Information Furnishers Rule Supporting Statement (2019)

Supporting Statement for Information Collection
Furnisher Rules under the
Fair and Accurate Credit Transactions Act of 2003 and
the Dodd-Frank Act of 2010
16 C.F.R. Part 660 and 12 C.F.R. Part 1022
(OMB Control # 3084-0144)
1. & 2.

Necessity for and Use of the Information Collected

The information collection provisions for which the Federal Trade Commission (“FTC”
or “Commission”) seeks renewed OMB clearance implement section 312 of the Fair and
Accurate Credit Transactions Act of 2003 (“FACT Act”), Pub. L. No. 108-159 (2003), and Title
X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) or
(“DFA”), Pub. L. 111-203, 124 Stat. 1376 (2010).
As described, below, portions of the FACT Act amended the Fair Credit Reporting Act of
1970 (“FCRA”), 15 U.S.C. 1681 et seq., to require the FTC, Office of the Comptroller of the
Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of Thrift Supervision, and National Credit Union Administration
(collectively, “Agencies”) to issue guidelines for use by furnishers regarding the accuracy and
integrity of the information about consumers that they furnish to consumer reporting agencies
(“CRAs”) and to prescribe rules requiring furnishers to establish reasonable policies and
procedures for implementing the guidelines.
The prescribed rules also implement the requirement that the Agencies issue regulations
identifying the circumstances under which a furnisher must reinvestigate disputes about the
accuracy of information contained in a consumer report based on a direct request from a
consumer.
FACT Act Section 312(a) (implemented within 16 C.F.R. 660.3)
Section 312(a) of the FACT Act added section 623(e) to the FCRA, 15 U.S.C. 1681s2(e), to require the Agencies to, in consultation and coordination, (a) establish and maintain
guidelines for use by furnishers of information to CRAs regarding the accuracy and integrity of
the information relating to consumers that such entities furnish to CRAs and update such
guidelines as often as necessary; and (b) prescribe regulations requiring furnishers to establish
reasonable policies and procedures for implementing the guidelines.
In developing the guidelines, the Agencies were directed to: (1) identify patterns,
practices, and specific forms of activity that can compromise the accuracy and integrity of
furnished information; (2) review the methods (including technological means) used to furnish
information to CRAs; (3) determine whether furnishers maintain and enforce policies to assure the
accuracy and integrity of information furnished to CRAs; and (4) examine the policies and
procedures that furnishers employ to conduct investigations and correct inaccurate information
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that has been furnished to CRAs.
FACT Act Section 312(c) (implemented within 16 C.F.R. 660.4).
Section 312(c) of the FACT Act added section 623(a)(8) to the FCRA, 15 U.S.C. 1681s2(a)(8), to require the Agencies to jointly prescribe regulations that identify the circumstances
under which a furnisher must investigate a dispute concerning the accuracy of information
contained in a consumer report, in response to a direct request from the consumer to whom the
report relates.
In prescribing these regulations, the Agencies were required to weigh: (1) the benefits to
consumers and the costs to furnishers and the credit reporting system; (2) the impact of any
requirements imposed by the rule on the overall accuracy and integrity of consumer reports; (3)
whether permitting consumers to contact furnishers directly to dispute the accuracy of consumer
report information will likely result in the most expeditious resolution of such disputes; and (4)
the potential impact on the credit reporting process if “credit repair organizations,” as defined in
the Credit Repair Organization Act, are able to submit notices of dispute directly to furnishers on
behalf of consumers.
The regulations implementing section 312(c) require each furnisher to amend their
procedures to ensure that disputes received directly from consumers are handled the same way as
disputes received from CRAs. The regulations also require each furnisher to notify consumers by
mail or other means (if authorized by the consumer) within five business days after making a
determination that a dispute is frivolous or irrelevant.
On July 21, 2010, President Obama signed into law the Dodd-Frank Act. The DoddFrank Act substantially changed the federal legal framework for financial services providers.
Among the changes, the Dodd-Frank Act transferred to the Bureau of Consumer Financial
Protection (“CFPB”) most of the FTC’s rulemaking authority for the furnisher provisions of the
FCRA on July 21, 2011. The Commission, however, retains rulemaking authority under the
FCRA over any motor vehicle dealer described in Section 1029(a) of the Dodd-Frank Act that is
predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both.
In addition, the FTC retains its authority to enforce the furnisher provisions of the FCRA
and the FTC and CFPB rules issued under those provisions. Thus, the FTC and CFPB have
overlapping enforcement authority for many entities subject to the CFPB rule and the FTC has
sole enforcement authority for the motor vehicle dealers subject to the FTC rule.
Under section 660.3 of the FTC’s Information Furnishers Rule1 and section 1022.42 of

1

16 C.F.R. Part 660.
2 

the CFPB Rule,2 furnishers must establish and implement reasonable written policies and
procedures regarding the accuracy and integrity of the information relating to consumers that they
furnish to a consumer reporting agency (“CRA”).3 Section 660.4 of the FTC Rule and section
1022.43 of the CFPB Rule require entities that furnish information about consumers to a CRA to
respond to direct disputes from consumers. These provisions also require that a furnisher notify
consumers by mail or other means (if authorized by the consumer) within five business days after
making a determination that a dispute is frivolous or irrelevant (“F/I dispute”).
On December 21, 2011, the CFPB issued its interim final FCRA rule, including the
furnisher provisions (subpart E) of CFPB’s Regulation V.4 Contemporaneous with that issuance,
the CFPB and FTC had each submitted to OMB, and received its approval for, the agencies’
respective burden estimates reflecting their overlapping enforcement jurisdiction, with the FTC
supplementing its estimates for the enforcement authority exclusive to it regarding the class of
motor vehicle dealers noted above. The discussion below continues that analytical framework, as
appropriately updated or otherwise refined for instant purposes.
3.

Consideration of Using Improved Information Technology to Reduce Burden

Consistent with the aims of the Government Paperwork Elimination Act, 44 U.S.C. 3504
note, the Furnisher Regulations permit furnishers latitude in using new technologies to reduce
compliance costs. Indeed, the Agencies attempted to draft the regulations in a flexible,
technology-neutral manner. For example, the regulations do not prevent furnishers from
continuing to use automated, electronic, mechanical, or other technological means to provide
information about consumers to CRAs. In addition, as noted in #2 above, furnishers are
permitted to use means other than postal mail (if authorized by the consumer) to notify
consumers after making a determination that a dispute is frivolous or irrelevant.
4.

Efforts to Identify Duplication/Availability of Similar Information

Apart from DFA’s amendments to the FCRA that enable some overlapping FCRA
jurisdiction between the FTC and the CFPB, the FTC staff has not identified any other federal
or state statutes, rules, or policies that duplicate, overlap, or conflict with these regulations.
Section 625(b)(1)(F) of the FCRA preempts states from enacting any law concerning furnisher
obligations included in section 623 of the FCRA, including the requirements contained in the
2

12 C.F.R. Part 1022.
The rule defines a “furnisher” as an entity that furnishes information relating to consumers to one or more
CRAs for inclusion in a consumer report, but provides that an entity is not a furnisher when it: Provides
information to a CRA solely to obtain a consumer report for a permissible purpose under the FCRA; is
acting as a CRA as defined in section 603(f) of the FCRA; is an individual consumer to whom the furnished
information pertains; or is a neighbor, friend, or associate of the consumer, or another individual with whom
the consumer is acquainted or who may have knowledge about the consumer's character, general reputation,
personal characteristics, or mode of living in response to a specific request from a CRA.
4
76 Fed. Reg. 79,308 (Dec. 21, 2011).
3 
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instant regulations.
5.

Efforts to Minimize Burdens on Small Businesses

The collection applies to any entity, other than an individual consumer, that furnishes
information relating to consumers to one or more CRAs, regardless of size. The standards in the
regulations are flexible and designed to take into account a covered entity’s size and
sophistication to minimize burdens on small businesses.
6.

Consequences of Conducting Collection Less Frequently

The burden associated with this rulemaking is in part attributable to the written policies
and procedures that a respondent must establish to implement the guidelines. Once they are
developed, these policies and procedures will only need to be adjusted if they become ineffective.
The burden associated with this rulemaking is also in part attributable to the requirement that a
furnisher must investigate disputes received directly from consumers and notify consumers after
making a determination that a dispute is frivolous or irrelevant. Furnishers will only need to
amend their procedures once to ensure that disputes received directly from consumers are
handled the same way as complaints from CRAs, and will need to notify consumers after making
a determination that a dispute is frivolous or irrelevant only when such a determination is made.
7.

Circumstances Requiring Disclosures Inconsistent with Guidelines

The collection of information in the regulations is consistent with all applicable
guidelines contained in 5 C.F.R. 1320.5(d)(2).
8.

Consultation Outside the Agency

The Agencies sought public comment on the originating rulemaking, factoring them into
consideration for the final rule.5 In addition, in response to OMB filed comments on the
associated notice of proposed rulemaking, the Agencies described in the final rule preamble how
they maximized the practical utility of the rule’s information collection requirements and
minimized associated PRA burden. More recently, the Commission sought public comment on
the information collection requirements associated with the Information Furnishers Rule and the
FTC’s shared enforcement with the CFPB of the furnisher provisions in subpart E of the CFPB’s
Regulation V. 84 Fed. Reg. 10074 (March 19, 2019). No relevant comments were received.
9.

Payments/Gifts to Respondents
Not applicable.

5

See 74 Fed. Reg. 31,484, 31,502 (July 1, 2009).
4 

10. & 11.

Assurances of Confidentiality/Matters of a Sensitive Nature

No assurance of confidentiality is necessary because the regulations do not require
furnishers to register or file any documents with the Agencies. Moreover, the regulations do not
contain recordkeeping requirements.
12.

Estimated Hours Burden

The FTC’s currently cleared burden totals, post-adjustment for the effects of the Dodd
Frank Act, are 10,607 hours with $488,148 in associated labor costs. Estimated capital/nonlabor costs remain listed as $0 because FTC staff had reiterated its belief that the Rule imposes
negligible capital or other non-labor costs, as the affected entities are already likely to have the
necessary supplies and/or equipment (e.g., offices and computers) for the information collections
within the Rule.
Using the currently cleared estimates (post-adjustment for the effects of the Dodd-Frank
Act) of the number of applicable motor vehicle dealers and their assumed recurring disclosure
burdens, the FTC proposes the following:
Estimated number of respondents: 7,2106
Section 660.3 of FTC Rule/Section 1022.42 of CFPB Rule:
A.

Burden Hours

Yearly recurring burden of 2 hours for training7 to help ensure continued compliance
regarding written policies and procedures for the accuracy and integrity of the information
furnished to a CRA about consumers.
6

The CFPB estimates that there are 16,000 furnishers, excluding motor vehicle dealers that are subject to
the FTC’s jurisdiction, with an allocation to that agency of 63% of the burden or 10,080 respondents. See
CFPB Supporting Statement Part A, Fair Credit Reporting Act (Regulation V) 12 CFR 1022 (OMB Control
Number: 3170–0002) (https:// www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201707-3170002). Allocating the remaining 37% of the burden to the FTC yields 5,920 respondents, excluding motor
vehicle dealers that are subject to the FTC’s jurisdiction. Based on figures obtained from the North
American Industry Classification System (NAICS) Association’s database of U.S. businesses, the FTC
estimates that there are approximately 129,000 motor vehicle dealers determined as follows: 88,695 car
dealers per NAICS data (53,549 new car dealers, 35,146 used car dealers) in addition to 4,023 Recreational
Vehicle Dealers; 9,248 boat dealers; and 26,706 motorcycle, ATV/All Other Motor Vehicle Dealers. See
https://www.naics.com/six-digit-naics/?code=44-45. It is difficult to determine precisely the number of
motor vehicle dealers that are subject to the FTC’s jurisdiction and that are furnishers. Given the restrictions
in section 1029(a) of the Dodd-Frank Act that motor vehicle dealers subject to the FTC’s jurisdiction are
those that routinely assign consumer contracts governing retail credit to an unaffiliated third party finance
source, Commission staff believes the number is de minimis. Accordingly, the FTC estimates that 1% of
motor vehicle dealers subject to the FTC’s jurisdiction are furnishers of information to CRAs or 1,290
respondents. Thus, 1,290 motor vehicle dealers + 5,920 other entities = 7,210 respondents for the FTC’s
burden calculations.
7
74 Fed. Reg. at 31,505.
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7,210 respondents x 2 hours for training = 14,420 hours
B.

Labor Costs

Labor costs are derived by applying appropriate estimated hourly cost figures to the
burden hours described above. The FTC assumes that respondents will use managerial and/or
professional technical personnel to train company employees in order to foster continued
compliance with the information collection requirements in the Information Furnishers Rule and
the furnisher provisions of Regulation V.
14,420 hours x $56.588 = $815,884
Section 660.4 of FTC Rule/Section 1022.43 of CFPB Rule:
A.

Burden Hours

No recurring burden other than that necessary to prepare and distribute F/I notices
(estimate: 14 minutes per notice9).

8

1.

21,720 F/I disputes (estimated number received by furnishers under the
FTC’s jurisdiction10)

2.

“Carve-out” to FTC: assumed 4%11 = 869 F/I disputes

3.

21,720 F&I disputes - 869 “carve-out” = 20,851 respondents for CFPBFTC split
a.

Divided by 2 = 10,425 F/I disputes, co-jurisdiction estimate

b.

CFPB: 10,425 F/I disputes

http://www.bls.gov/news.release/ocwage.nr0.htm: “Occupational Employment and Wages—May 2017,”
Bureau of Labor Statistics, U.S. Department of Labor, released March 30, 2018, Table 1 (National
employment and wage data from the Occupational Employment Statistics survey by occupation, May 2017)
(hereinafter, “BLS Table 1”).
See mean hourly wage for “Training and Development Managers.”
9
74 Fed. Reg. at 31,505.
10
Id. at 31,506 n. 58.
11
FTC staff believes that 4% is a reasonable estimate based on recent data. See “Key Dimensions and
Processes in the U.S. Credit Reporting System: A review of how the nation’s largest credit bureaus handle
consumer data,” December 2012, pp. 14, 29, 31, 34. The CFPB report noted that almost 40% of all
consumer disputes at the nationwide CRAs, on average, can be linked to collections. It stated that collection
trade lines generate significantly higher numbers of consumer disputes than other types of trade lines –
specifically, four times higher than auto. These figures seem to suggest that almost 10% of all consumer
disputes at the nationwide CRAs, on average, can be linked to auto. When the FTC issued its final Rule,
FTC staff estimated that 40% of direct disputes would result in the sending of F/I dispute notices. See 74
Fed. Reg. 31,506 n.58. The FTC’s estimate of 4% is based on taking forty percent of the 10% of all
consumer disputes at the nationwide CRAs, on average, linked to auto loans.
6 

B.

c.

FTC: 869 “carve-out” + 10,425 additional F/I disputes = 11,294
F/I disputes

d.

FTC: 11,294 F/I disputes x 14 minutes each = 2,635 hours

Labor Costs

Labor costs are derived by applying appropriate estimated hourly cost figures to the
burden hours described above. The FTC assumes that respondents will use skilled administrative
support personnel to provide the required F/I dispute notices to consumers.
2,635 hours x $23.6912 = $62,423
Thus, total estimated burden under the above-noted regulatory sections is 17,055 hours
and $878,307 in associated labor costs.
13.

Estimated Capital and Other Non-Labor Costs

The FTC staff believes that the regulations impose negligible capital or other non-labor
costs, as the affected entities are already likely to have the necessary supplies and/or equipment
(e.g., offices and computers) for the information collections described herein.
14.

Estimated Cost to the Federal Government

FTC staff estimates that a representative year’s cost to the FTC of administering the
regulations requirements during the 3-year clearance period sought will be approximately
$17,170. This represents one-tenth of an attorney work year, and includes employee benefits.
15.

Program Changes or Adjustments

There are no program changes. The only adjustments to the most recently cleared
estimates reflect updates to estimated labor costs informed by newer Bureau of Labor Statistics
data. Remaining estimates are unchanged from the last clearance.
16.

Publishing Results of the Collection of Information
There are no plans to publish any information for statistical use.

17.

Display of Expiration Date for OMB Approval
Not applicable.

12

The revised figure is an average of Bureau of Labor Statistics mean hourly wages for potentially
analogous employee types: First-line supervisors of office and administrative support workers ($28.14);
bookkeeping, accounting, and auditing clerks ($19.76); brokerage clerks ($25.41); eligibility interviewers,
government programs ($21.45). See BLS Table 1. This averages to $23.69 per hour, rounded.
7 

18.

Exceptions to the Certifications for PRA Submissions
Not applicable.

8