Page 1 of 11 BUREAU OF CONSUMER FINANCIAL PROTECTION PAPERWORK REDUCTION ACT SUBMISSION INFORMATION COLLECTION REQUEST

SUPPORTING STATEMENT PART A
Generic Information Collection Plan for Surveys Using the Consumer Credit Panel
(OMB C ONTROL NUMBER : 3170

- XXXX )

TERMS OF CLEARANCE : None. This is a Request for a new collection

ABSTRACT: U nder the Dodd

- Frank Wall Street Reform and Consumer Protection Act, the
Consumer Financial Protection Bureau is charged with researching, analyzing, and reporting on topics rela ting to the Bureau’s mission, including consumer behavior, consumer awareness, and developments in markets for consumer financial products and services . In order to improve its understanding of how consumers engage with financial markets, the CFPB uses th e Consumer Credit Panel (CCP), a proprietary sample dataset from one of the national credit reporting agencies
, as a frame to survey people about their experiences in consumer credit markets

. The Bureau seeks to obtain approval for a generic information c ollection plan for these types of

surveys

. Survey responses will be used for general, formative, and informational research on consumer financial markets and consumers’ use of financial products and will not directly provide the basis for specific policymaking at the Bureau.

A. JUSTIFICATION

1. Circumstances Necessitating the Data Collection

Much of the Consumer Financial Protection Bureau (CFPB, Bureau)’s mission focuse s on understanding how c onsumer financial markets work, highlighting avenues for innovation in financial products and services, and identifying and mitigating potential risks to consumers. 1 The
Dodd

- Frank Wall Street Reform and Consumer Protection Act (Dodd

- Frank Act) authorizes the CFPB to engage in research and market monitoring activities to assess trends and to identify

1 CFPB FY 2013

– FY 2017 Strategic Plan, goal 3, http://www.consumerfinance.gov/strategic

- plan/Page 2 of 11 emerging risks in consumer financial markets. 2 Section 1013(b)(1) of the Dodd

- Frank Act
establishes the Office of Research for the purpose of researching, ana lyzing, and reporting on topics relat ed to the Bureau’s mission, including consumer behavior, consumer awareness, and developments in markets for consumer financial products and services. The Office of Research and the Bureau as a whole improve their unde rstanding in these areas by analyzing empirical evidence and performing rigorous analyses that can be used to benefit consumers, businesses, researchers, and policymakers. To perform the tasks necessary to carry out its mission, the CFPB needs to build a

n uanced understanding of consumer behavior in financial markets . For this reason, the Office of Research is planning to build a portfolio of generic information collection plans for “research” functions (outside of rulemaking), to improve our scientific un derstanding.
T o further improve its understanding of how consumers engage with financial markets, the CFPB proposes research projects that rely on the Consumer Credit Panel (CCP), a proprietary sample dataset from one of the nat ional credit reporting agencies. The CFPB seeks to use this generic information collection clearance to survey consumers of financial products
and services based on credit records sampled from the CCP . The research will be used for developmental and info rmative purposes, but will not directly provide the basis for specific rulemaking or policymaking at the Bureau. In general, the topics that the Bureau is interested in studying include :

• consumer experiences with financial products and potential risks to c onsumers, including traditionally underserved consumers;

• consumer awareness and decision

- making, for example, understanding what financial products or features people are aware of and why they choose one product over another;

• information disclosure and how disclosure may affect behavior;

• the effect of educational or other interventions on consumer financial behavior or
outcomes

.

2 DFA Section 1013(b)(1) mandates that the Bureau have research staff whose responsibilities include “[r]esearching, analyzing, and reporting on (A) developments in markets for consumer financial products or

s ervices, including market areas of alternative consumer financial products or services with high growth rates and areas of risk to consumers; (B) access to fair and affordable credit for traditionally underserved communities; (C) consumer awareness, unders tanding, and use of disclosures and communications regarding consumer financial products or services; (D) consumer awareness and understanding of costs, risks, and benefits of consumer financial products or services; (E) consumer behavior with respect to c onsumer financial products or services, including performance on mortgage loans; and (F) experiences of traditionally underserved consumers, including un

‐ banked and under

‐ banked consumers.”Page 3 of 11 These topics will typically be examined in the context of consumer financial product markets, including mortgages, auto loans, st udent loans, installment loans, small dollar loans
, credit cards, debit cards, and prepaid cards. The CFPB envisions that the research covered under this generic clearance will be basic research about consumer credit markets and household
finance.
When c ollecting information about consumer credit markets, the CFPB recognizes that there are privacy and data security risks. We outline the ways the CFPB plans to mitigate these risks when collecting data using this generic clearance later in this supporting statement.

2. Use of the Information
The CFPB requests approval from the Office of Management and Budget (OMB) for a generic information collection plan clearance which will allow the bureau to collect data by administering surveys which use the CCP as a survey frame . The specific purpose of this generic clearance is to allow the Bureau to better inform and advance scientific understanding of consumer credit markets and household finance. For example, the Office of Research envisions

a broad, multifac eted set of data collection effo r ts , and this generic clearance will facilitate and expedite monitor ing and research of market developments. This generic clearance will allow the Bureau to conduct data collections which will achieve our research goals wit h the least amount of burden on the public, and while ensuring strong privacy and data protections throughout these projects. Research conducted under the requested clearance will not be the primary basis for particular regulatory decisions or for the deve lop ment and evaluat ion of specific policies. Studies conducted under this generic approval may identify opportunities for enhanced or improved regulatory or other policy actions; however, as noted, the Bureau will not initiate any changes based solely on research projects enabled by this generic information collection plan

. Activities conducted under this clearance may include pretesting of the questionnaires to ensure the collection of reliable information while minimizing the cost and burden to

respon dents. For example, the Bureau may engage in cognitive interviewing or pretesting to gauge the effectiveness of the survey questions and respondents ’ understand ing of the question s

.Page 4 of 11 T he CCP is a 1

- in

- 48 nationally representative random sample of de

- identi fied credit
records from one of the three major national credit reporting agencies. Using th e s e data, the CFPB plans to select survey samples and then to inform the credit reporting agency of which
credit records are selected . T he credit reporting agency (which, unlike the CFPB, has access to direct identifying information related to these records) will mail a copy of the survey instrument

to the consumer associated with each sampled credit record

. The Bureau expects that for mo st surveys to be conducted under this clearance, c onsumers will be able to respond to the survey either online or by mail using a prepaid envelope. All responses will be collected by the credit reporting agency or a subcontractor, wh o will remove any dire ct identifying information that respondents may have inadvertently included, convert the responses into an electronic format,
and transmit the data to the Bureau. T he respondents will remain anonymous to the CFPB, but the survey responses will include a u nique key that will allow responses to be matched with the
associated de

- identified credit record. The Bureau has experience using de

- identified credit
records as a sampling frame and with conducting mail and web surveys through this type of arrangement w ith the credit bureau and a survey subcontractor through its work with FHFA on the National Survey of Mortgage Borrowers and the expected Survey of Consumer Views on
Debt. The CCP data are proprietary and cannot be shared publicly. To allow outside

resear chers and other interested parties to benefit from research conducted by the Bureau, the CFPB may make a version of the survey data available publicly to the extent that such releases are legally permissible and consistent with protecting consumers’ privac y. Any public

- release
version of the data would be de

- identified and exclude any direct identifying information. In addition, the CFPB may , for example, withhold some data elements , aggregate response categories, or take other steps to protect the privacy of respondents in any publicly available
version of the data.

3. Use of Information Technology
Surveys will be sent by mail to sampled consumers . The Bureau expects to typically allow respondents to complete the survey either online or by mail using a prepaid envelope. ThePage 5 of 11 website to complete the survey online will be hosted on servers owned and operated by the credit reporting agency’s subcontractor. The Bureau generally expects to provide a Spanish version of the survey instrument at
least online for any survey. Returned p aper surveys will be electronically scanned by a subcontractor of the credit reporting agency, stripped of any direct identifying information that the respondent may have inadvertently included, and converted to an electr onic format. The data will then be transmitted to the CFPB using a secure FTP server.

4

. Efforts to Identify Duplication
The CFPB will design surveys to address questions that have not yet been satisfactorily
answered in the relevant research literature. For topics on which there exists previous research, the CFPB will detail the relationship between the proposal and existi ng studies and will describe how the data collection supports the CFPB’s mission. A review of the existing relevant literature
will be undertaken befor e proceeding with any project initiated under this generic clearance. Surveys may include general quest ions that are asked on existing surveys to, for example, draw rough conclusions about how characteristics measured in the CFPB survey relate to those measured in other surveys.

5. Efforts to Minimize Burdens on Small Entities

No small businesses will b e impacted by this study, as survey respondents will be individuals only.

6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction

We envision a series of one

- time data collections, not an on

- going collection of the same
informatio n . For this reason, less frequent collections are not possible. The proposed clearance will allow the Bureau to collect information on the market s we regulate from consumers, allowing us to develop a more complete understanding of this market
and consumer s’ experiences with it. Without this data collection, the Bureau will not be as well informed, and the CFPB will not be able to achieve its mission as effectively.Page 6 of 11 Where appropriate, the CFPB plans to make the results of any research conducted using
these data publicly available. Additionally, where legally permissible and consistent with protecting consumers’ privacy, we envision making the collected survey data available to researchers outside of the CFPB and to the public. Therefore, the data to be coll ected under this proposed clearance will not only improve the CFPB’s understanding of consumer financial markets, but also increase the knowledge of researchers and other policymakers.

7. Circumstances Requiring Special Information Collection
Generally, m ost information collections under this generic clearance will be conducted in a manner consistent with the gu idelines in 5 CFR 1320. 5(d)(2). Most collections will require a single interaction between the agency and respondents, but some information collections could require multiple interactions. For example, some studies may ask for subjects to be surveyed
more than once , and possibly more than once in a quart er . The CFPB will work to limit the burden on respondents and ensure that studies only include repeated interactions when the additional information gained is anticipated to be substantial and valuable to the study.

8. Consultation Outside the Agency

In accordance with 5 CFR 1320.8(d)(1), the Bureau has published a notice Federal Register allowing the public 60 days to comment on this proposed new generic information collection plan. Further and in accordance with 5 CFR 1320.5(a)(1)(iv), the Bureau will publi sh a notice in the Federal Register allowing the public 30 days to comment on the submission of this information collection request to the Office of Management and Budget.

9. Payment or Gifts to Respondents
Survey recipients will receive a pre

- paid c ash incentive as an inducement to complete and return the survey questionnaire (ex: five dollars) . Recipi ents who fail to respond to the initial survey solicitation will receive a second cash incentive (ex: another five dollars)

. This incentive strategy is identical to that used by the National Survey of Mortgage Borrowers, and the Bureau expects to use this same strategy for the planned Survey of Consumer Views on Debt.Page 7 of 11 Meta

- analyses of mail surveys find that incentives given in itially with the questionnaire yield significantly higher response rates than do incentives contingent on return of the survey or no incentives; furthermore, monetary incentives produce a stronger effect than non

- monetary incentives. 3 , 4 Many recurring f ederally

- funded surveys use monetary incentives, including the Survey of Consumer Finances, the Survey of Income and Program Participation, and the National Survey of Drug Use and Health, and self

- administered surveys such as the Survey of Doctorate Recipi ents, the National Survey of Recent College Graduates, and the National Survey of Mortgage Borrowers. 5 Incentives have consistently been found to improve response rates across a variety of survey topics and modes. 6 , 7 Incentives have been found to be cost

- effective in
different modes and often reduc e the effort required to contact and interview sample persons or
the number of follow

- up mailings. 8 , 9 , 10

10. Assurances of Confidentiality
CFPB shall treat the information in accordance with applicable federal law, including
, but
not limited to
, the Bureau’s confidentiality rules, 12 C.F.R. Part 1070, and the federal laws and regulations that apply to federal agencies for the protection of privacy, confidentiality, security and integrity.

The CFPB uses best practices of social science research design to inform the notice and
consent vehicles. For research studies under this generic clearance, the CFPB provides notice to individuals that explain how their information will be used through Privacy Act State ments. Privacy Act Statements are made available prior to the collection of information and explain

3 Allan H. Church (1993), “Estimating the Effects of Incentives on Mail Survey Response Rates: A Meta

- Analysis.” Public Opinion Quarterly
, 57(1): 62

- 79 4 Phil Edwards et al. (2002), “Increasing Response Rates to Postal Questionnaires: Systematic Review.” British Medical Journal, 324: 1183

- 1189. 5 Fan Zhang (2010), “Incen tive Experiments: NSF Experiences.” NSF Working Paper. 6 Eleanor Singer (2002), “The Use of Incentives to Reduce Nonresponse in Household Surveys.” In R.M. Groves, D.A. Dillman, J.L. Eltinge, and R.J.A. Little (eds), Survey Nonresponse . New York: Wiley, pp 163

- 177. 7 Eleanor Singer, Cong Ye (2013), “The Use and Effects of Incentives in Surveys.” The Annals of the American Academy of Political and Social Science , 645 8 Martha B erlin et al. (1992), “An Experiment in Monetary Incentives.” Proceedings of Survey Research Methods Section, American Statistical Association , pp. 393

- 398. 9 Eleanor Singer et al. (2000), “Experiments with Incentives in Telephone Surveys.” Public Opinion Quarterly, 64(2): 171

- 188. 10 Gwen L. Alexander et al. (2008), “Effects of In centives and Mailing Features on Recruitment for an Online Health Program.” American Journal of Preventative Medicine , 34(5): 382

- 388.Page 8 of 11 whether the information is mandatory or voluntary; the authority for the information collection; whether there are any opportunities to consent to sharing a nd submission of information; how the
information will be secured and what System of Records applies

. The information collected under this generic clearance by contractors will include direct identifying personally identifiable information (PII) in order to contact survey participants and match the survey data to administrative records

. The CFPB will only receive and keep response data stripped of direct identifying PII

. Conducting these research studies implicates privacy concerns because a breach of

con fidentiality, or re

- identification, could result in an individual suffering harm. To reduce the risk of breaches of confidentiality, the CFPB designs recruitment materials so as not to disclose sensitive information about those it seeks to recruit, and us es appropriate security controls to protect information used in research. There is also risk related to misuse of information collected for research. Misuse might involve secondary types of research that are incompatible with the purposes of the initial co llection, or a use of the information that individuals do not understand or to which they have not provided consent.
To reduce the risk of misuse, the CFPB minimizes access to PII based on need

- to

- know and stipulates, in most instances, that contractors th at collect data on behalf of the Bureau remove or redact all direct identifying PII, as defined by the Bureau’s privacy office, before transmitting data to the Bureau. Any contractor staff assigned to the project also sign confidentiality agreements. When appropriate, research results will be presented in aggregated form to protect the confidentiality of firms or consumers, and any publicly released version of data will use disclosure protection techniques (e.g., rounding, imputation, exclusion of some var iables, aggregation of categorical responses) to minimize the risk of releasing personally identifiable or otherwise sensitive information (12 CFR 1070.40 et seq. ). The Bureau treats the information collected from participating persons and institutions in a manner consistent with our confidentiality regulations, and all data and analyses are subject to legal and privacy review prior
to their release.
The Bureau also evaluates the potential privacy risk and harm to individuals of specific
research relative to that authorized purpose, and vets research proposals to ensure that they serve an authorized purpose. Research conduct ed under this generic clearance will be consistent withPage 9 of 11 the Privacy Act and the E

- Government Act. The requisite SORNs and PIAs will do cument the collection, use, disclosure, and retention of PII; the technical, administrative, and physical controls used to minimize privacy risks. The CFPB.022 Market and Consumer Research
Records
, 77 FR 67802 System of Records Notice, and the Market Analysis of Administrative Data under Research Authorities PIA cover the use of administrative data and the matching required to contact potential survey respondents. The Consumer Experience Research PIA covers
the collection of survey responses. The SORNs and PIAs will be updated as appropriate, and details regarding information handling will be specified in individual submissions under this generic clearance

.

11. Justification for Sensitive Questions

Questions about an individual’s finances, for example, monthly income or mortgage payments , are commonly considered sensitive. Nonetheless, the CFPB must ask these questions
in order to understand consumer behavior and to recognize financial trends and emergent ris ks
relevant to consumers. The Bureau believes that these questions are justified by their central importance to the Bureau’s mission. In addition, some people may beli eve that questions about race and other socioeconomic factors may be considered sensitiv e. However, the CFPB is mandated to enforce fair lending laws and focus on the risks to vulnerable populations, including service members and older
Americans. For this reason , the Bureau often needs to ask these types of sensitive questions. For
informa tion collections involving questions of race/ethnicity, the CFPB will ensure that the OMB standards for Classification of Federal Data on Race and Ethnicity (Federal Register, October 30, 1997, Volume 62, Number 210, pages 58781

- 59790) are followed. Respon dent participation will be voluntary for each survey distributed under this generic
clearance ; subjects will be made aware of this fact. All respondents shall be free to opt

- out of a data collection at any time and for any reason. Administrative data for the respondents and non

respondents will be used to analyze nonresponse bias.
The CFPB will ensure that a citation is made to any applicable System of Records Notice ( SORN) for the collection of direct identifying information, and that a Privacy Impact Assessment (PIA) is published.Page 10 of 11 12. Estimated Burden of Information Collection
Exhibit 1: Burden Hour Summary

Information Collection No. of Respondents Frequency Annual Responses Average Response Time Annual Burden Hours

Surveys 8,500 1 8,500 .5 hours 4 , 250 3 Year Total: 25,500 /////////////// 25,500 /////////////// 12,750

The CFPB plans to mail surveys to up to 25,000 consumers per year under this generic clearance and estimates an average response rate of 34 percent. For the estimated 8,500 respondents per year who fill out the survey, we estimate that completing a survey will take 30 minutes on average, for a total burden of 4 , 250 hours per year.

13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
There are no capital/start

- up or ongoing operation/maintenance costs associated with this
informatio n collection. Postage costs to return the survey questionnaire will be pre

- paid by the survey contractor.

14. Estimated Cost to the Federal Government
The costs of each individual survey distributed under this generic clearance will vary based on the number individuals surveyed and the size of any payments made to incentivize participation. We expect the cost of each survey to range from $ 250,000 to $ 6 00 ,000.

15. Program Changes or Adjustments

This is a new informa tion collection request; therefore, all the burden (see item 12) is considered a program change.

16. Plans for Tabulation, Statistical Analysis, and Publication

All survey responses gathered under this generic clearance will be tabulated and analyzed

on ce received. Generally, data collection will take at least two to three months. Once the data havePage 11 of 11 been received, we expect data tabulation and preliminary data analyses to last another four to five months normally. We expect the analysis will include pr oviding descriptive statistics for those variables of primary interest in a given survey, which may include statistics for which there are currently no reliable estimates . These and any other analysis would incorporate nonresponse

adjusted sample weights. We also expect to pro duce cross

- tabulations of these key measures by, for example, demographic characteristics

. The tabulations and analytical results will be published as technical articles that will be publically disseminated as working papers, publishe d in peer

- reviewed journals, or published as CFPB white papers. If any survey data are publicly released, the data release will generally follow the publication of documents presenting the results of their analysis.

17. Display of Expiration Date

The Bureau plans to display the expiration date for OMB approval of the information
collection on all instruments. Further, the OMB control number and expiration date will be displayed on the Federal government’s electronic PRA docket at www.reginfo.gov

.

18. Exceptions to the Certification Requirement
The Bureau certifies that this collection of information is consistent with the requirements of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an exemption to these certification requirements.