Reg B Rev'd carveout and burden

Feb. 2012 FTC rev’d burden estimates for Reg. B having a motor vehicle dealer component
[Refer back to October 2011 burden allocation written analyses for Parts I and II re: existing
PRA burden inventory totals to date,1 and see the Feb. 7, 2012 FTC 60-day FRN for proposed
update as a whole to this and other regs]
III.

FTC Carve-Out for Motor Vehicle Dealers
A.

Disclosures
1.

Credit history reporting
a. Set-up/Monitoring
Auto 13,854 - 1/4 of total independent auto (9,429) + 1/4 of
franchise auto (4,425)2
10% increase for other motor vehicle dealers - 1,385
= 15,239 motor vehicle dealers
x .25 hours setup/monitoring hours (re-applied from 2009
estimates) = <3,810 hours> for carve-out
at 10% managerial ($49) and 90% skilled technical ($30) time
[(3,810 x .1 x $49) + (3,810 x .9 x $30)] = $121,539 in
labor costs
# of respondents allocated to FTC: (i) 250,000 total respondents
(re-applied from 2009 estimates) - 15,239 carve-out to FTC =
234,761 to split; (ii) 234,761 ÷ 2 = 117,381; (iii) 117,381 + 15,239
carve-out to FTC = 132,620; (iv) staff rounded to 133,000
b. Transaction-related
Pro-rata apportionment: 250,000 existing respondents incurring
125,000,000 credit reporting transactions (re-applied from 2009
estimates) = 500 credit reporting transactions per respondent

1

The October 2011 analysis, however, inadvertently excluded from Part I. A the following additional
observation from the 2009 PRA clearance submission with regard to recordkeeping: “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 for approximately 9 million credit applications (based
on industry data regarding the approximate number of mortgage purchase and refinance originations), for a
total of 150,000 hours.” The estimates for the number of applications and total hours, respectively, have been
revised downward since to 2.25 million applications and 37,500 hours in the Feb. 7, 2012 notice. See 77 Fed.
Reg. 6114 at 6116.
2

FTC staff estimates of the relevant portion of motor vehicle dealers potentially to engage in this activity.

15,239 motor vehicle dealers x 500 transactions per dealer =
<7,619,500 transactions> for carve-out
x .25 minutes per transaction (re-applied from 2009 estimates) =
<31,747 hours> for carve-out
at 10% managerial ($49) and 90% skilled technical ($30) time
[(31,747 x .1 x $49) + (31,747 x .9 x $30)] = $1,012,735 in
labor costs for carve-out
# of transactions allocated to FTC: (i) 125,000,000 total
transactions - 7,619,500 carve-out to FTC = 117,380,500 to
split; (ii) 117,380,500 ÷ 2 = 58,690,250; (iii) 58,690,250 +
7,619,500 carve-out to FTC = 66,309,750
2.

Adverse action notices
a. Set-up/Monitoring
Auto - 55,417 - all of total
10% increase for other motor vehicle dealers - 5,542
= 60,959 motor vehicle dealers
x .75 hours setup/monitoring hours (increased from 2009
estimates) = <45,719 hours> for carve-out
at 10% managerial ($49) and 90% skilled technical ($30) time
[(45,719 x .1 x $49) + (45,719 x .9 x $30)] = <$1,458,438
in labor costs> for carve-out
# of respondents allocated to FTC: (i) 1,000,000 total
respondents - 60,959 carve-out to FTC = 939,041 to split; (ii)
939,041 ÷ 2 = 469,521; (iii) 469,521 + 60,959 carve-out to FTC
= 530,480; (iv) staff rounded to 530,000
b. Transaction-related
Pro-rata apportionment: 1,000,000 existing respondents preparing
200,000,000 adverse action notices (re-applied from 2009
estimates) = 200 adverse action notices prepared per respondent
60,959 motor vehicle dealers x 200 adverse action notices per
dealer = 12,191,800 transactions
x .25 minutes per transaction (re-applied from 2009 estimates) =
2

<50,799 hours> for carve-out
at 10% managerial ($49) and 90% skilled technical ($30) time
[(50,799 x .1 x $49) + (50,799 x .9 x $30)] = <$1,620,490
in labor costs> for carve-out
# of transactions allocated to FTC: (i) 200,000,000 total
transactions - 12,191,800 carve-out to FTC = 187,808,200 to split;
(ii) 187,808,200 ÷ 2 = 93,904,100; (iii) 93,904,100 + 12,191,800
carve-out to FTC = 106,095,900; (iv) staff rounded to 106,096,000
3.

Self-test disclosures
a. Set-up/Monitoring
Assumption: 10% of the existing estimate of respondents
performing self-test disclosures (2,500) are motor vehicle dealers;
i.e., 250 motor vehicle dealers for carve-out
x .5 hours setup/monitoring hours (re-applied from 2009 estimates)
= <125> hours for carve-out
at 10% managerial ($49) and 90% skilled technical ($30) time
[(125 x .1 x $49) + (125 x .9 x $30)] = <$3,997> in labor
costs for carve-out
# of respondents allocated to FTC: (i) 2500 total respondents 250 carve-out to FTC = 2,250 to split; (ii) 2,250 ÷ 2 = 1,125; (iii)
1,125 + 250 carve-out to FTC = 1,375
b. Transaction-related
Pro-rata apportionment:
2,500 existing respondents incurring 125,000 transactions
(re-applied from 2009 estimates) = 50 transactions per
respondent
250 motor vehicle dealers x 50 transactions per dealer = <12,500
transactions> for carve-out
x .25 minutes per transaction (re-applied from 2009 estimates) =
<52 hours> for carve-out
at 10% managerial ($49) and 90% skilled technical ($30) time
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[(52 x .1 x $49) + (52 x .9 x $30) = <$1,655> in labor
costs for carve-out
# of transactions allocated to FTC: (i) 125,000 total transactions
- 12,500 carve-out to FTC = 112,500 to split; (ii) 112,500 ÷ 2 =
56,250 + 12,500 carve-out to FTC = 68,750
B.

Recordkeeping3
The credit history entities are basically covered by adverse action entities per
III.A.2 above
1.

General
60,959 motor vehicle dealers x 1.25 hours each (increased from 2009
estimates) = <76,199 hours> for carve-out
at 10% skilled/technical wage ($30) and 90% clerical ($16) wage
[(76,199 x .1 x $30) + (76,199 x .9 x $16)] = <$1,325,864
in labor costs> for carve-out

2.

Recordkeeping of self-test
Assumption: 10% of existing totals (2,500 respondents, 1 hour
each) cover motor vehicle dealers
Thus, <250 hours> for carve-out (10% x 2,500 hours, or 250
respondents x 1 hour each) (re-applied from 2009 estimates)
at 100% skilled/technical wage ($30)
250 x $30= <$7,500 in labor costs> for carve-out

3.

Recordkeeping of corrective action (from self-test)
Assumption: 10% of existing totals (250 respondents, 4 hours
each) cover motor vehicle dealers
Thus, <100 hours> for carve-out (10% x 1,000 hours, or 25

3

The Feb. 7, 2012 notice estimates 530,479 credit firms subject to the FTC’s jurisdiction. This is determined
by applying the 2009 cleared estimate of 1,000,000 firms, subtracting an FTC carve-out of 60,959 firms
(motor vehicle dealers), dividing that sub-total by half (= 469,520), and then adding back the carve-out for the
FTC. The notice also allocates to the FTC an estimated 1,375 firms that conduct self-testing for
recordkeeping; that population estimate is detailed in III.A.3.a. above (re: self-test disclosures: setup/monitoring).

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respondents x 4 hours each) (re-applied from 2009 estimates)
at 100% skilled/technical wage ($30)
100 x $30= <$3,000 in labor costs> for carve-out
IV.

Burden Allocations After Carve-Out
A.

Disclosures
1.

Total Hours (2,196,664) - Carve-Out (3,810 + 31,747 + 45,719 + 50,799 +
125 + 52) = 2,064,412 hours to split
2,064,412 hours ÷ 2 = 1,032,206
a. CFPB: 1,032,206 hours
b. FTC: 1,164,458 hours (1,032,206 + 132,252 carve-out)

2.

Labor Costs ($70,073,514) - Carve-Out ($121,539 + $1,012,735 +
$1,458,438 + $1,620,490 + $3,997 + $1,655) = $65,854,660 to split
$65,854,660 ÷ 2 = $32,927,330
a. CFPB: $32,927,330
b. FTC: $37,146,184 ($32,927,330 + $4,218,854 carve-out)

B.

Recordkeeping
1.

Total Hours (1,328,503) - Carve-Out (76,199 + 250 + 100) = 1,251,954
hours to split
1,251,954 ÷ 2 = 625,977
a. CFPB: 625,977 hours
b. FTC: 702,526 hours (625,977 + 76,549 carve-out)

2.

Labor Costs ($24,105,104) - Carve-Out ($1,325,864 + $7,500 + $3,000) =
$22,768,740 to split
$22,768,740 !2 = $11,384,370
a. CFPB: $11,384,370
b. FTC: $12,720,734 ($11,384,370 + $1,336,364 carve-out)

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