3170-0002 FCRA_Supporting_Statement_final_06282017

30-day Federal Register & OMB Review
CONSUMER FINANCIAL PROTECTION BUREAU
INFORMATION COLLECTION REQUEST
SUPPORTING STATEMENT PART A
FAIR CREDIT REPORTING ACT (REGULATION V) 12 C.F.R. 1022
(OMB CONTROL NUMBER: 3170-0002)

TERMS OF CLEARANCE: The Office of Management and Budget (OMB) Notice of
Action dated July 31, 2014 provides “Prior to the renewal of this collection, [the
Consumer Financial Protection Bureau] CFPB will consult with OMB on the placement
of OMB control numbers on the model forms included in this collection.” After a review
CFPB has determined that there are no separate “model forms” or instructions associated
with this collection. The disclosure requirements are provided within the text and
appendices of the applicable regulations,
ABSTRACT: The consumer disclosures included in Regulation V are designed to alert
consumers that a financial institution furnished negative information about them to a
consumer reporting agency, that they have a right to opt out of receiving marketing
materials and credit or insurance offers, that their credit report was used in setting the
material terms of credit that may be less favorable than the terms offered to consumers
with better credit histories, that they maintain certain rights with respect to a theft of their
identity that they reported to a consumer reporting agency, that they maintain rights with
respect to knowing what is in their consumer reporting agency file, that they can request a
free credit report, and that they can report a theft of their identity to the CFPB.
Consumers then can use the information provided to consider how and when to check and
use their credit reports.

A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
The Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111203, 124 Stat. 1376 (2010) (Dodd-Frank Act) transferred rulemaking authority for most
provisions of the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq., to the
Bureau of Consumer Financial Protection (CFPB), effective July 21, 2011. 1

1

See Sections 1061 and 1088 of the Dodd-Frank Act.

Page 1 of 25

Section 1088 of the Dodd-Frank Act, read in combination of Section 1061,
amends the FCRA to vest the CFPB with rulemaking authority over most provisions of
the FCRA, excepting providing rulemaking authority over certain motor vehicle dealers
engaged primarily in the sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both. The Dodd-Frank Act also provided the CFPB with enforcement
authority over certain institutions that have been under the jurisdiction of other agencies.
Section 1088 of the Dodd-Frank Act states that the CFPB “shall prescribe such
regulations as are necessary to carry out the purposes of this title, except with respect to
sections 615(e) and 628 [of the FCRA],” and therefore on December 21, 2011, the CFPB
issued an interim final rule (76 FR 79308) establishing the CFPB’s Regulation V (12
C.F.R. § 1022). The new Regulation V assembles applicable regulations, commentary,
and model notices 2 formerly promulgated by the transferor agencies, with minor
revisions to reflect accurate references and contact information.
Accordingly, the CFPB requests approval from the Office of Management and
Budget (OMB) to continue requiring the disclosures described within Regulation V from
certain populations over which the CFPB now has enforcement authority. This request is
an extension without change of a currently approved OMB control number.
2. Use of the Information
The consumer disclosures included in Regulation V are designed alert consumers
that a financial institution furnished negative information about them to a consumer
reporting agency, that they have a right to opt out of receiving marketing materials and
credit or insurance offers, that their credit report was used in setting the material terms of
credit that may be less favorable than the terms offered to consumers with better credit
histories, that they maintain certain rights with respect to a theft of their identity that they
reported to a consumer reporting agency, that they maintain rights with respect to
knowing what is in their consumer reporting agency file, that they can request a free
credit report, and that they can report a theft of their identity to the CFPB. Consumers
then can use the information provided to consider how and when to check and use their
credit reports.
3. Use of Information Technology
Consistent with the aims of the Government Paperwork Elimination Act, PL 105277, Title XVII, 112 Stat. 2681-749, 44 U.S.C. § 3504 note, the forms allow creditors to
use applicable technologies to reduce compliance costs. Financial institutions may use
any existing technology relevant to producing the notice, obtaining the consumer opt out
determination, and maintaining records of the notice and opt out determination.
4. Efforts to Identify Duplication

2

The disclosures requirements are substantially the same as those previously provided by model forms
promulgated by the FRS, the FDIC, the NCUA, the OCC, and the FTC.

2

There is no duplication. The information is not available from any other source.
This regulation is also enforced by other agencies under the following control numbers:

Agency Name

OMB Control Number

Federal Reserve System (FRS)
Federal Trade Commission (FTC)
Commodities Futures Trading
Commission (CFTC)
National Credit Union Administration*
Office of Comptroller of the Currency
Federal Deposit Insurance
Corporation**

7100-0308
3084-0144
3038-0067
3133-0165
1557-0230
3064-0161

*this collection has been submitted to OMB and is pending approval
** This collection is only for the dispute resolution procedures of Regulation V

However, each of these agencies is responsible for different regulated entities and these
collections do not overlap, so there is no duplication of the information collections.
5. Efforts to Minimize Burdens on Small Entities
Regulation V includes model notices that businesses may use to comply with
regulatory requirements, and which are very similar or identical to previous model
notices circulated by the FRS, the FDIC, the NCUA, and the OCC, the, and the FTC. By
minimizing the proposed alterations to model forms, the CFPB has sought to help
businesses of all sizes reduce the burden or inconvenience of complying with the
amendments to the regulations.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
The frequency of the disclosure requirements contained in Regulation V are
transactional based (on occasion). Less frequent disclosures would reduce the protections
to consumers that were contemplated by FCRA and Regulation V. The burden of
complying is, however, diminished by the provision of model notices and that creditors
may continue to use previous versions of the model notices.
7. Circumstances Requiring Special Information Collection
The collections of information in Regulation V are consistent with the applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
8. Consultation Outside the Agency
In accordance with 5 C.F.R. § 1320.8(d)(1), the Bureau published a notice
allowing the public 60 days to comment on the proposed extension of this currently
approved collection of information. No Comments were received. Further and in

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accordance with 5 C.F.R. § 1320.5(a)(1)(iv), the Bureau has 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
Not applicable. No assurance of confidentiality is necessary because the CFPB
does not collect any information under this collection.
11. Justification for Sensitive Questions
Not applicable. The CFPB does not collect any information under this collection,
therefore, no sensitive or personally identifying information is collected by the CFPB as a
result of these requirements.
12. Estimated Burden of Information Collection
Hours: 12,829,524
Exhibit 1: Total Burden for this regulation across all agencies with enforcement
authority for Regulation V,
Information
No. of
Type of IC Frequency Annual
Average Annual
Hourly Hourly
Collection
Respondents
Responses Response Burden
Rate Costs
Requirement
Time
Hours
Pre-employment
Screening
744,400
Disclosure
219 163,020,000
1.0 2,717,000 n/a1
n/a1
Disclosures
Adverse Action
762,800
Disclosure
287 219,186,800
0.7 2,417,700 18.76 45,347,600
Notices
Investigative
Procurement
626
Disclosure
1,740 1,089,200
1.4
25,900 23.50
608,700
Disclosures
Mortgage
Application Score
18,000
Disclosure
550 9,898,300
0.4
66,900 30.48 2,039,200
Disclosures
Risk-based Pricing
8,000
Disclosure
4,883 39,063,000
0.5
325,500 16.96 5,520,900
Notices
Pre-screen Opt-out
***
Disclosure
***
***
0.0
0 0.00
0
Notices
Unsolicited Offer
47 Recordkeeping
122,679 5,765,900
0.0
0 0.00
0
Opt-outs
Affiliate Marketing
***
Disclosure
***
***
0.0
0 0.00
0
Notices
Fraud Alerts
3 Recordkeeping
323,133
969,400
4.6
74,800 15.25 1,140,800

4

Information Block
3 Recordkeeping
85,067
255,200
13.0
53,200 15.24
810,700
Requests
Coordination of
3
Reporting
1
3 5,280.0
264 33.71
8,900
Complaints
Credit Scores and
3
Disclosure 14,133,333 42,400,000
2.2 1,526,400 0.00
0
Reports
Disputes with CRAs
16,047 Recordkeeping
2,336 37,478,000
9.0 5,621,700 15.00 84,301,900
Disputes with
16,000 Recordkeeping
***
***
***
***
***
***
Furnishers
Furnisher Negative
Information
16,000
Disclosure
10,875 174,000,000
0.0
0 0.00
0
Disclosures
Reseller
Permissible
*** Recordkeeping
***
***
***
***
***
***
Purpose Disclosure
Totals:
779,073 ////////////// ////////// 693,125,805 ///////// 12,829,524 ////// 139,787,600
1
The Bureau is not attributing a labor cost to consumer burden.
***The Bureau is requesting public comment and will consult with industry during the comment period to
obtain an estimate.

Employment related consumer report disclosure requirements
Employment screening disclosure and consent
Before a consumer reporting agency (CRA) may furnish a consumer report 3
for employment purposes, the person who requests the report from the agency shall
disclose to the consumer, in writing on a document that consists solely of the
disclosure, their intention to obtain the consumer report for employment purposes
and receive authorization from the consumer, in writing, to procure that report. If a
consumer applies for employment by mail, telephone, computer, or other similar
means, the person requesting the report may provide this disclosure and receive
consent from the consumer using one of these methods.
Adverse action disclosure
The Bureau estimates that there are 8.2 million positions hired annually at
companies where the employer has procured each candidate’s consumer report. 4 The
Bureau assumes that each opening results in 20 completed applications, on average.
Therefore the Bureau estimates that there are approximately 163 million consumers
receiving pre-employment screening disclosures each year. If each consumer spends
1 minute, on average, to read the notice and authorize the prospective employer to
3

Generally, consumer reports are any written, oral, or other communication of any information by a
consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or mode of living.
4
There were 62.7 million hires in the U.S. in the 12 months ending November 2016 and one survey
reported that 13 percent of employers use credit reports to screen candidates for all positions. See Bureau
of Labor Statistics, Job Openings and Labor Turnover – November 2016 (January 2017), available at
https://www.bls.gov/news.release/jolts.nr0.htm and Society for Human Resource Management,
Background Checking – The Use of Credit Background Checks in Hiring Decisions (July 2012), available
at https://www.shrm.org/hr-today/trends-and-forecasting/research-andsurveys/Pages/creditbackgroundchecks.aspx.

5

procure their consumer report, the annual burden of these notices on consumers is
approximately 2.7 million hours annually. The Bureau does not attribute any time
burden to employers since these notices are standardized. Therefore, the burden of
sending these notices should be minimal.
Before a potential employer takes any adverse action based in whole or in part on
information contained in a consumer report, the potential employer shall provide a copy
of the report and a description of the rights of the consumer as prescribed by the Bureau. 5
The Bureau assumes that 5 percent of applications are rejected as a result of information
contained in a consumer report. The Bureau assumes that approximately 67 percent of
adverse action notices are sent by mail or e-mail and result in minimal burden, and the
remaining notices are provided in person and take approximately 2 minutes to deliver. 6
Therefore the annual burden of adverse action notices is approximately 661,800 hours,
resulting in annual labor costs of approximately $18.6 million. 7
Non employment consumer report disclosure requirements
Adverse action disclosure
Outside of employment, if any other person takes an adverse action based in whole or in
part on information contained in a consumer report, that person must also provide a copy
of the report and description of the rights of the consumer as prescribed by the Bureau.
This requirement applies to any decision based on information in a consumer report,
including but not limited to credit transactions, insurance transactions, and tenant
screenings. The Bureau estimates that 34 percent of applications result in an adverse
action, requiring notice. 8 The Bureau estimates that there are 466.7 million annual
inquiries outside of employment screenings. 9 Therefore there are approximately 159.6
million adverse action notices provided to consumers outside of employment screenings
annually. The Bureau assumes that approximately 67 percent of adverse action notices
are sent by mail or e-mail and result in minimal burden, and the remaining notices are
provided in person and take approximately 2 minutes to deliver. 10 The Bureau estimates
5

In certain instances specific to national security investigations where the potential employer is the Federal
Government, there are alternative requirements designed to shield sensitive information from being made
available. The Bureau is not aware of available data which would allow it estimate burden in these cases,
therefore the Bureau is assuming the burden is the same and is not differentiating between employment
screenings and national security screenings in this analysis.
6
The Bureau does not have information to inform its estimate as to the number of consumers who receive
these written notices by mail, in person, or electronically, so the Bureau has assumed that the distribution of
methods is uniform.
7
The Bureau uses the median hourly wage of $28.06 for Human Resources Workers (13-1070) to calculate
labor costs. See Bureau of Labor Statistics, National Occupational Employment and Wage Estimates (May
2015), available at https://www.bls.gov/oes/current/oes_nat.htm (May 2015 BLS Wage Estimates).
8
Estimate based on the average credit rejection rate reported by consumers in the 2016 iterations of the
FRBNY Survey of Consumer Expectations. Available at
https://www.newyorkfed.org/microeconomics/databank.html.
9
Estimate obtained from the CFPB Consumer Credit Panel.
10
The Bureau does not have information to inform its estimate as to the number of consumers who receive
these written notices by mail, in person, or electronically, so the Bureau has assumed that the distribution of
methods is uniform.

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that adverse action notices taking place outside of employment decisions result in annual
burden of approximately 1.8 million hours and $26.8 million in labor costs annually. 11
Investigation disclosure
Prior to a consumer report being furnished for an investigation, the person
procuring the investigative consumer report shall certify to the CRA supplying the report
that the consumer whose report is being furnished has or will receive a disclosure in
writing. This disclosure will include a statement informing the consumer of the request
and of the consumer’s right to request additional information on the nature and scope of
the investigation and the summary of consumer rights under 15 U.S.C. § 1681g. If a
consumer requests the additional information, the person procuring the investigative
consumer report must provide this additional disclosure to the consumer in writing.
The Bureau estimates that there are 1 million investigative inquiries made
annually. 12 Given that the notice is standardized, the Bureau believes that sending these
disclosures results in minimal time burden. The Bureau assumes that the large majority
of consumers for whom an investigative report is being procured are aware of the
investigation, and therefore a small number of consumers request additional information.
If 5 percent of consumers request additional information regarding the nature and scope
of the investigation and each subsequent disclosure takes 30 minutes to draft, then the
annual burden as a result of these disclosures is approximately 25,900 hours and the
annual labor cost is approximately $608,700. 13
Mortgage application credit score disclosure
Any person who uses a consumer credit score in connection with a consumer
application for a mortgage loan secured by 1 to 4 units of residential real property must
provide certain information to the consumer. This information must include a disclosure
of the credit score used, the range of possible credit scores under the model that was used,
all of the key factors that adversely affected the credit score of the consumer, the date on
which the credit score was created, and the name of the person or entity that provided the
score or file upon which the score was created. The consumer must also receive a notice
to home loan applicants that is prescribed in 15 U.S.C. § 1681g.
The Bureau estimates that there are 9.9 million applications for mortgage loans
annually which trigger the need for a disclosure to consumers. 14 The Bureau provides
model forms for lenders to use for this disclosure and the process of generating loan
terms is generally automated, therefore the time burden of providing this disclosure is
small. If each disclosure takes, on average, 30 seconds to modify for each consumer’s
situation, then the annual burden on mortgage lenders is approximately 66,900 hours and

11

The Bureau uses the median hourly wage or $15.25 for Customer Service Representatives (43-4021) to
calculate labor costs. See May 2015 BLS Wage Estimates.
12
Estimate obtained from the CFPB Consumer Credit Panel.
13
The Bureau uses the median hourly wage of $23.47 for Paralegals and Legal Assistants (23-2011) to
calculate labor costs. See May 2015 BLS Wage Estimates.
14
Estimate based on 2015 Agency Home Mortgage Disclosure Act data.

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annual labor costs total approximately $2.0 million. 15
Risk-based pricing disclosure
Any person that (1) uses a consumer report in connection with an application for,
or a grant, extension, or other provision of, credit to a consumer that is primarily for
personal, family, or household purposes; and (2) provides credit to that consumer on
material terms that are materially less favorable than the most favorable terms that it
makes available to a substantial number of consumers, must provide the consumer with a
risk-based pricing notice. 16 Creditors must determine whether the terms that are offered
to a consumer result in a significantly greater cost of credit by comparing the terms
offered to other consumers for a specific credit product, or by using a credit score proxy
method or a tiered pricing method as prescribed under Regulation V § 1022.72. If a
person uses a consumer report to review an extension of credit made to the consumer and
based on that consumer report increases the annual percentage rate on the consumer’s
account, that entity must also provide a risk-based pricing notice.
A person is not required to provide a risk-based pricing notice if the consumer
applies for specific material terms and is granted those terms, as long as the material term
is specified before the consumer applied for or requested credit. Similarly, a creditor is
not required to provide the risk-based pricing notice to a consumer who receives a firm
offer of credit from a prescreened solicitation, so long as that consumer is offered a
specific material term. If a creditor provides the consumer with an adverse action notice,
then the creditor is not required to provide a risk-based pricing notice. In addition, a
creditor that is extending credit secured by a 1-4 family residential property is not
required to provide a risk-based pricing notice, but must provide a separate credit score
notice to any consumer whose credit report is used in the application (see discussion
above).
The Bureau estimates that there are 174 million account openings that are
potentially subject to risk-based pricing notices annually. 17 Of these accounts, the
Bureau estimates that 45 percent are opened by consumers with FICO scores below 700,
and would potentially receive lesser terms. 18 The Bureau does not have data available to
estimate the number of opened accounts for which material terms were specified in
advance; therefore the Bureau assumes that 50 percent of these new accounts resulted in a
risk-based pricing notice. The Bureau is requesting comment on this assumption and data
to improve this estimate. The Bureau estimates that 40 million accounts are opened with
terms that are materially less favorable than the most favorable terms and result in a
15

The Bureau uses the median hourly wage of $30.49 for Loan Officers (13-2072) to calculate labor costs.
See May 2015 BLS Wage Estimates.
16
Generally, material terms refers to the annual percentage rate which varies based on the information in a
consumer credit report and that has the most significant impact on consumers (e.g. the purchase APR on a
credit card). In the case of credit for which there is no APR, material terms refers to the term that varies
based on information in a consumer credit report and that has the most significant impact on consumers
(e.g. the deposit required in connection with credit extended by a utility company).
17
Data retrieved from the CFPB’s Consumer Credit Panel.
18
Estimate based on FICO score distributions reported as of October 2015, see
http://www.fico.com/en/blogs/risk-compliance/us-credit-quality-rising-the-beat-goes-on/.

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consumer receiving a risk-based pricing notice. The Bureau assumes that the large
majority of creditors use systems which automatically populate these notices; however
some creditors may modify notices manually. If each disclosure takes, on average, 30
seconds to modify for each consumer’s situation, then the annual burden on creditors is
approximately 325,500 hours and annual labor costs total approximately $5.5 million. 19
Consumer solicitation disclosure and opt-out requirements
Pre-screen opt out notice
Any person who uses a consumer report in connection with any credit or
insurance transaction that is not initiated by the consumer shall provide with each written
solicitation made to the consumer two notices. The first notice, referred to as the “short
notice”, shall state that the consumer has the right to opt out of receiving prescreened
solicitations. It shall also provide a telephone number, maintained by the CRAs, that the
consumer can call to opt out of these solicitations. The short notice shall also direct the
consumer to the existence and location of the second notice, referred to as the “long
notice”. The long notice shall state that: information in the consumer’s consumer report
was used in connection with the transaction; the consumer received the offer because the
consumer satisfied the selection criteria; the credit or insurance may not be extended if
the consumer does not meet the selection criteria after the consumer responds to the offer
(if applicable); the consumer has a right to prohibit the use of their file for unsolicited
offers; and the consumer may exercise their right to prohibit unsolicited offers by
notifying the CRA using a notification system that the CRA is required to establish and
maintain. Any person who makes an offer of credit or insurance in this way must also
maintain on file the criteria that was used to select the consumer to receive the offer and
criteria that may be used for determining whether or not to extend credit or insurance
pursuant to the offer.
The Bureau assumes that the burden related to providing the short notice and long
notice is minimal. The notices are standardized, small, and may be included on the same
page as other information provided by the offeror. Therefore these notices should take
minimal time to include when designing an offer and rarely result in increased materials
costs. The Bureau believes that the notification system used by CRAs to receive requests
from consumers to prohibit unsolicited offers consists largely of a website and an
automated phone line. The Bureau assumes that the time burden associated with these
systems is minimal. The Bureau believes that companies using prescreened solicitation
advertising campaigns likely maintain the selection criteria and offer criteria in their
usual course of business for operations and marketing research, therefore the Bureau
assumes that the maintenance of this information does not result in additional burden.
The Bureau is seeking comment on these assumptions.
Unsolicited offer opt-out systems
Consumer reporting agencies must maintain notification systems permitting
consumers to elect to be excluded from unsolicited credit and insurance transactions.
19

The Bureau uses the median hourly wage of $16.96 for Credit Authorizers, Checkers, and Clerks (434041) to calculate labor costs. See May 2015 BLS Wage Estimates.

9

CRAs that operate nationwide must maintain such a system jointly with other CRAs.
These systems must include a toll-free number that consumers may call to make a
request to be excluded. When a CRA receives notification from a consumer through
the notification system it maintains, it shall inform the consumer that the election is
effective for a 5-year period if the consumer does not sign a notice of election form,
and it shall provide a form to any consumer that requests one.
The Bureau estimates that 6 percent of consumers have elected to opt out of
unsolicited offers. 20 Taking into account population growth, in order for the percentage
of opted-out consumers to remain constant, approximately 5.8 million opt-outs would
have to take place annually. 21 The Bureau assumes that 50 percent of consumers opt out
electronically and that the other 50 percent of consumers opt out via an automated phone
system. It is possible that some consumers mail their election to opt-out, but the Bureau
assumes that the number of such instances is negligible. The Bureau believes that the
maintenance of opt-out websites and automated phone systems result in minimal time
burden for CRAs.

Affiliate marketing opt-out disclosure
Before making a solicitation to a consumer based on eligibility information
obtained from an affiliate, a consumer must receive a clear and conspicuous disclosure
that the person may use information provided by the affiliate for the purposes of making
solicitations to the consumer. 22 The consumer must also be provided a reasonable
opportunity and a reasonable and simple method to prohibit the use of their eligibility
information in this way. The notice must be provided by an affiliate that has or has
previously had a pre-existing business relationship with the consumer, or as part of a joint
notice from members of an affiliated group, provided that at least one of the affiliates has
or has previously had a pre-existing business relationship with the consumer. A
consumer who opts out of receiving solicitations from a group of affiliates is granted an
opt-out period of at least 5 years. A consumer who is opted out must be given an
opportunity to renew their opt-out status before their election expires.
The Bureau believes that affiliate marketing notices are generally included with
account opening agreements. Affiliate marketing notices are sometimes included with
the initial and annual privacy notice. 23 In other instances, the notice may be a standalone
20

See Board of Governors of the Federal Reserve System, Report to the Congress on Further Restrictions
on Unsolicited Written Offers of Credit and Insurance (Dec 2004), at 4, available at
https://www.federalreserve.gov/boarddocs/rptcongress/UnsolicitedCreditOffers2004.pdf.
21
The Bureau estimates that 288.3 million consumers have credit files and the U.S. population grows at a
rate of approximately 0.8 percent annually. To maintain an opt-out percentage of 6 percent, annual optouts must reach approximately 2 percent (0.8 percent population growth plus 20 percent of the 6 percent of
consumers previously opted out, to keep pace with the 5 year opt-out period expirations). Therefore optouts are estimated to occur approximately 5.8 million times per year. Population growth estimate obtained
from The World Bank, available at http://data.worldbank.org/indicator/SP.POP.GROW/
22
Affiliate is defined as any company that is related by common ownership or common corporate control
with another company.
23
The affiliate marketing notice cannot be included with the privacy notice if a firm uses the alternative
deliver method of posting the privacy notice to their website.

10

document; however the Bureau believes that the notice is rarely sent to a consumer by
itself. Given that there exist model forms for affiliate marketing notices and the notices
themselves are generally sent along with other disclosures, the Bureau assumes that the
time burden required to provide these forms is minimal. The Bureau is seeking comment
on this assumption and data to better estimate the impact of this requirement.
Identity theft and fraud reporting, recordkeeping, and disclosure requirements
Fraud reporting and required disclosures
Consumer reporting agencies must maintain policies and procedures to allow
consumers to report suspected identity theft and fraudulent activity. Upon verifying the
identity of a consumer who has alerted a CRA of potential fraud, a CRA shall include
fraud alerts with any credit score generated for that consumer for a time period specified
by the type of request, refer the information regarding the fraud alert to the other CRAs,
disclose to the consumer that they may request a free copy of their consumer report, and
provide the summary of consumer rights disclosure and the summary of rights of identity
theft victims disclosure required under 15 U.S.C. § 1681g.
The Bureau estimates that 1 million consumers contact CRAs requesting fraud
alerts annually. 24 The Bureau estimates that 407,200 of these alerts are received online,
126,000 alerts are received by telephone, and 436,200 of these alerts are received in the
mail or by some other means. 25 The Bureau assumes that alerts received online are
sufficiently automated so that the time burden is minimal. The Bureau believes that the
majority of fraud alerts (90 percent) received by telephone are handled by an automated
phone system and result in minimal time burden for CRAs. However, the remaining
alerts received by phone and through other channels will require significant personnel
time, which the Bureau assumes will result in an average burden of 10 minutes per alert.
Therefore the Bureau estimates that the handling of fraud and identity theft alerts results
in approximately 74,800 hours of burden to CRAs annually and $1.14 million in annual
labor costs. 26
Information block requests
Upon receipt of a request from a consumer to block information resulting from
identity theft from being included in a consumer report, a CRA shall promptly notify the
furnisher of the information identified by the consumer that the information may be the
24

Estimate based on survey data from the U.S. Department of Justice. Approximately 17.6 million people
were victims of identity theft in 2014, and an estimated 8.1 percent contacted a CRA. See U.S. Department
of Justice, Victims of Identity Theft, 2014 (Sep 2015), at 1 and 18, available at
https://www.bjs.gov/index.cfm?ty=pbdetail&iid=5408 (2015 DOJ Report).
25
An estimated 42 percent of consumers submit disputes to CRAs online, 44 percent by mail, 13 percent by
phone, and the remainder by fax, walk-ins, or other methods (for which the Bureau assumed resulted in
burden resembling disputes submitted by mail). See Consumer Financial Protection Bureau, Key
Dimensions and Processes in the U.S. Credit Reporting System (Dec 2012), at 27, available at
http://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-paper.pdf (2012 CFPB White
Paper).
26
The Bureau uses the median hourly wage or $15.25 for Customer Service Representatives (43-4021) to
calculate labor costs. See May 2015 BLS Wage Estimates.

11

result of identity theft, that a report has been filed, and that a block has been requested
along with the effective dates for the block. If a CRA decides to decline or rescind a
block of information, the CRA shall promptly notify the affected consumer in writing.
The CRA shall include the business name, address, and telephone number of any
furnisher that was contacted in connection with the decision to decline or rescind the
block of information, and a notice that the consumer has the right to add a statement to
the consumer’s file disputing the accuracy or completeness of the disputed information.
The Bureau estimates that approximately 255,200 consumers make requests to
block information annually. 27 The Bureau assumes that 50 percent of consumers make
block requests online and 50 percent make block requests in writing. 28 The Bureau
assumes that each request to block information takes, on average, 10 if requested online,
and 15 minutes if requested by mail. Therefore, the Bureau estimates that consumer
requests to block information result in 53,200 hours of burden annually and $810,700 in
annual labor costs. 29
Fraud related consumer complaints recordkeeping and annual report
Each nationwide CRA must submit an annual summary report to the Bureau on
consumer complaints received by the agency on identity theft or fraud alerts. The Bureau
believes that the mechanism to track complaints has already been established and results
in minimal annual burden. The Bureau assumes that each of the 3 nationwide CRAs
commits, on average, 80 hours of compliance officer time to draft each report and 8 hours
of lawyer time for review. Therefore the Bureau estimates that these annual reports result
in 264 hours of burden and $8,900 of labor costs annually. 30
Credit score, consumer report, and disclosure requirements
Consumer report disclosure
Upon the request of a consumer, a CRA shall disclose to the consumer all of the
information in that consumer’s file at the time of the request; the sources of information
in the consumer’s file; a list of each person that procured a consumer report for a
specified period in advance of the request (depending on the purpose for that report)
including each person’s address and telephone number; the dates, original payees, and
amounts of any checks upon which any adverse characterization of the consumer is
based; a record of all inquiries received by the agency in the previous year that identified
the consumer in connection with a transaction that was not initiated by the consumer;
27

Of the estimated 1 million consumers contacting CRAs to report fraud or identity theft, approximately
17.9 percent provided a copy of a police report. The police report is a prerequisite to obtaining a block of
information; therefore the Bureau assumes that these consumers are submitting police reports to submit a
request for a block of information. See 2015 DOJ Report, at 18.
28
To make a request to block information a consumer must provide, among other things, a copy of an
identity theft report which could not be provided by telephone.
29
The Bureau uses the median hourly wage or $15.25 for Customer Service Representatives (43-4021) to
calculate labor costs. See May 2015 BLS Wage Estimates.
30
The Bureau uses the median hourly wage of $31.56 for Compliance Officers (13-1041) and the median
hourly wage of $55.69 for Lawyers (23-1011) to calculate labor costs. See May 2015 BLS Wage
Estimates.

12

and, if the consumer requests the credit file and not the credit score, a statement that the
consumer may request and obtain the credit score. The CRA must also include the
summary of consumer rights under 15 U.S.C. § 1681g.
Credit score disclosure
Upon request, a CRA shall supply a consumer with their current credit score (or
the most recent credit score that was previously calculated for a purpose related to the
extension of credit), the range of possible credit scores under the model used, all of the
key factors that adversely affected to consumer’s credit score, the date on which the score
was created, the name of the entity that provided the score or the file upon which the
score was created, and a statement indicating that the information and scoring model may
be different than the credit score that may be used by a lender. A CRA may charge a fair
and reasonable fee to the consumer for providing this information.
Free credit scores and reports
All nationwide CRAs, upon the request of a consumer, must make all disclosures
pursuant to 15 U.S.C. § 1681g once during any 12-month period free of charge. 31 The
nationwide CRAs maintain a centralized source for consumers to make these requests.
Consumers may make requests through the centralized website, a dedicated toll-free
phone number, or a mailing address. Consumers may also receive these disclosures
without charge under other circumstances, including after a consumer receives an adverse
action, in connection with a fraud alert, after notification from a debt collector that the
consumer’s credit rating may or has been adversely affected, during a period of
unemployment, during a period where the consumer is a recipient of public welfare, or if
the consumer has reason to believe that the file contains inaccurate information due to
fraud.
The Bureau estimates that consumers request approximately 43.4 million credit
reports and credit scores annually. 32 Approximately 16 million are at no cost to the
consumer, due to the annual free report requirement or one of the special circumstances
described above. Approximately 26 million are paid for by the consumer or a reseller.
The Bureau assumes that the large majority (90 percent) of such requests is made online,
and the remainder is made through an automated phone line. Furthermore, the Bureau
assumes that the delivery of these disclosures following a consumer request is a highly
automated process. The Bureau assumes that the time burden of maintaining this system
is minimal.
Dispute resolution and disclosure requirements
Disputes handled by consumer reporting agencies
Consumer reporting agencies, upon receiving a notice of dispute from a
consumer, shall conduct an investigation with respect to the disputed information. If the
CRA determines that the dispute is frivolous or irrelevant, then it shall notify the
31

Disclosures pursuant to 15 U.S.C. § 1681g include the consumer report, the consumer’s credit score, and
the summary of consumer rights.
32
See 2012 CFPB White Paper, at 27.

13

consumer of the determination, the reasons for the determination, and any information
required to investigate the disputed information. If the CRA is unable to make a
determination, the CRA shall promptly notify the furnisher of the dispute and provide the
furnisher with information related to the dispute. The furnisher is then tasked with
making a determination and notifying the CRA of that determination. Once a final
determination has been reached, the CRA shall notify the consumer that the investigation
is complete and include in that notification a consumer report that is based on the
consumer’s revised file; a notice that, if requested by the consumer, a description of the
procedure used to make the determination can be provided by the CRA; a notice that the
consumer has the right to add a statement to the consumer’s file disputing the accuracy
and completeness of the information; and a notice that the consumer has the right to
request that the CRA furnish notification of deleted information to persons specified by
the consumer within time periods specified in 15 U.S.C. § 1681i.
Disputes handled by furnishers
Furnishers of information to CRAs, upon receiving a notice of dispute from a
consumer, shall conduct an investigation with respect to the disputed information; review
all relevant information provided by the consumer; report the results of the investigation
to the consumer; and, if the investigation finds that the information reported was
inaccurate, modify, delete, or permanently block the reporting of that information; and
promptly notify each CRA to which the person furnished the inaccurate information. If a
furnisher determines that the dispute is frivolous or irrelevant, the furnisher shall notify
the consumer by mail (or other means if authorized by the consumer) and include with
that notification the reasons for the determination and identification of any information
required to investigate the disputed information.
The Bureau estimates that CRAs receive approximately 8 million disputes
annually. 33 As of 2011, the national CRAs reported little impact from the 2009 Furnisher
Rule on the number of disputes CRAs received, suggesting that, at least at that time, the
number of disputes received by furnishers was small. 34 For the purposes of this analysis,
the Bureau is assuming that all disputes are initially sent to CRAs. The Bureau is
requesting data to estimate the number of disputes sent directly to furnishers. The Bureau
estimates that each consumer dispute results in, on average, 4.4 disputed trade lines. 35
Therefore the Bureau estimates that there are approximately 35 million disputed trade
lines annually.
The Bureau estimates that 5 percent of disputed trade lines are frivolous or
irrelevant. 36 The Bureau assumes that investigations of this type take approximately 5
33

See 2012 CFPB White Paper, at 27.
Id. at 34.
35
The Bureau estimates that 8 million disputes result in 32 to 28 disputed trade line investigations. Taking
the midpoint, the Bureau estimates that each dispute results in 4.4 disputed trade lines. See 2012 CFPB
White Paper, at 27.
36
Estimates based on findings from a 2012 FTC study of consumer credit reports. Of the 1001 participants
in the study, 262 (26%) consumers identified at least one potentially material error on at least one of their
credit reports, but only 206 (21%) of consumers had a modification as a result of their dispute. The Bureau
uses the 5 percent that did not receive a modification as a proxy for frivolous and irrelevant disputes. See
34

14

minutes to complete. The Bureau estimates that another 10 percent of disputed trade
lines can be handled by the CRAs without the help of a furnisher. 37 The Bureau assumes
that this type of investigation tends to be clear-cut and will take, on average,
approximately 5 minutes to complete. The Bureau estimates that the remaining 85
percent of disputed trade lines must be referred to a furnisher, and that these disputes take
approximately 5 minutes of CRA time and 10 minutes of furnisher time. In total, the
Bureau estimates that the handling of consumer disputes results in annual time burden to
CRAs of approximately 2.8 million hours at a labor cost of $42.3 million, and an annual
time burden to furnishers of approximately 2.5 million hours at a labor cost of $42.0
million. 38
Negative information disclosure requirements
If a financial institution furnishes or may furnish negative information to a CRA
regarding credit extended to a consumer, the financial institution shall provide a notice of
such furnishing of negative information, in writing, to the consumer. If a financial
institution furnishes additional negative information to a CRA with respect to the same
transaction, extension of credit, account, or customer, that institution is not required to
provide additional notice to the customer. This notice must be clear and conspicuous, but
may be included with any notice of default, any billing statement, or any other materials
provided to the consumer (with the exception of the initial disclosures provided under
section 127(a) of TILA). The notice may be provided to the consumer prior to the
furnishing of negative information or within 30 days of the furnishing of negative
information.
The Bureau believes that these negative information disclosures are given at
account opening. The Bureau provides model forms of this notice and there is little
modification needed to adapt the model notice for an institution. Furthermore, these
model notices can be combined with certain other disclosures, and the model notice is
only 2 sentences long. Therefore, the Bureau believes that the burden to provide this
notice is negligible.
Reseller permissible purpose disclosure requirement
Any person who procures a consumer report for purposes of reselling information
contained in the report must disclose to the CRA that originally furnishes the report (1)
the identity of the end-user(s) of the information and (2) each permissible purpose for
Federal Trade Commission, Report to Congress Under Section 319 of the Fair and Accurate Credit
Transaction Act of 2003 (Jan 2015), at i, available at https://www.ftc.gov/news-events/pressreleases/2015/01/ftc-issues-follow-study-credit-report-accuracy.
37
The Bureau estimates that 15 percent of disputes are handled internally by CRAs, 5 percent of which the
Bureau assumes are frivolous or irrelevant. Therefore CRAs have information available internally to make
determinations for 10 percent of disputed trade lines beyond the 5 percent deemed frivolous or irrelevant.
See 2012 CFPB White Paper, at 32.
38
For CRAs, the Bureau uses the median hourly wage of $15.25 for Customer Service Representatives (434051), and for furnishers, the Bureau uses the median hourly wage of $16.96 for Credit Authorizers,
Checkers, and Clerks (43-4041) to calculate labor costs. See May 2015 BLS Wage Estimates.

15

which the information is furnished to the end-user. The Bureau does not have
comprehensive data with which to estimate the burden of this requirement and is
requesting public comment to better inform its estimate. In the absence of better data, the
Bureau assumes that this requirement is part of the regular cost of doing business for
resellers and therefore results in minimal burden.
Government agency requests and reporting requirements
At the request of the Federal Bureau of Investigations, CRAs must provide certain
information related to a consumer’s credit report. Similarly, CRAs must provide certain
information related to a consumer’s credit report when requested to do so by other
government agencies for counterterrorism purposes. The Bureau assumes that such
requests are made in the conduct of an individualized investigation or equivalent and
therefore, according to 5 C.F.R. § 1320.4(a), are not collections of information subject to
the Paperwork Reduction act.
The Bureau is responsible for burden for the 135 institutions for which the
Bureau has primary enforcement authority. 39 The Bureau is also responsible for half
of the burden for non-depository institutions, not including motor vehicle dealers. 40
Therefore, the Bureau is assuming half of the burden for requirements of CRAs,
firms conducting investigations, resellers, and employers procuring consumer reports
for employment screening. The Bureau estimates that it is responsible for 63 percent
of the burden for requirements of furnishers and for procurers of consumer reports
who may send adverse action notices. 41 Since the 135 institutions for which the
Bureau has primary enforcement authority make approximately 25 percent of the
mortgage loans, and non-depository institutions make approximately 45 percent of
mortgage loans, the Bureau has assumed 48 percent (25 percent plus half of the 48
percent for non-DIs) of the burden for the mortgage application credit score
requirement. 42 The Bureau has assumed the same percentage of burden for riskbased pricing notices and pre-screen opt out notices. Using estimates from a study of
39

As of February 2017, these are comprised of the 113 depository institutions with assets exceeding $10
billion for four consecutive quarters and their 22 affiliates. Institutions subject to CFPB supervisory
authority can be found here: http://www.consumerfinance.gov/policy-compliance/guidance/supervisionexaminations/institutions/
40
The Dodd-Frank Act exempts certain motor vehicle dealers from CFPB’s enforcement
authority. However, due to the difficulty of making a reliable estimate of those dealers, the FTC has
attributed to itself the PRA burden for all motor vehicle dealers. This attribution does not change actual
enforcement authority.
41
This estimate is based on trade line data from the CFPB’s Consumer Credit Panel. The Bureau made
assumptions about large depository institutions in the sample based on associated trade lines in an attempt
to identify depository institutions that are large enough for the Bureau to have primary enforcement
authority. The Bureau then calculated the share of trade lines associated with these institutions (burden for
which the Bureau allocates to itself) and the share of trade lines associated with non-depository institutions
(burden for which the Bureau splits with the FTC) to estimate the share of burden for which the Bureau is
responsible for. The Bureau performed a similar calculation using inquiries in place of trade lines to
estimate the burden allocation for adverse action notices. This calculation also resulted in the Bureau
allocating 63 percent of the burden to itself.
42
Estimate based on 2015 Agency HDMA data.

16

privacy notices, the Bureau estimates that it is responsible for 95 percent of the
burden for affiliate marketing opt-out notices. 43
A detailed reporting of the requirements, total burden, and burden allocated to the
Bureau can be found below. In summary, the Bureau requests burden for the following:
Number of Respondents:
Total Annual Responses:
Total Annual Burden Hours:

779,073
415,290,203
6,093,412

Associated Labor Costs: $81,081,400

[Space intentionally blank]

43

The Bureau uses the share of very large financial institutions (by asset size) that share information to
affiliates for marketing purposes (65.4 percent), reported in the study, weighted by the share of trade lines
associated with large depository institutions in its Consumer Credit Panel to estimate the burden share
associated with the depository institutions for which the Bureau has primary enforcement authority. The
Bureau uses the share of all other sized institutions in the study that share information to affiliates for
marketing purposes (26.6 percent) weighted by the share of trade lines associated with non-depository
institutions in its Consumer Credit Panel to estimate the burden share associated with non-depository
institutions. The Bureau allocates to itself the large depository share and half of the non-depository share.
See Lorrie Fairth Cranor, Pedro Giovanni Leon & Blase Ur, A Large-Scale Evaluation of U.S. Financial
Institutions’ Standardized Privacy Notices (July 2014), at 28, available at
https://www.andrew.cmu.edu/user/pgl/financialnotices.pdf.

17

Exhibit 2: CFPB’s share of the burden of all information collections in Regulation V
Information
Collection
Requirement
Pre-employment
Screening
Disclosures
Adverse Action
Notices
Investigative
Procurement
Disclosures
Mortgage
Application
Score
Disclosures
Risk-based
Pricing Notices
Pre-screen Optout Notices
Unsolicited
Offer Opt-outs
Affiliate
Marketing
Notices
Fraud Alerts
Information
Block Requests
Coordination of
Complaints
Credit Scores
and Reports

163,020,000

1

Annual
Bureau
Annual
Labor Costs Allocation Responses
of Burden (CFPB)

Annual
Labor Costs
(CFPB)

0

219,186,800 0.661819

2,417,700

45,347,600

1,089,200 1.426735

25,900

608,700

50%

544,600

13,000

304,400

9,898,300 0.405524

66,900

2,039,200

48%

4,721,500

31,900

972,700

39,063,000 0.499962

325,500

5,520,900

48%

48,633,100

155,300

2,633,500

***

0

0

48%

***

0

0

0

0

0

50%

2,882,950

0

0

***

0

0

95%

***

0

0

969,400 4.629668

74,800

1,140,800

50%

484,700

37,400

570,400

255,200 12.50784

53,200

810,700

50%

127,600

26,600

405,400

3 88 hours

264

8,900

50%

2

132

4,500

1,526,400

0

50%

21,200,000

0

0

37,478,0001 2,947,300

47,617,000

5,765,900
***

42,400,000

37,478,000

***

174,000,000

***

2.16
9
***

0

***

5,621,700

50%

Annual
Burden
Hours
(CFPB)

2,717,000

***

Disputes with
CRAs
Disputes with
Furnishers
Furnisher
Negative
Information
Disclosures
Reseller
Permissible
Purpose
Disclosure
Total

Time Per Annual
Response Burden
Hours
(in
minutes)

Annual
Respondents

81,510,000 1,358,500

0

63% 138,087,700 1,523,200

28,569,000

50%
(CRAs) and
84,301,900
63%
(Furnishers)

***

***

0

0

***

***

63%

***

***

***

63% 153,120,000

0

0

***

***

50%

***

779,0732
12,829,524 139,787,600 ///////////
415,290,203 6,093,412 81,081,400
Given the involvement of both CRAs and furnishers, the Bureau has assumed all responses.
***The Bureau has requesting public comment and has consulted and will continue to consult with
industry to obtain an estimate. But so far no information has been received that would allow the
Bureau to make an estimate on the burden of these items. We believe them to be de minimus at this time.
2
This total reflects the Bureau’s estimate of the number of unique respondents affected by this regulation as
many of the same entities respond to multiple information collection requirements. We estimate the number
1

18

of unique respondents to breakdown as follows:
Respondents:

Total

Furnishers
NCRAs
CRAs
Employers
Resellers
Prescreen and Affiliate Marketers
Investigative Law Firms & Private
Investigators
MLOs
Total

16,000
3
44
744,400
???
???
626
18,000
779,073

13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
Exhibit 3: Material Cost Burden Summary
Description of Costs (O&M)
Pre-employment screening
disclosures

Adverse Action Notices

Investigative Inquiries

Mortgage Application Score
Disclosures

Risk Based Pricing

Unsolicited Offer Opt-Outs
Affiliate Marketing Opt-out
Fraud Alert

Information Block Requests
Credit Scores and Reports

Disputes with CRAs

Action

Per Unit
Costs

Quantity

In person
Mail

$0.10
$0.47

53,796,600
53,796,600

In person
Mail

$0.10
$0.47

72,530,187
19,855,000

Mail Disclosure
Mail Additional
Information

$0.47

1,037,328

$0.67

51,866

In person
Mail

$0.10
$0.10

3,286,000
3,286,000

In Person
Mail

$0.10
$0.47

12,890,790
12,890,790

Phone
***

$0.24
***

2,882,926
***

Phone
Mail

$1.20
$0.67
$0.47

126,023
562,256
12,759

Phone Request
Mail Report

$0.36
$1.77

4,406,621
22,033,105

19

Bureau
Allocation

Costs

50%

$15,412,800

63%

$26,182,700

50%

$262,800

48%

$313,500

48%

$3,523,300

50%

$346,000

95%
50%

***
$257,300

50%

$3,000

50%

$20,325,600

50% (CRAs)

$642,800

Frivolous Notice
Outcome Notice

Total Burden Material Costs:

$0.47
$.10

1,757,525
8,034,400

/////////

////////////

63%
(Furnishers)

$66,627,000

The Bureau estimates that 163 million pre-employment screening disclosures are
delivered to consumers annually. The Bureau does not have information to inform its
estimate as to the number of consumers who receive these written disclosures by mail, in
person, or electronically, so the Bureau has assumed that the distribution of methods is
uniform. The Bureau estimates that notices sent electronically result in zero cost burden;
notices provided in person result in the cost of a single sheet of printed paper,
approximately $0.10; and notices sent in the mail result in the cost of commercial postage
and a single sheet of printed paper, approximately $0.47. 44 Therefore, the Bureau
estimates that the total material cost of providing pre-employment screening disclosures
is approximately $30.8 million annually. The Bureau allocates 50% of this cost to itself,
resulting in $15.4 million annually.
The Bureau estimates that there are 59.6 million employment-related adverse
action notices and 159.6 million adverse action notices not employment-related delivered
each year. The Bureau does not have information to inform its estimate as to the number
of consumers who receive these notices by mail, in person, or electronically, so the
Bureau has assumed that the distribution of methods is uniform. The Bureau estimates
that notices sent electronically result in zero cost burden; notices provided in person
result in the cost of a single sheet of printed paper, approximately $0.10; and notices sent
in the mail result in the cost of commercial postage and a single sheet of printed paper,
approximately $0.47. Therefore the Bureau estimates that the total material cost of
providing adverse action notices is approximately $41.6 million annually. The Bureau
allocates 63% of this cost burden to itself, resulting in $26.2 million annually.
The Bureau estimates that there are 1 million investigative inquiries made
annually. The Bureau estimates that the disclosure of a consumer report being procured
for investigative purposes is sent in the mail, resulting in the cost of commercial postage
and a single sheet of printed paper, approximately $0.47. The Bureau assumes that the
large majority of consumers for whom an investigative report is being procured are aware
of the investigation, and therefore a small number of consumers request additional
information. If 5 percent of consumers request additional information regarding the
nature and scope of the investigation and each subsequent disclosure results in a cost of
approximately $0.67, then the total material cost to persons requesting reports for
44

Postage rates based on per unit costs of sending first-class letters, $0.373. See USPS Business Price
Calculator, available at https://dbcalc.usps.com/Default.aspx.

20

investigations is $525,600 annually. 45 The Bureau allocates 50% of this cost burden to
itself, resulting in $262,800 annually.
The Bureau estimates that there are 9.9 million mortgage loan applications
annually which trigger a disclosure of the consumer’s credit score. The Bureau does not
have information to inform its estimate as to the number of consumers who receive these
disclosures by mail, in person, or electronically, so the Bureau has assumed that the
distribution of methods is uniform. The Bureau estimates that disclosures delivered in
person will cost $0.10 and disclosures delivered by mail will also cost $0.10 because the
Bureau assumes that this disclosure can be included with other documents and will not
require additional postage. The Bureau assumes that disclosures provided electronically
result in zero material burden. The Bureau estimates that these disclosures triggered by
mortgage loan applications results in costs to originators of $657,200 annually. The
Bureau allocates 48% of burden to itself, resulting in $313,500 annually.
The Bureau estimates that 40 million accounts are opened with terms that are
materially less favorable than the most favorable terms available. This results in a
consumer receiving a risk-based pricing notice. The Bureau does not have information to
inform its estimate as to the number of consumers who receive these disclosures by mail,
in person, or electronically, so the Bureau has assumed that the distribution of methods is
uniform. The Bureau estimates that this disclosure costs $0.47 to send by mail and $0.10
to deliver in person. The Bureau assumes disclosures sent electronically result in zero
material burden. The Bureau estimates that sending risk-based pricing notices results in
costs to creditors of approximately $7.4 million annually. The Bureau allocates 48% of
the burden to itself, resulting in $3.5 million annually.
The Bureau assumes that 50 percent of consumers electing to opt out of
unsolicited offers of credit and insurance transactions do so electronically, and 50
percent of consumers do so via an automated phone system. The Bureau estimates
that 5.8 million consumers opt out annually. The Bureau estimates that each call
takes approximately 2 minutes, and that each minute of automated phone system
time costs CRAs approximately $0.12. Therefore, the Bureau estimates that the cost
to maintain the phone system is $691,900 annually. The Bureau allocates 50% of the
burden to itself, resulting in 346,000 annually. The Bureau assumes that there is no
material burden when a consumer elects to opt out electronically. The Bureau does
not possess data to estimate the number of election forms sent to consumers who
have requested that they be excluded from unsolicited credit and insurance
transactions for a period longer than the minimum 5 years. The Bureau is seeking
comment on this issue and data to better estimate the impact of this requirement.
The Bureau is seeking comment on the burden experienced by financial
institutions as a result of the requirement to provide an affiliate marketing opt-out notice.
The Bureau does not possess data with which to accurately estimate the burden imposed
by this requirement.
45

This estimate assumes postage costs of $0.37 and 3 sheets of paper, printed, double-sided, at a cost of
$0.10 each.

21

The Bureau estimates that 126,000 fraud alerts are requested by telephone, of
which 90 percent are handled by an automated system which costs CRAs approximately
$0.12 per minute to maintain. The Bureau assumes that each call lasts, on average, 10
minutes. Therefore, the Bureau estimates that the automated systems used to receive
fraud alerts cost $136,100 annually. The Bureau estimates that an additional 436,200
fraud alerts are received by mail and the remaining alerts are received electronically. The
Bureau assumes that for alerts sent electronically, the CRA can provide the required
summary of consumer rights and the summary of rights for identity theft victims
electronically at no cost. For the alerts received by telephone or mail, the summary of
rights disclosures must be mailed, at an estimated cost of $0.67 per disclosure. 46
Therefore the Bureau estimates that providing these disclosures to consumers costs CRAs
$514,500 annually. The Bureau allocates 50% of the burden to itself, resulting in
$257,300 annually.
The Bureau estimates that approximately 255,000 consumers make requests to
block information resulting from fraud or identity theft annually. The Bureau estimates
that 5 percent of these requests are denied, or approved and later rescinded, triggering the
requirement to notify the consumer involved of the decision. The Bureau estimates that
this notice is sent in the mail, resulting in the cost of commercial postage and a single
sheet of printed paper, approximately $0.47. Therefore the Bureau estimates that these
notices result in material costs of approximately $6,000 to CRAs annually. The Bureau
allocates 50% of the burden to itself, resulting in $3,000 annually.
The Bureau estimates that consumers request approximately 43.4 million credit
reports and credit scores annually. 47 The Bureau assumes that the large majority (90
percent) of such requests is made online, and the remainder is made through an
automated phone line. The Bureau assumes that the online requests result in zero
material burden and the automated phone line costs CRAs approximately $0.12 per
minute to operate. If each phone call lasts, on average, 3 minutes, then the annual
material cost to receive requests for credit scores and reports is approximately $1.6
million annually.
The Bureau estimates that the average credit report is 25 pages in length. With
each report, CRAs must include the summary of consumer rights, which the Bureau
estimates adds 3 pages. The Bureau assumes that approximately 50 percent of reports are
delivered electronically at no cost, and the rest are delivered by mail. 48 Therefore
approximately 21.7 million consumers receive, on average, 14 pages printed pages
(double-sided) in the mail as a result of a request for a consumer report. The Bureau
estimates the cost to CRAs of sending a consumer report is, on average, $1.77. Therefore
46

This estimate assumes postage costs of $0.37 and 3 sheets of paper, printed, double-sided, at a cost of
$0.10 each.
47
See 2012 CFPB White Paper, at 27.
48
Although the Bureau assumes the large majority of credit report requests are made electronically, the
Bureau believes that many consumers prefer physical copies of their credit reports and will request that
their reports be mailed.

22

the Bureau estimates that the material cost of sending credit reports is $40.6 million
annually. The Bureau allocates 50% of the burden to itself, resulting in $20.3 million
annually.
The Bureau estimates that CRAs receive approximately 8 million disputes
annually and approximately 35 million disputed trade lines annually. While each trade
line results in its own investigation, the Bureau assumes that, with the exception of
frivolous or irrelevant disputes, CRAs send result notices for disputes containing multiple
disputed trade lines. The Bureau estimates that approximately 5 percent of disputed trade
lines are frivolous and irrelevant and, therefore, receive a separate determination notice.
The Bureau believes that each of the 8 million disputes also result in CRAs sending
notices of results. The Bureau estimates that 42 percent of these notices are sent
electronically, and the remaining 58 percent of notices are sent by mail. 49 The Bureau
assumes notices sent electronically result in zero material burden, that frivolous and
irrelevant notices sent by mail cost $0.47, and that results notices sent by mail cost
$0.10. 50 Therefore, the Bureau estimates that notices to consumers as a result of CRA
investigations result in costs of approximately $1.3 million to CRAs annually. 51 The
Bureau allocates 50% of the CRA burden and 63% of the furnisher burden to itself,
resulting in $642,800 annually.
Using the same methodology to allocate burden to the Bureau based on the
respondents found in the previous section, the Bureau requests burden for the following:
Material Costs: $66,627,000

14. Estimated Cost to the Federal Government
There are no additional costs to the Federal Government.
15. Program Changes or Adjustments

49

The Bureau assumes that disputes delivered electronically can be responded to electronically and
disputes delivered by other means are responded to by mail. The Bureau estimates that 42 percent of
disputes are delivered electronically. See 2012 CFPB White Paper, at 27.
50
Results notice must be sent with a copy of the consumer’s updated consumer report. The materials and
postage costs for these reports are included in the larger discussion of consumer report costs, above. The
Bureau assumes that the results notice will only add one sheet of paper at a cost of $0.10 and will be
included in the mailing containing the consumer report; therefore it will not result in additional postage.
51
Five percent of the 35 million disputed trade lines (1.75 million) result in postage and printing costs of
approximately $0.47, totaling 827,800. Fifty-eight percent of the 8 million disputes (4.64 million) result in
results notices sent by mail at a cost of $0.10, totaling $464,000. Therefore the total cost to creditors is
approximately $1.3 million.

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Total Annual Burden
Requested
Current OMB
Inventory
Difference (+/-)
Program Change
Discretionary
New Statute
Violation
Adjustment

Total
Respondents
779,073

Annual
Responses
415,290,203

155

Burden Hours
6,093,412

Cost Burden (O
& M)
$66,627,000

677,536

4,156,000

0

+778,918

+414,612,667

+1,937,412

+$66,627,000

+778,918

+414,612,667

+1,937,412

+$66,627,000

The Bureau reports no program changes to Regulation V at this time. The
adjustment of +778,918 respondents is due to the Bureau estimating the burden
associated on firms for which the Bureau has enforcement authority. After a full review,
it was determined that the Bureau did not account for all FCRA requirements on these
firms previously. The adjustment of +1,937,412 hours is largely a result of the estimation
of burden of requirements under FCRA for which an estimate had not previously existed.
This is the first time that the impact of these requirements has been estimated, resulting in
an increase in requested PRA burden. This increase does not represent new requirements
or a substantial increase in burden due to existing requirements. The adjustment of
+$66,627,000 in cost burden is also a result of newly estimated requirements.
16. Plans for Tabulation, Statistical Analysis, and Publication
Not applicable.
17. Display of Expiration Date
The OMB number will be displayed in the PRA section of the final rule and in the
codified version of the Code of Federal Regulations. Further, the OMB control 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 C.F.R. § 1320.9, and the related provisions of 5 C.F.R. § 1320.8(b)(3)
and is not seeking an exemption to these certification requirements.

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Supporting Statement Part B, Collections of Information Using Statistical Methods

Not applicable. This collection of information does not use statistical methods.

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