[Federal Register Volume 70, Number 187 (Wednesday, September 28, 2005)]
[Notices]
[Pages 56696-56703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19319]


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FEDERAL TRADE COMMISSION


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

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (``OMB'') for 
review, as required by the Paperwork Reduction Act (``PRA'') (44 U.S.C. 
3501-3520). The FTC is seeking public comments on its proposal to 
extend through January 31, 2009 the current PRA clearances for 
information collection requirements contained in four consumer 
financial regulations enforced by the Commission. Those clearances 
expire on January 31, 2006.

DATES: Comments must be received on or before November 28, 2005.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Regs BEMZ: FTC File No. P054803'' to 
facilitate the organization of comments. A comment filed in paper form 
should include this reference both in the text and on the envelope and 
should be mailed or delivered, with two complete copies, to the 
following address: Federal Trade Commission/Office of the Secretary, 
Room H-135 (Annex J), 600 Pennsylvania Avenue, NW., Washington, DC 
20580. Because paper mail in the Washington area and at the Commission 
is subject to delay, please consider submitting your comments in 
electronic form, (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to e-mail messages directed to the 
following e-mail box: <a href="/cdn-cgi/l/email-protection#314150415443465e435a525e5c5c545f45715745521f565e47"><span class="__cf_email__" data-cfemail="b8c8d9c8ddcacfd7cad3dbd7d5d5ddd6ccf8deccdb96dfd7ce">[email protected]</span></a>. However, if the comment 
contains any material for which confidential treatment is requested, it 
must be filed in paper form, and the first page of the document must be 
clearly labeled ``Confidential.'' \1\
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments will be 
considered by the Commission and will be available to the public on the 
FTC website, to the extent practicable, at www.ftc.gov. As a matter of 
discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy at http://www.ftc.gov/ftc/privacy.htm.

[[Page 56697]]


FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements should be addressed to 
Carole Reynolds, Attorney, Division of Financial Practices, Bureau of 
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Ave., 
NW., Washington, DC 20580, (202) 326-3230.

SUPPLEMENTARY INFORMATION: Under the PRA, federal agencies must obtain 
approval from OMB for each collection of information they conduct or 
sponsor. ``Collection of information'' means agency requests or 
requirements that members of the public submit reports, keep records, 
or provide information to a third party. 44 U.S.C. 3502(3), 5 CFR 
1320.3(c). As required by the PRA, the FTC is providing this 
opportunity for public comment before requesting that OMB extend the 
existing paperwork clearance for the regulations noted herein. 44 U.S.C 
3506(c)(2)(A).
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
    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'') (OMB Control 
Number: 3084-0087);
    (2) Regulations promulgated under The Electronic Fund Transfer Act, 
15 U.S.C. 1693 et seq. (``EFTA'') (``Regulation E'') (OMB Control 
Number: 3084-0085);
    (3) Regulations promulgated under The Consumer Leasing Act, 15 
U.S.C. 1667 et seq., (``CLA'') (``Regulation M'') (OMB Control Number: 
3084-0086);
    (4) Regulations promulgated under The Truth-In-Lending Act, 15 
U.S.C. 1601 et seq. (``TILA'') (``Regulation Z'') (OMB Control Number: 
3084-0088).
    Each of these four rules impose certain recordkeeping and 
disclosure requirements associated with providing credit or with other 
financial transactions. As detailed below, the FTC staff has calculated 
the PRA burden for each rule based on the compliance costs of entities 
subject to enforcement by the FTC. All of these rules require covered 
entities to keep certain records. Staff believes that these entities 
would likely retain these records in the normal course of business even 
absent the recordkeeping requirement in the rules.\2\ 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.
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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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    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\
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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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    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.\4\ The burden 
estimates represent staff's best assessment, based on its knowledge and 
expertise relating to the financial services industry. To derive these 
estimates, staff considered the wide variations in covered entities': 
(1) Size and location; (2) credit or lease products offered, extended, 
or advertised, and their particular terms; (3) types of EFTs used; (4) 
types and occurrences of adverse actions; (5) types of appraisal 
reports utilized; and (6) computer systems and electronic features of 
compliance operations.
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    \4\ The Commission generally does not have jurisdiction over 
banks under the applicable regulations.
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    The required disclosures do not impose PRA burden on some covered 
entities because the entities make those disclosures in the ordinary 
course of business. In addition, as noted above, some entities use 
computer-based and/or electronic means of providing the required 
disclosures, while others rely on methods requiring more manual effort.
    The cost estimates detailed below relate solely to labor costs and 
include the time necessary to train employees to be in compliance with 
the regulations. 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.

1. Regulation B

    The ECOA prohibits discrimination in the extension of credit. 
Regulation B, 12 CFR 202, promulgated by the Board of Governors of the 
Federal Reserve System (``FRB''), establishes both recordkeeping and 
disclosure requirements to assist customers 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

[[Page 56698]]

agency (such as federally chartered or insured depository 
institutions).
    Estimated annual hours burden: 3,189,000 hours, rounded to the 
nearest thousand (1,186,833 recordkeeping hours +2,001,771 disclosure 
hours).
    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 \5\ for approximately eleven million credit 
applications (based on industry data regarding the approximate number 
of mortgage purchase and refinance originations), for a total of 
183,333 hours. 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 1,186,833 hours.
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    \5\ Regulation B contains model forms that creditors may use to 
gather and retain the required information.
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    Disclosure: Regulation B requires that creditors (i.e., entities 
that regularly participate in a credit decision, including setting the 
terms of the credit) provide notices whenever they take adverse action. 
It requires entities that extend various types of mortgage credit to 
provide a copy of the appraisal report to applicants or to notify them 
of their right to a copy of the report (and thereafter provide a copy 
of the report, upon the applicant's request). It also requires that for 
accounts which spouses may use or for which they are contractually 
liable, creditors who report credit history must do so in a manner 
reflecting both spouses' participation. Further, it requires creditors 
that collect applicant characteristics for purposes of conducting a 
self-test to disclose to those applicants that providing the 
information is optional, that the creditor will not take the 
information into account in any aspect of the credit transactions, and, 
if applicable, that the information will be noted by visual observation 
or surname if the applicant chooses not to provide it.\6\
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    \6\ The disclosure may be provided orally or in writing. 
Regulation B provides a model form to assist creditors in providing 
the disclosure. The FRB added this disclosure requirement in 2003. 
See 52 FR 13144, 13163-64 (Mar. 18, 2003).
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    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.

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                                                       Setup/monitoring \1\                                   Transaction-related \2\
                                         ---------------------------------------------------------------------------------------------------------------
                                                                                                          Average burden
               Disclosure                                 Average burden   Total setup/      Number of          per            Total       Total burden
                                            Respondents   per respondent    monitoring     transactions     transaction     transaction       (hours)
                                                              (hours)     burden (hours)                     (minutes)    burden (hours)
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Credit history reporting................         250,000             .25          62,500     125,000,000             .25         520,833         583,333
Adverse action notices..................       1,000,000              .5         500,000     200,000,000             .25         833,333       1,333,333
Appraisal notices.......................          25,000              .5          12,500       7,000,000             .25          29,167          41,667
Appraisal reports.......................          25,000              .5          12,500       7,000,000             .25          29,167          41,667
Self-test disclosures...................           2,500              .5           1,250         125,000             .25             521           1,771
                                         -----------------
    Total...............................  ..............  ..............  ..............  ..............  ..............  ..............      2,001,771
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\1\ With respect to appraisal notices and appraisal reports, the above figures reflect an increase in applicable mortgage entities. The figures assume
  that approximately half of those entities (.5 x 50,000, or 25,000 businesses) would not otherwise provide this information and thus would be affected.
  The figures also assume that all applicable entities would provide notices first and thereafter provide the reports upon request.
\2\ The above figures reflect an increase in mortgage transactions. They assume that half of applicable mortgage transactions (.5 x 14,000,000, or
  7,000,000) would not otherwise provide the appraisal notices and reports and thus would be affected.

    Estimated annual cost burden: $62,863,000 rounded to the nearest 
thousand ($18,623,493 recordkeeping cost + $44,239,138 disclosure 
cost).
    Staff calculated labor costs by applying appropriate hourly cost 
figures to the burden hours described above. The hourly rates used 
below ($32 for managerial or professional time, $21 for skilled 
technical time, and $14 for clerical time) are averages, based on 
current Bureau of Labor Statistics cost figures.
    Recordkeeping: Staff estimates that the general recordkeeping 
responsibility of 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 one minute of skilled technical time. Keeping records of 
the self-test responsibility and of any corrective actions requires an 
estimated one hour and four hours, respectively, of skilled technical 
time. As shown below, the total recordkeeping cost is $18,623,493.
    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 $44,239,138.

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                                                    Managerial                   Skilled technical                   Clerical
                                         ------------------------------------------------------------------------------------------------   Total  cost
              Required task                                 Cost  ($32/                                                                         ($)
                                           Time  (hours)       hr.)        Time  (hours)  Cost ($21/hr.)   Time  (hours)  Cost ($14/hr.)
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General recordkeeping...................               0              $0         100,000      $2,100,000         900,000     $12,600,000     $14,700,000
Other recordkeeping.....................               0               0         183,333       3,849,993               0               0       3,849,993
Recordkeeping of test...................               0               0           2,500          52,500               0               0          52,500

[[Page 56699]]

 
Recordkeeping of corrective action......               0               0           1,000          21,000               0               0          21,000
                                         -----------------
    Total recordkeeping.................  ..............  ..............  ..............  ..............  ..............  ..............      18,623,493
Credit history reporting................          58,333      $1,866,656         525,000      11,025,000               0               0      12,891,656
Adverse action notices..................         133,333       4,266,656       1,200,000      25,200,000               0               0      29,466,656
Appraisal notices.......................           4,167         133,344          37,500         787,500               0               0         920,844
Appraisal reports.......................           4,167         133,344          37,500         787,500               0               0         920,844
Self-test disclosure....................             177           5,664           1,594         133,474               0               0          39,138
                                         -----------------
    Total disclosure....................  ..............  ..............  ..............  ..............  ..............  ..............      44,239,138
                                         =================
        Total recordkeeping and           ..............  ..............  ..............  ..............  ..............  ..............      62,862,631
         disclosure.....................
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2. Regulation E

    The EFTA requires accurate disclosure of the costs, terms, and 
rights relating to EFT services to consumers. Regulation E, 12 CFR 205, 
promulgated by the FRB, establishes both recordkeeping and disclosure 
requirements applicable to entities providing EFT services to 
consumers. The FTC enforces the EFTA as to all entities providing EFT 
services except those that are subject to the regulatory authority of 
another federal agency (such as federally chartered or insured 
depository institutions).
    Estimated annual hours burden: 3,580,000 hours (500,000 
recordkeeping hours + approximately 3,080,000 disclosure hours).
    Recordkeeping: Staff estimates that Regulation E's recordkeeping 
requirements affect 500,000 firms offering EFT services to consumers 
and subject to the Commission's jurisdiction, at an average annual 
burden of one hour per firm, for a total of 500,000 hours.
    Disclosure: Regulation E applies to financial institutions 
(including certain retailers and electronic commerce entities), service 
providers, various federal and state agencies offering EFTs, and 
others. Below is staff's best estimate of burden applicable to this 
highly broad spectrum of covered entities.

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                                                         Setup/monitoring                               Transaction-related
                                         ------------------------------------------------------------------------------------------------
                                                                                                          Average burden                   Total burden
               Disclosure                                 Average burden   Total setup/      Number of          per            Total          (hours)
                                            Respondents   per respondent    monitoring     transactions     transaction     transaction
                                                              (hours)     burden (hours)                     (minutes)    burden (hours)
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Initial terms...........................         100,000             .5           50,000       1,000,000             .02             333          50,333
Change in terms.........................          25,000             .5           12,500      33,000,000             .02          11,000          23,500
Periodic statements.....................         100,000             .5           50,000   1,200,000,000             .02         400,000         450,000
Error resolution........................         100,000             .5           50,000       1,000,000            5             83,333         133,333
Transaction receipts....................         100,000             .5           50,000   5,000,000,000             .02       1,666,667       1,716,667
Preauthorized transfers.................         500,000             .5          250,000       1,000,000             .25           4,167         254,167
Service provider notices................         100,000             .25          25,000       1,000,000             .25           4,167          29,167
Govt. benefit notices...................          10,000             .5            5,000     100,000,000             .25         416,667         421,667
ATM notices.............................             500             .25             125         250,000             .25           1,041           1,166
                                         -----------------
    Total...............................  ..............  ..............  ..............  ..............  ..............  ..............       3,080,000
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    Estimated annual cost burden: $75,418,000, rounded to the nearest 
thousand ($7,350,00 recordkeeping cost + $68,068,000 disclosure cost).
    Staff calculated labor costs by applying appropriate hourly cost 
figures to the burden hours described above. The hourly rates used 
below ($32 for managerial or professional time, $21 for skilled 
technical time, and $14 for clerical time) are averages, based on 
current Bureau of Labor Statistics cost figures.
    Recordkeeping: For the 500,000 recordkeeping hours, staff estimates 
that 10 percent of the burden hours require skilled technical time and 
90 percent require clerical time. As shown below, the total 
recordkeeping cost is $7,350,000.
    Disclosure: For each notice or information item listed, staff 
estimates that 10 percent of the burden hours require managerial time 
and 90 percent require skilled technical time. As shown below, the 
total disclosure cost is $68,068,000.

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                                                    Managerial                   Skilled technical                   Clerical
                                         ------------------------------------------------------------------------------------------------   Total cost
              Required task                                                                 Cost  ($21/                                         ($)
                                           Time  (hours)  Cost ($32/hr.)   Time  (hours)       hr.)        Time (hours)    Cost (14/hr)
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Recordkeeping...........................               0              $0          50,000      $1,050,000         450,000      $6,300,000      $7,350,000

[[Page 56700]]

 
Disclosure:
    Initial terms.......................           5,033         161,056          45,300         951,300               0               0       1,112,356
    Change in terms.....................           2,350          75,200          21,150         444,150               0               0         519,350
    Periodic statements.................          45,000       1,440,000         405,000       8,505,000               0               0       9,945,000
    Error resolution....................          13,333         426,656         120,000       2,520,000               0               0       2,946,656
    Transaction receipts................         171,667       5,493,344       1,545,000      32,445,000               0               0      37,938,344
    Preauthorized transfers.............          25,417         813,344         228,750       4,803,750               0               0       5,617,094
    Service provider notices............           2,917          93,344          26,250         551,250               0               0         644,594
    Govt. benefit notices...............          42,167       1,349,344         379,500       7,969,500               0               0       9,318,844
    ATM notices.........................             116           3,712           1,050          22,050               0               0          25,762
                                         -----------------
        Total disclosure................  ..............  ..............  ..............  ..............  ..............  ..............      68,068,000
                                         =================
            Total recordkeeping and       ..............  ..............  ..............  ..............  ..............  ..............      75,418,000
             disclosures................
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3. Regulation M

    The CLA requires accurate disclosure of the costs and terms of 
leases to consumers. Regulation M, 12 CFR 213, promulgated by the FRB, 
establishes disclosure requirements that assist consumers in comparison 
shopping and in understanding the terms of leases and recordkeeping 
requirements that assist enforcement of the CLA. The FTC enforces the 
CLA as to all lessors and advertisers except those that are subject to 
the regulatory authority of another federal agency (such as federally 
chartered or insured depository institutions).
    Estimated annual hours burden: 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.

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                                                         Setup/monitoring                               Transaction-related
                                         ------------------------------------------------------------------------------------------------
                                                                                                          Average burden                   Total burden
               Disclosure                                 Average burden   Total setup/      Number of          per            Total          (hours)
                                            Respondents   per respondent    monitoring     transactions     transaction     transaction
                                                              (hours)     burden (hours)                     (minutes)    burden (hours)
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Auto leases \1\.........................          50,000             .75          37,500       2,500,000             .50          20,833          58,333
Other leases \2\........................         100,000             .50          50,000       1,000,000             .25           4,167          54,167
Advertising.............................          25,000             .50          12,500       1,000,000             .25           4,167          16,667
                                         -----------------
    Total...............................  ..............  ..............  ..............  ..............  ..............  ..............        129,167
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\1\ This category focuses on consumer vehicle leases. Vehicle leases are subject to more lease disclosure requirements (pertaining to computation of
  payment obligations) than other lease transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
  213.2(e)(1).
\2\ This category focuses on all types of consumer leases other than vehicle leases. It includes leases for computers, other electronics, small
  appliances, furniture, and other transactions. (Only consumers leases for more than four months are covered.) See 15 U.S.C. 1667(1); 12 CFR
  213.2(e)(1).

    Estimated annual cost burden: $5,060,000, rounded to the nearest 
thousand ($2,205,5000 recordkeeping cost + $2,854,594 disclosure cost).
    Staff calculated labor costs by applying appropriate hourly cost 
figures to the burden hours described above. The hourly rates used 
below ($32 for managerial or professional time, $21 for skilled 
technical time, and $14 for clerical time) are averages, based on 
current Bureau of Labor Statistics cost figures.
    Recordkeeping: For the 150,000 recordkeeping hours, staff estimates 
that 10 percent of the burden hours require skilled technical time and 
90 percent require clerical time. As shown below, the total 
recordkeeping cost is $2,205,000.

[[Page 56701]]

    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 $2,854,594.

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                                                    Managerial                   Skilled technical                   Clerical
              Required task              ------------------------------------------------------------------------------------------------ Total cost ($)
                                           Time (hours)   Cost ($32/hr.)   Time (hours)   Cost ($21/hr.)   Time (hours)   Cost ($14/hr.)
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Recordkeeping...........................               0              $0          15,000        $315,000         135,000      $1,890,000      $2,205,000
Disclosures:
    Auto leases.........................           5,833         186,656          52,500       1,102,500               0               0       1,289,156
Other leases............................           5,417         173,344          48,750       1,023,750               0               0       1,197,094
Advertising.............................           1,667          53,344          15,000         315,000               0               0         368,344
                                         -----------------
    Total disclosures...................  ..............  ..............  ..............  ..............  ..............  ..............       2,854,594
    Total recordkeeping and disclosures.  ..............  ..............  ..............  ..............  ..............  ..............       5,059,594
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4. Regulation Z

    The TILA was enacted to foster comparison credit shopping and 
informed credit decision making by requiring accurate disclosure of the 
costs and terms of credit to consumers. Regulation Z, 12 CFR 226, 
promulgated by the FRB, establishes both recordkeeping and disclosure 
requirements to assist consumers and the enforcement of the TILA. The 
FTC enforces the TILA as to all creditors and advertisers except those 
that are subject to the regulatory authority of another federal agency 
(such as federally chartered or insured depository institutions).
    Estimated annual hours burden: 17,439,000 hours, rounded to the 
nearest thousand (1,000,000 recordkeeping hours + 16,439,165 disclosure 
hours).
    Recordkeeping: FTC staff estimates that Regulation Z's 
recordkeeping requirements affect approximately 1,000,000 firms 
offering credit and subject to the Commission's jurisdiction, at an 
average annual burden of one hour per firm, for a total of 1,000,000 
hours.
    Disclosure: Regulation Z disclosure requirements pertain to open-
end and closed-end credit. The Regulation applies to retailers (such as 
department stores, appliance stores, discount retailers, medical-dental 
service providers, home improvement sellers, and electronic commerce 
retail operators); mortgage companies; finance companies; credit 
advertisers; auto dealerships; student loan companies; home fuel or 
power services (for furnaces, stoves, microwaves, and other heating, 
cooling or residential power equipment); credit advertisers; and 
others. Below is staff's best estimate of burden applicable to this 
highly broad spectrum of covered entities.

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                                                         Setup/monitoring                               Transaction-related
                                         ------------------------------------------------------------------------------------------------
                                                                                                          Average burden                   Total burden
             Disclosure \1\                               Average burden   Total setup/      Number of          per            Total           hours
                                            Respondents   per respondent    monitoring     transactions     transaction     transaction
                                                              (hours)     burden (hours)                     (minutes)    burden (hours)
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Open-end credit:
    Initial terms.......................         100,000             .5           50,000      50,000,000           .25           208,333         258,333
    Rescission notices..................          10,000             .5            5,000         500,000           .25             2,083           7,083
    Change in terms.....................          25,000             .5           12,500     136,000,000           .125          283,333         295,833
    Periodic statements.................         100,000             .5           50,000   4,800,000,000           .0625       5,000,000       5,050,000
    Error resolution....................         100,000             .5           50,000      10,000,000          5              833,333         883,333
    Credit and charge card accounts.....         100,000             .5           50,000      50,000,000           .25           208,333         258,333
    Home equity lines of credit.........          10,000             .5            5,000       5,000,000           .25            20,833          25,833
    Advertising.........................         250,000             .25          62,500         700,000           .5              5,833          68,333
Closed-end credit:
    Credit disclosures..................         800,000             .5          400,000     330,000,000          1.5          8,250,000       8,650,000
    Rescission notices..................         100,000             .5           50,000      34,000,000          1              566,667         616,667
    Variable rate mortgages.............          75,000             .5           37,500       3,000,000          1.5             75,000         112,500
    High rate/high-fee mortgages........          50,000             .5           25,000         750,000          1.5             18,750          43,750
    Reverse mortgages...................          50,000             .5           25,000         150,000          1                2,500          27,500
Advertising.............................         500,000             .25         125,000       1,000,000          1               16,667         141,667
                                         -----------------
        Total open-end credit...........  ..............  ..............  ..............  ..............  ..............  ..............       6,847,081

[[Page 56702]]

 
        Total closed-end credit.........  ..............  ..............  ..............  ..............  ..............  ..............       9,592,084
                                         =================
        Total credit....................  ..............  ..............  ..............  ..............  ..............  ..............     16,439,165
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Open-end transactions with rescission notices (where the notices may not be otherwise provided) have increased. Closed-end variable rate mortgages
  have increased. Computer technology use has expanded in some closed-end areas with lengthy disclosures that previously involved more manual efforts,
  i.e., credit, variable rate, and high rate/high fee disclosures.

    Estimated annual cost burden: $378,006,000, rounded to the nearest 
thousand ($14,700,000 recordkeeping cost + $363,305,530 disclosure 
cost).
    Staff calculated labor costs by applying appropriate hourly cost 
figures to the burden hours described above. The hourly rates used 
below ($32 for managerial or professional time, $21 for skilled 
technical time, and $14 for clerical time) are averages, based on 
current Bureau of Labor Statistics cost figures.
    Recordkeeping: For the 1,000,000 recordkeeping hours, staff 
estimates that 10 percent of the burden hours require skilled technical 
time and 90 percent require clerical time. As shown below, the total 
recordkeeping cost is $14,700,000.
    Disclosure: For each notice or information item listed, staff 
estimates that 10 percent of the burden hours require managerial time 
and 90 percent require skilled technical time. As shown below, the 
total disclosure cost is $363,305,530.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Managerial                   Skilled technical                   Clerical
              Required task              ------------------------------------------------------------------------------------------------ Total cost ($)
                                           Time (hours)   Cost ($32/hr.)   Time (hours)   Cost ($21/hr.)   Time (hours)   Cost ($14/hr.)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping...........................               0              $0         100,000      $2,100,000         900,000     $12,600,000     $14,700,000
Open-end credit disclosures:
    Initial terms.......................          25,833         826,656         232,500       4,882,500               0               0       5,709,156
    Rescission notices..................             708          22,656           6,375         133,875               0               0         156,531
    Change in terms.....................          29,583         946,656         266,250       5,591,250               0               0       6,537,906
    Periodic statements.................         505,000      16,160,000       4,545,000      95,445,000               0               0     111,605,000
    Error resolution....................          88,333       2,826,656         795,000      16,695,000               0               0      19,521,656
    Credit and charge card accounts.....          25,833         826,656         232,500       4,882,500               0               0       5,709,156
    Home equity lines of credit.........           2,583          82,656          23,250         488,250               0               0         570,906
Advertising.............................           6,833         218,656          61,500       1,291,500               0               0       1,510,156
                                         -----------------
        Total open-end credit...........  ..............  ..............  ..............  ..............  ..............  ..............     151,320,467
Closed-end credit disclosures:
    Credit disclosures..................         865,000      27,680,000       7,785,000     163,485,000               0               0     191,165,000
    Rescission notices..................          61,667       1,973,344         555,000      11,655,000               0               0      13,628,344
    Variable rate mortgages.............          11,250         360,000         101,250       2,126,250               0               0       2,486,250
    High-rate/high-fee mortgages........           4,375         140,000          39,375         826,875               0               0         966,875
    Reverse mortgages...................           2,750          88,000          24,750         519,750               0               0         607,750
    Advertising.........................          14,167         453,344         127,500       2,677,500               0               0       3,130,844
                                         -----------------
        Total closed-end credit.........  ..............  ..............  ..............  ..............  ..............  ..............     211,985,063
                                         =================
        Total disclosures...............  ..............  ..............  ..............  ..............  ..............  ..............     363,305,530
            Total recordkeeping and       ..............  ..............  ..............  ..............  ..............  ..............     378,005,530
             disclosures................
--------------------------------------------------------------------------------------------------------------------------------------------------------



[[Page 56703]]

William Blumenthal,
General Counsel.
[FR Doc. 05-19319 Filed 9-27-05; 8:45 am]
BILLING CODE 6750-01-P


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