SUPPORTING STATEMENT

Unfair and Deceptive Acts or Practices,

18(f)(1) of the Federal Trade Commission Act (FTC Act), 12 U.S.C. 57a(f)(1)

 

 

A.              JUSTIFICATION

 

1.               Circumstances that make the collection necessary

OTS requests OMB approval for the collections of information contained in the attached joint proposed rulemaking, which implements section 18(f)(1) of the Federal Trade Commission Act (FTC Act), 12 U.S.C. 57a(f)(1).  Under section 18(f)(1) of the FTC Act, OTS is exclusively responsible for prescribing rules applicable to savings associations to prevent unfair or deceptive acts or practices (UDAPs) in or affecting commerce, including acts or practices that are unfair or deceptive to consumers.  Under this proposed rulemaking, OTS would incorporate its existing Prohibited Consumer Credit Practices (12 CFR part 535), which governs UDAPs involving consumer credit, into a new, more comprehensive UDAP Rule, which would also address UDAPs involving credit cards and overdraft protection services.  Some of the regulatory provisions to prevent UDAPs involve savings associations providing disclosures to consumers so that consumers will know their rights and responsibilities as cosigners on consumer loans and have an opportunity to opt-out of receipt of overdraft services on deposit accounts and the fees associated with such services.

 

2.               Use of the Information Collected

The FTC Act does not require that OTS impose information collection requirements.  Section  535.13 is not a new requirement, but is renumbered in this proposed rule.  The proposal in section 535.32 to require that institutions provide an opportunity to consumers to opt out of overdraft services on deposit accounts will turn OTS guidance into a rule, and will therefore not create more information collection than institutions currently conduct. 

 

3.               Consideration of the use of improved information technology

An institution may use any effective information technology it chooses to reduce any burden associated with the rule implementing section 18(f)(1) of the FTC Act.

 

4.               Efforts to identify duplication

There is no duplication.

 

5.               Methods used to minimize burden if the collection has a significant impact on a substantial number of small entities

 

This information collection does not have a significant impact on a substantial number of small entities.

 

6.               Consequences to the Federal program if the collection were conducted less frequently

The burden associated with this collection is largely attributable to practices that an institution should already be carrying out under the current Credit Practices Rule and OTS guidance.

 

7.               Special circumstances necessitating collection inconsistent with 5 CFR part 1320

No special circumstances exist.

 

 

8.               Consultation with persons outside the agency

OTS issued an advance notice of proposed rulemaking seeking comment. 72 FR 43570 (August 6, 2007).  No comments specifically addressed PRA burden.

 

9.               Payment to respondents

 

OTS provides no payments or gifts to respondents.

 

10.            Confidentiality

The final rule does not contain any requirements for thrifts to report information to OTS.  To the extent OTS obtains information about thrifts’ compliance, the Freedom of Information Act, the Trade Secrets Act, Executive Order 12,600, Treasury Department regulations at 31 CFR pt. 1, and OTS regulations at 12 CFR pts. 505 and 510 will apply.

 

11.            Information of a Sensitive Nature

 

None.

 

12.            Burden estimate

OTS believes that most covered entities already comply with its Credit Practices Rule and provide opt outs so that consumers may chose whether to accept overdraft protection programs.[1]

 

OTS’ estimates attribute all burdens to covered entities, which are entities directly subject to the requirements of the final rulemaking.  A covered entity that outsources activities to a third-party service provider is, in effect, reallocating to that service provider the burden that it would otherwise have carried itself.  Under these circumstances, burden is, by contract, shifted from the covered entity to the service provider, but the total amount of burden is not increased.  Thus, third-party service provider burden is already included in the burden estimates provided for covered entities.   

   

 

Number of respondents:  826

Estimated time developing opt outs: 10 hours

Estimated time developing disclaimer: 10 hours

Estimated to for training: 4 hours

Total estimated annual burden: 19,824 hours

 

 

13.            Estimate of annualized costs to respondents

 

Do you have any idea how much it will cost the institutions to implement these regulations?

 

14.            Estimate of annualized costs to the government

 

This is the number of Federal employees and their hourly salary times the amount of time it takes review the collection requirements submitted by the institutions

 

15.            Analysis of change in burden

 

            OTS is citing an increase in the burden inventory of 19,824 hours as a program change.

 

 

16.       Information regarding collections whose results are planned to be published for    

         Statistical use

 

The results of these collections will not be published for statistical use.

           

17.       Display of expiration date

 

Are there any forms?

 

18.       Exceptions to certification statement

 

None.

 

B.              STATISTICAL METHODS

 

Not applicable.