Source: https://www.federalregister.gov/documents/2019/05/22/2019-10110/rescission-of-model-forms-and-disclosures
Timestamp: 2019-07-17 20:45:40
Document Index: 165801846

Matched Legal Cases: ['arts 640', 'ART 680', 'art 681', 'art 682', 'art 603', 'art 610', 'art 611', 'art 613', 'art 614', 'art 698', 'art 698', 'art 698', 'art 1022', 'art 1022', 'art 1022', 'art 1022', 'art 1022', 'art 1022', 'art 1022', 'art 640', 'art 680', 'art 698', 'art 698', 'art 640', '§\u2009640', '§\u2009640', '§\u2009640', 'art 698', 'art 698', 'art 698', 'art 680', '§\u2009680', 'art 698', 'art 698', 'art 698', '§\u2009698', '§\u2009698', '§\u2009640', '§\u2009640', 'art 313', 'art 640', 'art 641', 'art 642', 'art 660', 'art 680']

Federal Register :: Rescission of Model Forms and Disclosures
Rescission of Model Forms and Disclosures
A Rule by the Federal Trade Commission on 05/22/2019
This action is effective May 22, 2019.
84 FR 23471
23471-23486 (16 pages)
16 CFR 680
List of Subjects in 16 CFR Parts 640, 680, and 698
PART 680—AFFILIATE MARKETING
Appendices A Through H [Removed]
B-1 Model Form for Initial Opt-Out Notice (Single-Affiliate Notice)
B-2 Model Form for Initial Opt-Out Notice (Joint Notice)
B-3 Model Form for Renewal Notice (Single-Affiliate Notice)
B-4 Model Form for Renewal Notice (Joint Notice)
B-5 Model Form for Voluntary “No Marketing” Notice
https://www.federalregister.gov/d/2019-10110 https://www.federalregister.gov/d/2019-10110
The Federal Trade Commission (“FTC” or “Commission”) is rescinding several Model Forms and Disclosures promulgated pursuant to the Fair Credit Reporting Act (“FCRA”) that it has determined are no longer necessary. The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred rulemaking authority associated with these forms and disclosures to the Bureau of Consumer Financial Protection (“Bureau” or “CFPB”). Given the CFPB's 2018 updates to its model forms and disclosures, the Commission has determined that rescinding several of its model forms and disclosures would reduce confusion. The Commission is also making conforming amendments to address references to the updated model forms and disclosures in related rules.
David Lincicum, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, (202) 326-2773, dlincicum@ftc.gov, or Kenny Wright, Office of the General Counsel, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, (202) 326-2907, kwright@ftc.gov.
Section 1061 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) [1] transferred Start Printed Page 23472rulemaking authority for certain enumerated consumer financial laws to the Bureau, including portions of the Fair Credit Reporting Act (“FCRA”),[2] although the FTC retained general rulemaking authority under Sections 615(e) (“Red Flag Guidelines and Regulations Required”) and 628 (“Disposal of Records”) of the FCRA. See 15 U.S.C. 1681s(e); Public Law 111-203, sec. 1088(a)(10)(E). Following these amendments, the Commission retains rulemaking authority for its “Identity Theft Rules,” 16 CFR part 681, and its rules governing “Disposal of Consumer Report Information and Records,” 16 CFR part 682, for all entities subject to those rules. See 15 U.S.C. 1681m, 1681w.
The Commission also retains rulemaking authority under the FCRA over any motor vehicle dealer described in Section 1029(a) of the Dodd-Frank Act that is predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both. See Dodd-Frank Act, sec. 1029(a), (c).
After the issuance of the Dodd-Frank Act, the Commission rescinded several rules following their republication by the CFPB. See 77 FR 22200 (2012). The Commission rescinded five rules issued under the FCRA, as amended by the FACT Act, that were republished by the CFPB: (1) [Identity Theft] Definitions, 16 CFR part 603 (republished by the CFPB at 12 CFR 1022.3); (2) Free Annual File Disclosures Rule, 16 CFR part 610 (republished by the CFPB at 12 CFR 1022.130); (3) Prohibition Against Circumventing Treatment as a Nationwide Consumer Reporting Agency, 16 CFR part 611 (republished by the CFPB at 12 CFR 1022.140); (4) Duration of Active Duty Alerts, 16 CFR part 613 (republished by the CFPB at 12 CFR 1022.121); and (5) Appropriate Proof of Identity, 16 CFR part 614 (republished by the CFPB at 12 CFR 1022.123).
The FTC also retained seven rules issued under the FCRA, as amended, that continue to apply to motor vehicle dealers, including the FCRA Model Forms and Disclosures in 16 CFR part 698.[3]
The CFPB recently issued further revisions to its own model forms and disclosures associated with the FCRA on September 18, 2018 through an interim final rulemaking. See 83 FR 47027 (2018).
The Commission is now adopting further revisions to its own Model Forms and Disclosures to rescind forms that are no longer necessary. Accordingly, the Commission is rescinding the following appendices in 16 CFR part 698:
Appendix A—Model Prescreen Opt-Out Notices;
Appendix D—Standardized Form for Requesting Annual File Disclosures;
Appendix E—Summary of Identity Theft Rights;
Appendix F—General Summary of Consumer Rights;
Appendix G—Notice of Furnisher Responsibilities; and
Appendix H—Notice of User Responsibilities.
In addition, the Commission is redesignating Appendix B—Model Forms for Risk-Based Pricing and Credit Score Disclosure Exception Notices as appendix A, and Appendix C—Model Forms for Affiliate Marketing Opt-Out Notices as appendix B.
Following these rescissions, covered entities should look to the corresponding forms issued by the CFPB to obtain the appropriate model forms and disclosures. The following is a chart that provides cross-references to the appropriate forms:
Rescinded FTC Form (16 CFR part 698)
Corresponding CFPB Form in Regulation V (12 CFR part 1022)
Appendix A: Model Prescreen Opt Notices Appendix D to Part 1022—Model Forms for Firm Offers of Credit or Insurance.
Appendix D: Standardized Form for Requesting Annual File Disclosures Appendix L to Part 1022—Standardized Form for Requesting Annual File Disclosures.
Appendix E: Summary of Identity Theft Rights Appendix I to Part 1022—Summary of Consumer Identity Theft Rights.
Appendix F: General Summary of Consumer Rights Appendix K to Part 1022—Summary of Consumer Rights.
Appendix G: Notice of Furnisher Responsibilities Appendix M to Part 1022—Notice of Furnisher Responsibilities.
Appendix H: Notice of User Responsibilities Appendix N to Part 1022—Notice of User Responsibilities.
The Commission is also making conforming amendments to update references in several Commission rules to the currently applicable forms issued under the FCRA. These amendments address references to the model forms and disclosures in the Risk-Based Pricing Rule, 16 CFR part 640, and the Affiliate Marketing Rule, 16 CFR part 680.
Under the Administrative Procedure Act, an agency may promulgate or rescind a rule without prior notice and an opportunity for public comment if the agency finds for good cause that notice and comment are unnecessary.[4] The Commission has determined that public comment on the rescission of these rules is unnecessary because the rulemaking authority for rules associated with these model forms and disclosures has transferred to the CFPB pursuant to the Dodd-Frank Act. The rescission of these FTC model forms will help avoid confusion as to which model forms and disclosures covered entities should look to in order to fulfill their disclosure obligations under the FCRA. Thus, there is no reason for public comment on this regulatory action.
In addition, the Commission has determined that these rescissions may take effect immediately upon publication of this notice in the Federal Register, as permitted by the Administrative Procedure Act.[5] The removal of the regulations is exempt from the usual 30-day notice requirement as it merely “relieves a restriction” from FTC requirements. The 30-day notice requirement does not apply under these circumstances, in which the underlying rulemaking authority for rules associated with these model forms and disclosures has transferred to the CFPB. Therefore, Start Printed Page 23473affected persons do not need time to prepare for or take any action with regard to the rescission.
The FTC is rescinding several model forms and disclosures contained in 16 CFR part 698 that it has determined are no longer necessary. The removal of these forms will not impact paperwork burden estimates relating to the Commission's rules issued under the FCRA. Neither the Model Forms and Disclosures in 16 CFR part 698 that are being rescinded nor the remaining Model Forms and Disclosures fall within the definition of a “collection of information” covered by the Paperwork Reduction Act (“PRA”), 44 U.S.C. 3501-3521, because they constitute “[t]he public disclosure of information originally supplied by the Federal government to the recipient for the purpose of disclosure to the public * * *.” 5 CFR 1320.3(c)(2).[6] Accordingly, these model forms and disclosures do not constitute a “collection of information” as defined in the regulations implementing the PRA, nor do the financial resources expended in relation to the distribution of these documents constitute a PRA burden.
Because the Commission has determined that it may remove these model forms and disclosures without public comment, the Commission is also not required to publish an initial or final regulatory flexibility analysis under the Regulatory Flexibility Act as part of such action.[7]
Accordingly, for the reasons set forth above, the Commission amends title 16, Code of Federal Regulations, as follows:
1. The authority citation for part 640 is revised to read as follows:
Authority: 12 U.S.C. 5519; 15 U.S.C. 1681m(h).
2. In § 640.4(b)(2), for each reference indicated in the left column, remove the reference indicated from wherever it appears in the section, and add in its place the reference indicated in the right column:
B-1 A-1.
B-2 A-2.
B-6 A-6.
B-7 A-7.
§ 640.5
3. In § 640.5, for each reference indicated in the left column, remove the reference indicated from wherever it appears in the section, and add in its place the reference indicated in the right column:
16 CFR part B 16 CFR part 698.
16 CFR Part 698, Appendix B 16 CFR part 698, appendix A.
appendix B appendix A.
B-3 A-3.
B-4 A-4.
B-5 A-5.
4. The authority citation for part 680 is revised to read as follows:
Authority: 12 U.S.C. 5519; 15 U.S.C. 1681s-3; 15 U.S.C. 1681s-3 note.
5. In § 680.23(a)(4), remove the words “Appendix C of Part 698 of this chapter” and add in their place the words “appendix B of part 698 of this chapter”.
6. The authority citation for part 698 is revised to read as follows:
7. Revise § 698.1 to read as follows:
8. Revise § 698.2 to read as follows:
9. Remove appendices A through H.
10. Add a new appendix A to read as follows:
2. Model form A-1 is for use in complying with the general risk-based pricing notice requirements in § 640.3 if a credit score is not used in setting the material terms of credit. Model form A-2 is for risk-based pricing notices given in connection with account review if a credit score is not used in increasing the annual percentage rate. Model form A-3 is for use in connection with the credit score disclosure exception for loans secured by residential real property. Model form A-4 is for use in connection with the credit score disclosure exception for loans that are not secured by residential real property. Model form A-5 is for use in connection with the credit score disclosure exception when no credit score is available for a consumer. Model form A-6 is for use in complying with the general risk-based pricing notice requirements in § 640.3 if a credit score is used in setting the material terms of credit. Model form A-7 is for risk-based pricing notices given in connection with account review if a credit score is used in increasing the annual percentage rate. All forms contained in this appendix are models; their use is optional.
3. A person may change the forms by rearranging the format or by making technical modifications to the language of the forms, in each case without modifying the substance of Start Printed Page 23474the disclosures. Any such rearrangement or modification of the language of the model forms may not be so extensive as to materially affect the substance, clarity, comprehensibility, or meaningful sequence of the forms. Persons making revisions with that effect will lose the benefit of the safe harbor for appropriate use of the model forms in this appendix. A person is not required to conduct consumer testing when rearranging the format of the model forms.
A-1 Model form for risk-based pricing notice.
A-2 Model form for account review risk-based pricing notice.
A-3 Model form for credit score disclosure exception for loans secured by one to four units of residential real property.
A-4 Model form for credit score disclosure exception for loans not secured by residential real property.
A-5 Model form for credit score disclosure exception for loans where credit score is not available.
A-6 Model form for risk-based pricing notice with credit score information.
A-7 Model form for account review risk-based pricing notice with credit score information.
Start Printed Page 23475
Start Printed Page 23476
Start Printed Page 23477
Start Printed Page 23478
Start Printed Page 23479
Start Printed Page 23480
Start Printed Page 23481
Start Printed Page 23482
Start Printed Page 23484
Start Printed Page 23485
11. Add a new appendix B to read as follows:
[Name of Affiliate] is providing this notice.
[Optional: Federal law gives you the right to limit some but not all marketing from our affiliates. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from our affiliates.]
You may limit our affiliates in the [ABC] group of companies, such as our [credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that we collect and share with them. This information includes your [income], your [account history with us], and your [credit score].
Your choice to limit marketing offers from our affiliates will apply [until you tell us to change your choice]/[for x years from when you tell us your choice]/[for at least 5 Start Printed Page 23486years from when you tell us your choice]. [Include if the opt-out period expires.] Once that period expires, you will receive a renewal notice that will allow you to continue to limit marketing offers from our affiliates for [another x years]/[at least another 5 years].
[Include, if applicable, in a subsequent notice, including an annual notice, for consumers who may have previously opted out.] If you have already made a choice to limit marketing offers from our affiliates, you do not need to act again until you receive the renewal notice.
By telephone: 1-877-###-####
On the web: www..com
By mail: Check the box and complete the form below, and send the form to:
The [ABC group of companies] is providing this notice.
[Optional: Federal law gives you the right to limit some but not all marketing from the [ABC] companies. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from the [ABC] companies.]
You may limit the [ABC companies], such as the [ABC credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that they receive from other [ABC] companies. This information includes your [income], your [account history], and your [credit score].
Your choice to limit marketing offers from the [ABC] companies will apply [until you tell us to change your choice]/[for x years from when you tell us your choice]/[for at least 5 years from when you tell us your choice]. [Include if the opt-out period expires.] Once that period expires, you will receive a renewal notice that will allow you to continue to limit marketing offers from the [ABC] companies for [another x years]/[at least another 5 years].
[Include, if applicable, in a subsequent notice, including an annual notice, for consumers who may have previously opted out.] If you have already made a choice to limit marketing offers from the [ABC] companies, you do not need to act again until you receive the renewal notice.
__Do not allow any company [in the ABC group of companies] to use my personal information to market to me.
You previously chose to limit our affiliates in the [ABC] group of companies, such as our [credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that we share with them. This information includes your [income], your [account history with us], and your [credit score].
Your choice has expired or is about to expire.
__Renew my choice to limit marketing for [x] more years.
You previously chose to limit the [ABC companies], such as the [ABC credit card, insurance, and securities] affiliates, from marketing their products or services to you based on your personal information that they receive from other [ABC] companies. This information includes your [income], your [account history], and your [credit score].
You may choose to stop all marketing from us and our affiliates.
[Your choice to stop marketing from us and our all affiliates will apply until you tell us to change your choice.]
__Do not market to me.
2. 15 U.S.C. 1681 et seq. Section 1088 of the Dodd-Frank Act made conforming amendments to the FCRA.
3. The other six retained rules that pertain to motor vehicle dealers consisted of: (1) Privacy of Consumer Financial Information Privacy Rule, 16 CFR part 313; (2) Duties of Creditors Regarding Risk-Based Pricing, 16 CFR part 640; (3) Duties of Users of Consumer Reports Regarding Address Discrepancies, 16 CFR part 641; (4) Prescreen Opt-Out Notice, 16 CFR part 642; (5) Duties of Furnishers of Information to Consumer Reporting Agencies, 16 CFR part 660; and (6) Affiliate Marketing, 16 CFR part 680.
4. 5 U.S.C. 553(b)(B).
5. 5 U.S.C. 553(d)(1).
6. See 62 FR 35586, 35589 (1997); 69 FR 69776, 69784 (2004).
7. See 5 U.S.C. 603(a), 604(b).
[FR Doc. 2019-10110 Filed 5-21-19; 8:45 am]