Reg B '12 SS final_mtd

Federal Trade Commission
Supporting Statement for Information Collection
Provisions of Regulation B
(Equal Credit Opportunity Act)
12 C.F.R. 202;12 C.F.R. 1002
(OMB Control Number: 3084-0087)
1.

Necessity for Collecting the Information

The Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. 1691 et seq., was enacted to
ensure that credit is made available to all creditworthy applicants without discrimination on the
basis of sex, marital status, race, color, religion, national origin, or age. The ECOA also
prohibits discrimination because an applicant’s income is derived from a public assistance
program, or because the applicant has in good faith exercised any right under the Consumer
Credit Protection Act.
The ECOA applies to anyone who regularly extends or arranges for the extension of
credit and to an assignee who participates in the decision to extend credit.1 Subject to the
discussion below, the Federal Trade Commission (“FTC” or “Commission”) enforces the ECOA
as to all creditors except those (such as federally chartered or insured depository institutions) that
are subject to the regulatory authority of another federal agency. The ECOA also contains a
private right of action with a five-year statute of limitations for aggrieved applicants.
The Board of Governors of the Federal Reserve System (“FRB”) promulgated the
original Regulation B (12 C.F.R. Part 202) to implement the ECOA, as required by the statute.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”),
Pub. L. 111-203, 124 Stat. 1376 (2010), however, almost all rulemaking authority for the ECOA
transferred from the FRB to the Consumer Financial Protection Bureau (“CFPB”) on July 21,
2011 (“transfer date”). To implement this transferred authority, the CFPB has published for
public comment interim final rules for new regulations in 12 C.F.R. Part 1002 (Regulation B) for
those entities under its rulemaking jurisdiction.2 Although the Dodd-Frank Act transferred most
rulemaking authority under ECOA to the CFPB, the FRB retained rulemaking authority for

1

The law applies to a person who, in the ordinary course of business, regularly participates in a credit
decision, including setting the terms of credit. See 12 C.F.R. 202.2(l); 12 C.F.R. 1002.2(l). It includes all
persons participating in the credit decision. It may include an assignee or potential purchaser of the obligation
who influences the credit decision by indicating whether or not it will purchase the obligation if the
transaction is consummated. Section 202.2(l)-1 of the FRB Official Staff Commentary; Section 1002.2(l)1 of the CFPB Official Staff Commentary.
2

12 C.F.R. 1002 (76 Fed. Reg. 79,442, Dec. 21, 2011). Because both the FRB and the CFPB have certain
rulemaking authority under Regulation B – as discussed further below – citations to both aspects of the
regulation are included in this document. Hence, 12 C.F.R. 202 refers to the FRB-issued Regulation B; 12
C.F.R. 1002 refers to the CFPB-issued Regulation B. Generally, these two aspects of Regulation B are
virtually identical, other than occasional minor technical differences, and citations.

certain motor vehicle dealers.3
As a result of the Dodd-Frank Act, the FTC and CFPB now share the authority to enforce
Regulation B for entities for which the FTC had enforcement authority before the Act, except for
certain motor vehicle dealers. The FTC generally has sole authority to enforce Regulation B
regarding motor vehicle dealers predominantly engaged in the sale and servicing of motor
vehicles, the leasing and servicing of motor vehicles, or both.4
Recordkeeping
Sections 202.12(b)/1002.12(b) of Regulation B require creditors to retain records relating
to consumer credit applications for 25 months from the date that the applicant is notified of the
action taken on the application or, where notice is not required, for 25 months from the date of
the application. When a creditor takes adverse action on an existing account, the creditor must
retain records for 25 months after the applicant is notified of the action taken. Records of
business credit applications must be retained for comparable 12 month periods, with certain
exceptions. Regulation B also requires creditors who have been informed that they are the
subject of an investigation by the FTC (or another agency) regarding their compliance with the
ECOA to retain such records until the agency or a court informs the creditor that retention is no
longer necessary. Regulation B also requires creditors to retain certain prescreened solicitation
materials for 25 months after the date on which an offer of credit is made to potential customers
(12 months for business credit, with certain exceptions).5 Moreover, Regulation B requires
creditors to retain all written or recorded information about a self-test (including corrective
action), as defined in Sections 202.15/1002.15 of Regulation B, for 25 months after a self-test
has been completed (and longer under some circumstances).
Sections 202.13/1002.13 of Regulation B requires that creditors who receive applications
for certain mortgage credit requests, as part of the application process, obtain information about
the applicant’s race/national origin, sex, marital status, and age. The applicant is asked but not
required to supply the information. If the applicant chooses not to provide the information or
any part of it, the creditor must note that fact on the form and must note the applicant’s
race/national origin and sex, to the extent that it is possible to determine these characteristics
based on a visual observation or a surname. The creditor is required to inform the applicant that
the information is sought by the federal government to help monitor compliance with federal
statutes that prohibit creditors from discriminating against applicants based on the above-noted

3

Generally, these are dealers “predominantly engaged in the sale and servicing of motor vehicles, the leasing
and servicing of motor vehicles, or both.” See Dodd-Frank Act, § 1029(a), -(c).
4

See Dodd-Frank Act, § 1029(a), -(c).

5

The records generally are already retained by creditors in connection with their business operations in part
due to the credit extension that will be made to responding applicants.

2

factors.6
The recordkeeping requirement ensures that records that might contain evidence of
violations of the ECOA remain available to the FTC, other agencies, and private litigants.
Disclosure7
Sections 202.9/1002.9 of Regulation B requires creditors to provide notice (within
specified time periods) to applicants for credit against whom adverse action is taken.8 Generally,
the required notice must be in writing and contain: a statement of the action taken; the name and
address of the creditor; a statement describing the anti-discrimination provisions of the ECOA;
the name and address of the federal agency that administers compliance as to the creditor; and
either a statement of specific reasons for the action taken or a notice of the applicant's right to
obtain such a statement.
Sections 202.10/1002.10 of Regulation B requires creditors that furnish credit
information to consumer reporting agencies to designate accounts to reflect the participation of
both spouses, if the applicant’s spouse is permitted to use or is contractually liable on the
account.
Sections 202.14/1002.14 of Regulation B requires that creditors notify mortgage credit
applicants of their right to receive a copy of the appraisal report prepared in connection with the
application. The requirement that the creditor provide a copy of the appraisal report upon the
applicant's request is statutorily mandated by Section 1691(e) of the ECOA. The requirement
that applicants be notified of this right is not specifically mandated by the ECOA. Regulation B
allows creditors to avoid the notice requirement by providing the appraisal report itself to all
applicants for whom an appraisal is performed in the first instance. Creditors may also avoid the
burden of sending a separate notice by including the notice of the right to an appraisal in an
adverse action notice or by placing the notice on the application form or other documents
provided to the applicant.
Under Sections 202.5(b)/1002.5(b) and 202.15/1002.15 of Regulation B, creditors that

6

Section 1071 of the Dodd-Frank Act amends the ECOA to require financial institutions to collect and report
information concerning credit applications by women- or minority-owned businesses and small businesses,
effective on the July 21, 2011 transfer date. Both the FRB and CFPB have exempted affected entities from
complying with this requirement until a date set by the prospective final rules these agencies issue to
implement the Dodd-Frank Act’s requirements. The Commission will address PRA burden for its
enforcement of these requirements after the FRB and CFPB have issued the associated final rules.
7

Regulation B permits many disclosures to be made orally. Any required written disclosures must be made
clearly and conspicuously and in a form the applicant can retain.
8

For incomplete applications, creditors may initially provide the adverse action notice or a notice of
incompleteness.

3

collect applicant characteristics for purposes of conducting a self-test under Regulation B must
disclose, orally or in writing, that providing the information is optional, that the creditor will not
take into account the information 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.
The requirement that spousal credit history information on shared accounts be reported
under both spouses’ names (if it is reported at all) is intended to ensure that each spouse has the
benefit of that shared credit history from which to seek and obtain further credit. The
requirement that a notice of adverse action be provided assists applicants in detecting unlawful
discrimination, correcting errors that may have occurred in the evaluation of their applications,
and learning how to become more creditworthy. The requirement that information about the
race/national origin, sex, marital status, and age of applicants be collected helps the FTC, other
enforcement agencies, and private litigants to determine whether creditors discriminated against
applicants on those bases. The collateral requirement that applicants be notified of the purpose
for collecting this information helps to ensure that the information is provided. The applicants'
right to a copy of the appraisal allows applicants to determine the role that the appraisal played
in the credit decision; the collateral requirement that applicants be informed of their right to
obtain a copy of the appraisal helps applicants take advantage of this right. The self-testing
disclosure helps applicants understand the nature of the information collection process.
The FRB and CFPB have issued model forms that may be used to comply with the notice
requirements of the ECOA and Regulation B. See Appendices B and C to 12 C.F.R. 202/1002.
Correct use of these model forms insulates creditors from liability for the respective
requirements under the ECOA and Regulation B. Id.
2.

Use of the Information

The FTC, other agencies, and private litigants use recordkeeping information to compare
accepted and rejected applicants in order to determine whether applicants are treated less
favorably on the basis of race, sex, age, or other prohibited bases under the ECOA. Information
derived from these records has been the primary evidence of law violations in most of the ECOA
enforcement actions brought by the FTC. Self-testing records (including for corrective action)
are used by creditors to identify potential violations and reflect their efforts to correct the
problem. Absent the Regulation B requirement that creditors retain monitoring information, the
FTC's ability to detect unlawful discrimination and enforce the ECOA would be significantly
impaired.
The FTC, other agencies, and private litigants use adverse action notices, appraisal
reports, and other information in the application file to compare accepted and rejected applicants
in order to determine whether any applicants are discriminated against on the basis of
race/national origin, sex, marital status, age, or other prohibited bases under the ECOA.
Information derived from these records has been the primary evidence of law violations in most
of the ECOA enforcement actions brought by the FTC. The adverse action notice requirement
apprises applicants of their rights under the ECOA and of the basis for a creditor's decision.
4

Applicants use their copy of the appraisal to review (and possibly challenge) the accuracy and/or
fairness of the information contained within, and to determine the role that the appraisal played
in the credit decision. Applicants use the self-testing disclosure to facilitate understanding of
creditors’ information collection, including its optionality.
3.

Consideration of the Use of Improved Information Technology

The FRB and CFPB have issued rules to establish uniform standards for using electronic
communication to deliver disclosures required under Regulation B, within the context of the
Electronic Signatures in Global and National Commerce Act (“ESIGN”), 15 U.S.C. 7001 et seq.
72 Fed. Reg. 63,445 (Nov. 9, 2007); 76 Fed. Reg. 79,442 (Dec. 21, 2011). These rules enable
businesses to utilize electronic disclosures and compliance, consistent with the requirements of
ESIGN. Use of such electronic communications is also consistent with the Government
Paperwork Elimination Act (“GPEA”), codified at 44 U.S.C. 3504, note. ESIGN and GPEA
serve to reduce businesses’ compliance burden related to federal requirements, including
Regulation B, by enabling creditors to utilize more efficient electronic media for disclosures and
compliance.
Regulation B also permits a creditor to retain records as “carbon copies, photocopies,
microfilm or microfiche copies, or copies produced by any other accurate retrieval system, such
as documents stored and reproduced by computer.” Section 202.12(b)-1 of the FRB
Commentary; Section 1002.12(b)-1 of the CFPB Commentary. In addition, Regulation B
permits a creditor to record the information required for monitoring purposes “by recording on
paper or by means of computer . . . .” Section 202.13(b)-2 of the FRB Commentary; Section
1002.13(b)-2 of the CFPB Commentary.
4.

Efforts to Identify Duplication/Availability of Similar Information

The recordkeeping requirement of Regulation B preserves the information considered by
the creditor in deciding whether to extend credit or terminate an existing credit account. The
creditor is the only source of this information, and no other federal law mandates its retention.
State laws do not duplicate these requirements.9 Similarly, the creditor is the only source of the
information provided by appraisal reports, adverse action notices, and self-testing information,
and no other federal law mandates their disclosure nor is staff aware of any state law mandating
their disclosure.

9

Regarding prescreened solicitations, Section 615(d) of the Fair Credit Reporting Act (“FCRA”) requires
retention of some, but not identical, information required by the ECOA. Among other things, the FCRA
requires persons who use information in consumer reports to select consumers to receive certain offers of
credit to maintain the criteria used to select the consumer, for three years from the date the credit offer is
made. The ECOA focuses on creditors, includes certain business applicants, and also addresses the
solicitation including the text and any related complaints. The FRB and CFPB issued these rules to ensure
that creditors would retain all necessary information for enforcement and avoidance of circumvention of the
ECOA.

5

Regulation C under the Home Mortgage Disclosure Act (“HMDA”) requires mortgage
lenders subject to that Act to collect and report information about the race or national origin and
sex of applicants. The data collection requirements of HMDA are similar, but not identical to,
those of the ECOA. However, the FTC has no enforcement authority for HMDA, and ordinarily
has no right to obtain this information except to the extent that it becomes publicly available.
Moreover, the HMDA information released publicly does not include identifying information
about individual applicants. Thus, the HDMA monitoring information is less useful to FTC staff
in its enforcement efforts than is the ECOA monitoring information. The creditor is also the
only source of the credit history reporting information regarding the applicant’s spouse.
5.

Efforts to Minimize Burdens on Small Businesses

The ECOA and Regulation B accord special treatment to creditors that receive fewer than
150 applications each year. Sections 202.9(d)/1002.9(d) of the Regulation states that such
creditors may provide required notices to rejected applicants orally rather than in writing. Where
fewer written records are required to be created, the recordkeeping burden is correspondingly
reduced. In addition, Sections 202.3(c)/1002.3(c) of the Regulation exempts providers of
incidental credit, such as a doctor or lawyer who allows a patient or client to defer payment of a
bill, from many requirements including notifications under Sections 202.9/1002.9 of the
Regulation and recordkeeping. The requirements to collect monitoring information and to
provide a copy of the appraisal report apply to all creditors who extend applicable mortgage
credit. There is no exception based on creditor size.
Additionally, as noted above, Regulation B provides model forms that may be used in
compliance with its requirements. Correct use of these forms insulates creditors from liability
from the respective requirements.
6.

Consequences of Conducting Collection Less Frequently

The current record retention period of 25 months supports the five-year statute of
limitations for private actions, and the FTC’s (and other administrative agencies’) need for
sufficient time to bring enforcement actions regarding ECOA issues. If the retention period were
shortened, applicants who sue under the ECOA, and administrative agencies that enforce the
ECOA, might find that the records needed to prove ECOA violations no longer exist.
Were the requirement that creditors provide notice of adverse action eliminated,
applicants could be deprived of the right to receive timely notice of the creditor's decision, the
reasons for any adverse action by the creditor, and the applicants' rights under the ECOA.
Eliminating the requirement that creditors provide a copy of the appraisal report or notice of its
availability would greatly impair applicants’ ability to assess the report’s impact on the
creditor’s decision and to challenge it in timely fashion. Were the requirement that creditors
collect information about an applicant's race or national origin eliminated or changed, the
creditor would still have access to this information when obtained through a face-to-face
interview with the applicant and could use the information to discriminate. However, the FTC
and others seeking to enforce compliance with the ECOA would not have that information and
6

would thereby be disadvantaged. Eliminating the self-test disclosure (which can be made orally
or in writing) could disadvantage consumers who may then not understand the purpose of the
information being collected, or their option not to provide it. Finally, eliminating the credit
history reporting requirement regarding spouses with shared accounts would undermine the goal
of affording both spouses the benefit of that shared credit history in seeking further credit.
7.

Circumstances Requiring Collection Inconsistent with Guidelines

Regulation B’s recordkeeping and disclosure requirements are consistent with the
guidelines contained in 5 C.F.R. 1320.5(d)(2).
8.

Consultation Outside the Agency

Both the recordkeeping and the notice requirements of Regulation B were issued by the
FRB and CFPB. Before the regulation was initially issued and prior to each amendment, the
amendments were published for public comment in the Federal Register.
More recently, the Commission sought public comment in connection with its latest PRA
clearance request for these regulations, in accordance with 5 C.F.R. 1320.8(d) See 77 Fed. Reg.
6114 (Feb. 7, 2012). The Commission received one comment from the National Automobile
Dealers Association (“NADA”) pertaining to regulatory burden affecting Regulation B.10
NADA stated, as a general matter, that the FTC staff estimates greatly underestimate Regulation
B’s recordkeeping, disclosure, and other related compliance requirements for NADA members.11
NADA did not provide sufficient specific information from which staff could revisit and revise
its estimates. Pursuant to OMB rules, 5 C.F.R. 1320.12(c), the FTC is providing a second
opportunity for NADA and the general public to comment while the FTC seeks OMB approval
to renew the pre-existing clearance for Regulation B. The Commission is seeking such
comments contemporaneously with this submission.
9.

Payments or Gifts to Respondents
Not applicable.

10. & 11.

Assurances of Confidentiality/Matters of a Sensitive Nature

The required recordkeeping and written disclosures contain private financial information
about applicants for consumer credit. This information is protected by the Right to Financial
Privacy Act, 12 U.S.C. 3401 et seq. Such records may also constitute confidential customer
lists. Any of these records provided to the FTC would be covered by the protections of Sections

10

NADA’s comment is available at http://www.ftc.gov/os/comments/regsbemzpra/index.shtm.

11

NADA states that it represents approximately 16,000 new car and truck dealers, both domestic and import,
with over 32,500 separate franchises. Id.

7

6(f) and 21 of the FTC Act, 15 U.S.C. 46(f) and 57b-2, by Section 4.10 of the Commission’s
Rules of Practice, 16 C.F.R. 4.10, and by the applicable exemptions of the Freedom of
Information Act, 5 U.S.C. 552(b).
12.

Estimated Hours Burden: 1,866,984 (702,526 recordkeeping hours: 625,977 + 76,549
carve-out for motor vehicles + 1,164,458 disclosure hours: 1,032,206 + 132,252 carveout for motor vehicles)

Because of their shared enforcement jurisdiction for Regulation B, the CFPB and the
FTC have divided the FTC’s previously-cleared PRA burden between them,12 except that the
FTC retained all of the part of that burden associated with certain motor vehicle dealers (for
brevity, referred to in the burden summaries below as a “carve-out”).13 The division of PRA
burden hours not attributable to certain motor vehicle dealers is reflected in the CFPB’s recent
PRA clearance requests to OMB.14 The FTC’s burden estimates below reflect both the shared
enforcement jurisdiction and the FTC’s separate accounting under the PRA for its exclusive
jurisdiction to enforce Regulation B for such motor vehicle dealers.
Recordkeeping
FTC staff estimates that Regulation B’s general recordkeeping requirements affect
530,479 credit firms subject to the Commission’s jurisdiction, at an average annual burden of
1.25 hour per firm15 for a total of 663,099 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 (of skilled technical time) for approximately
2.25 million credit applications (based on industry data regarding the approximate number of
mortgage purchase and refinance originations), for a total of 37,500 hours.16 Staff also estimates
that recordkeeping of self-testing subject to the regulation would affect 1,375 firms, with an

12

The CFPB also factored into its burden estimates respondents over which it has jurisdiction but the FTC
does not.

13

These are dealers specified by the Dodd-Frank Act under § 1029 (a), but as limited by subsection (b).
Subsection (b) does not preclude CFPB regulatory oversight regarding, among others, businesses that extend
retail credit or retail leases for motor vehicles in which the credit or lease offer is provided directly from those
businesses, rather than unaffiliated third parties, to consumers. It is not practicable, however, for PRA
purposes, to estimate the portion of dealers that engage in one form of financing versus another (and that
would or would not be subject to CFPB oversight). Thus, FTC staff’s “carve-out” for this PRA burden
analysis reflects a general estimated volume of motor vehicle dealers. This attribution does not change actual
enforcement authority.

14

OMB Control Number 3170-0013 (Regulation B).

15

This is an increase from past estimates of one hour per respondent in view of more complex transactions
and their associated impact on recordkeeping.

16

Regulation B contains model forms that creditors may use to gather and retain the required information.

8

average annual burden of one hour per firm, for a total of 1,375 hours, and that recordkeeping of
any corrective action for self-testing would affect 10% of them, i.e., 138 firms, with an average
annual burden of four hours (of skilled technical time) per firm, for a total of 552 hours.17
Keeping records of race/national origin, sex, age, and marital status requires an estimated one
minute of skilled technical time. Recordkeeping for the self-test responsibility and of any
corrective actions requires an estimated one hour and four hours, respectively of skilled technical
time. The total estimated recordkeeping burden is 702,526 hours.
Disclosure
Regulation B requires that creditors (i.e., entities that regularly participate in the decision
whether to extend credit under Regulation B) provide notices whenever they take adverse action,
such as denial of a credit application. 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).
Finally, Regulation B 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.18
Regulation B applies to retailers, mortgage lenders, mortgage brokers, finance
companies, and others. Below is staff’s best estimate of burden applicable to this very broad
spectrum of covered entities.
Regulation B: Disclosures – Burden Hours

Disclosures

Credit history reporting
Adverse action notices
Appraisal notices
Appraisal reports
Self-test disclosures

--------------- Setup/Monitoring1 --------------Average
Total Setup/
Burden per
Monitoring
Respondents Respondent
Burden
(hours)
(hours)
133,000
530,000
5,000
5,000
1,375

.25
.75
.5
.5
.5

33,250
397,500
2,500
2,500
688

--------- Transaction-related2----------Average
Total
Number of Burden per Transaction
Transactions Transaction
Burden
(minutes)
(hours)

Total
Burden
(hours)

66,309,750
106,096,000
1,125,000
1,125,000
68,750

309,541
839,567
7,188
7,188
974

.25
.25
.25
.25
.25

276,291
442,067
4,688
4,688
286

17

In contrast to banks, for example, entities under FTC jurisdiction are not subject to regular audits for
financial regulatory compliance with Regulation B; rather they may be subject to investigations and
enforcement actions. This may impact the level of self-testing (as specifically defined by Regulation B) in a
given year, and staff has sought to address such factors in its burden estimates.

18

The disclosure may be provided orally or in writing. Regulation B provides a model form to assist creditors
in providing the written disclosure.

9

Total

1,164,458

1
The estimates shown reflect a decrease in applicable mortgage entities regarding appraisal notices and appraisal reports. The figures assume
that approximately half of mortgage entities (.5 x 10,000, or 5,000 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 a decrease in mortgage transactions, compared to prior FTC estimates. They also assume that half of applicable
mortgage transactions (.5 x 2,250,000, or 1,125,000) would not otherwise provide the appraisal notices and reports and thus would be affected.

Associated labor cost: $ 49,866,948 ($12,720,734 recordkeeping costs: $11,384,370 +
$1,336,364 carve-out for motor vehicles + $37,146,214 disclosure costs: $32,927,360 +
$4,218,854 carve-out for motor vehicles)
Staff calculated labor costs by applying appropriate hourly cost figures to the burden
hours described above. The hourly rates used below ($49 for managerial or professional time,
$30 for skilled technical time, and $16 for clerical time) are averages.
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 $12,720,734.
Disclosure
For each notice or information item listed, staff estimates that the burden hours consist of
10 percent managerial or professional time and 90 percent skilled technical time. As shown
below, the total disclosure cost is $37,146,214.
Regulation B: Recordkeeping and Disclosures – Cost
Required Task

General recordkeeping
Other recordkeeping
Recordkeeping of test
Recordkeeping of corrective action

------Managerial-----Time
Cost
(hours)
($49/hr.)
0
0
0
0

$0
$0
$0
$0

-----Skilled Technical----Time
Cost
(hours)
($30/hr.)
66,310
37,500
1,375
552

$1,989,300
$1,125,000
$41,250
$16,560

--------Clerical-------Time
Cost
(hours)
($16/hr.)
596,789
0
0
0

$9,548,624
$0
$0
$0

Total Recordkeeping
Disclosures:
Credit history reporting
Adverse action notices
Appraisal notices
Appraisal reports
Self-test disclosure

Total
Cost
($)
$11,537,924
$1,125,000
$41,250
$16,650
$12,720,734

30,954
83,957
719
719
97

$1,516,746
$4,113,893
$35,231
$35,231
$4,753

278,587 $8,357,610
755,610 $22,668,300
6,469
$194,070
6,469
$194,070
877
$26,310

10

0
0
0
0
0

$0
$0
$0
$0
$0

$9,874,356
$26,782,193
$229,301
$229,301
$31,063

Total Disclosures

$37,146,214

Total Recordkeeping and Disclosures

$49,866,948

13.

Estimated Capital and Other Non-Labor Costs

The applicable requirements impose minimal start-up costs, as lenders generally have or
obtain necessary equipment for other business purposes. For the same reason, staff believes that
the cost of printing and copying needed to comply with Regulation B is minimal. Staff
anticipates that the above requirements necessitate ongoing, regular training so that lenders stay
current and have a clear understanding of federal mandates. This training, however, would be a
small portion of and subsumed within the ordinary training that employees receive apart from
that associated with collecting information to comply with Regulation B.
14.

Estimated Cost to the Federal Government

The FRB and CFPB issued the recordkeeping requirement of Regulation B, so there is no
cost to the FTC for that purpose. Enforcement of the recordkeeping requirements of Regulation
B is incidental to overall enforcement of the ECOA. In the course of compliance investigations,
staff routinely requests records of credit applications. If the records requested are not available,
it indicates that records are not being retained as required. Staff estimates that enforcing this
requirement will cost the FTC Bureau of Consumer Protection no more than $78,909, which is a
representative year’s cost of enforcing Regulation B’s requirements during the three-year
clearance period sought. This estimate is based on the assumption that one-half of one attorney
work year will be expended. Clerical and other support services are included in this estimate.
The FRB and CFPB issued the Regulation B disclosure requirements, so there is no cost
to the FTC for that purpose. Regarding enforcement, staff estimates that the cost to the FTC
Bureau of Consumer Protection for this requirement will approximate $236,725. This estimate
is based on the assumption that 1.5 attorney work years will be expended to enforce various
aspects of these rules. Clerical and other support services are also included in this estimate.
15.

Program Changes or Adjustments

Staff has decreased the prior annual burden estimate by 1,262,453 hours (from 3,129,437
to 1,866,984). This is attributable first to the burden splitting noted above regarding shared
enforcement authority with the CFPB. Additionally, it is due to a decrease in the number of
mortgage entities and mortgage transactions, relative to prior FTC estimates.
16.

Publishing Results of the Collection of Information
Not applicable.

17.

Display of Expiration Date for OMB Approval

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Not applicable.
18.

Exceptions to the Certification for PRA Submissions
Not applicable.

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