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Notice

Agency Information Collection Activities; Submission for OMB Review; Comment Request

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Start Preamble

AGENCY:

Federal Trade Commission (FTC).

ACTION:

Notice.

SUMMARY:

The FTC has submitted to the Office of Management and Budget (OMB) for review under the Paperwork Reduction Act (PRA) information collection requirements contained in four regulations enforced by the Commission. The FTC is seeking public comments on the proposal to extend through December 31, 2005 the current PRA clearance for information collection requirements contained in the regulations. That clearance expires on December 31, 2002.

DATES:

Comments must be filed by December 26, 2002.

ADDRESSES:

Send written comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10202, Washington, DC 20503, ATTN.: Desk Officer for the Federal Trade Commission (comments in electronic form should be sent to oira_docket@omb.eop.gov), and to the Secretary, Federal Trade Commission, Room H-159, 600 Pennsylvania Ave., NW., Washington, DC 20580 (comments in electronic form should be sent to RegsBEMZpprwork@ftc.gov). All comments should be captioned “Regs BEMZ: Paperwork Comment.”

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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.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Under the PRA (44 U.S.C. 3501-3520), Federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. On August 20, 2002, the FTC sought comment on the information collection requirements associated with the regulations discussed below. See 67 FR 53936.

The Commission received one comment pertaining to certain aspects of regulatory burden affecting Regulations B, E, and Z that the commenter believed understated applicable burden.[1] These Start Printed Page 70734issues are discussed more specifically below under the applicable regulations. In summary, much of the comment's analysis of the PRA mistakenly includes as a measure of burden procedural activities (e.g., individual credit decisions, investigating account errors) that are inherent in an entity's business, as opposed to disclosures and recordkeeping that are required by these regulations. Moreover, the comment overlooks the fact that the systems entities establish and maintain are commonly used for purposes extending well beyond the disclosure or recordkeeping requirements that these regulations entail.[2] Nonetheless, staff has revised its burden estimates in several areas to address the issues raised in the comment. Pursuant to the OMB regulations that implement the PRA (5 CFR Part 1320), the FTC is providing this second opportunity for public comment while seeking OMB approval to extend the existing paperwork clearance for the Rule.

If a comment contains nonpublic information, it must be filed in paper form, and the first page of the document must be clearly labeled “confidential.” Comments that do not contain any nonpublic information may instead be filed in electronic form (in ASCII format, Wordperfect, or Microsoft Word) as part of or as an attachment to email messages directed to the following email box: RegsBEMZpprwork@ftc.gov. Such comments will be considered by the Commission and will be available for inspection and copying at its principal office in accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of Practice, 16 CFR section 4.9(b)(6)(ii)).

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).

Each of these four rules impose certain PRA recordkeeping and disclosure requirements associated with providing credit or with other financial transactions. All of these rules require covered entities to keep certain records. Staff believes that these entities would likely retain these records in the normal course of business even absent the recordkeeping requirement in the rules. There is, however, 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. “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 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.[3]

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. 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.

In some instances, where covered entities may make certain required disclosures in the ordinary course of business, the Regulation imposes no PRA burden. 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 estimated PRA burden associated with these rules, attributable to the Commission, is somewhat less today than in the past. Staff believes that as computer-based and/or electronic procedures rise, and as quality control procedures are increasingly integrated into business operating systems, financial services entities also increase compliance efficiency.

The cost estimates shown below relate solely to labor costs. The applicable PRA requirements impose minimal capital or other non-labor costs, as affected entities generally have the necessary equipment for other business purposes. Similarly, staff estimates that compliance with these rules entails minimal printing and copying costs beyond that associated with documenting financial transactions in the ordinary course of business. The burden estimates shown below include the time necessary to train staff to be in compliance with the regulations.[4]

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The following paragraphs discuss each of these rules, their particular PRA requirements, and staff's best estimates of the related hour and cost burdens.

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, 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).

Estimated annual hours burden: 3,146,000 hours, rounded to the nearest thousand (1,153,500 recordkeeping hours + 1,992,832 disclosure hours).[5]

Recordkeeping: 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 one hour per firm, for a total of 1,000,000 hours. 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[6] for approximately nine million credit applications (based on industry data regarding the approximate number of mortgage purchase and refinance originations), for a total of 150,000 hours. 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 1,153,500 hours.

Disclosure: Regulation B requires that creditors (i.e., entities that regularly participate in the decision whether to extend credit under Regulation B) provide notices whenever they take adverse action. It 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). Finally, Regulation B also requires that for accounts which spouses may use or for which they are contractually liable, creditors who report credit history must do so in a manner reflecting both spouses' participation.

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.[7]

DisclosureRespondentsSetup/monitoring 1Total Setup/Monitoring burden (hours)Transaction-related 2
Average burden per respondent (hours)Number of transactionsAverage burden per transaction (minutes)Total Transaction burden (hours)Total burden (hours)
Credit history reporting250,000.2562,500125,000,000.25520,833583,333
Adverse action notices1,000,000.5500,00200,000,000.25833,3331,333,333
Appraisal notices22,000.511,0006,500,000.2527,08338,083
Appraisal reports22,000.511,0006,500,000.2527,08338,083
Total1,992,832
1 With respect to appraisal notices and appraisal reports, the above figures assume that approximately half of applicable mortgage entities (.5 × 44,000, or 22,000 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 assume that half of applicable mortgage transactions (.5 × 13,000,000 or 6,500,000) would not otherwise provide the appraisal notices and reports and thus would be affected.

Estimated annual cost burden: $59,905,000, rounded to the nearest thousand. Staff calculated labor costs by applying appropriate hourly cost figures to the burden hours described above. The hourly rates used below ($50 for managerial or professional time, $20 for skilled technical time, and $10 for clerical time) are averages.

Recordkeeping: Staff estimates that the general recordkeeping responsibility of one hour 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 on 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 Start Printed Page 70736technical time. As shown below, the total recordkeeping cost is $14,070,000.

Disclosure: For each notice or information item listed, staff estimates that the burden hours consist of 10 percent managerial time and 90 percent skilled technical time. As shown below, the total disclosure cost is $45,835,100.

Required TaskManagerialSkilled TechnicalClericalTotal Cost ($)
Time (hours)Cost ($50/hr.)Time (hours)Cost ($20/hr.)Time (hours)Cost ($10/hr.)
General recordkeeping0$0100,000$2,000,000900,000$9,000,000$11,000,000
Other recordkeeping00150,0003,000,000003,000,000
Recordkeeping of test002,50050,0000050,000
Recordkeeping of corrective action001,00020,0000020,000
Total Recordkeeping14,070,000
Credit history reporting58,3332,916,650525,00010,500,0000013,416,650
Adverse action notices133,3336,666,6501,200,00024,000,0000030,666,650
Appraisal notices3,808190,40034,275685,50000875,900
Appraisal reports3,808190,40034,275685,50000875,900
Total Disclosure45,835,100
Total Recordkeeping and Disclosure59,905,100

2. Regulation E

The EFTA requires accurate disclosure of the ocsts, terms, and rights relating to EFT services to consumers. Regulation E, 12 CFR 205, promulgated by the Board of Governors of the Federal Reserve System, 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.[8]

DisclosureRespondentsSetup/monitoringTransaction-related
average burden per respondent (hours)Total setup/ monitoring burden (hours)Number of transactionsAverage burden per transaction (minutes)Total transaction burden (hours)Total burden (hours)
Initial terms100,000.550,0001,000,000.0233350,333
Change in terms25,000.512,50033,000,000.0211,00023,500
Periodic statements100,000.550,0001,200,000,000.02400,000450,000 Start Printed Page 70737
Error resolution100,000.550,0001,000,000583,333133,333
Transaction receipts100,000.550.0005,000,000.021,666,6671,716,667
Preauthorized transfers500,000.5250,0001,000,000.254,167254,167
Service provider notices100,000.2525,0001,000,000.254,16729,167
Govt. benefit notices10,000.55,000100,000,000.25416,667421,667
ATM notices 1500.25125250,000.251,0411,166
Total3,080,000
1 Starting in 2001, ATM operators were required to provide certain notices to consumers regarding ATM fees. Generally, these notices must be provided on or at ATM machines and/or on paper before the consumer is committed to paying a fee.

Estimated annual cost burden: $76,240,000, rounded to the nearest thousand.

Staff calculated labor costs by applying appropriate hourly cost figures to the burden hours described above. The hourly rates used below ($50 for managerial or professional time, $20 for skilled technical time, and $10 for clerical time) are averages.

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 $5,500,000.

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 $70,740,000.

Required TaskManagerialSkilled technicalClericalTotal Cost ($)
Time (hours)Cost ($50/hr.)Time (hours)Cost ($20/hr.)Time (hours)Cost ($10/hr.)
Recordkeeping0$050,000$1,000,000450,000$4,500,000$5,500,000
Disclosure:
Initial terms5,033251,65045,300906,000001,157,650
Change in terms2,350117,50021,150423,00000540,500
Periodic statements45,0002,250,000405,0008,100,0000010,350,000
Error resolution13,333666,650120,0002,400,000003,066,650
Transaction receipts171,6678,583,3501,540,00030,800,0000039,383,350
Preauthorized transers25,4171,270,850228,7504,575,000005,845,850
Service provider notices2,917145,85026,250525,00000670,850
Govt. benefit notices42,1672,108,350379,5007,590,000009,698,350
ATM Notices1165,8001,05021,0000026,800
Total Disclosure70,740,000
Total Recordkeeping and Disclosures76,240,000

3. Regulation M

The CLA requires accurate disclosure of the costs and terms of leases to consumers. Regulation M, 12 CFR 213, promulgated by the Board of Governors of the Federal Reserve System, 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: 279,000 hours, rounded to the nearest thousand (150,000 recordkeeping hours + 129,167 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. Below is staff's best estimate of burden applicable to this highly broad spectrum of covered entities.Start Printed Page 70738

DisclosureSetup/monitoringTransaction-related
RespondentsAverage Burden per Respondent (hours)Total Setup/ Monitoring Burden (hours)Number of TransactionsAverage Burden per Transaction (minutes)Total Transaction Burden (hours)Total Burden (hours)
Auto Leases 150,000.7537,5002,500,000.5020,83358,333
Other Leases 2100,000.5050,0001,000,000.254,16754,167
Advertising25,000.5012,5001,000,000.254,16716,667
Total129,167
1 This category focuses on consumer vehicle leases. Vehicle leasing has decreased in the past two years. 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: $4,621,000, rounded to the nearest thousand.

Staff calculated labor costs by applying appropriate hourly cost figures to the burden hours described above. The hourly rates used below ($50 for managerial or professional time, $20 for skilled technical time, and $10 for clerical time) are averages.

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 $1,650,000.

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 $2,970,850.

Required TaskManagerialSkilled TechnicalClericalTotal Cost ($)
Time (hours)Cost ($50/hr.)Time (hours)Cost ($20/hr.)Time (hours)Cost ($10/hr.)
Recordkeeping0$015,000$300,000135,000$1,350,000$1,650,000
Disclosures:
Auto Leases5,833291,65052,5001,050,000001,341,650
Other Leases5,417270,85048,750975,000001,245,850
Advertising1,66783,35015,000300,00000383,350
Total Disclosures2,970,850
Total Recordkeeping and Disclosures$4,620,850

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 226, promulgated by the Board of Governors of the Federal Reserve System, 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: 20, 179,000 hours, rounded to the nearest thousand (1,000,000 recordkeeping hours + 19,178,749 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. Below is staff's best estimate of burden applicable to this highly broad spectrum of covered entities.[9]

Start Printed Page 70739
Disclosure 1Setup/MonitoringTransaction-relatedTotal burden (hours)
RespondentsAverage burden per respondent (hours)Total setup/ monitoring burden (hours)Number of transactionsAverage burden per transaction (minutes)Total transaction burden (hours)
Open-end credit:
Initial terms100,000.550,00050,000,000.25208,333258,333
Rescission notices10,000.55,000100,000.254175,417
Change in terms25,000.512,500136,000,000.125283,333295,833
Periodic statements100,000.550,0004,800,000,000.06255,000,0005,050,000
Error resolution100,000.550,00010,000,0005833,333883,333
Credit and charge card accounts100,000.550,00050,000,000.25208,333258,333
Home equity lines of credit10,000.55,0005,000,000.2520,83325,833
Advertising250,000.2562,500700,000.55,83368,333
Closed-end credit:
Credit disclosures800,000.50400,000330,000,000211,000,00011,400,000
Rescission notices100,000.5050,00034,000,0001566,667616,667
Variable rate mortgages75,000.5037,5001,800,000260,00097,500
High rate/high-fee mortgages50,000.5025,000750,000225,00050,000
Reserve mortgages50,000.5025,000150,00012,50027,500
Advertising500,000.25125,0001,000,000116,667141,667
Total open-end credit6,845,415
Total closed-end credit12,333,334
Total credit19,178,749
1 In some areas, e.g., home equity lines of credit, companies have merged, changed their business focus, and/or have shifted that focus into areas not under the FTC's jurisdiction. Accordingly, staff's estimates account for a reduced number of respondents in these areas. For high-rate, high-fee loans, some respondents in this area have merged and/or changed their business focus. However, revisions to these rules by the FRB became effective 10/1/02; as a result, certain additional mortgages may be covered by these rules.

Estimated annual cost burden: $452,111,000 rounded to the nearest thousand.

Staff calculated labor costs by applying appropriate hourly cost figures to the burden hours described above. The hourly rates used below ($50 for managerial or professional time, $20 for skilled technical time, and $10 for clerical time) are averages.

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 $11,000,000.

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 $441,111,200.

Required TaskManagerialSkilled TechnicalClericalTotal Cost ($)
Time (hours)Cost ($50/hr.)Time (hours)Cost ($20/hr.)Time (hours)Cost ($10/hr.)
Recordkeeping0$0100,000$2,000,000900,000$9,000,000$11,000,000
Open-end Disclosure:
Initial terms25,8331,291,650232,5004,650,000005,941,650
Rescission notices54227,1004,87597,50000124,600
Change in terms29,5831,479,150266,2505,325,000006,804,150
Periodic statements505,00025,250,0004,545,00090,900,00000116,150,000
Error resolution88,3334,416,650795,00015,900,0000020,316,650
Credit and charge card accounts25,8331,291,650232,5004,650,000005,941,650
Home equity lines of credit2,583129,15023,250465,00000594,150
Advertising6,833341,65061,5001,230,000001,571,650
Total open-end credit157,444,500
Closed-end credit Disclosures:
Credit disclosures1,140,00057,000,00010,260,000205,200,00000262,200,000
Rescission notices61,6673,083,350555,00011,100,0000014,183,350
Start Printed Page 70740
Variable rate mortgages9,750487,50087,7501,755,000002,242,500
High-rate/high-fee mortgages5,000250,00045,000900,000001,150,000
Reverse mortgages2,750137,50024,750495,00000632,500
Advertising14,167708,350127,5002,550,000003,258,350
Total closed-end credit283,666,700
Total Disclosures441,111,200
Total Recordkeeping and disclosures:452,111,200
Start Signature

John D. Graubert,

Acting General Counsel.

End Signature End Supplemental Information

Footnotes

1.  The comment was submitted on behalf of Visa U.S.A. (“Visa”), a membership organization comprised of certain domestic financial institutions licensed to offer Visa cards. Visa's comment is centered on open-end credit and EFT services. Furthermore, the focus of Visa's comment generally concerns banks and other depository institutions. For these regulations, however, except for nonfederally insured and noninsured credit unions (less than five thousand entities) and a limited number of securities-type entities engaged in financial activities covered by these regulations, the Commission, generally, lacks jurisdiction over depository institutions. And, most entities under the FTC's jurisdiction that offer open-end credit and EFT services are specialized regarding their plans and terms. Disclosures and recordkeeping for them would yield different, and lesser, burden than, for example, banks. Finally, regarding Regulation Z in particular, some entities no longer offer open-end credit directly (with banks now offering it instead).

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2.  PRA “burden” does not include effort expended in the ordinary course of business, regardless of any regulatory requirement. 5 CFR 1320.3(b)(2).

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3.  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 may have incorporated fewer of these approaches into their systems and may have a higher burden.

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4.  Employee training for these regulations may and often does address far more than the particular notices and recordkeeping required by these regulations. Regulatory compliance is just one subset of employee business training, and the regulatory compliance facet, for that matter, commonly encompasses a wide variety of issues and topics extending widely beyond those posed by Regulations B, E, M, and Z (e.g., privacy and security, tax, and contract issues). They also address state and local requirements, not merely those imposed or enforced by federal agencies. Moreover, this training commonly incorporates internal business issues as well (e.g., accounting concerns and secondary market or other investors issues).

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5.  Visa stated that burden estimates had not been included for credit history reporting; staff has now factored that into its burden estimates for disclosures. Visa also noted the absence of staff estimates for self-testing Staff has increased its burden estimates by including recordkeeping for self-testing. However, it is unclear to what extent entities subject to the Commission's jurisdiction are performing these tests, as defined by the Regulation. Unlike banks, for example, entities under FTC jurisdiction are not subject to regular audits for financial regulatory compliance with Regulations B, E, M, and Z. Rather they may be subject to investigations and enforcement actions that are fact- and issue-focused, rather than conducted in regular, periodic manner as are audits. This difference may account for relatively higher levels in self-testing, as defined under Regulation B, for depository entities under the jurisdiction of other federal agencies. As discussed further below, staff has retained certain other burden estimates.

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6.  Regulation B contains model forms that creditors may use to gather and retain the required information.

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7.  Visa asserted that burden estimates for adverse action were understated. However, staff believes that its adverse action notice estimates are a reasonable projection for those entities under the Commission's jurisdiction. Again, only incremental time and costs, beyond what would be incurred by an entity in its ordinary course of business apart from these FTC-enforced rules, are factored into staff's PRA burden estimates. Also, where multiple entities are involved in the adverse action decision (some within, and some outside, of Commission jurisdiction), it is only those entities under Commission jurisdiction—and only to the extent they are involved—that staff has attempted to account for in its PRA burden estimates.

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8.  Visa believes that staff's burden estimates were understated for the initial terms and periodic statements disclosures and for error resolution. Generally, however, under Regulation E, the Commission lacks jurisdiction over traditional depository-type entities, other than nonfederally-insured or noninsured credit unions and certain securities-type entities that may offer EFT services to consumers. While staff's analysis does not overlook the depository-type entities under the Commission's jurisdiction, their relative weighting is more than counterbalanced by the fact that many other entities under Commission jurisdiction subject to these requirements engage in limited types of EFTs, with more specialized terms and charges. The nature of entities subject to this jurisdiction impacts, among other things, initial and periodic disclosures. Moreover, regarding error resolution, staff notes that the procedural aspects that may be associated with investigation and account adjustments are not, per se PRA collected[s] of information.'' See note 2. Staff has retained its projected estimates in view of these considerations.

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9.  Visa asserted that the burden estimates were understated for the initial terms and periodic statements disclosures and for billing error resolution. As noted above regarding these regulations, generally, the Commission lacks jurisdiction over traditional depository-type entities (including banks), other than nonfederally-insured or noninsured credit unions and certain securities-type entities that offer credit services to consumers. The Commission has jurisdiction over certain nondepository financial services entities that offer open-end credit, as well as certain health care providers, and other retailers that still issue credit under their own names. Staff has accounted for these entities in its estimates. However, although some entities under the Commission's jurisdiction offer varying forms of and terms within open-ended credit to consumers, many have a more limited offering, including some retailers, health care providers, and others. Moreover, some entities no longer offer open-end credit directly (with banks offering it instead), including, for example, many oil companies, department stores, and other retailers. The nature of entities subject to this jurisdiction impacts initial and periodic disclosures. In addition, regarding billing error resolution, staff notes that the time associated with investigation and account adjustments is not burden imposed by these regulations and is thus not covered by the PRA. Staff has retained its projected estimates in view of these considerations.

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[FR Doc. 02-29980 Filed 11-25-02; 8:45 am]

BILLING CODE 6750-01-M