1550-0103 (Supporting Statement)

SUPPORTING STATEMENT
Privacy of Consumer Financial information
OMB Control No. 1550-0103

A.

JUSTIFICATION
1. Circumstances and Need

These information collections are required under section 504 of the Gramm-Leach-Bliley
Act (Act), Public Law No. 106-102. Section 502 of the Act prohibits a financial institution from
disclosing nonpublic personal information about a consumer to nonaffiliated third parties unless
the institution satisfies various disclosure requirements (i.e., provides a privacy notice and opt
out notice) and the consumer has not elected to opt out of the disclosure. Section 504 requires
the Office of Thrift Supervision, as well as the Office of the Comptroller of the Currency, Board
of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National
Credit Union Administration, Federal Trade Commission, and Securities and Exchange
Commission to issue regulations as necessary to implement the notice requirements and
restrictions.
2. Use of Information Collected
Consumers use the privacy notice information to determine whether they want personal
information disclosed to third parties that are not affiliated with the institution. Further,
consumers use the opt-out notice mechanism to advise the institution of their wishes regarding
disclosure of their personal information. Institutions use the opt-out information to determine
the wishes of their consumers and to act appropriately.
3. Use of Technology to Reduce Burden
The information collections consist of disclosures, filings from consumers, and internal
institution records. Institutions are not prohibited from using any technology that facilitates
consumer understanding and response and that permits review, as appropriate, by examiners.
4. Efforts to Identify Duplication
These information collections are not duplicative within the meaning of the PRA and
OMB regulations. Each collection is unique and covers the institution’s particular
circumstances.
5. Minimizing the Burden on Small Banks
The information collections do not impose any significant burden beyond that required
by the statute. Because of the statutory requirements, there are no significant alternatives that
minimize burden on small institutions.

-26. Consequences of Less Frequent Collections
The collections in the regulation closely follows the Act, which requires institutions to
provide an updated and annually restated notice to their customers of their privacy policies and
practices, and to permit consumers to opt-out of disclosure of their personal information.
7. Special Circumstances
These information collections are conducted in a manner consistent with the
requirements of 5 CFR Part 1320.
8. Consultation with Persons Outside the Agency
Notice of the intent to renew these information collections was published in the Federal
Register on August 7, 2006 (71 FR 44780). No comments were received.
9. Payment or Gift to Respondents
Not applicable.
10. Confidentiality
Not applicable.
11. Questions of a Sensitive Nature
No questions of a sensitive nature are involved.
12. Estimates of Annualized Hour Burden and Associated Cost
The burden estimate for this information collection is as follows:
Financial Institutions’ Disclosure Requirements
Initial notice (573.4(a)):
Institution prepares and provides initial notice of privacy policies and practices to
consumers. The number of respondents is a three-year average of the number of de novo
and acquired institutions for 2003, 2004, and 2005. The estimated response time is 80
hours (2 business weeks). The response time of this item may range from one hour to
100 or more hours, with an average of 80 hours.
13 de novos and acquisitions @ 80 hours = 1,040 burden hours
Annual notice (573.5(a)) and Notice of change in terms (573.8(c)):

-3Institution prepares and provides annual notice to customers. The number of respondents
is based on the number of institutions that reported data on their year-end 2005 Thrift
Financial Report. The average number of de novo and acquired institutions are not
included in this respondent count. The estimated response time is 8 hours (1 business
day).
854 institutions that filed June 30, 2006 TFRs @ 8 hours = 6,832 burden hours
Opt out and partial opt out (573.7(a)(1)(iii)):
Institution prepares and provides opt out notice to consumers.
747 small institutions (<=$1 billion in assets) x 15% = 112 institutions
107 large institutions (>$1 billion in assets) x 50% = 53
112 small institutions + 53 large institutions = 165 institutions
165 institutions @ 8 hours = 1,320 hours
Consumers’ Reporting Requirements
Opt out and partial opt out notice (573.7(a)(2), (a)(3)(i), and (c)) and Continuing
right to opt out (573.7(f) and (g)):
Consumer makes opt out and partial opt out response to institution.
112 small institutions x 5,000 approx. customers x 3.5% = 19,600 customers
53 large institutions x 25,000 approx. customers x 3.5% = 46,375 customers
19,600 customers (small) + 46,375 customers (large) = 65,975 customers
65,975 customers @ .5 hours = 32,988 hours
Total burden hours:
42,180 burden hours

Cost burden:
The estimated hour burden of this collection is 42,180 burden hours. The following is an
estimate of the annualized dollar cost to OTS-regulated institutions of the hour burden for
this collection of information broken down by wage rate categories:
Clerical: 25 % of 42,180 hours = 10,545 hours @ $20 = $210,900
Managerial/Technical: 40 % of 42,180 hours = 16,872 hours @ $40 = $674,880
Senior Management/Professional: 25 % of 42,180 hours = 10,545 hours @ $ 80 =

-4$843,600
Legal: 10 % of 42,180 hours = 4,218 hours @ $100 = $421,800
Total estimated dollar cost: $2,151,180
13. Capital/Start-up and Operation/Maintenance Costs
Institutions should be able to use readily available equipment to comply with the
information collections. However, some software costs likely will be incurred to add the privacy
notice and opt-out notice disclosures, probably to existing institution documents. Most
institution documents of this nature are revised on a continuing basis. Therefore, whether the
revisions are made in-institution or through a servicer, the cost would be a part of usual and
customary business practice.
14. Annualized cost to the Federal Government
Not applicable.
15. Reason for Change in Burden
This submission reflects a decrease in institution burden (from 11,048 to 9,192) and
consumer burden (from 33,775 to 32,988), due to fewer institution respondents (from 1,156 to
1,032) and consumer respondents (from 67,550 to 65,975).
16. Publication
These are disclosures from institutions to consumers and filings from consumers to
institutions. OTS is not collecting data; therefore, it has no information to publish and no plans
to publish any data for statistical or other purposes.
17. Display of Expiration Dates
Not applicable.
18. Exceptions to Certification
Not applicable.

B. STATISTICAL METHODS
Not applicable.