FR2572.200810.omb

Supporting Statement for the
Report of Terms of Credit Card Plans
(FR 2572; OMB No. 7100-0239)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority
from the Office of Management and Budget (OMB), proposes to extend for three years,
with minor clarifications, the semiannual Report of Terms of Credit Card Plans (FR
2572; OMB No. 7100-0239). The FR 2572 collects data on credit card pricing and
availability from a sample of at least 150 financial institutions that offer credit cards. The
information is reported to the Congress and made available to the public in order to
promote competition within the industry.
The Federal Reserve proposes to move the contact information from the end of
the reporting form to the front of the reporting form, include a new line for the contact’s
e-mail address, and provide examples for columns A and D and items 56 thru 58 in the
instructions to improve data quality. The current annual burden is estimated to be 75
hours and would remain unchanged. A copy of the reporting form and instructions,
marked to show the proposed clarifications, is attached.
Background and Justification
The Report of Terms of Credit Card Plans was implemented in February 1990 as
required by Section 5 of the Fair Credit and Charge Card Disclosure Act (FCCCA) of
1988. 1 Each respondent provides information about its credit card plan with the largest
outstanding number of cards. The FCCCA requires the Federal Reserve to collect this
information semiannually from the largest 25 issuers of credit cards and at least 125
additional institutions, in a manner that ensures both an equitable geographic distribution
within the sample and representation of a wide spectrum of institutions. The Federal
Reserve is further directed to make the credit card price information for each institution
available to the public upon request and to report the information semiannually to the
Congress. The credit card plan information is available only at the Board’s public web
site, http://www.federalreserve.gov/pubs/shop/survey.htm. 2 General consumer
information about shopping for credit cards is also available at this web site.
Although the House and Senate Conference Report that accompanied the FCCCA
did not explain specifically why the credit card reports are required, the legislative history
1.

The FCCCA was enacted on November 3, 1988, and amends the Truth in Lending Act (15 U.S.C. 1601 et
seq). Amendments to Regulation Z implementing the provisions of the FCCCA were adopted by the Board
on March 30, 1989, with an effective date of April 3, 1989. Creditors were required to comply with the
new disclosure rules by August 31, 1989.
2.

The information was previously published in the E.5 statistical release “Report on the Terms of Credit
Card Plans”, but the E.5 was discontinued in 1994 in favor of a brochure format. Today, this credit card
plan information is available only at the Board’s public web site.

suggests that the reports are intended to facilitate credit card shopping by consumers and
thereby enhance competition. 3 In this context, the credit card reports are similar to the
Shopper's Guide to Credit that the Federal Reserve prepared as required by law for the
Annual Percentage Rate Demonstration Project in 1984 and 1985. 4
The report was discontinued prior to the July 2000 reporting date pursuant to the
Federal Reports Elimination and Sunset Act of 1995 (Sunset Act) (PL 104-66). In
December 2000, the Congress approved the American Homeownership and Economic
Opportunity Act of 2000 (Act) that restored the reporting of this information, along with
40 other collections. Title XI of the Act states that Section 3003(a)(1) of the Sunset Act
“shall not apply to any report required to be submitted under any of the following
provisions of law: ... Section 8 of the FCCCA (15 U.S.C. 1637 note); ...”.
In 2001, the Congress approved legislation that amended Section 136(b)(1) of the
Truth in Lending Act (TILA) (15 U.S.C. 1646). This amendment requires the Federal
Reserve to collect, on a semiannual basis, from a broad sample of financial institutions
that offer credit card services, further credit card price and availability information. As a
consequence of this 2001 amendment, the report was reinstated in July 2002.
Description of Information Collection
Section 127(c) of the TILA (15 U.S.C. §1637), as amended by the FCCCA, is
quite specific with respect to the credit term information that is to be included in the
semiannual reports. The following information on pricing and fees must be collected:
•
•
•
•
•
•
•
•
•

annual percentage rate for purchases (must state if it is a variable rate)
length of the grace period
name or description of the balance computation method
minimum finance charge
fee for issuance or availability (membership fee)
fee for late payment
fee for exceeding credit limit
transaction fee for purchases
transaction fee for cash advances

To report credit card availability information, respondents state whether the credit
card plan is available to consumers nationally (in all 50 states and the District of
Columbia) or limited to consumers within a specific region or state (such as the issuer's
home state). Generally, respondents are not required to fill out each line (corresponding
3.

U.S. Congress, Senate, "Report of the Committee on Banking, Housing, and Urban Affairs, to
accompany H.R. 515," December 16, 1987. Statements by Edward M. Gramlich, p.12, and Senators Garn,
Hecht, Bono, Karnes, and Shelby, p.14.

4.

Board of Governors of the Federal Reserve System, "Annual Percentage Rate Demonstration Project,"
March 1987.

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to the states); rather, respondents may fill out one line that describes the most common
terms, and then circle the states in which those terms apply, or fill out the lines for states
in which different terms are offered. In practice, the majority of respondents offer
national plans and fill out only one or two lines on the form. The reporting form also
collects information on credit card plan enhancements, name and address for consumers
to obtain a credit card application, and telephone number for consumer questions.
Reporting Panel
The Federal Reserve identifies the card issuers to which they will send the
FR 2572, including the 25 largest issuers, by analyzing data on the volume of outstanding
credit card receivables that are reported on the Reports of Condition and Income for
commercial banks Call Reports) (FFIEC 031 and 041; OMB No. 7100-0036) and for
thrift institutions (OTS Form 1313; OMB No. 1550-023). Like the 25 largest issuers, the
other respondents are chosen by size, but only such that the required diversity of region
and type of institution is achieved. The dynamism of the card industry, with trading of
card receivables portfolios and entry into and exit from the industry, ensures turnover in
the panel.
The Federal Reserve Banks distribute the FR 2572 reporting forms to
approximately 200 institutions each period, which has proven sufficient to generate at
least 150 responses, as required. The number of solicitations exceeds 150 because some
institutions that do not issue cards are chosen on the basis of holding large portfolios of
credit card receivables. There is a lag of several months between the as-of date of the
Call Report data used to choose the panel and the as-of date of the upcoming FR 2572,
and an institution selected for the panel may have ceased issuing cards during that period.
In addition, the extra solicitations are needed because the panel may include a number of
subsidiaries of the same parent bank, in which case the Federal Reserve consolidates the
data of these subsidiaries and counts them as only one response. Also, the Federal
Reserve on occasion adds banks that are offering particularly attractive deals, regardless
of size, as long as the offer is national.
Typically, about 90 percent of the responses come from commercial banks, with
the remainder from savings banks, industrial banks, and savings and loans associations. 5
The panel is consistent with the three criteria of the FCCCA: a reasonable number of
creditors of each type, a significant geographic dispersion, and at least 150 card issuers,
including the 25 largest issuers.

5.

Credit unions are not included because they normally limit their card issuance to consumers with a preexisting relationship with the organization, such as employees. Similarly, retailers are excluded since they
are not financial institutions and because their card issuance is limited to store-specific cards. The credit
card term report includes credit card banks, such as Discover Bank, which issues the Discover Card, and
American Express Centurion Bank (a subsidiary of the American Express Company), which issues the
Optima Card. It also includes large consumer finance companies that issue credit cards through banks or
thrifts.

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Proposed Clarifications
The Federal Reserve proposes minor clarifications to the FR 2572 reporting form
and instructions. The reporting form would be modified by moving the contact
information from the bottom of page 3 to the top of page 1, to be consistent with most
other Federal Reserve reporting forms. Also, the line captions for the contact name, title,
and phone number would be clarified in response to frequent questions from respondents.
A line for the contact’s e-mail address also would be added. In addition, item 62 would
be modified to request a toll-free number, consistent with the current instructions. The
instructions for columns A (Annual percentage rate) and N (Variable rate margins) would
be clarified by adding examples to address situations when a range of rates and margins
exist. The instructions for items 56 through 58 would be clarified by adding an example
to address situations when no minimum fee exists.
Time Schedule for Information Collection and Publication
Twice a year, the Federal Reserve Banks collect credit card price and availability
information from a sample of card issuers, as of January 31 and July 31. Each respondent
must send its data to the appropriate Reserve Bank within 10 business days of the as-of
date, and the Reserve Bank must edit and transmit the data to the Board within 20
business days of the as-of date. Individual respondent data are then published on the
Board’s public web site.
Legal Status
The Board's Legal Division has determined that 15 U.S.C. §1646(b) authorizes
the Board to collect the information contained in the FR 2572. The report is voluntary,
and the data are not considered confidential.
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as
defined by OMB guidelines.
Consultation Outside the Agency
On August 4, 2008, the Federal Reserve published a notice in the Federal
Register (73 FR 45222) requesting public comment for 60 days on the extension, with
revision, for the FR 2572. The comment period for this notice expired on September
30, 2008. The Federal Reserve did not receive any comments. On October 15, 2008, the
Federal Reserve published a final notice in the Federal Register (73 FR 61128).

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Estimate of Respondent Burden
As shown in the table below, the burden for the FR 2572 is estimated to be 75
hours annually. The Federal Reserve is required to collect this voluntary information
from at least 150 credit card issuers; typically the number of respondents fluctuates right
around 150. Since the information collected on the FR 2572 is in nearly all respects
identical to information that card issuers are required to disclose in their credit card
solicitations, the FR 2572 imposes little burden. The proposed clarifications would have
no affect on the estimated annual burden hours. The total burden represents less than 1
percent of the total Federal Reserve System burden.

FR 2572

Number of
respondents

Annual
frequency

Estimated
average hours
per response

Estimated
annual
burden hours

150

2

.25 hours

75

The total cost to the public for the FR 2572 is estimated to be $4,624. 6
Estimate of Cost to the Federal Reserve System
The total annual cost to the Federal Reserve System for the support and
processing of the FR 2572 report is estimated to be $31,700.

6.

Total cost to the public was estimated using the following formula. Percent of staff time, multiplied by annual
burden hours, multiplied by hourly rate: 30% Clerical @ $25, 45% Managerial or Technical @ $55, 15% Senior
Management @ $100, and 10% Legal Counsel @ $144. Hourly rate estimates for each occupational group are
averages using data from the Bureau of Labor and Statistics, Occupational Employment and Wages, news release.

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