3170-XXXX Reg I Supporting Statement Final31416

BUREAU OF CONSUMER FINANCIAL PROTECTION
PAPERWORK REDUCTION ACT SUBMISSION
INFORMATION COLLECTION REQUEST

SUPPORTING STATEMENT PART A
REGULATION I: DISCLOSURE REQUIREMENTS FOR DEPOSITORY
INSTITUTIONS LACKING FEDERAL DEPOSIT INSURANCE (12 CFR 1009)
(OMB CONTROL NUMBER: 3170-XXXX)

EMERGENCY JUSTIFICATION
The Bureau of Consumer Financial Protection (Bureau) respectfully requests emergency
processing and approval of the collection of information discussed below because the use of
normal clearance procedures would require the Bureau to collect information contrary to the
requirements of the Paperwork Reduction Act for the length of the normal clearance process.
On December 16, 2011, the Bureau published an interim final rule (IFR) republishing Regulation
I and making technical and conforming changes to reflect the transfer of authority and certain
other changes made by the Dodd-Frank Act (76 FR 78126 / RIN 3170-AA06). The IFR did not
impose any new substantive obligations on persons subject to the existing regulations. As the
Bureau added no new recordkeeping or reporting requirements, it adopted the PRA analysis from
the original regulation. Upon further review, the Bureau has determined that the disclosures
required by 12 CFR 1009.3 and 1009.4 and the signed acknowledgement required by 1009.5 are
subject to the PRA and require OMB approval thereunder. The Bureau has determined that it
cannot reasonably comply with the standard approval timelines because the use of normal
clearance procedures is reasonably likely to prevent the collection of information and result in
public harm. See 5 CFR 1320.13(a)(2); 44 U.S.C. § 3507(j).
In addition to the 15 day emergency comment period, upon receipt of emergency approval from
the Office of Management and Budget, the Bureau will begin a standard approval process for this
collection and will seek public input at that time.
OMB TERMS OF CLEARANCE:
Not applicable. This is a new information collection request.
ABSTRACT:
This Rule applies to all depository institutions lacking Federal deposit insurance. It requires the
disclosure of certain insurance-related information in periodic statements, account records,
locations where deposits are normally received, and advertising. This part also requires such
depository institutions to obtain a written acknowledgment from depositors regarding the
Page 1 of 7

institution’s lack of Federal deposit insurance.
PART A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection:

Section 43(b)-(f) of the Federal Deposit Insurance Act (FDIA) of 1950 (Pub.L. 81–797), requires
that depository institutions lacking Federal deposit insurance make certain insurance-related
disclosures in periodic statements, account records, locations where deposits are normally
received, and advertising. The FDIA also requires such depository institutions to obtain a
written acknowledgment from depositors regarding the institution’s lack of Federal deposit
insurance. Prior to July 21, 2011, the FDIA required that the Federal Trade Commission
(Commission), by regulation or order, prescribe the manner and content of these disclosures. The
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Public Law
111-203, amended a number of consumer financial protection laws, including the FDIA. In
addition to various substantive amendments, the Dodd-Frank Act transferred rulemaking
authority for implementing the disclosure requirements for depository institutions lacking
Federal deposit insurance, as described above, to the Bureau, effective July 21, 2011. These
requirements are implemented by the Bureau’s Regulation I, codified at 12 CFR 1009.
Section 1009.3 requires any depository institution (defined as any bank or savings association, as
defined by 12 U.S.C. section 1813, or any credit union organized and operated according to the
laws of any state, the District of Columbia, the several territories and possessions of the United
States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, which laws provide for
the organization of credit unions similar in principle and objectives to Federal credit unions) that
lacks Federal deposit insurance to disclose that the institution is not Federally insured, and that if
the institution fails, the Federal government does not guarantee that depositors will get back their
money, in all periodic statements of account, on each signature card, and on each passbook,
certificate of deposit, or share certificate.
Section 1009.4 requires any depository institution that lacks Federal deposit insurance to disclose
its lack of insurance to customers in the following locations:
(1) At each station or window where deposits are normally received, its principal place of
business and all its branches where it accepts deposits or opens accounts (excluding automated
teller machines or point of sale terminals), and on its main internet page; and
(2) In all advertisements.
In addition, section 1009.5 requires the institution to obtain from all depositors (except as
described below) a signed document acknowledging:
(1) The institution is not federally insured; and
Page 2 of 7

(2) If the institution fails, the Federal Government does not guarantee that the depositor will
get back the depositor’s money.
For new depositors obtained as a result of a conversion or merger and for depositors who were
depositors before October 13, 2006, section 1009.5 provides that the institution may either:
(1) Obtain a signed document as described above; or
(2) Send to the depositor a conspicuous card stating that the institution is not federally
insured and if the institution fails the Federal Government does not guarantee that the depositor
will get back the depositor’s money, including a line for the signature of the depositor, and
including accompanying materials requesting that the depositor sign the card and return the
signed card to the institution.
2. Use of the Information:
The information required to be disclosed by this regulation is used by consumers to make
informed decisions about where to deposit their money and the risks they may incur by
depositing money with institutions lacking Federal deposit insurance. The signed
acknowledgement requirement further serves to ensure that consumers are aware of the risks
they may incur by depositing money with institutions lacking Federal deposit insurance and are
able to make informed decisions about where to deposit their money, and in addition allows
institutions to show they have made the required disclosures to consumers and that consumers
are on notice regarding the lack of Federal deposit insurance.
3. Use of Information Technology:
The regulation requires that the covered institution make the required disclosures on its main
internet page as well as in all advertising in whatever format. Certain of the required disclosures
may be provided in electronic form, subject to compliance with the consumer consent and other
applicable provisions of the Electronic Signatures in Global and National Commerce Act (ESIGN Act). Pub.L. 106–229.
4. Efforts to Identify Duplication:
This requirement is unique to the requirements of Regulation I. Therefore, the request does not
duplicate an existing collection of information contained in any regulatory or statutory
requirement administered by the Bureau.
5. Efforts to Minimize Burdens on Small Entities:
This requirement imposes the minimum burden necessary to implement Regulation I, and the
Bureau believes the requirements impose only a minor burden, if any, on all covered institutions,
including small entities.
Page 3 of 7

6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
The Bureau does not collect any information from the covered entities, and to the extent the rule
requires the covered entities to collect a signed acknowledgement from their customers, the rule
requires the information be collected only once from each new or existing customer of the
institution.
7. Circumstances Requiring Special Information Collection
There are no special circumstances. The collection of information is conducted in a manner
consistent with the guidelines in 5 CFR 1320.5(d)(2).
8. Consultation Outside the Agency
The Bureau is publishing notice of our request for emergency approval from OMB in the Federal
Register that will allow the public 15 days to comment on this request. Contemporaneously
with this notice and, as part of the regular clearance process, in accordance with 5 CFR
1320.8(d)(1), the Bureau is also publishing a Federal Register notice allowing the public 60 days
to comment on this proposed collection of information. Further, and in accordance with 5 CFR
1320.5(a)(1)(iv), the Bureau will also publish a notice in the Federal Register allowing the public
30 days to comment on the submission of this information collection request to Office of
Management and Budget (OMB) under standard clearance procedures. Comments submitted in
response to the above noted emergency and 60-day Federal Register notices will be summarized,
along with the Bureau’s response to those comments, in the submission to OMB.
9. Payments or Gifts to Respondents
Not applicable. The information collection does not provide for making payments or gifts to
respondents.
10. Assurances of Confidentiality
Because this collection of information does not involve the collection of information from or
about individuals, the Privacy Act of 1974, as amended, 5 U.S.C. section 552a, is not implicated.
Therefore, no privacy impact assessment has been conducted nor has the Bureau published a
Systems of Records Notice relative to this collection of information.
11. Justification for Sensitive Questions
Not applicable. The collection of information does not impact individuals and does not
collect information that would be considered private.
12. Estimated Burden of Information Collection
The vast majority of depository institutions are insured by the Federal Deposit Insurance
Page 4 of 7

Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). We estimate
that there are at present 136 depository institutions potentially subject to Regulation I, and thus
required to provide the above noted disclosures in their advertising and obtain written
acknowledgement of the institution’s lack of federal insurance for their accounts. The Bureau
also estimates that approximately one depository institution will convert from federal insurance
to non-federal insurance per year, and will incur one time costs to provide disclosures on their
premises, account statements, and other documents specified above. This depository institution
will also incur a one time cost to attempt to receive written acknowledgement from its current
accountholders. Accordingly, the Bureau estimates the burden as follows:
Information Collection
Requirement
Costs of Operating
Advertising Disclosures
Obtaining & Maintaining a signed
acknowledgement
Consumer reviewing and signing
acknowledgement
Costs of Federal to Non-Federal
Conversion
Posting of Disclosures on the
Premises
Formatting Account Statement and
other Document Disclosures
Mailing Attempt to Obtain Member
Acknowledgement
Consumer reviewing and signing
acknowledgement
Total

No. of
Respondents

Annual
Frequency

Annual
Responses

Average
Response
Time (hrs.)

Annual
Burden
Hours

Hourly
Rate 1

Annual
Labor
Costs

136 2

0.3 3

41

1.00

41

$31.23

$1,274

136

296 4

40,256

0.04

1,610

$31.23

$50,288

136

296

40,256

0.04

1,610

n/a

n/a

1

1

1

8.00

8

$31.23

$250

1

1

1

8.00

8

$31.23

$250

1

1

1

8.00

8

$31.23

$250

1

6779 5

6,779

0.04

271

n/a

n/a

136

87,430

3,652

$52,311

13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
There should be minimal annualized costs to keep the required acknowledgement forms on file
and insert the necessary language into all advertisements. Covered entities will incur a small
material cost to obtain the written disclosures. Depository institutions who convert from federal
insurance to non-federal insurance will incur costs to mail disclosures with return postage for
acknowledgements. It is the Bureau’s understanding that the only private insurer of depository
institutions provides disclosure signage for its customers. Therefore, there will be minimal costs
to depository institutions who convert to private insurance to develop and display disclosures on
1

Bureau of Labor Statistics May 2014 Occupational Employment and Wage Estimates
http://www.bls.gov/oes/current/oes_nat.htm#13-0000 Median hourly wage for Compliance Officers
2
The number of respondents is an average of the estimate for the three year period spanning 2016 to 2018, taking
into account the growth of non-federally insured depositary institutions over that time.
3
Represents the average annual number of advertising campaigns at non-federally insured depository institutions.
4
Represents the average annual member growth of non-federally insured depository institutions.
5
Represents the average number of accountholders at depository institutions that have converted from federal to
private insurance over the last three years.
Page 5 of 7

their premises. If an institution instead converts to another form of insurance, such as state
insurance, that institution would incur minimal costs to display disclosures on its premises.
Accordingly, the Bureau estimates the burden as follows:
Description of Costs
Costs of Operating
Material Cost of Written Disclosure
Costs of Federal to Non-Federal
Conversion
Material and Postage Cost of
Acknowledgement Mailing
Total

No. of
Respondents

Annual
Frequency

Annual
Responses

Unit Cost

Annual
Burden

136

296

40,256

$0.01

$403

1

1

1

$3,810

$3,810

136

40,257

$4,212

14. Estimated Cost to the Federal Government
The Bureau does not incur any new or unique costs as a result of this information collection.
15. Program Changes or Adjustments
Since this is a new information collection request, all of the burden is considered a program
change. On December 16, 2011, the Bureau published an interim final rule (IFR) republishing
Regulation I and making technical and conforming changes to reflect the transfer of authority
and certain other changes made by the Dodd-Frank Act (76 FR 78126 / RIN 3170-AA06). The
IFR did not impose any new substantive obligations on persons subject to the existing
regulations. As the Bureau added no new recordkeeping or reporting requirements, it adopted
the PRA analysis from the original regulation. Upon further review, the Bureau has since
determined that the disclosures required by 12 CFR 1009.4 and signed acknowledgement
required by 1009.5 are subject to the PRA and require OMB approval thereunder.
16. Plans for Tabulation, Statistical Analysis, and Publication
Not applicable. The information will not be published.
17. Display of Expiration Date
There are currently no forms or other instruments associated with this information collection on
which to display the OMB-assigned expiration date. The OMB number and expiration date will
be displayed on the Federal government’s electronic PRA docket at www.reginfo.gov.
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.
Page 6 of 7

Page 7 of 7