,000 hours, rounded to the nearest
thousand (1,436,833 recordkeeping
hours + 2,251,771 disclosure hours).
Recordkeeping: In its comment,
NADA states that burden estimates in
the September 2005 Federal Register
Notice do not account for recordkeeping
of ‘‘dead deals’’ (i.e., customer inquiries
that do not result in a vehicle sale, for
example, where the customer submits a
credit application at one dealership but
purchases elsewhere) because these
records would not be retained in the
ordinary course of business. However, it
is unclear that the auto dealers, or any
particular auto transaction, would be
covered by the aforementioned
definition of ‘‘creditor’’ under
Regulation B; a factual assessment
would be necessary regarding the
dealers’ activities. Nonetheless,
although auto dealers may or may not be
covered, depending on the facts in any
given situation, as discussed below, staff
has increased its burden estimates to
account for the possibility of additional
recordkeeping costs for these items.
FTC staff estimates that Regulation B’s
general recordkeeping requirements
affect 1,000,000 credit firms subject to
the Commission’s jurisdiction, at an
average annual burden of 1.25 hours per
firm, for a total of 1,250,000 hours.9
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
for approximately eleven million credit
applications (based on industry data
regarding the approximate number of
mortgage purchase and refinance
originations), for a total of 183,333
hours.10 Staff also estimates that
recordkeeping of self-testing subject to
the regulation would affect 2,500 firms,
with an average annual burden of one
hour per firm, for a total of 2,500 hours,
and that recordkeeping of any corrective
action for self-testing would affect 250
firms in a given year, with an average
annual burden of four hours per firm,
for a total of 1,000 hours. The total
estimated recordkeeping burden is
1,436,833 hours.
Setup/Monitoring 1
Disclosure
Average Burden per
Respondent
Respondents
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Credit history reporting ....................
Adverse action notices 3 ..................
250,000
1,000,000
6 Employee training for these regulations often
addresses far more than the notices and
recordkeeping required for the regulations.
Regulatory compliance is one subset of employee
business training and the regulatory compliance
encompasses a wide variety of issues extending
beyond those for Regulations B, E, M, and Z (e.g.,
privacy and security, tax, and contract and other
state law issues).
7 For many industries (including auto dealers),
contractual obligations and financial disclosures are
often merged into a single document, such as the
‘‘retail installment contract’’ (for credit) or ‘‘lease
agreement’’ (for leases). This document provides
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.25
.75
Transaction-related 2
Total Setup/
Monitoring
Burden
Number of
Transactions
Average
Burden per
Transaction
Total
Transaction
Burden
62,500
750,000
125,000,000
200,000,000
.25
.25
520,833
833,333
contractual terms as well as various state and
federal disclosures; in many instances, the terms
meet federal and state contract and other state law
purposes. Thus, printing and copying costs are
attributable to multiple purposes, including
establishing the contractual obligation of the
parties, and generally occur in the ordinary course
of business, rather than being solely attributable to
federal disclosure mandates. Moreover, streamlined
model forms are also provided for notices under the
regulations, which minimizes compliance costs,
including any for printing and copying.
8 Under Regulation B, for the requirements at
issue, ‘‘creditor’’ means a person who ‘‘in the
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Disclosure: Regulation B requires that
creditors (i.e., entities that regularly
participate in a credit decision,
including setting the terms of the credit)
provide notices whenever they take
adverse action. NADA asserts that
burden estimates are understated, in
view of recent developments, including
case law, which necessitates additional
specialized compliance training.
Although staff believes its estimates
encompassed these matters—and such
regulatory compliance training tends to
involve multiple topics under Federal
and state law—staff has increased its
adverse action disclosure estimates to
account for these issues.
Regulation B also requires entities
that extend various types of mortgage
credit to provide a copy of the appraisal
report to applicants or to notify them of
their right to a copy of the report (and
thereafter provide a copy of the report,
upon the applicant’s request). It 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 providing the
information is optional, that the creditor
will not take the information into
account in any aspect of the credit
transactions, and, if applicable, that the
information will be noted by visual
observation or surname if the applicant
chooses not to provide it.11
Regulation B applies to retailers,
mortgage lenders, mortgage brokers,
finance companies, Internet businesses,
and others. Below is staff’s best estimate
of burden applicable to this highly
broad spectrum of covered entities.
Sfmt 4703
Total
Burden
583,333
1,583,333
ordinary course of business, regularly participates
in a credit decision, including setting the terms of
the credit.’’ See 12 CFR 202.2(l).
9 As aforementioned, in light of NADA’s
comment, staff has increased its previous estimate.
10 Regulation B contains model forms that
creditors may use to gather and retain the required
information.
11 The disclosure may be provided orally or in
writing. Regulation B provides a model form to
assist creditors in providing the disclosure. The
FRB added this disclosure requirement in 2003. See
52 FR 13144, 13163–64 (Mar. 18, 2003).
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Setup/Monitoring 1
Disclosure
Average Burden per
Respondent
Respondents
Transaction-related 2
Total Setup/
Monitoring
Burden
Number of
Transactions
Average
Burden per
Transaction
Total
Transaction
Burden
Total
Burden
Appraisal notices ..............................
Appraisal reports ..............................
Self-test disclosures .........................
25,000
25,000
2,500
.5
.5
.5
12,500
12,500
1,250
7,000,000
7,000,000
125,000
.25
.25
.25
29,167
29,167
521
41,667
41,667
1,771
Total ..........................................
........................
........................
....................
......................
....................
....................
2,251,771
1 With
respect to appraisal notices and appraisal reports, the above figures reflect an increase in applicable mortgage entities. The figures assume that approximately half of those entities (.5 × 50,000, or 25,000 businesses) would not otherwise provide this information and thus would
be affected. The figures also assume that all applicable entities would provide notices first and thereafter provide the reports upon request.
2 The above figures reflect an increase in mortgage transactions. They assume that half of applicable mortgage transactions (.5 × 14,000,000
or 7,000,000) would not otherwise provide the appraisal notices and reports and thus would be affected.
3 These figures include the fact that for incomplete applications, creditors may initially provide the adverse action notice or a notice of
incompleteness.
Estimated annual cost burden:
$74,754,000, rounded to the nearest
thousand ($22,298,493 recordkeeping
cost + $52,455,799 disclosure cost).
Staff calculated labor costs by
applying appropriate hourly cost figures
to the burden hours described above.
The hourly rates used below ($32 for
managerial or professional time,12 $21
for skilled time, and $14 for clerical
time) are averages, based on current
Bureau of Labor Statistics cost figures.
Recordkeeping: Staff estimates that
the general recordkeeping responsibility
of 1.25 hours per creditor would involve
approximately 90 percent clerical time
and 10 percent skilled technical time.
Keeping records of race/national origin,
sex, age, and marital status requires an
estimated one minute of skilled
technical time. Keeping records of the
self-test responsibility and of any
corrective actions requires an estimated
one hour and four hours, respectively,
Managerial
Required task
Time
(hours)
of skilled technical time. As shown
below, the total recordkeeping cost is
$22,298,493.
Disclosure: For each notice or
information item listed, staff estimates
that the burden hours consist of 10
percent managerial or professional time
and 90 percent skilled technical time.
As shown below, the total disclosure
cost is $52,455,799.
Skilled technical
Cost
($32/hr.)1
Time
(hours)
Clerical
Cost
($21/hr.)
Time
(hours)
Total cost
($)
Cost
($14/hr.)
General recordkeeping ....................................
Other recordkeeping ........................................
Recordkeeping of test ......................................
Recordkeeping of corrective action .................
0
0
0
0
$0
0
0
0
125,000
183,333
2,500
1,000
$2,625,000
3,849,993
52,500
21,000
1,125,000
0
0
0
$15,750,000
0
0
0
$18,375,000
3,849,993
52,500
21,000
Total Recordkeeping .................................
..............
..................
..................
....................
..................
......................
22,298,493
Credit history reporting ....................................
Adverse action notices .....................................
Appraisal notices ..............................................
Appraisal reports ..............................................
Self-test disclosure ...........................................
58,333
158,333
4,167
4,167
177
1,866,656
7,758,317
133,344
133,344
5,664
525,000
1,425,000
37,500
37,500
1,594
11,025,000
29,925,000
787,500
787,500
133,474
0
0
0
0
0
0
0
0
0
0
12,891,656
37,683,317
920,844
920,844
39,138
Total Disclosure ........................................
..............
..................
..................
....................
..................
......................
52,455,799
..............
..................
..................
....................
..................
......................
74,754,292
Total Recordkeeping and Disclosure
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1 The
above figures reflect that for adverse action, hourly rates of $49 for attorney/professional time were used due to specialized training.
2. Regulation E
The EFTA requires accurate
disclosure of the costs, terms, and rights
relating to EFT services to consumers.
Regulation E, 12 CFR part 205,
promulgated by the FRB, establishes
both recordkeeping and disclosure
requirements applicable to entities
providing EFT services to consumers.
The FTC enforces the EFTA as to all
entities providing EFT services except
those that are subject to the regulatory
authority of another Federal agency
(such as federally chartered or insured
depository institutions).
Estimated annual hours burden:
3,580,000 hours (500,000 recordkeeping
hours + approximately 3,080,000
disclosure hours).
Recordkeeping: Staff estimates that
Regulation E’s recordkeeping
requirements affect 500,000 firms
offering EFT services to consumers and
subject to the Commission’s
jurisdiction, at an average annual
burden of one hour per firm, for a total
of 500,000 hours.
Disclosure: Regulation E applies to
financial institutions (including certain
retailers and electronic commerce
entities), service providers, various
Federal and state agencies offering
EFTs, and others. Below is staff’s best
estimate of burden applicable to this
highly broad spectrum of covered
entities.
12 In view of NADA’s comment, staff has utilized
higher hourly rates of $49 for ‘‘attorney or
professional time’’ for specialized training in
adverse action requirements, as part of the cost of
compliance.
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Setup/monitoring
Disclosure
Respondents
Transaction-related
Average burden
per respondent
Total setup/
monitoring
burden
Average
burden per
transaction
Number of
transactions
Initial terms ...............................
Change in terms ......................
Periodic statements .................
Error resolution ........................
Transaction receipts .................
Preauthorized transfers ............
Service provider notices ..........
Govt. benefit notices ................
ATM notices .............................
100,000
25,000
100,000
100,000
100,000
500,000
100,000
10,000
500
.5
.5
.5
.5
.5
.5
.25
.5
.25
50,000
12,500
50,000
50,000
50,000
250,000
25,000
5,000
125
1,000,000
33,000,000
1,200,000,000
1,000,000
5,000,000,000
1,000,000
1,000,000
100,000,000
250,000
Total ..................................
........................
..........................
....................
..........................
Estimated annual cost burden:
$75,418,000, rounded to the nearest
thousand ($7,350,000 recordkeeping
cost + $68,068,000 disclosure cost).
Staff calculated labor costs by
applying appropriate hourly cost figures
to the burden hours described above.
The hourly rates used below ($32 for
managerial time, $21 for skilled
technical time, and $14 for clerical time)
are averages, based on current Bureau of
Labor Statistics cost figures.
Recordkeeping: For the 500,000
recordkeeping hours, staff estimates that
10 percent of the burden hours require
skilled technical time and 90 percent
require clerical time. As shown below,
Managerial
Required task
Time
(hours)
.02
.02
.02
Time
(hours)
Total
burden
.02
.25
.25
.25
.25
333
11,000
400,000
83,333
1,666,667
4,167
4,167
416,667
1,041
50,333
23,500
450,000
133,333
1,716,667
254,167
29,167
421,667
1,166
......................
....................
3,080,000
5
the total recordkeeping cost is
$7,350,000.
Disclosure: For each notice or
information item listed, staff estimates
that 10 percent of the burden hours
require managerial time and 90 percent
require skilled technical time. As shown
below, the total disclosure cost is
$68,068,000.
Skilled technical
Cost
($32/hr.)
Total
transaction
burden
Clerical
Cost
($21/hr.)
Time
(hours)
Total cost
($)
Cost
($14/hr.)
Recordkeeping .........................................................
Disclosure:
Initial terms ...............................................................
Change in terms ......................................................
Periodic statements .................................................
Error resolution ........................................................
Transaction receipts .................................................
Preauthorized transfers ............................................
Service provider notices ..........................................
Govt. benefit notices ................................................
ATM Notices ............................................................
0
$0
50,000
$1,050,000
450,000
$6,300,000
$7,350,000
5,033
2,350
45,000
13,333
171,667
25,417
2,917
42,167
116
161,056
75,200
1,440,000
426,650
5,493,344
813,344
93,344
1,349,344
3,712
45,300
21,150
405,000
120,000
1,545,000
228,750
26,250
379,500
1,050
951,300
444,150
8,505,000
2,520,000
32,445,000
4,803,750
551,250
7,969,500
22,050
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,112,356
519,350
9,945,000
2,946,656
37,938,344
5,617,094
644,594
9,318,844
25,762
Total Disclosure ................................................
..............
..................
..................
....................
..............
....................
68,068,000
Total Recordkeeping and Disclosures ..........
..............
..................
..................
....................
..............
....................
75,418,000
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3. Regulation M
The CLA requires accurate disclosure
of the costs and terms of leases to
consumers. Regulation M, 12 CFR part
213, promulgated by the FRB,
establishes disclosure requirements that
assist consumers in comparison
shopping and in understanding the
terms of leases and recordkeeping
requirements that assist enforcement of
the CLA. The FTC enforces the CLA as
to all lessors and advertisers except
those that are subject to the regulatory
authority of another federal agency
(such as federally chartered or insured
depository institutions).
Estimated annual hours burden:
292,000 hours, rounded to the nearest
thousand (150,000 recordkeeping hours
+ 141,667 disclosure hours).
VerDate Aug<31>2005
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Jkt 208001
Recordkeeping: Staff estimates that
Regulation M’s recordkeeping
requirements affect approximately
150,000 firms leasing products to
consumers and subject to the
Commission’s jurisdiction, at an average
annual burden of one hour per firm, for
a total of 150,000 hours.
Disclosure: Regulation M applies to
automobile 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, and diverse types of
lease advertisers, and others.
As aforementioned, NADA asserts
that burden estimates are understated,
in view of recent developments,
including case law, which necessitates
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additional specialized compliance
training. Although staff believes its
estimates encompassed these matters—
and, as noted above, such regulatory
compliance training tends to involve
multiple topics under Federal and state
law—staff has increased its burden
estimates pertaining to auto leases to
account for these issues. Additionally,
NADA asserts that estimates are
understated due to printing and copying
costs associated with providing
Regulation M disclosures on lease
agreements and retention of paper
records. However, these contracts, and
the specific lease terms, serve a dual
purpose of providing contractual
provisions as well as regulatory
information; the material is generally
part of the agreement under state law.
Moreover, Regulation M does not
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mandate paper record retention: it
permits companies to use electronic and
other nonpaper forms of record
retention. As more dealers shift to such
other formats, any such costs should
decrease or be eliminated. Staff believes,
therefore, that additional increases
based on this consideration are not
appropriate. Accordingly, below is
staff’s best estimate of burden applicable
to this highly broad spectrum of covered
entities.
Setup/monitoring
Disclosure
Transaction-related
Average
burden per
respondent
Respondents
Total setup/
monitoring
burden
Average
burden per
transaction
Number of
transactions
Total transaction burden
Total burden
Auto Leases 1 .............................................
Other Leases 2 ...........................................
Advertising .................................................
50,000
100,000
25,000
1
.50
.50
50,000
50,000
12,500
2,500,000
1,000,000
1,000,000
.50
.25
.25
20,833
4,167
4,167
70,833
54,167
16,667
Total ....................................................
....................
..................
....................
......................
....................
....................
141,667
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 213.2(e)(1).
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 consumers leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
213.2(e)(1).
Estimated annual cost burden:
$5,456,000, rounded to the nearest
thousand ($2,205,000 recordkeeping
cost + $3,251,255 disclosure cost).
Staff calculated labor costs by
applying appropriate hourly cost figures
to the burden hours described above.
The hourly rates used below ($32 for
managerial or professional time,13 $21
for skilled technical time, and $14 for
clerical time) are averages, based on
current Bureau of Labor Statistics cost
figures.
Recordkeeping: For the 150,000
recordkeeping hours, staff estimates that
10 percent of the burden hours require
skilled technical time and 90 percent
require clerical time. As shown below,
Managerial
Required task
Time
(hours)
the total recordkeeping cost is
$2,205,000.
Disclosure: For each notice or
information item listed, staff estimates
that 10 percent of the burden hours
require managerial or professional time
and 90 percent require skilled technical
time. As shown below, the total
disclosure cost is $3,251,255.
Skilled technical
Cost
($32/hr.) 1
Time
(hours)
Clerical
Cost
($21/hr.)
Time
(hours)
Total cost
($)
Cost
($14/hr.)
Recordkeeping .................................................
Disclosures:
Auto Leases ..............................................
Other Leases ............................................
Advertising ................................................
0
$0
15,000
$315,000
135,000
$1,890,000
$2,205,000
7,083
5,417
1,667
347,067
173,344
53,344
63,750
48,750
15,000
1,338,750
1,023,750
315,000
0
0
0
0
0
0
1,685,817
1,197,094
368,344
Total Disclosures ...............................
..............
..................
..................
....................
..................
......................
3,251,255
Total Recordkeeping and Disclosures .......................................
..............
..................
..................
....................
..................
......................
5,456,255
1 The
above figures reflect that for auto leases, hourly rates of $49 for attorney/professional time were used due to specialized training.
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4. Regulation Z
The TILA was enacted to foster
comparison credit shopping and
informed credit decision making by
requiring accurate disclosure of the
costs and terms of credit to consumers.
Regulation Z, 12 CFR part 226,
promulgated by the FRB, establishes
both recordkeeping and disclosure
requirements to assist consumers and
the enforcement of the TILA. The FTC
enforces the TILA as to all creditors and
advertisers except those that are subject
to the regulatory authority of another
Federal agency (such as federally
chartered or insured depository
institutions).
13 In view of NADA’s comment, staff has utilized
higher hourly rates of $49 for ‘‘attorney or
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16:16 Jan 19, 2006
Jkt 208001
Estimated annual hours burden:
17,639,000 hours, rounded to the
nearest thousand (1,000,000
recordkeeping hours + 16,639,165
disclosure hours).
Recordkeeping: FTC staff estimates
that Regulation Z’s recordkeeping
requirements affect approximately
1,000,000 firms offering credit and
subject to the Commission’s
jurisdiction, at an average annual
burden of one hour per firm, for a total
of 1,000,000 hours.
Disclosure: Regulation Z disclosure
requirements pertain to open-end and
closed-end credit. The Regulation
applies to retailers (such as department
stores, appliance stores, discount
retailers, medical-dental service
providers, home improvement sellers,
and electronic commerce retail
operators); mortgage companies; finance
companies; credit advertisers; auto
dealerships; student loan companies;
home fuel or power services (for
furnaces, stoves, microwaves, and other
heating, cooling or residential power
equipment); credit advertisers; and
others.
NADA asserts that the burden
estimates for closed end credit
disclosures are understated in view of
recent developments including case
law, which necessitates additional
professional time’’ to reflect the need for
specialized training in lease requirements, as part
of the cost of compliance.
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specialized compliance training. As
noted, although staff believes its
estimates encompassed these matters—
and such regulatory compliance training
tends to involve multiple topics under
federal and state law—staff has
increased its estimates pertaining to
closed-end credit disclosures to account
for these issues. Additionally, NADA
asserts that estimates are understated
due to printing and copying costs
associated with providing Regulation Z
disclosures on retail installment
contracts. However, these contracts, and
the specific credit terms, serve a dual
purpose of providing contractual
provisions as well as regulatory
information; the material is generally
Setup/Monitoring
Disclosure 1
Transaction-related
Average
burden per
respondent
Respondents
part of the agreement under state law.
Staff believes, therefore, that additional
increases based on this consideration
are, therefore, not appropriate.
Accordingly, below is staff’s best
estimate of burden applicable to this
highly broad spectrum of covered
entities.
Total setup/
monitoring
burden
Average
burden per
transaction
Number of
transactions
Total
transaction
burden
Total burden
Open-end credit:
Initial terms .....................................
Rescission notices ..........................
Change in terms .............................
Periodic statements ........................
Error resolution ...............................
Credit and charge card accounts ...
Home equity lines of credit .............
Advertising ......................................
Closed-end credit:
Credit disclosures ...........................
Rescission notices ..........................
Variable rate mortgages .................
High rate/high-fee mortgages .........
Reverse mortgages ........................
Advertising ......................................
100,000
10,000
25,000
100,000
100,000
100,000
10,000
250,000
.5
.5
.5
.5
.5
.5
.5
.25
50,000
5,000
12,500
50,000
50,000
50,000
5,000
62,500
50,000,000
500,000
136,000,000
4,800,000,000
10,000,000
50,000,000
5,000,000
700,000
.25
.25
.125
.0625
.5
.25
.25
.5
208,333
2,083
283,333
5,000,000
833,333
208,333
20,833
5,833
258,333
7,083
295,833
5,050,000
883,333
258,333
25,833
68,333
800,000
100,000
75,000
50,000
50,000
500,000
.75
.50
.50
.50
.50
.25
600,000
50,000
37,500
25,000
25,000
125,000
330,000,000
34,000,000
3,000,000
750,000
150,000
1,000,000
1.5
1
1.5
1.5
1
1
8,250,000
566,667
75,000
18,750
2,500
16,667
8,850,000
616,667
112,500
43,750
27,500
141,667
Total open-end credit ..............
....................
..................
....................
..........................
....................
..................
6,847,081
Total closed-end credit ............
....................
..................
....................
..........................
....................
..................
9,792,084
Total credit ........................
....................
..................
....................
..........................
....................
..................
16,639,165
1 Open-end
transactions with rescission notices (where the notices may not be otherwise provided) have increased. Closed-end variable rate
mortgages have increased. Computer technology use has expanded in some closed-end areas with lengthy disclosures that previously involved
more manual efforts, i.e., credit, variable rate, and high rate/high fee disclosures.
Estimated annual cost burden:
$397,471,000, rounded to the nearest
thousand ($14,700,000 recordkeeping
cost + $382,770,530 disclosure cost).
Staff calculated labor costs by
applying appropriate hourly cost figures
to the burden hours described above.
The hourly rates used below ($32 for
managerial or professional time,14 $21
for skilled technical time, and $14 for
clerical time) are averages, based on
current Bureau of Labor Statistics cost
figures.
Recordkeeping: For the 1,000,000
recordkeeping hours, staff estimates that
10 percent of the burden hours require
skilled technical time and 90 percent
require clerical time. As shown below,
Managerial
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Required task
Time
(hours)
the total recordkeeping cost is
$14,700,000.
Disclosure: For each notice or
information item listed, staff estimates
that 10 percent of the burden hours
require managerial or professional time
and 90 percent require skilled technical
time. As shown below, the total
disclosure cost is $382,770,530.
Skilled technical
Cost
($32/hr.) 1
Time
(hours)
Clerical
Cost
($21/hr.)
Time
(hours)
Total cost
($)
Cost
($14/hr.)
Recordkeeping .................................................
Open-end credit Disclosures:
Initial terms ...............................................
Rescission notices ....................................
Change in terms .......................................
Periodic statements ..................................
Error resolution .........................................
Credit and charge card accounts .............
Home equity lines of credit .......................
Advertising ................................................
0
$0
100,000
$2,1000,000
900,000
$12,600,000
$14,700,000
25,833
708
29,583
505,000
88,333
25,833
2,583
6,833
826,656
22,656
946,656
16,160,000
2,826,656
826,656
82,656
218,656
232,500
6,375
266,250
4,545,000
795,000
232,500
23,250
61,500
4,882,500
133,875
5,591,250
95,445,000
16,695,000
4,882,500
488,250
1,291,500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5,709,156
156,531
6,537,906
111,605,000
19,521,656
5,709,156
570,906
1,510,156
Total open-end credit ........................
..............
..................
..................
....................
..................
......................
151,320,467
14 In view of NADA’s comment, staff has utilized
higher hourly rates of $49 for ‘‘attorney or
VerDate Aug<31>2005
16:16 Jan 19, 2006
Jkt 208001
professional time’’ to reflect the need for
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specialized training in closed-end credit
requirements, as part of the cost of compliance.
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Managerial
Required task
Skilled technical
Clerical
Cost
($32/hr.) 1
Time
(hours)
Cost
($21/hr.)
Closed-end credit Disclosures:
Credit disclosures .....................................
Rescission notices ....................................
Variable rate mortgages ...........................
High-rate/high-fee mortgages ...................
Reverse mortgages ..................................
Advertising ................................................
885,000
61,667
11,250
4,375
2,750
14,167
43,365,000
1,973,344
360,000
140,000
88,000
453,344
7,965,000
555,000
101,250
39,375
24,750
127,500
167,265,000
11,655,000
2,126,250
826,875
519,750
2,677,500
0
0
0
0
0
0
0
0
0
0
0
0
210,630,000
13,628,344
2,486,250
966,875
607,750
3,130,844
Total closed-end credit ......................
..............
..................
..................
....................
..................
......................
231,450,063
Total Disclosures ...............................
..............
..................
..................
....................
..................
......................
382,770,530
Total Recordkeeping and Disclosures .......................................
..............
..................
..................
....................
..................
......................
397,470,530
1 The
Cost
($14/hr.)
above figures reflect that for credit disclosures, hourly rates of $49 for attorney/professional time were used due to specialized training.
John D. Graubert,
Acting General Counsel.
[FR Doc. E6–626 Filed 1–19–06; 8:45 am]
BILLING CODE 6750–01–P
FEDERAL TRADE COMMISSION
Agency Information Collection
Activities; Proposed Collection;
Comment Request; Extension
Federal Trade Commission
(‘‘FTC’’ or ‘‘Commission’’).
ACTION: Notice.
AGENCY:
wwhite on PROD1PC65 with NOTICES
Time
(hours)
Total cost
($)
Time
(hours)
SUMMARY: The FTC is seeking public
comments on its proposal to extend
through February 28, 2009 the current
Paperwork Reduction Act (‘‘PRA’’)
clearance for information collection
requirements contained in its
Telemarketing Sales Rule, 16 CFR part
435 (‘‘TSR’’ or ‘‘Rule’’). That clearance
expires on February 28, 2006.
DATES: Comments must be received on
or before March 21, 2006.
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to
‘‘Telemarketing Sales Rule: FTC File No.
P994414’’ to facilitate the organization
of comments. A comment filed in paper
form should include this reference both
in the text and on the envelope and
should be mailed or delivered, with two
complete copies, to the following
address: Federal Trade Commission,
Room H 135 (Annex J), 600
Pennsylvania Ave., NW., Washington,
DC 20580. Because paper mail in the
Washington area and at the Commission
is subject to delay, please consider
submitting your comments in electronic
form, (in ASCII format, WordPerfect, or
Microsoft Word) as part of or as an
attachment to e-mail messages directed
to the following e-mail box:
paperworkcomment@ftc.gov. However,
VerDate Aug<31>2005
16:16 Jan 19, 2006
Jkt 208001
if the comment contains any material for
which confidential treatment is
requested, it must be filed in paper
form, and the first page of the document
must be clearly labeled ‘‘Confidential.’’ 1
The FTC Act and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. All timely and responsive
public comments will be considered by
the Commission and will be available to
the public on the FTC Web site, to the
extent practicable, at https://www.ftc.gov.
As a matter of discretion, the FTC makes
every effort to remove home contact
information for individuals from the
public comments it receives before
placing those comments on the FTC
Web site. More information, including
routine uses permitted by the Privacy
Act, may be found in the FTC’s privacy
policy at https://www.ftc.gov/ftc/
privacy.htm.
FOR FURTHER INFORMATION CONTACT:
Requests for additional information or
copies of the proposed information
requirements should be sent to
Catherine Harrington-McBride,
Attorney, Division of Marketing
Practices, Bureau of Consumer
Protection, Federal Trade Commission,
600 Pennsylvania Ave., NW.,
Washington, DC 20580, (202) 326–2452.
SUPPLEMENTARY INFORMATION: Under the
Paperwork Reduction Act (‘‘PRA’’), 44
U.S.C. 3501–3520, federal agencies must
obtain approval from OMB for each
collection of information they conduct
1 Commission Rule 4.2(d), 16 CFR 4.2(d). The
comment must be accompanied by an explicit
request for confidential treatment, including the
factual and legal basis for the request, and must
identify the specific portions of the comment to be
withheld from the public record. The request will
be granted or denied by the Commission’s General
Counsel, consistent with applicable law and the
public interest. See Commission Rule 4.9(c), 16 CFR
4.9(c).
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or sponsor. ‘‘Collection of information’’
means agency requests or requirements
that members of the public submit
reports, keep records, or provide
information to a third party. 44 U.S.C.
3502(3); 5 CFR 1320.3(c). As required by
section 3506(c)(2)(A) of the PRA, the
FTC is providing this opportunity for
public comment before requesting that
OMB extend the existing paperwork
clearance for the regulations noted
herein.
The FTC invites comments on: (1)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(2) the accuracy of the agency’s estimate
of the burden of the proposed collection
of information, including the validity of
the methodology and assumptions used;
(3) ways to enhance the quality, utility,
and clarity of the information to be
collected; and (4) ways to minimize the
burden of the collection of information
on those who are to respond, including
through the use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology, e.g., permitting electronic
submission of responses. All comments
should be filed as prescribed in the
ADDRESSES section above, and must be
received on or before March 21, 2006.
The TSR implements the
Telemarketing and Consumer Fraud and
Abuse Prevention Act, 15 U.S.C. 6101–
6108 (‘‘Act’’), as amended by the
Uniting and Strengthening America by
Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act
(‘‘USA PATRIOT Act’’), Pub. L. 107056
(Oct. 25, 2001). The Act seeks to prevent
deceptive or abusive telemarketing
practices in telemarketing, which,
pursuant to the USA PATRIOT Act,
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]]>Agencies
[Federal Register Volume 71, Number 13 (Friday, January 20, 2006)]
[Notices]
[Pages 3295-3302]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-626]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Submission for OMB
Review; Comment Request
AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The information collection requirements described below will
be submitted to the Office of Management and Budget (``OMB'') for
review, as required by the Paperwork Reduction Act (``PRA'') (44 U.S.C.
3501-3520). The FTC is seeking public comments on its proposal to
extend through January 31, 2009 the current PRA clearances for
information collection requirements contained in four consumer
financial regulations enforced by the Commission. Those clearances
expire on January 31, 2006.
DATES: Comments must be received on or before February 21, 2006.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Regs BEMZ: FTC File No. P054803'' to
facilitate the organization of comments. A comment filed in paper form
should include this reference both in the text and on the envelope and
should be mailed or delivered, with two complete copies, to the
following address: Federal Trade Commission/Office of the Secretary,
Room H-135 (Annex J), 600 Pennsylvania, NW., Washington, DC 20580.
Because paper mail in the Washington area and at the Commission is
subject to delay, please consider submitting your comments in
electronic form, (in ASCII format, WordPerfect, or Microsoft Word) as
part of or as an attachment to e-mail messages directed
[[Page 3296]]
to the following e-mail box: paperworkcomment@ftc.gov. However, if the
comment contains any material for which confidential treatment is
requested, it must be filed in paper form, and the first page of the
document must be clearly labeled ``Confidential.'' \1\
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\1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be
accompanied by an explicit request for confidential treatment,
including the factual and legal basis for the request, and must
identify the specific portions of the comment to be withheld from
the public record. The request will be granted or denied by the
Commission's General Counsel, consistent with applicable law and the
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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All comments should additionally be submitted to: Office of
Management and Budget, Attention: Desk Officer for the Federal Trade
Commission. Comments should be submitted via facsimile to (202) 395-
6974 because U.S. Postal Mail is subject to lengthy delays due to
heightened security precautions.
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments will be
considered by the Commission and will be available to the public on the
FTC Web site, to the extent practicable, at https://www.ftc.gov. As a
matter of discretion, the FTC makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC Web site. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy at https://www.ftc.gov/ftc/privacy.htm.
FOR FURTHER INFORMATION CONTACT: Requests for additional information or
copies of the proposed information requirements should be addressed to
Carole Reynolds, Attorney, Division of Financial Practices, Bureau of
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Ave.,
NW., Washington, DC 20580, (202) 326-3230.
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'') (Control Number:
3084-0087);
(2) Regulations promulgated under The Electronic Fund Transfer Act,
15 U.S.C. 1693 et seq. (``EFTA'') (``Regulation E'') (Control Number:
3084-0085);
(3) Regulations promulgated under The Consumer Leasing Act, 15
U.S.C. 1667 et seq. (``CLA'') (``Regulation M'') (Control Number: 3084-
0086);
(4) Regulations promulgated under The Truth-In-Lending Act, 15
U.S.C. 1601 et seq. (``TILA'') (``Regulation Z'') (Control Number:
3084-0088).
On September 28, 2005, the FTC sought comment on the information
collection requirements associated with the regulations discussed
below. See 70 FR 56696. The Commission received one comment from the
National Automobile Dealers Association (``NADA'') pertaining to
certain aspects of regulatory burden affecting Regulations B, M, and
Z.\2\ The issues raised in the NADA comment are discussed under the
applicable regulation subheadings. As required by the PRA, the FTC is
providing this second opportunity for public comment before requesting
that OMB extend the existing paperwork clearance for the regulations
discussed herein. 44 U.S.C. 3506(c)(2)(A).
---------------------------------------------------------------------------
\2\ NADA represents approximately 20,000 franchised automobile
and truck dealers (``auto dealers'') who sell new and used vehicles
and engage in service, repair and parts sales. NADA's comment is
available at https://www.ftc.gov/os/comments/pra-regsbemz/index.htm.
---------------------------------------------------------------------------
Each of these four rules impose certain recordkeeping and
disclosure requirements associated with providing credit or with other
financial transactions. As detailed below, FTC staff has calculated the
PRA burden for each rule based on the compliance costs of entities
subject to enforcement by the FTC. All of these rules require covered
entities to keep certain records. As discussed below, in most
instances, staff believes that these entities would generally retain
these records in the normal course of business even absent the
recordkeeping requirement in the rules.\3\ There is also some burden
associated with ensuring that covered entities do not prematurely
dispose of relevant records during the period of time required by the
applicable rule.
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\3\ Because most records would be retained in the ordinary
course of business, entities can use existing retention or storage
facilities for any particular records that might be maintained for
regulatory purposes. Additionally, as discussed below, paper
retention is not required under the regulations; financial entities
may use electronic or other non-paper retention formats.
---------------------------------------------------------------------------
Disclosure requirements involve both set-up and monitoring costs as
well as certain transaction-specific costs. ``Set-up'' burden, incurred
by new entrants only, includes identifying the applicable disclosure
requirements, determining compliance obligations, and designing and
developing compliance systems and procedures. ``Monitoring'' burden,
incurred by all covered entities, includes reviewing and obtaining
guidance on revisions to regulatory requirements, revising compliance
systems and procedures as necessary, and monitoring the ongoing
operation of systems and procedures to ensure continued compliance.
``Transaction-related'' burden refers to the effort 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 actual range of compliance burden experienced by covered
entities, and reflected in those averages, varies widely. Depending on
the extent to which covered entities have developed computer-based
systems and procedures for providing the required disclosures (and/or
the extent which such entities utilize electronic transactions,
communications, and/or electronic recordkeeping), and the efficacy of
those systems and procedures, some entities may have little burden,
while others may incur a higher burden.\4\
---------------------------------------------------------------------------
\4\ For example, large retailers 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 retailers or other creditors 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; as such, they may have minimal
additional burden. Other entities, including auto dealers, may have
incorporated fewer of these approaches into their systems and may
have a higher burden.
---------------------------------------------------------------------------
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 credit and lease advertisers,
creditors, financial institutions, service providers, certain
government agencies and others involved in delivering electronic fund
transfers (EFTs) of government benefits, and lessors.\5\ The burden
estimates represent staff's best assessment, based on its knowledge and
expertise relating to the financial services industry. To derive these
estimates, 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) types of EFTs used; (4)
types and occurrences of adverse actions; (5) types of appraisal
reports utilized; and (6) computer systems and electronic features of
compliance operations.
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\5\ The Commission generally does not have jurisdiction over
banks under the applicable regulations.
---------------------------------------------------------------------------
The required disclosures do not impose PRA burden on some covered
[[Page 3297]]
entities because the entities make those disclosures in the ordinary
course of business. In addition, as noted above, some entities use
computer-based and/or electronic means of providing the required
disclosures, while others rely on methods requiring more manual effort.
The cost estimates shown below relate to labor costs and include
the time necessary to train employees to be in compliance with the
regulations.\6\ The applicable PRA requirements generally impose
minimal capital or other non-labor costs, as affected entities usually
have the necessary equipment and storage for other business purposes.
Similarly, staff estimates that compliance with these rules generally
entails minimal printing and copying costs beyond that associated with
documenting financial transactions in the ordinary course of
business.\7\
---------------------------------------------------------------------------
\6\ Employee training for these regulations often addresses far
more than the notices and recordkeeping required for the
regulations. Regulatory compliance is one subset of employee
business training and the regulatory compliance encompasses a wide
variety of issues extending beyond those for Regulations B, E, M,
and Z (e.g., privacy and security, tax, and contract and other state
law issues).
\7\ For many industries (including auto dealers), contractual
obligations and financial disclosures are often merged into a single
document, such as the ``retail installment contract'' (for credit)
or ``lease agreement'' (for leases). This document provides
contractual terms as well as various state and federal disclosures;
in many instances, the terms meet federal and state contract and
other state law purposes. Thus, printing and copying costs are
attributable to multiple purposes, including establishing the
contractual obligation of the parties, and generally occur in the
ordinary course of business, rather than being solely attributable
to federal disclosure mandates. Moreover, streamlined model forms
are also provided for notices under the regulations, which minimizes
compliance costs, including any for printing and copying.
---------------------------------------------------------------------------
1. Regulation B
The ECOA prohibits discrimination in the extension of credit.
Regulation B, 12 CFR 202, promulgated by the Board of Governors of the
Federal Reserve System (``FRB''), establishes both recordkeeping and
disclosure requirements to assist consumers in understanding their
rights under the ECOA and to assist in detecting unlawful
discrimination. The FTC enforces the ECOA as to all creditors except
those that are subject to the regulatory authority of another federal
agency (such as federally chartered or insured depository
institutions).\8\
---------------------------------------------------------------------------
\8\ Under Regulation B, for the requirements at issue,
``creditor'' means a person who ``in the ordinary course of
business, regularly participates in a credit decision, including
setting the terms of the credit.'' See 12 CFR 202.2(l).
---------------------------------------------------------------------------
Estimated annual hours burden: 3,689,000 hours, rounded to the
nearest thousand (1,436,833 recordkeeping hours + 2,251,771 disclosure
hours).
Recordkeeping: In its comment, NADA states that burden estimates in
the September 2005 Federal Register Notice do not account for
recordkeeping of ``dead deals'' (i.e., customer inquiries that do not
result in a vehicle sale, for example, where the customer submits a
credit application at one dealership but purchases elsewhere) because
these records would not be retained in the ordinary course of business.
However, it is unclear that the auto dealers, or any particular auto
transaction, would be covered by the aforementioned definition of
``creditor'' under Regulation B; a factual assessment would be
necessary regarding the dealers' activities. Nonetheless, although auto
dealers may or may not be covered, depending on the facts in any given
situation, as discussed below, staff has increased its burden estimates
to account for the possibility of additional recordkeeping costs for
these items.
FTC staff estimates that Regulation B's general recordkeeping
requirements affect 1,000,000 credit firms subject to the Commission's
jurisdiction, at an average annual burden of 1.25 hours per firm, for a
total of 1,250,000 hours.\9\ 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 for approximately eleven million credit applications (based on
industry data regarding the approximate number of mortgage purchase and
refinance originations), for a total of 183,333 hours.\10\ Staff also
estimates that recordkeeping of self-testing subject to the regulation
would affect 2,500 firms, with an average annual burden of one hour per
firm, for a total of 2,500 hours, and that recordkeeping of any
corrective action for self-testing would affect 250 firms in a given
year, with an average annual burden of four hours per firm, for a total
of 1,000 hours. The total estimated recordkeeping burden is 1,436,833
hours.
---------------------------------------------------------------------------
\9\ As aforementioned, in light of NADA's comment, staff has
increased its previous estimate.
\10\ Regulation B contains model forms that creditors may use to
gather and retain the required information.
---------------------------------------------------------------------------
Disclosure: Regulation B requires that creditors (i.e., entities
that regularly participate in a credit decision, including setting the
terms of the credit) provide notices whenever they take adverse action.
NADA asserts that burden estimates are understated, in view of recent
developments, including case law, which necessitates additional
specialized compliance training. Although staff believes its estimates
encompassed these matters--and such regulatory compliance training
tends to involve multiple topics under Federal and state law--staff has
increased its adverse action disclosure estimates to account for these
issues.
Regulation B also requires entities that extend various types of
mortgage credit to provide a copy of the appraisal report to applicants
or to notify them of their right to a copy of the report (and
thereafter provide a copy of the report, upon the applicant's request).
It 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
providing the information is optional, that the creditor will not take
the information into account in any aspect of the credit transactions,
and, if applicable, that the information will be noted by visual
observation or surname if the applicant chooses not to provide it.\11\
---------------------------------------------------------------------------
\11\ The disclosure may be provided orally or in writing.
Regulation B provides a model form to assist creditors in providing
the disclosure. The FRB added this disclosure requirement in 2003.
See 52 FR 13144, 13163-64 (Mar. 18, 2003).
---------------------------------------------------------------------------
Regulation B applies to retailers, mortgage lenders, mortgage
brokers, finance companies, Internet businesses, and others. Below is
staff's best estimate of burden applicable to this highly broad
spectrum of covered entities.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Setup/Monitoring \1\ Transaction-related \2\
-------------------------------------------------------------------------------------
Disclosure Average Burden Total Setup/ Average Total Total
Respondents per Monitoring Number of Burden per Transaction Burden
Respondent Burden Transactions Transaction Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Credit history reporting............................... 250,000 .25 62,500 125,000,000 .25 520,833 583,333
Adverse action notices \3\............................. 1,000,000 .75 750,000 200,000,000 .25 833,333 1,583,333
[[Page 3298]]
Appraisal notices...................................... 25,000 .5 12,500 7,000,000 .25 29,167 41,667
Appraisal reports...................................... 25,000 .5 12,500 7,000,000 .25 29,167 41,667
Self-test disclosures.................................. 2,500 .5 1,250 125,000 .25 521 1,771
-----------------
Total.............................................. .............. .............. ........... ............ ........... ........... 2,251,771
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ With respect to appraisal notices and appraisal reports, the above figures reflect an increase in applicable mortgage entities. The figures assume
that approximately half of those entities (.5 x 50,000, or 25,000 businesses) would not otherwise provide this information and thus would be affected.
The figures also assume that all applicable entities would provide notices first and thereafter provide the reports upon request.
\2\ The above figures reflect an increase in mortgage transactions. They assume that half of applicable mortgage transactions (.5 x 14,000,000 or
7,000,000) would not otherwise provide the appraisal notices and reports and thus would be affected.
\3\ These figures include the fact that for incomplete applications, creditors may initially provide the adverse action notice or a notice of
incompleteness.
Estimated annual cost burden: $74,754,000, rounded to the nearest
thousand ($22,298,493 recordkeeping cost + $52,455,799 disclosure
cost).
Staff calculated labor costs by applying appropriate hourly cost
figures to the burden hours described above. The hourly rates used
below ($32 for managerial or professional time,\12\ $21 for skilled
time, and $14 for clerical time) are averages, based on current Bureau
of Labor Statistics cost figures.
---------------------------------------------------------------------------
\12\ In view of NADA's comment, staff has utilized higher hourly
rates of $49 for ``attorney or professional time'' for specialized
training in adverse action requirements, as part of the cost of
compliance.
---------------------------------------------------------------------------
Recordkeeping: Staff estimates that the general recordkeeping
responsibility of 1.25 hours per creditor would involve approximately
90 percent clerical time and 10 percent skilled technical time. Keeping
records of race/national origin, sex, age, and marital status requires
an estimated one minute of skilled technical time. Keeping records of
the self-test responsibility and of any corrective actions requires an
estimated one hour and four hours, respectively, of skilled technical
time. As shown below, the total recordkeeping cost is $22,298,493.
Disclosure: For each notice or information item listed, staff
estimates that the burden hours consist of 10 percent managerial or
professional time and 90 percent skilled technical time. As shown
below, the total disclosure cost is $52,455,799.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Managerial Skilled technical Clerical
------------------------------------------------------------------------- Total cost
Required task Time Cost ($32/ Time Cost ($21/ Time Cost ($14/ ($)
(hours) hr.)\1\ (hours) hr.) (hours) hr.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
General recordkeeping............................................ 0 $0 125,000 $2,625,000 1,125,000 $15,750,000 $18,375,000
Other recordkeeping.............................................. 0 0 183,333 3,849,993 0 0 3,849,993
Recordkeeping of test............................................ 0 0 2,500 52,500 0 0 52,500
Recordkeeping of corrective action............................... 0 0 1,000 21,000 0 0 21,000
-----------
Total Recordkeeping.......................................... ........ .......... .......... ........... .......... ............ 22,298,493
-----------
Credit history reporting......................................... 58,333 1,866,656 525,000 11,025,000 0 0 12,891,656
Adverse action notices........................................... 158,333 7,758,317 1,425,000 29,925,000 0 0 37,683,317
Appraisal notices................................................ 4,167 133,344 37,500 787,500 0 0 920,844
Appraisal reports................................................ 4,167 133,344 37,500 787,500 0 0 920,844
Self-test disclosure............................................. 177 5,664 1,594 133,474 0 0 39,138
-----------
Total Disclosure............................................. ........ .......... .......... ........... .......... ............ 52,455,799
-----------
Total Recordkeeping and Disclosure....................... ........ .......... .......... ........... .......... ............ 74,754,292
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The above figures reflect that for adverse action, hourly rates of $49 for attorney/professional time were used due to specialized training.
2. Regulation E
The EFTA requires accurate disclosure of the costs, terms, and
rights relating to EFT services to consumers. Regulation E, 12 CFR part
205, promulgated by the FRB, establishes both recordkeeping and
disclosure requirements applicable to entities providing EFT services
to consumers. The FTC enforces the EFTA as to all entities providing
EFT services except those that are subject to the regulatory authority
of another Federal agency (such as federally chartered or insured
depository institutions).
Estimated annual hours burden: 3,580,000 hours (500,000
recordkeeping hours + approximately 3,080,000 disclosure hours).
Recordkeeping: Staff estimates that Regulation E's recordkeeping
requirements affect 500,000 firms offering EFT services to consumers
and subject to the Commission's jurisdiction, at an average annual
burden of one hour per firm, for a total of 500,000 hours.
Disclosure: Regulation E applies to financial institutions
(including certain retailers and electronic commerce entities), service
providers, various Federal and state agencies offering EFTs, and
others. Below is staff's best estimate of burden applicable to this
highly broad spectrum of covered entities.
[[Page 3299]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Setup/monitoring Transaction-related
-----------------------------------------------------------------------------------------
Disclosure Total setup/ Average Total Total
Respondents Average burden monitoring Number of burden per transaction burden
per respondent burden transactions transaction burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial terms...................................... 100,000 .5 50,000 1,000,000 .02 333 50,333
Change in terms.................................... 25,000 .5 12,500 33,000,000 .02 11,000 23,500
Periodic statements................................ 100,000 .5 50,000 1,200,000,000 .02 400,000 450,000
Error resolution................................... 100,000 .5 50,000 1,000,000 5 83,333 133,333
Transaction receipts............................... 100,000 .5 50,000 5,000,000,000 .02 1,666,667 1,716,667
Preauthorized transfers............................ 500,000 .5 250,000 1,000,000 .25 4,167 254,167
Service provider notices........................... 100,000 .25 25,000 1,000,000 .25 4,167 29,167
Govt. benefit notices.............................. 10,000 .5 5,000 100,000,000 .25 416,667 421,667
ATM notices........................................ 500 .25 125 250,000 .25 1,041 1,166
-----------------
Total.......................................... .............. .............. ........... ............... ............ ........... 3,080,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated annual cost burden: $75,418,000, rounded to the nearest
thousand ($7,350,000 recordkeeping cost + $68,068,000 disclosure cost).
Staff calculated labor costs by applying appropriate hourly cost
figures to the burden hours described above. The hourly rates used
below ($32 for managerial time, $21 for skilled technical time, and $14
for clerical time) are averages, based on current Bureau of Labor
Statistics cost figures.
Recordkeeping: For the 500,000 recordkeeping hours, staff estimates
that 10 percent of the burden hours require skilled technical time and
90 percent require clerical time. As shown below, the total
recordkeeping cost is $7,350,000.
Disclosure: For each notice or information item listed, staff
estimates that 10 percent of the burden hours require managerial time
and 90 percent require skilled technical time. As shown below, the
total disclosure cost is $68,068,000.
----------------------------------------------------------------------------------------------------------------
Managerial Skilled technical Clerical
---------------------------------------------------------------------- Total cost
Required task Time Cost ($32/ Time Cost ($21/ Time Cost ($14/ ($)
(hours) hr.) (hours) hr.) (hours) hr.)
----------------------------------------------------------------------------------------------------------------
Recordkeeping................ 0 $0 50,000 $1,050,000 450,000 $6,300,000 $7,350,000
Disclosure:
Initial terms................ 5,033 161,056 45,300 951,300 0 0 1,112,356
Change in terms.............. 2,350 75,200 21,150 444,150 0 0 519,350
Periodic statements.......... 45,000 1,440,000 405,000 8,505,000 0 0 9,945,000
Error resolution............. 13,333 426,650 120,000 2,520,000 0 0 2,946,656
Transaction receipts......... 171,667 5,493,344 1,545,000 32,445,000 0 0 37,938,344
Preauthorized transfers...... 25,417 813,344 228,750 4,803,750 0 0 5,617,094
Service provider notices..... 2,917 93,344 26,250 551,250 0 0 644,594
Govt. benefit notices........ 42,167 1,349,344 379,500 7,969,500 0 0 9,318,844
ATM Notices.................. 116 3,712 1,050 22,050 0 0 25,762
-----------
Total Disclosure......... ........ .......... .......... ........... ........ ........... 68,068,000
===========
Total Recordkeeping and ........ .......... .......... ........... ........ ........... 75,418,000
Disclosures...........
----------------------------------------------------------------------------------------------------------------
3. Regulation M
The CLA requires accurate disclosure of the costs and terms of
leases to consumers. Regulation M, 12 CFR part 213, promulgated by the
FRB, establishes disclosure requirements that assist consumers in
comparison shopping and in understanding the terms of leases and
recordkeeping requirements that assist enforcement of the CLA. The FTC
enforces the CLA as to all lessors and advertisers except those that
are subject to the regulatory authority of another federal agency (such
as federally chartered or insured depository institutions).
Estimated annual hours burden: 292,000 hours, rounded to the
nearest thousand (150,000 recordkeeping hours + 141,667 disclosure
hours).
Recordkeeping: Staff estimates that Regulation M's recordkeeping
requirements affect approximately 150,000 firms leasing products to
consumers and subject to the Commission's jurisdiction, at an average
annual burden of one hour per firm, for a total of 150,000 hours.
Disclosure: Regulation M applies to automobile 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, and diverse types of lease advertisers, and others.
As aforementioned, NADA asserts that burden estimates are
understated, in view of recent developments, including case law, which
necessitates additional specialized compliance training. Although staff
believes its estimates encompassed these matters--and, as noted above,
such regulatory compliance training tends to involve multiple topics
under Federal and state law--staff has increased its burden estimates
pertaining to auto leases to account for these issues. Additionally,
NADA asserts that estimates are understated due to printing and copying
costs associated with providing Regulation M disclosures on lease
agreements and retention of paper records. However, these contracts,
and the specific lease terms, serve a dual purpose of providing
contractual provisions as well as regulatory information; the material
is generally part of the agreement under state law. Moreover,
Regulation M does not
[[Page 3300]]
mandate paper record retention: it permits companies to use electronic
and other nonpaper forms of record retention. As more dealers shift to
such other formats, any such costs should decrease or be eliminated.
Staff believes, therefore, that additional increases based on this
consideration are not appropriate. Accordingly, below is staff's best
estimate of burden applicable to this highly broad spectrum of covered
entities.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Setup/monitoring Transaction-related
------------------------------------------------------------------------------
Disclosure Average Total setup/ Average Total Total
Respondents burden per monitoring Number of burden per transaction burden
respondent burden transactions transaction burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Auto Leases \1\............................................... 50,000 1 50,000 2,500,000 .50 20,833 70,833
Other Leases \2\.............................................. 100,000 .50 50,000 1,000,000 .25 4,167 54,167
Advertising................................................... 25,000 .50 12,500 1,000,000 .25 4,167 16,667
--------------
Total..................................................... ........... .......... ........... ............ ........... ........... 141,667
--------------------------------------------------------------------------------------------------------------------------------------------------------
\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
213.2(e)(1).
\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 consumers leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
213.2(e)(1).
Estimated annual cost burden: $5,456,000, rounded to the nearest
thousand ($2,205,000 recordkeeping cost + $3,251,255 disclosure cost).
Staff calculated labor costs by applying appropriate hourly cost
figures to the burden hours described above. The hourly rates used
below ($32 for managerial or professional time,\13\ $21 for skilled
technical time, and $14 for clerical time) are averages, based on
current Bureau of Labor Statistics cost figures.
---------------------------------------------------------------------------
\13\ In view of NADA's comment, staff has utilized higher hourly
rates of $49 for ``attorney or professional time'' to reflect the
need for specialized training in lease requirements, as part of the
cost of compliance.
---------------------------------------------------------------------------
Recordkeeping: For the 150,000 recordkeeping hours, staff estimates
that 10 percent of the burden hours require skilled technical time and
90 percent require clerical time. As shown below, the total
recordkeeping cost is $2,205,000.
Disclosure: For each notice or information item listed, staff
estimates that 10 percent of the burden hours require managerial or
professional time and 90 percent require skilled technical time. As
shown below, the total disclosure cost is $3,251,255.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Managerial Skilled technical Clerical
------------------------------------------------------------------------- Total cost
Required task Time Cost ($32/ Time Cost ($21/ Time Cost ($14/ ($)
(hours) hr.) \1\ (hours) hr.) (hours) hr.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping.................................................... 0 $0 15,000 $315,000 135,000 $1,890,000 $2,205,000
Disclosures:
Auto Leases.................................................. 7,083 347,067 63,750 1,338,750 0 0 1,685,817
Other Leases................................................. 5,417 173,344 48,750 1,023,750 0 0 1,197,094
Advertising.................................................. 1,667 53,344 15,000 315,000 0 0 368,344
-----------
Total Disclosures........................................ ........ .......... .......... ........... .......... ............ 3,251,255
===========
Total Recordkeeping and Disclosures.................. ........ .......... .......... ........... .......... ............ 5,456,255
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The above figures reflect that for auto leases, hourly rates of $49 for attorney/professional time were used due to specialized training.
4. Regulation Z
The TILA was enacted to foster comparison credit shopping and
informed credit decision making by requiring accurate disclosure of the
costs and terms of credit to consumers. Regulation Z, 12 CFR part 226,
promulgated by the FRB, establishes both recordkeeping and disclosure
requirements to assist consumers and the enforcement of the TILA. The
FTC enforces the TILA as to all creditors and advertisers except those
that are subject to the regulatory authority of another Federal agency
(such as federally chartered or insured depository institutions).
Estimated annual hours burden: 17,639,000 hours, rounded to the
nearest thousand (1,000,000 recordkeeping hours + 16,639,165 disclosure
hours).
Recordkeeping: FTC staff estimates that Regulation Z's
recordkeeping requirements affect approximately 1,000,000 firms
offering credit and subject to the Commission's jurisdiction, at an
average annual burden of one hour per firm, for a total of 1,000,000
hours.
Disclosure: Regulation Z disclosure requirements pertain to open-
end and closed-end credit. The Regulation applies to retailers (such as
department stores, appliance stores, discount retailers, medical-dental
service providers, home improvement sellers, and electronic commerce
retail operators); mortgage companies; finance companies; credit
advertisers; auto dealerships; student loan companies; home fuel or
power services (for furnaces, stoves, microwaves, and other heating,
cooling or residential power equipment); credit advertisers; and
others.
NADA asserts that the burden estimates for closed end credit
disclosures are understated in view of recent developments including
case law, which necessitates additional
[[Page 3301]]
specialized compliance training. As noted, although staff believes its
estimates encompassed these matters--and such regulatory compliance
training tends to involve multiple topics under federal and state law--
staff has increased its estimates pertaining to closed-end credit
disclosures to account for these issues. Additionally, NADA asserts
that estimates are understated due to printing and copying costs
associated with providing Regulation Z disclosures on retail
installment contracts. However, these contracts, and the specific
credit terms, serve a dual purpose of providing contractual provisions
as well as regulatory information; the material is generally part of
the agreement under state law. Staff believes, therefore, that
additional increases based on this consideration are, therefore, not
appropriate. Accordingly, below is staff's best estimate of burden
applicable to this highly broad spectrum of covered entities.
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Setup/Monitoring Transaction-related
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Disclosure \1\ Average Total setup/ Average Total Total
Respondents burden per monitoring Number of burden per transaction burden
respondent burden transactions transaction burden
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Open-end credit:
Initial terms......................................... 100,000 .5 50,000 50,000,000 .25 208,333 258,333
Rescission notices.................................... 10,000 .5 5,000 500,000 .25 2,083 7,083
Change in terms....................................... 25,000 .5 12,500 136,000,000 .125 283,333 295,833
Periodic statements................................... 100,000 .5 50,000 4,800,000,000 .0625 5,000,000 5,050,000
Error resolution...................................... 100,000 .5 50,000 10,000,000 .5 833,333 883,333
Credit and charge card accounts....................... 100,000 .5 50,000 50,000,000 .25 208,333 258,333
Home equity lines of credit........................... 10,000 .5 5,000 5,000,000 .25 20,833 25,833
Advertising........................................... 250,000 .25 62,500 700,000 .5 5,833 68,333
Closed-end credit:
Credit disclosures.................................... 800,000 .75 600,000 330,000,000 1.5 8,250,000 8,850,000
Rescission notices.................................... 100,000 .50 50,000 34,000,000 1 566,667 616,667
Variable rate mortgages............................... 75,000 .50 37,500 3,000,000 1.5 75,000 112,500
High rate/high-fee mortgages.......................... 50,000 .50 25,000 750,000 1.5 18,750 43,750
Reverse mortgages..................................... 50,000 .50 25,000 150,000 1 2,500 27,500
Advertising........................................... 500,000 .25 125,000 1,000,000 1 16,667 141,667
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Total open-end credit............................. ........... .......... ........... ............... ........... ........... 6,847,081
--------------
Total closed-end credit........................... ........... .......... ........... ............... ........... ........... 9,792,084
==============
Total credit.................................. ........... .......... ........... ............... ........... ........... 16,639,165
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\1\ Open-end transactions with rescission notices (where the notices may not be otherwise provided) have increased. Closed-end variable rate mortgages
have increased. Computer technology use has expanded in some closed-end areas with lengthy disclosures that previously involved more manual efforts,
i.e., credit, variable rate, and high rate/high fee disclosures.
Estimated annual cost burden: $397,471,000, rounded to the nearest
thousand ($14,700,000 recordkeeping cost + $382,770,530 disclosure
cost).
Staff calculated labor costs by applying appropriate hourly cost
figures to the burden hours described above. The hourly rates used
below ($32 for managerial or professional time,\14\ $21 for skilled
technical time, and $14 for clerical time) are averages, based on
current Bureau of Labor Statistics cost figures.
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\14\ In view of NADA's comment, staff has utilized higher hourly
rates of $49 for ``attorney or professional time'' to reflect the
need for specialized training in closed-end credit requirements, as
part of the cost of compliance.
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Recordkeeping: For the 1,000,000 recordkeeping hours, staff
estimates that 10 percent of the burden hours require skilled technical
time and 90 percent require clerical time. As shown below, the total
recordkeeping cost is $14,700,000.
Disclosure: For each notice or information item listed, staff
estimates that 10 percent of the burden hours require managerial or
professional time and 90 percent require skilled technical time. As
shown below, the total disclosure cost is $382,770,530.
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Managerial Skilled technical Clerical
------------------------------------------------------------------------- Total cost
Required task Time Cost ($32/ Time Cost ($21/ Time Cost ($14/ ($)
(hours) hr.) \1\ (hours) hr.) (hours) hr.)
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Recordkeeping.................................................... 0 $0 100,000 $2,1000,000 900,000 $12,600,000 $14,700,000
Open-end credit Disclosures:
Initial terms................................................ 25,833 826,656 232,500 4,882,500 0 0 5,709,156
Rescission notices........................................... 708 22,656 6,375 133,875 0 0 156,531
Change in terms.............................................. 29,583 946,656 266,250 5,591,250 0 0 6,537,906
Periodic statements.......................................... 505,000 16,160,000 4,545,000 95,445,000 0 0 111,605,000
Error resolution............................................. 88,333 2,826,656 795,000 16,695,000 0 0 19,521,656
Credit and charge card accounts.............................. 25,833 826,656 232,500 4,882,500 0 0 5,709,156
Home equity lines of credit.................................. 2,583 82,656 23,250 488,250 0 0 570,906
Advertising.................................................. 6,833 218,656 61,500 1,291,500 0 0 1,510,156
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Total open-end credit.................................... ........ .......... .......... ........... .......... ............ 151,320,467
===========
[[Page 3302]]
Closed-end credit Disclosures:
Credit disclosures........................................... 885,000 43,365,000 7,965,000 167,265,000 0 0 210,630,000
Rescission notices........................................... 61,667 1,973,344 555,000 11,655,000 0 0 13,628,344
Variable rate mortgages...................................... 11,250 360,000 101,250 2,126,250 0 0 2,486,250
High-rate/high-fee mortgages................................. 4,375 140,000 39,375 826,875 0 0 966,875
Reverse mortgages............................................ 2,750 88,000 24,750 519,750 0 0 607,750
Advertising.................................................. 14,167 453,344 127,500 2,677,500 0 0 3,130,844
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Total closed-end credit.................................. ........ .......... .......... ........... .......... ............ 231,450,063
===========
Total Disclosures........................................ ........ .......... .......... ........... .......... ............ 382,770,530
-----------
Total Recordkeeping and Disclosures.................. ........ .......... .......... ........... .......... ............ 397,470,530
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\1\ The above figures reflect that for credit disclosures, hourly rates of $49 for attorney/professional time were used due to specialized training.
John D. Graubert,
Acting General Counsel.
[FR Doc. E6-626 Filed 1-19-06; 8:45 am]
BILLING CODE 6750-01-P
