[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Rules and Regulations]
[Pages 51609-51611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19826]


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FEDERAL TRADE COMMISSION

16 CFR Part 680

RIN 3084-AB63


Affiliate Marketing Rule

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is 
issuing a final rule (``Final Rule'') to amend its Affiliate Marketing 
Rule to correspond to changes made to the Fair Credit Reporting Act 
(``FCRA'') by the Dodd-Frank Act.

DATES: This rule is effective October 18, 2021.

FOR FURTHER INFORMATION CONTACT: David Lincicum (202-326-2773), 
Division of Privacy and Identity Protection, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Affiliate Marketing Rule

    The Fair and Accurate Credit Transactions Act of 2003 (``FACT 
Act'') was signed into law on December 4, 2003. Public Law 108-159, 117 
Stat. 1952. Section 214 of the FACT Act added a new section 624 to the 
FCRA. This provision gives consumers the right to restrict a person 
from using certain information obtained from an affiliate to make 
solicitations to that consumer. Section 624 generally provides that if 
a person receives certain consumer eligibility information from an 
affiliate, the person may not use that information to make 
solicitations to the consumer about its products or services, unless 
the consumer is given notice and an opportunity (via a simple method) 
to opt out of such use of the information, and the consumer does not 
opt out. The statute also provides that Section 624 does not apply, for 
example, to a person using eligibility information: (1) To make 
solicitations to a consumer with whom the person has a pre-existing 
business relationship; (2) to perform services for another affiliate 
subject to certain conditions; (3) in response to a communication 
initiated by the consumer; or (4) to make a solicitation that has been 
authorized or requested by the consumer. Unlike the FCRA affiliate 
sharing opt-out (15 U.S.C. 1681a(d)(2)(A)(iii)) and the opt-out of 
sharing with non-affiliated third parties under the Gramm-Leach-Bliley 
Act (``GLBA''), 15 U.S.C. 6801 et seq., which apply indefinitely, 
Section 624 provides that a consumer's affiliate marketing opt-out 
election must be effective for a period of at least five years. Upon 
expiration of the opt-out period, the consumer must be given a renewal 
notice and an opportunity to renew the opt-out before information 
received from an affiliate may be used to make solicitations to the 
consumer.
    The Commission published regulations implementing Section 624, the 
Affiliate Marketing Rule, 16 CFR part 680, on October 30, 2007.\1\
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    \1\ 72 FR 61423 (October 30, 2007). Model forms for opt-out 
notices are published at 16 CFR part 698, appendix B.
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B. Dodd-Frank Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act'') was signed into law in 2010.\2\ The Dodd-Frank Act 
substantially changed the federal legal framework for financial 
services providers. Among the changes, the Dodd-Frank Act transferred 
to the Consumer Financial Protection Bureau (``CFPB'') the Commission's 
rulemaking authority under portions of the FCRA.\3\ Accordingly, in 
2012, the Commission rescinded several of its FCRA rules, which had 
been replaced by rules issued by the CFPB.\4\ The FTC retained 
rulemaking authority for other rules promulgated under the FCRA to the 
extent the rules apply to motor vehicle dealers described in section 
1029(a) of the Dodd-Frank Act \5\ predominantly engaged in the sale and 
servicing of motor vehicles, the leasing and servicing of motor 
vehicles, or both (``motor vehicle dealers'').\6\ The rules for which 
the FTC retains rulemaking authority include the Affiliate Marketing 
Rule, which now applies only to motor vehicle dealers.\7\ Entities that 
are not motor vehicle dealers are covered by the CFPB's Regulation V, 
subpart C, which is substantially similar to the Commission's rule.\8\
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    \2\ Public Law 111-203 (2010).
    \3\ 15 U.S.C. 1681 et seq. The Dodd-Frank Act does not transfer 
to the CFPB rulemaking authority for section 615(e) of the FCRA 
(``Red Flag Guidelines and Regulations Required'') and section 628 
of the FCRA (``Disposal of Records''). See 15 U.S.C. 1681s(e).
    \4\ 77 FR 22200 (April 13, 2012).
    \5\ 12 U.S.C. 5519.
    \6\ 77 FR 22200 (April 13, 2012).
    \7\ Id.
    \8\ 12 CFR 1022.20 through 1022.27. There are no substantive 
differences between the two rules, but the two rules are organized 
differently and, in some cases, use different examples. See, e.g., 
12 CFR 1022.20(b)(4)(iii).
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II. Regulatory Review of the Affiliate Marketing Rule

    On September 22, 2020, the Commission solicited comments on the 
Affiliate Marketing Rule as part of its periodic review of its rules 
and guides.\9\ The Commission sought information about the costs and 
benefits of the rule, and its regulatory and economic impact. In 
addition, the Commission proposed amending the rule to narrow its scope 
to motor vehicle dealers excluded from CFPB jurisdiction as described 
in the Dodd-Frank Act.\10\ The Commission received no comments.
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    \9\ 85 FR 59466 (September 22, 2020).
    \10\ 12 U.S.C. 5519.
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III. Overview of Final Rule

    The Commission promulgated the Affiliate Marketing Rule at a time 
when it had rulemaking authority for a broader group of entities. While 
the Dodd-Frank Act did not change the Commission's enforcement 
authority for the Affiliate Marketing Rule, it did narrow the 
Commission's rulemaking authority with respect to the rule. It now 
covers only motor vehicle dealers. The amendments in the Dodd-Frank Act 
necessitate a technical revision to the Affiliate Marketing Rule to 
ensure the regulation is consistent with the text of the amended FCRA. 
Accordingly, the Commission amends the Affiliate Marketing Rule to 
properly reflect the rule's scope.
    The amendment to Sec.  680.1(b) narrows the scope description of 
the Affiliate Marketing Rule to the entities excluded from CFPB 
jurisdiction as described in the Dodd-Frank Act.\11\ It does so by 
replacing the broad term ``person'' with the term ``motor vehicle 
dealer,'' as defined in amended Sec.  680.3.
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    \11\ Id.
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    The amendment to Sec.  680.3 adds a definition of ``motor vehicle 
dealer'' that defines motor vehicle dealers as those entities excluded 
from CFPB jurisdiction as described in the Dodd-Frank Act.\12\
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    \12\ Id.
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    The amendments do not change the substantive provisions of the rule 
or the examples in the rule, even where those provisions and examples 
involve entities covered by the CFPB's rule rather than the 
Commission's rule. The

[[Page 51610]]

primary reason for retaining these provisions and examples is that the 
rule addresses the relationship between covered motor vehicle dealers 
and their affiliates, which may not be motor vehicle dealers. The 
obligations and exceptions set forth by the rule are inextricably 
linked to a consumer's relationship and actions in relation to all 
affiliates, both motor vehicle dealers and non-motor vehicle dealers. 
In order for the rule to apply meaningfully, it must address both types 
of entities, even those not directly covered by the rule. This will not 
create any conflict with the CFPB's corresponding rule, as the 
Commission's Affiliate Marketing Rule and the CFPB's rule are 
substantially similar and impose the same obligations and exceptions on 
entities they cover.

IV. Paperwork Reduction Act

    The Affiliate Marketing Rule contains information collection 
requirements as defined by 5 CFR 1320.3(c), the definitional provision 
within the Office of Management and Budget (``OMB'') regulations that 
implement the Paperwork Reduction Act (``PRA''). 44 U.S.C. 3501 et seq. 
OMB has approved the rule's existing information collection 
requirements through February 28, 2023 (OMB Control No. 3084-0131). 
Under the existing clearance, the FTC has attributed to itself the 
estimated burden regarding all motor vehicle dealers and shares equally 
the remaining estimated PRA burden with the CFPB for other persons for 
which both agencies have enforcement authority.
    The Final Rule amends 16 CFR part 680. The amendments do not modify 
or add to information collection requirements previously approved by 
OMB. The amendments make no substantive changes to the rule, other than 
to clarify that the scope of the rule is limited to motor vehicle 
dealers. The rule's OMB clearance already reflects that scope. 
Therefore, the Commission does not believe the amendments substantially 
or materially modify any ``collections of information'' as defined by 
the PRA.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires an 
agency to either provide an Initial Regulatory Flexibility Analysis 
(``IRFA'') with a proposed rule, or certify that the proposed rule will 
not have a significant impact on a substantial number of small 
entities.\13\ The Commission published an Initial Regulatory 
Flexibility Analysis in order to inquire into the impact of the 
proposed rule on small entities.\14\ The Commission received no 
responsive comments.
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    \13\ 5 U.S.C. 603-605.
    \14\ 85 FR 59466, 59469 (Sept. 22, 2020).
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    The Commission does not believe these amendments have the threshold 
impact on small entities. The amendments effectuate changes to the 
Dodd-Frank Act and will not impose costs on small motor vehicle dealers 
because the amendments are for clarification purposes and will not 
result in any increased burden on any motor vehicle dealer. Thus, a 
small entity that complies with current law need not take any different 
or additional action under the Final Rule. Therefore, the Commission 
certifies that amending the Affiliate Marketing Rule will not have a 
significant economic impact on a substantial number of small 
businesses.
    Although the Commission certifies under the RFA that the Final Rule 
will not have a significant impact on a substantial number of small 
entities, and hereby provides notice of that certification to the Small 
Business Administration, the Commission nonetheless has determined 
publishing a final regulatory flexibility analysis (``FRFA'') is 
appropriate to ensure the impact of the rule is fully addressed. 
Therefore, the Commission has prepared the following analysis:

A. Need for and Objectives of the Final Rule

    To address the Dodd-Frank Act's changes to the Commission's 
rulemaking authority, the amendments clarify that the rule applies only 
to motor vehicle dealers.

B. Significant Issues Raised in Public Comments in Response to the IRFA

    The Commission did not receive any comments that addressed the 
burden on small entities. In addition, the Commission did not receive 
any comments filed by the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA'').

C. Estimate of Number of Small Entities to Which the Final Rule Will 
Apply

    The Commission anticipates many covered motor vehicle dealers may 
qualify as small businesses according to the applicable SBA size 
standards. As explained in the IRFA, however, determining a precise 
estimate of the number of small entities is not readily feasible. No 
commenters addressed this issue. Nonetheless, as discussed above, these 
amendments do not add any additional burdens on any covered small 
businesses.

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements, Including Classes of Covered Small Entities and 
Professional Skills Needed To Comply

    The amendments impose no new reporting, recordkeeping, or other 
compliance requirements.

E. Description of Steps Taken To Minimize Significant Economic Impact, 
if any, on Small Entities, Including Alternatives

    The Commission did not propose any specific small entity exemption 
or other significant alternatives because the amendments will not 
increase reporting requirements and will not impose any new 
requirements or compliance costs.

VI. Other Matters

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

List of Subjects in 16 CFR Part 680

    Consumer protection, Credit, Trade practices.

    For the reasons stated above, the Federal Trade Commission amends 
part 680 of title 16 of the Code of Federal Regulations as follows:

PART 680--AFFILIATE MARKETING

0
1. Revise the authority citation for part 680 to read as follows:

    Authority: 12 U.S.C. 5519(d); 15 U.S.C. 1681s-3; 15 U.S.C. 
1681s-3 note.

0
2. In Sec.  680.1, revise paragraph (b) to read as follows:


Sec.  680.1  Purpose and scope.

* * * * *
    (b) Scope. This part applies to any motor vehicle dealer as defined 
in Sec.  680.3 that uses information from its affiliates for the 
purpose of marketing solicitations, or provides information to its 
affiliates for that purpose.

0
3. In Sec.  680.3, redesignate paragraphs (i) through (l) as paragraphs 
(j) through (m) and add a new paragraph (i) to read as follows:


Sec.  680.3   Definitions.

* * * * *
    (i) Motor vehicle dealer. The term ``motor vehicle dealer'' means 
any person excluded from Consumer Financial Protection Bureau 
jurisdiction as described in 12 U.S.C. 5519.
* * * * *


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    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-19826 Filed 9-15-21; 8:45 am]
BILLING CODE 6750-01-P