3170-0013 ECOA (B) 2015 renewal -final;

BUREAU OF CONSUMER FINANCIAL PROTECTION
PAPERWORK REDUCTION ACT SUBMISSION
INFORMATION COLLECTION REQUEST
SUPPORTING STATEMENT PART A
EQUAL CREDIT OPPORTUNITY ACT
(REGULATION B) 12 CFR 1002
(OMB CONTROL NUMBER: 3170-0013)

OMB TERMS OF CLEARANCE:
Not applicable. The Office of Management and Budget (OMB) did not provide Terms of
Clearance when approved this information collection on April 10, 2013.
ABSTRACT:
The Equal Credit Opportunity Act (“ECOA”) 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, age, or other prohibited bases under the ECOA. The ECOA allows for
creditors to collect information for self-testing against these criteria, while not allowing creditors to use
this information in making credit decisions of applicants. For certain mortgage applications, the ECOA
requires creditors to ask for some of the prohibited information for monitoring purposes. In addition,
for certain mortgage applications, creditors are required to send a copy of any appraisal or written
valuation used in the application process to the applicant in a timely fashion.
The ECOA also prescribes creditors to inform applicants of decisions made on credit
applications. In particular, where creditors make adverse actions on credit applications or existing
accounts, creditors must inform consumers as to why the adverse action was taken, such that credit
applicants can challenge errors on their accounts or learn how to become more creditworthy. Creditors
must retain all application information for 25 months, including notices sent and any information
related to adverse actions.
Finally, the ECOA requires creditors who furnish applicant information to a consumer credit
bureau to reflect participation of the applicant’s spouse, if the spouse if permitted to use or
contractually liable on the account.

1. Circumstances Necessitating the Data Collection
The Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. 1691 et seq., implemented by the
Consumer Financial Protection Bureau’s Regulation B, 12 CFR Part 1002, 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, age, or other prohibited bases under the ECOA.
To aid in implementation of this prohibition, the statute and regulation subject creditors to various
mandatory disclosure requirements, notification provisions informing applicants of action taken on
the credit application, credit history reporting, monitoring rules, and recordkeeping requirements.
These requirements are triggered by specific events and disclosures must be provided within the time

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periods established by the statute and regulation. ECOA was recently amended to include a provision
of appraisal notices to be provided to applicants of certain mortgage credit.
Recordkeeping/Collection of information
Section 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 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). Moreover, Regulation B requires
creditors to retain all written or recorded information about a self-test (including corrective action), as
defined in Sections 1002.15 of Regulation B, for 25 months after a self-test has been completed (and
longer under some circumstances).
Section 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 factors.
Disclosure
Section 1002.9 of Regulation B requires creditors to provide notice (within specified time
periods) to applicants for credit against whom adverse action is taken. 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.
Section 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.
Section 1002.13(c) of Regulation B also requires the creditor to inform the applicant that
ethnicity, race, sec, marital status, and age are being requested by the Federal Government for the
purpose of monitoring compliance. The creditor shall also inform the applicant that the information

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is optionally reported by the applicant, and that if the applicant chooses to not provide the
information, the creditor is required to note it by visual observation or surname.
Section 1002.14 of Regulation B requires that creditors provide applicants for a mortgage loan
with a first lien on the dwelling a copy of the appraisal report or other written valuation prepared in
connection with an application. The material must be furnished promptly, free of charge, but no later
than three business days prior to consummation of the transaction (closed-end credit) or account
opening (open-end credit), whichever is earlier.
Under Sections 1002.5(b) and 1002.15 of Regulation B, creditors that 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.

2. Use of the Information
The CFPB and other agencies 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. 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 agencies’ ability
to detect unlawful discrimination and enforce the ECOA would be significantly impaired.
The adverse action notice requirement apprises applicants of their rights under the ECOA
and of the basis for a creditor’s decision. 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. Use of Information Technology
The disclosures required by Regulation B may be provided to the consumer in electronic form,
subject to compliance with the consumer consent and other applicable provisions of the Electronic
Signatures in Global and National Commerce Act (E-Sign Act), 15 U.S.C. 7001 et seq. Use of such
electronic communications is consistent with the Government Paperwork Elimination Act (GPEA),
Title XVII of Pub. L. 105-277, codified at 44 U.S.C. 3504 note. The E-Sign Act and GPEA serve to
reduce businesses’ compliance burden related to federal requirements, including Regulation B, by
enabling lessors to utilize more efficient electronic media for disclosures and compliance.
Regulation B also permits lessors to retain records on any method that reproduces records
accurately, including digitally. Lessors need only retain enough information to reconstruct the
required disclosure or other records. Most lessors use computer support to calculate the required
information and generate the mandated disclosures, thereby limiting the burden on these entities.

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. Efforts to Identify Duplication
For the most part, the information collections in Regulation B do not duplicate other
regulations. There is some overlap with the Fair Credit Reporting Act (“FCRA”) for disclosure and
retention of certain information, but they focus on populations which are not necessarily the same,
and Regulation B is necessary to avoid circumvention by creditors of the ECOA.
The appraisals information collection does duplicate, in part, two other Federal efforts.
Specifically, the information collection requirement duplicates in part the Truth in Lending Act
requirement to provide free copies of written appraisals for higher-risk mortgages. See 15 U.S.C.
1639h. In addition, the requirement also duplicates in part the National Credit Union
Administration’s regulation requiring national credit unions to provide copies of appraisal reports
to loan applicants upon request. See 12 CFR 701.31(c)(5). However, where duplicative
requirements apply, a creditor need only provide an applicant one copy of each appraisal and other
written valuation to comply with all three requirements, in order to minimize burden.

5. Efforts to Minimize Burdens on Small Entities
The ECOA and Regulation B accord special treatment to creditors that receive fewer than 150
applications each year. Section 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, Section
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 Section 1002.9 of the Regulation and recordkeeping. Additionally, as noted above, the Bureau
has taken steps in the final rule to minimize the situations in which creditors would need to provide
copies of multiple versions of the same appraisal or other written valuation.
Regulation B provides model forms that may be used in compliance with its requirements.

6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
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 Bureau and others seeking to enforce compliance with
the ECOA would not have that information and would thereby be disadvantaged in taking action
against that creditor. 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
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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.
The current record retention period of 25 months supports the 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.
This information is not collected by the federal government. The burdens on respondents
are the minimum necessary to comply with the statute, and to assist borrowers in obtaining
information with respect to application decisions.

7. Circumstances Requiring Special Information Collection
Information is not reported to the Bureau. There are no special circumstances. The
collection of information requirements in the changes to Regulation B are consistent with the
applicable guidelines contained in 5 CFR 1320.5(d)(2).

8. Consultation Outside the Agency
In accordance with 5 CFR §1320.8(d)(1), the Bureau has published a notice at Federal
Register allowing the public 60 days to comment on this proposed the extension (renewal) of this
currently approved collection of information. No Comments were received. Further and in
accordance with 5 CFR §1320.5(a)(1)(iv), the Bureau has also published a notice in the Federal
Register allowing the public 30 days to comment on the submission of this information
collection request to the Office of Management and Budget.

9. Payments or Gifts to Respondents
No payments or gifts are provided to respondents.

10. Assurances of Confidentiality
Some of the recordkeeping requirements contain private information about consumers who
apply for and/or obtain financial credit. Such information is protected by the Right to Financial
Privacy Act, 12 U.S.C. 3401 et seq. There is no part of the rule that mandates information collection
by the CFPB, and this information is used exclusively to ensure compliance with the ECOA, and that
creditors aren’t discriminating against applicants.
To the extent that information covered by a recordkeeping requirement is collected by the
CFPB for law enforcement purposes, the confidentiality provisions of CFPB’s rules on Disclosure of
Records and Information, 12 CFR Part 1070, would apply.

The information that may be collected for law enforcement purposes would be covered by
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the following Systems of Records Notices (SORNs): CFPB.004 Enforcement Database, 76 FR
45757, that can be found at https://www.federalregister.gov/articles/2011/08/01/201119424/privacy-act-of-1974-as-amended; and the CFPB.018 CFPB Litigation Files SORN, 77 FR
27446, that can be found at https://www.federalregister.gov/articles/2012/05/10/201211233/privacy-act-of-1974-as-amended.
11. Justification for Sensitive Questions
The sensitive information asked of applicants by creditors is either mandated for mortgage
loan applications, or optionally used for self-tests. The information collected are used to ensure
compliance with the ECOA, and that creditors aren’t discriminating against applicants.

12. Estimated Burden of Information Collection
Total Labor Hours: 1,450,250
Information collection

Type

requirement

No. of

Annual

Total

Average

Annual

Hourly

Respondents

responses

Annual

Response

Burden

Rate

per

Responses

Time

Hours

respondent

Labor Costs

(minutes)

1002.9

Notice of Action

514,000

206

105,927,000

0.25

441,363

$29

$ 12,799,513

1002.10

Furnishing of Credit

135,000

499

67,371,000

0.25

280,713

$29

$ 8,140,663

206

105,927,000

0.25

441,363

$29

$ 12,799,513

161,883

$29

$ 4,694,617

Information
1002.12

Record Retention

514,000

1002.13(a)&(b)

Information

2,300

4,223

9,713,000

1

2,300

4,223

9,713,000

0.25

40,471

$29

$ 1,173,654

0.5

80,942

$29

$ 2,347,308

0.25

3,517

$29

$

Collected for
Monitoring Purposes
1002.13(c)

Disclosure or Intent
of Information
Collected for
Monitoring Purposes

1002.14(a)(1)&(3)

Copy of Appraisal

2,300

4,223

9,713,000

1002.5(b)(1)

Disclosure of Self-

1,900

444

844,000

101,983

Test Inquiries
Totals

514,000

183,855,000

1,450,250

$ 42,057,250

The CFPB and Federal Trade Commission (FTC) share enforcement authority for
those non-depository institutions subject to the CFPB’s regulation B, with the CFPB assuming
burden for half of all non-depository institutions. Our estimate excludes burden for motor
vehicle dealers, which the FTC assumes burden for.
The CFPB assumes labor burden for ongoing recordkeeping and disclosure requirements
under Regulation B of 1,450,250 hours for those creditors under CFPB enforcement authority. To
calculate labor costs, the CFPB applies a market rate of $29, the rounded hourly mean wage for
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loan officers in BLS1. 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.

13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
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, as many disclosures can be sent
electronically.

14. Estimated Cost to the Federal Government
As the Bureau does not collect any information, there are no costs to the Bureau
associated with this information collection.

15. Program Changes or Adjustments
Total
Respondents
Total Annual Burden
Requested
Current OMB
Inventory
Difference (+/-)
Program Change
Discretionary
New Statute
Violation
Adjustment

Annual Responses

Burden Hours

Cost Burden (O &
M)

514,000

183,855,000

1,450,250

$0

14,000
500,000
0
0
0
0
500,000

511,652
183,343,348
0
0
0
0
183,343,348

1,811,058
-360,808
0
0
0
0
-360,808

$40,278,254
-$40,278,254
$0
$0
$0
$0
-$40,278,254

The new estimates calculated by the CFPB reflect improved calculations done on the market.
In particular, the previous estimates appear to have been mislabeled and therefore erroneous. The
current entry of annual responses appear to be the previous estimated number of respondents in the
market, while the current respondents are only those respondents that fall under the appraisals
sections of Regulation B and do not reflect the entire market of respondents under the ECOA. The
current Cost Burden was misattributed to those labor costs associated with the burden hours arising
from the ECOA, and did not represent any extra operations and maintenance costs. The labor costs
are now properly positioned in section 12 of this Supporting Statement.
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Hourly rate labor costs are the median hourly wages from the Bureau of Labor and Statistics (BLS) for affected
occupational groups. Occupational groups for the PRA burden of regulation G are defined as loan officers
(http://www.bls.gov/ooh/business-and-financial/loan-officers.htm#tab-5).

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16. Plans for Tabulation, Statistical Analysis, and Publication
The results of the information collection will not be published.

17. Display of Expiration Date
The only forms associated with the collection are non-mandatory model forms,
therefore display of the OMB control Number and expiration date on them would not
be appropriate. The OMB control number and expiration date associated with this PRA
submission will be displayed on the Federal government’s electronic PRA docket at
www.reginfo.gov, as well as in the Federal Register Notice of the submission.
18. Exceptions to the Certification Requirement
The Bureau certifies that this collection of information is consistent with the requirements
of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an
exemption to these certification requirements.

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