[Federal Register Volume 83, Number 166 (Monday, August 27, 2018)]
[Notices]
[Pages 43683-43685]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18448]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
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). The FTC seeks public 
comments on the agency's shared enforcement with the Consumer Financial 
Protection Bureau (``CFPB'') of the information collection requirements 
in subpart N of the CFPB's Regulation V (``Rule''). That clearance 
expires on November 30, 2018.

DATES: Comments must be received on or before October 26, 2018.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comments part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Paperwork Reduction 
Act: FTC File No. P072108'' on your comment, and file your comment 
online at https://ftcpublic.commentworks.com/ftc/regulationVsubpartNpra 
by following the instructions on the web-based form. If you prefer to 
file your comment on paper, mail or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), Washington, DC 
20580, or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Requests for copies of the collection 
of information and supporting documentation should be addressed to Ryan 
Mehm, Attorney, Bureau of Consumer Protection, (202) 326-2918, Federal 
Trade Commission, 600 Pennsylvania Ave. NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

Proposed Information Collection Activities

    Under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520, 
federal agencies must get OMB approval for each collection of 
information they conduct, sponsor, or require. ``Collection of 
information'' means agency requests or requirements to 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 PRA clearance for FTC's portion 
of the estimated burden for the information collection requirements 
associated with the CFPB's subpart N of Regulation V, 12 CFR 1022.130-
1022.138 (OMB Control Number 3084-0128).
    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. All comments must be received on or before October 26, 
2018.

I. Overview of the Rule

    The FTC shares enforcement authority with the CFPB for subpart N of 
Regulation V.\1\ Subpart N requires nationwide consumer reporting 
agencies and nationwide consumer specialty reporting agencies to 
provide to consumers, upon request, one free file disclosure within any 
12-month period. Generally, it requires the nationwide consumer 
reporting agencies, as defined in Section 603(p) of the Fair Credit 
Reporting Act (``FCRA''), 15 U.S.C. 1681a(p), to create and operate a 
centralized source that provides consumers with the ability to request 
their free annual file disclosures from each of the nationwide consumer 
reporting agencies through a centralized internet website, toll-free 
telephone number, and postal address. Subpart N also requires the 
nationwide consumer reporting agencies to establish a standardized form 
for internet and mail requests for annual file disclosures, and 
provides a model standardized form that may be used to comply with that 
requirement. It additionally requires nationwide specialty consumer 
reporting agencies, as defined in Section 603(w) of the FCRA, 15 U.S.C. 
1681a(w), to establish a streamlined process for consumers to request 
annual file disclosures. This streamlined process must include a toll-
free telephone number for consumers to make such requests.
---------------------------------------------------------------------------

    \1\ Subpart N sets forth the former FTC's Free Annual File 
Disclosures Rule that appeared under 16 CFR parts 610 and 698. 
Rulemaking authority for this and several other FCRA rules was 
transferred to the CFBP under Title X of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act, Public Law 111-203, 124 Stat. 
1376 (2010). Title X comprises sections 1001-100H (collectively, the 
``Consumer Financial Protection Act of 2010'').
---------------------------------------------------------------------------

II. Burden Statement

    Because the FTC shares enforcement authority with the CFPB for 
subpart N, the two agencies split between them the related estimate of 
PRA burden for firms under their co-enforcement jurisdiction. Estimated 
PRA burden, excluding the halving (to be shown at the conclusion of 
this analysis), are as follows:

A. Requests per Year From Consumers for Free Annual File Disclosures

    The Consumer Data Industry Association estimated that in 2011, the 
nationwide consumer reporting agencies provided approximately 30 
million free annual file disclosures through the centralized internet 
website, toll-free telephone number, and postal address required to be 
established by the FACT Act and subpart N.\2\ When it last sought 
clearance renewal for the Rule, the FTC had been unable to obtain, 
through public comment or otherwise, updated information on request 
volume. As a proxy, it then assumed a volume of 35 million requests per 
year. We expect that the number of requests for free annual credit 
reports will rise over the

[[Page 43684]]

next three years because of increases in the population and consumer 
awareness that they are entitled to a free annual report. As a proxy, 
we are now estimating 38 million requests per year as a representative 
average year to estimate PRA burden for purposes of the instant 
analysis.
---------------------------------------------------------------------------

    \2\ See Consumer Financial Protection Bureau Report to Congress, 
The Impact of Differences Between Consumer- and Creditor-Purchased 
Credit Scores, at 9 (July 19, 2011), available at https://files.consumerfinance.gov/f/2011/07/Report_20110719_CreditScores.pdf.
---------------------------------------------------------------------------

    The Commission, however, seeks more recent estimates of the number 
of requests consumers are making for free annual credit reports. In 
addition to data on the number of requests, data on how the number of 
requests has changed over time, and how these requests are being 
received--by internet, phone, or by mail--would be most helpful.

B. Annual File Disclosures Provided Through the Internet

    Both nationwide and nationwide specialty consumer reporting 
agencies will likely handle the overwhelming majority of consumer 
requests through internet websites. The annual file disclosure requests 
processed through the internet will not impose any hours burden per 
request on the nationwide and nationwide specialty consumer reporting 
agencies. However, consumer reporting agencies periodically will be 
required to adjust the internet capacity needed to handle the changing 
request volume. Consumer reporting agencies likely will make such 
adjustments by negotiating or renegotiating outsourcing service 
contracts annually or as conditions change. Trained personnel will need 
to spend time negotiating and renegotiating such contracts. Commission 
staff estimates that negotiating such contracts will require a 
cumulative total of 8,320 hours and $598,957 in labor costs.\3\ Such 
activity is treated as an annual burden of maintaining and adjusting 
the changing internet capacity requirements.
---------------------------------------------------------------------------

    \3\ Based on the time necessary for similar activity in the 
federal government (including at the FTC), staff estimates that such 
contracting and administration will require approximately 4 full-
time equivalent employees (``FTE'') for the web service contracts. 
Thus, staff estimates that administering the contract will require 4 
FTE, which is 8,320 hours per year (4 FTE x 2,080 hours/year). The 
cost is based on the reported May 2017 Bureau of Labor Statistics 
(BLS) rate ($71.99) for computer and information systems managers. 
See Occupational Employment and Wages--May 2017, Table 1, available 
at https://www.bls.gov/news.release/ocwage.t01.htm. Thus, the 
estimated setup and maintenance cost for an internet system is 
$598,957 per year (8,320 hours x $71.99/hour).
---------------------------------------------------------------------------

C. Annual File Disclosures Requested Over the Telephone

    Most of the telephone requests for annual file disclosures will 
also be handled in an automated fashion, without any additional 
personnel needed to process the requests. As with the internet, 
consumer reporting agencies will require additional time and investment 
to increase and administer the automated telephone capacity for the 
expected increase in request volume. The nationwide and nationwide 
specialty consumer reporting agencies will likely make such adjustments 
by negotiating or renegotiating outsourcing service contracts annually 
or as conditions change. Staff estimates that this will require a total 
of 6,240 hours at a cost of $449,218 in labor costs.\4\ This activity 
also is treated as an annual recurring burden necessary to obtain, 
maintain, and adjust automated call center capacity.
---------------------------------------------------------------------------

    \4\ Staff estimates that recurring contracting for automated 
telephone capacity will require approximately 3 FTE, a total of 
6,240 hours (3 x 2,080 hours). Applying an hourly wage rate of 
$71.99 (see supra note 3), estimated setup and maintenance cost is 
$449,218 (6,240 x $71.99) per year.
---------------------------------------------------------------------------

D. Annual File Disclosures Requiring Processing by Mail

    Based on their knowledge of the industry, staff believes that no 
more than 1% of consumers (1% x 38 million, or 380,000) will request an 
annual file disclosure through U.S. postal service mail. Staff 
estimates that clerical personnel will require 10 minutes per request 
to handle these requests, thereby totaling 63,333 hours of time. 
[(380,000 x 10 minutes)/60 minutes per hour = 63,333 hours]
    In addition, whenever the requesting consumer cannot be identified 
using an automated method (a website or automated telephone service), 
it will be necessary to redirect that consumer to send identifying 
material along with the request by mail. Staff estimates that this will 
occur in about 5% of the new requests (or 1,881,000) \5\ that were 
originally placed over the internet or telephone. Staff estimates that 
clerical personnel will require approximately 10 minutes per request to 
input and process those redirected requests for a cumulative total of 
313,500 clerical hours. [(1,881,000 x 10 minutes)/60 minutes per hour = 
313,500 hours]
---------------------------------------------------------------------------

    \5\ This figure reflects five percent of all requests, net of 
the estimated one percent of all requests that might initially be 
made by mail. That is, 0.05 x (38,000,000 - 380,000) = 1,881,000.
---------------------------------------------------------------------------

E. Instructions to Consumers

    The Rule also requires that certain instructions be provided to 
consumers. See Rule sections 1022.136(b)(2)(iv)(A-B), 
1022.137(a)(2)(iii)(A-B). Minimal associated time or cost is involved, 
however. Internet instructions to consumers are embedded in the 
centralized source website and do not require additional time or cost 
for the nationwide consumer reporting agencies. Similarly, for 
telephone requests, the automated phone systems provide the requisite 
instructions when consumers select certain options. Some consumers who 
request their credit reports by mail might additionally request printed 
instructions from the nationwide and nationwide specialty consumer 
reporting agencies. Staff estimates that there will be a total of 
2,261,000 requests each year for free annual file disclosures by 
mail.\6\ Based on their knowledge of the industry, staff estimates 
that, of the predicted 2,261,000 mail requests, 10% (or 226,100) will 
request instructions by mail. If printed instructions are sent to each 
of these consumers by mail, requiring 10 minutes of clerical time per 
consumer, this will total 37,683 hours. [(226,100 instructions x 10 
minutes)/60 minutes per hour].
---------------------------------------------------------------------------

    \6\ This figure includes both the estimated 1% of 38 million 
requests that will be made by mail each year (380,000), and the 
estimated 1,881,000 requests initially made over the internet or 
telephone that will be redirected to the mail process (see supra 
note 5).
---------------------------------------------------------------------------

F. Labor Costs

    Labor costs are derived by applying hourly cost figures to the 
burden hours described above. Staff anticipates that processing of 
requests for annual file disclosures and instructions will be performed 
by clerical personnel, and estimates that the processing will require 
414,516 hours at a cost of $7,444,707. [(63,333 hours for handling 
initial mail request + 313,500 hours for handling requests redirected 
to mail + 37,683 hours for handling instructions mailed to consumers) x 
$17.96 per hour.\7\]
---------------------------------------------------------------------------

    \7\ See Occupational Employment and Wages--May 2017, Table 1, 
available at https://www.bls.gov/news.release/ocwage.t01.htm (Office 
and administrative support workers, general).
---------------------------------------------------------------------------

    As elaborated on above, staff estimates that a total of 14,560 
labor hours will be needed to negotiate or renegotiate outsourced 
service contracts annually (or as conditions otherwise change) to 
increase internet (8,320 hours) and telephone (6,240 hours) capacity 
requirements for internet web services and the automated telephone call 
center. This will result in approximately $1,048,174 per year in labor 
costs. [14,560 hours x $71.99 per hour \8\]
---------------------------------------------------------------------------

    \8\ See supra notes 3 and 4.
---------------------------------------------------------------------------

    Thus, estimated cumulative labor will costs are $8,492,881.

G. Capital/Non-Labor Costs

    As in the previous PRA clearance analysis, FTC staff believes it is 
likely

[[Page 43685]]

that consumer reporting agencies will use third-party contractors 
(instead of their own employees) to increase the capacity of their 
systems. Because of the way these contracts are typically established, 
these costs will likely be incurred on a continuing basis, and will be 
calculated based on the number of requests handled by the systems. 
Staff estimates that the total annual amount to be paid for services 
delivered under these contracts is $13,919,400.\9\
---------------------------------------------------------------------------

    \9\ This consists of an estimated $9,302,400 for automated 
telephone cost ($1.36 per request x 6.84 million requests) and an 
estimated $4,617,000 ($0.15 per request x 30.78 million requests) 
for internet web service cost. Per unit cost estimates are based on 
staff's knowledge of the industry.
---------------------------------------------------------------------------

H. Net Burden for FTC, After 50:50 Split

    After halving the updated estimates to split the PRA burden with 
the CFPB regarding the Rule, the FTC's burden totals are 214,538 hours, 
$4,246,441 in associated labor costs, and $6,959,700 in non-labor/
capital costs.
Request for Comments
    You can file a comment online or on paper. For the FTC to consider 
your comment, we must receive it on or before October 26, 2018. Write 
``Paperwork Reduction Act: FTC File No. P072108'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission website, at https://www.ftc.gov/policy/public-comments. Postal mail addressed to the Commission is subject to delay 
due to heightened security screening. As a result, we encourage you to 
submit your comments online. To make sure that the Commission considers 
your online comment, you must file it at https://ftcpublic.commentworks.com/ftc/regulationVsubpartNpra by following the 
instructions on the web based form. If this Notice appears at https://www.regulations.gov, you also may file a comment through that website.
    If you file your comment on paper, write ``Paperwork Reduction Act: 
FTC File No. P072108'' on your comment and on the envelope, and mail it 
to the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC 
20024. If possible, submit your paper comment to the Commission by 
courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
website at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . . is privileged or confidential''--as provided 
by Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 
4.10(a)(2), 16 CFR 4.10(a)(2)--including in particular competitively 
sensitive information such as costs, sales statistics, inventories, 
formulas, patterns, devices, manufacturing processes, or customer 
names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the Commission website at https://www.ftc.gov to read this 
Notice. The FTC Act and other laws that the Commission administers 
permit the collection of public comments to consider and use in this 
proceeding as appropriate. The Commission will consider all timely and 
responsive public comments that it receives on or before October 26, 
2018. You can find more information, including routine uses permitted 
by the Privacy Act, in the Commission's privacy policy, at https://www.ftc.gov/site-information/privacy-policy.

Heather Hippsley,
Acting Principal Deputy General Counsel.
[FR Doc. 2018-18448 Filed 8-24-18; 8:45 am]
 BILLING CODE 6750-01-P