3170-0006 CLA (M)-FO 30-dayFRN_OMB

30-day Federal Register Version (2018 Renewal)

BUREAU OF CONSUMER FINANCIAL PROTECTION
PAPERWORK REDUCTION ACT SUBMISSION
INFORMATION COLLECTION REQUEST
SUPPORTING STATEMENT PART A
CONSUMER LEASING ACT
(REGULATION M) 12 CFR 1013
(OMB CONTROL NUMBER: 3170-0006)
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 September 22, 2015.
ABSTRACT:
Consumers rely on the disclosures required by the Consumer Leasing Act, 15 U.S.C. 1667
et seq. (CLA) and Regulation M, 12 CFR 1013, for information to comparison shop among
leases, as well as to ascertain the true costs and terms of lease offers. Federal and state
enforcement and private litigants use the records to ascertain whether accurate and complete
disclosures of the cost of leases have been provided to consumers prior to consummation of the
lease. This information provides the primary evidence of law violations in CLA enforcement
actions brought by federal agencies. Without Regulation M's recordkeeping requirement, the
agencies' ability to enforce the CLA would be significantly impaired.
A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
The Consumer Leasing Act, 15 U.S.C. 1667 et seq. (CLA), an amendment to the Truth
in Lending Act (TILA), 15 U.S.C. 1601 et seq., was enacted to foster comparison shopping and
informed decision making by requiring accurate disclosure of the costs and terms of leases to
consumers. Lessors are subject to disclosure requirements that apply to both open-end leases
(i.e., with a residual due at lease end) and closed-end leases (i.e., “walkaway” leases, with no
substantial amount due at lease end).
Disclosure
Regulation M imposes disclosure requirements on all types of lessors, including
automobile lessors (such as auto dealers, independent leasing companies, and manufacturers’
captive finance companies), computer lessors (such as computer dealers and other retailers),
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furniture lessors, various electronic commerce lessors, and diverse types of lease advertisers, and
others. These requirements are intended to ensure that consumers are fully apprised of the terms
of leases prior to consummation of the transaction. The written disclosures required by
Regulation M are derived from statutory disclosures and directives mandated by the CLA. See
12 CFR 1013.4; 15 U.S.C. 1667a; 15 U.S.C. 1667f (written disclosures); 12 CFR 1013.7; 15
U.S.C. 1667c; 15 U.S.C. 1667f (advertising disclosures).
Regulation M includes model forms and clauses that can be used to comply with the
written disclosure (non-advertising) requirements of the CLA and Regulation M. See
Appendices A-1, A-2, and A-3 to Regulation M. Correct use of these model forms and clauses
insulates lessors from liability under the CLA and Regulation M. See comment I-1.
Recordkeeping
Section 1013.8 of Regulation M requires lessors to retain evidence of compliance with
its requirements (other than its advertising rules) but does not specify the particular records to
be kept. Entities subject to Regulation M may choose the records they consider adequate to
show compliance, and each entity may interpret the requirement differently. Records, however,
must be retained for twenty-four months.
2. Use of the Information
As noted above, consumers rely upon the disclosures required by the CLA and
Regulation M for information to comparison shop among leases, as well as to ascertain the true
costs and terms of lease offers.
Federal and state enforcement and private litigants use the records to ascertain whether
accurate and complete disclosures of the cost of leases have been provided to consumers prior to
consummation of the lease. This information provides the primary evidence of law violations in
CLA enforcement actions brought by federal agencies. Without Regulation M’s recordkeeping
requirement, the agencies’ ability to enforce the CLA would be significantly impaired.
3. Use of Information Technology
The disclosures required by Regulation M 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 M, by enabling lessors to utilize more efficient electronic
media for disclosures and compliance.
Regulation M also permits lessors to retain records on any method that reproduces
records accurately, including computer programs, microfilm, or microfiche. Lessors need only
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retain enough information to reconstruct the required disclosure or other records. See 12 CFR
1013.8 and comment 8-1.
Most lessors use computer support to calculate the required information and generate
the mandated disclosures, thereby limiting the burden on these entities.
4. Efforts to Identify Duplication
The disclosures required by the CLA and Regulation M are not otherwise available.
Although some lease cost information is contained in contractual documents, the information is
not standardized, and as a result, consumers cannot use them efficiently to comparison shop or
fully appreciate lease terms.
The recordkeeping requirement of Regulation M preserves the information provided by
lessors to consumers considering the costs and terms of lease offers. The lessor is the only
source of this information. No other federal law mandates retention of this information. No state
law known to the Bureau imposes this requirement, although some states may have other rules
applicable to consumer leases.
5. Efforts to Minimize Burdens on Small Entities
The CLA and Regulation M disclosure and recordkeeping requirements are imposed on
all lessors. Most lessors today utilize some measure of computerization in their business, and
Regulation M permits lessors to rely on computer support, among other alternatives, to meet
their recordkeeping and disclosure requirements. This flexibility presumably yields reduced
recordkeeping and disclosure costs (see #3 above). Regulation M also provides model forms and
clauses that may be used to comply with its requirements, and correct use of these forms and
clauses insulates a lessor from liability for the respective requirements.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
The disclosure requirements are needed to facilitate comparison cost shopping and to
spur informed lease decision making. If these requirements were eliminated, consumers would
not have access to this critical information. Their right to sue under the CLA would be
undermined, and enforcement agencies could not fulfill their charge in enforcing CLA.
The current record retention period of two years supports the one-year statute of
limitations for private actions, and enforcement agencies’ need for sufficient time to bring
enforcement actions regarding lease transactions. If the retention period were shortened,
consumers who sue under the CLA, and the administrative agencies, might find that lessor
records needed to prove violations of the CLA no longer exist.

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7. Circumstances Requiring Special Information Collection
The recordkeeping and disclosure requirements in Regulation M are consistent with the
applicable guidelines contained in 5 CFR 1320.5(d)(2).
8. Consultation Outside the Agency
The Bureau of Consumer Financial Protection (Bureau) consulted with industry experts
and other federal regulators to gather information relating to the burdens of CLA and Regulation
M when first estimating this burden. In addition, in accordance with 5 CFR §1320.8(d)(1), the
Bureau published a notice in the 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 in response to this notice. 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 in accordance with CFR
§1320.8(d)(1).
9. Payments or Gifts to Respondents
No payments or gifts are provided to respondents.
10. Assurances of Confidentiality
The recordkeeping and written disclosure requirements contain private financial
information about consumers who apply for and/or obtain consumer leases. Such information is
protected by the Right to Financial Privacy Act, 12 U.S.C. 3401 et seq. Such records may also
constitute confidential customer lists. However, there is no part of the rule that mandates
information collection by the Bureau.
To the extent that information covered by a recordkeeping requirement is collected by the
Bureau for law enforcement purposes, the confidentiality provisions of Bureau’s rules on
Disclosure of Records and Information, 12 CFR Part 1070, would apply.
11. Justification for Sensitive Questions
Regulation M only requires institutions to provide leasing information disclosures to
consumers and keep records of those disclosures. No questions of a sensitive nature are asked of
respondents.

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12. Estimated Burden of Information Collection
Labor Hours: 2,126
Exhibit 1: Burden Hour Summary
Requirement
Requires 1013.4 disclosures
Content of disclosures required
by 1013.3 for any consumer
lease
Extends disclosure
requirements of 1013.3 to lease
renegotiation and extension
Advertising disclosure
Advertising disclosure on
TV/radio, alternative
requirement
Recordkeeping
Other Lessors Total
Bureau portion

Non-Motor Vehicle Lessors Labor Burden
Citation
Respondents
Responses
per
Respondent
1013.3
13,718
1
1013.4(a) through (e),
g(1), h(1)(2), (i) through
(t)
1013.5 (a) through (c)
1013.7(a) through (e)
1013.7(f)
Recordkeeping

Average
Response Time
(hours)
0

Total
Hours
0

13,718

1

.13

1,783

13,718

1

.13

1,783

0
0

0
0

N/A
N/A

0
0

13,718

1

.05

686
4,253
2,126

The Bureau and Federal Trade Commission (FTC) share enforcement authority for
those non-depository institutions subject to the Bureau’s regulation M, with the Bureau
assuming burden for half of all non-depository institutions. Our estimate excludes burden
for motor vehicle dealers, which the FTC assumes burden for. The Bureau believes that
depository institutions represent a negligible segment of the leasing market.
While the Bureau includes section 1013.3 in the table above, we attribute to it no burden,
as it just refers to other provisions in the regulation, where we do estimate burden. The Bureau
estimates the total labor burden for ongoing recordkeeping and disclosure requirements under
Regulation M to be 4,253 hours for non-motor vehicle lessors. The Bureau assumes 2,126 hours
of this burden associated with regulation M. The Bureau estimates of respondent and market
volumes are drawn from a number of public and proprietary sources. 1
Associated Labor Cost: $81,398
The Bureau calculated labor costs by estimating the burden hours associated with
complying with the required disclosures, advertising disclosures, and recordkeeping activates

Market size sources include internal CFPB automobile markets data, Mintel® auto advertising data, publicly
available Census data on County Business Patterns (2013-2014), and previous FTC estimate under OMB 3084-0086
(2012).
1

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described in Exhibit 1, and applying appropriate hourly cost figures. 2 With a composite wage of
$38.29, the cost for these labor hours then works out to be 4,253 hours * $38.29/hour = $162,835
labor cost overall, of which 2,126 hours * $38.29/hour = $81,398.16 labor cost is attributed to
the Bureau.
13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
Additional Materials Cost: $13,992.36
Exhibit 2: Additional Materials Cost

Non-Motor Vehicle Lessors Materials Burden
Citation
Respondents
Responses per
Respondent

Requirement

Cost per
Response

Total Cost
(USD)

Requires 1013.4 disclosures

1013.3

13,718

12

0

Content of disclosures required
by 1013.3 for any consumer
lease
Extends disclosure requirements
of 1013.3 to lease renegotiation
and extension

1013.4(a) through (e), g(1),
h(1)(2), (i) through (t)

13,718

12

$0.08

13,169.28

1013.5 (a) through (c)

13,718

12

$0.08

13,169.28

Advertising disclosure
Advertising disclosure on
TV/radio, alternative
requirement
Recordkeeping
Other Lessors Total
Bureau portion

1013.7(a) through (e)
1013.7(f)

0
0

0
0

N/A
N/A

0
0

13,718

12

$0.01

1,646.16
27,984.72
13,992.36

Recordkeeping

0

The Bureau claims responsibility for an additional $13,992.36 in non-motor-vehicle
lessor’s burden resulting from material costs directly related to the information collections in
Exhibit 2. The material costs of disclosures were estimated based on industry and supervisory
estimates. The number of respondents and market sizes were estimated from proprietary and
public data sources available to the Bureau. 3 As discussed in section 12, while we include
section 1013.3 in the table above, we attribute it no cost, as it just refers to other provisions in the
regulation, where we do estimate cost.

Wage burden was calculated as a composite wage, with weighting based on previous estimates and information
provided by various industry professionals. Median values from the BLS Occupational Employment and Wages data
were used to estimate a composite wage as 5% Compliance Officer (occupation code 13-1041) at $32.63/hour, 5%
Sales Manager (occupation code 11-2022) at $58.20/hour), 45% Lawyer at $57.33/hour (occupation code 23-1011),
and 45% administrative assistant (occupation code 43-6014) at $17.66/hour), for a composite wage of $35.99.
3
Market size sources include internal CFPB automobile markets data, Mintel® auto advertising data, publicly
available Census data on County Business Patterns (2013-2014), and previous FTC estimates (see 4 above).
2

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14. Estimated Cost to the Federal Government
As the Bureau does not collect any information, there are no additional costs to the
Federal Government.
15. Program Changes or Adjustments
Exhibit 3: Summary of Burden Changes

Annual
Responses

Total Respondents

Burden
Hours

Cost Burden

Total Requested

13,718

13,718

2,126

$13,992

Current OMB Inventory

13,718

13,718

5,018

$14,137

0

0

-2,892

-$145

Program Change

0

0

0

$0

Discretionary

0

0

-2,892

-$145

New Statue

0

0

0

$0

Violation

0

0

0

$0

Adjustment

0

0

0

0

Difference

The Bureau estimates the total number of burden hours associated with Regulation M (12
CFR 1013) to decrease by 2,892 in each of the next three years. This is due to the elimination of
one-time compliance costs associated with Regulation M. The Bureau also estimates a decrease
of $145 due to math errors associated with the Bureau’s previous estimates.
16. Plans for Tabulation, Statistical Analysis, and Publication
There are no plans to provide any publications based on the information collection of this
regulation.
17. Display of Expiration Date
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. Inasmuch
as all forms associated with this collection are model forms and therefore their use is voluntary,
the display of the OMB control number would not be appropriate on them.
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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