SPST-0083 Renewal (2020) Final

SUPPORTING STATEMENT
RECORDKEEPING AND DISCLOSURE REQUIREMENTS
IN CONNECTION WITH REGULATION M (CONSUMER LEASING)
(OMB No. 3064-0083)

INTRODUCTION
The Federal Deposit Insurance Corporation (“FDIC”) is requesting a three-year renewal of the
information collection (3064-0083) for the recordkeeping and disclosure requirements contained
in Regulation M. The current clearance for the collection expires on November 30, 2020. There is
no change in the method or substance of the collection.
Regulation M (12 C.F.R. 1013), issued by the Bureau of Consumer Financial Protection,
implements the consumer leasing provisions of the Truth in Lending Act. Regulation M requires
lessors of personal property to provide consumers with meaningful disclosures about the costs
and terms of the leases for personal property. Lessors are required to retain evidence of
compliance with Regulation M for twenty-four months.
A.

Justification
1.

Circumstances and Need
The requirements for this collection are contained in Regulation M – Consumer
Leasing (12 C.F.R. 1013) issued by the Bureau of Consumer Financial Protection
(CFPB). Regulation M is issued under the authority 15 U.S.C. § 1604 and
implements the Consumer Leasing Act (“CLA”). The CLA was enacted in 1976
as an amendment to the Truth in Lending Act and is codified at 15 U.S.C. §§
1667-1667f. Regulation M requires lessors of personal property to provide
consumers with meaningful disclosures about the costs and terms of the leases for
personal property. Although the CFPB has authority to promulgate rules to
implement CLA, the FDIC has enforcement authority, pursuant to 15 U.S.C.
§1607, for state nonmember banks.

2.

Use of Information Collected
Regulation M is intended to provide consumers with disclosures about the costs
and terms of leases for personal property. The disclosures enable consumers to
compare the terms for a particular lease with those for other leases and, when
appropriate, to compare lease terms with those for credit transactions. The lease
disclosure requirements apply to leases of personal property for a period
exceeding four months where the contractual obligation is $50,000 or less.
Lessors are required to provide certain key information to consumers in a
standard, uniform manner before they enter into the lease transaction.
The purpose of the advertising rules is to provide potential shoppers with uniform
and accurate information. The advertising requirements apply to all persons that
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promote the availability of consumer leases through commercial messages in any
form, including messages in print, electronic media, direct mailings, or on any
sign or display. Advertising certain terms triggers the requirement for additional
disclosures. For television or radio advertisements, special rules allow alternative
disclosures using toll-free telephone numbers or written advertisements in a
publication of general circulation.
Lessors are required to retain evidence of compliance with Regulation M for
twenty-four months, but the regulation does not specify types of records that must
be retained.
3.

Use of Technology to Reduce Burden
The Regulation M information collection consists of third-party disclosures and
recordkeeping requirements. There are no reporting forms. Institutions may
provide electronic disclosures consistent with the Electronic Signatures in Global
and National Commerce Act, 15 U.S.C. §§ 7001 et seq., and § 1013.3 of
Regulation M.

4.

Efforts to Identify Duplication
A lease contract may contain many of the same items required by the Regulation
M disclosures, but not all of them and not in the same terminology or form.

5.

Minimizing the Burden on Small Businesses
Consistent with the statute, Regulation M and its requirements apply to lessors
based on the amount of their leasing activity. The CFPB provides model forms to
ease the compliance burden for small institutions. Of the 52 respondents affected
by this information collection, 38 are small institutions.

6.

Consequence of Less Frequent Collections
The information collection is triggered by specific events consistent with
Regulation M. The frequency of response varies according to the lessor’s level of
consumer leasing and advertising activities.

7.

Special Circumstances
There are no special circumstances.

8.

Consultation with Persons Outside the FDIC
A notice seeking public comment for a 60-day period was published in the
Federal Register on September 23, 2020 (85 FR 59797). No comments were
received.
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9.

Payment or Gift to Respondents
None.

10.

Confidentiality
As no information is collected, no issue of confidentiality arises.

11.

Information of a Sensitive Nature
This collection contains no sensitive information.

12.

Estimates of Annualized Hour Burden and Associated Cost

Recordkeeping and Disclosure
Requirements in Connection with
Regulation M (Consumer Leasing)
Recordkeeping and Disclosure
Requirements in Connection with
Regulation M (Consumer Leasing)
TOTAL HOURLY BURDEN
TOTAL INTERNAL COST*

2020 Summary of Annual Burden and Internal Cost (3064-0083)
Estimated
Estimated
Estimated
Frequency of
Type of Burden
Number of
Number of
Time per
Response
Respondents
Responses
Response

Total Annual
Estimated
Burden

Recordkeeping

19

100

0.375

On Occasion

712.5 hours

Third-Party
Disclosure

19

100

0.375

On Occasion

712.5 hours

$64.88

1,425 hours
$92,454

/HR

Total Annual Burden: 1,425 hours
The total estimated annual cost for all respondents is:
1,425 hours x $64.88 = $92,454.

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Summary of Hourly Burden Cost Estimate (3064-0083)
Estimated Category of
Total Estimated
Personnel Responsible for
Hourly
Estimated Weights
Complying with the PRA
Compensation
Burden
Executives and Managers 1
$121.85
10%
Compliance Officers 2
$66.55
15%
Financial Analysts 3
$78.46
45%
Clerical 4
$33.05
30%
Weighted Average

Weighted Hourly
Wage
$12.19
$9.98
$35.31
$7.40
$64.88

Source: Bureau of Labor Statistics: "National Industry-Specific Occupational Employment and
Wage Estimates: Industry: Credit Intermediation and Related Activities (5221 And 5223 only)"
(May 2019), Employer Cost of Employee Compensation (June 2020), Consumer Price Index (June
2020).
Note: The 75th percentile wage information reported by the BLS in the Specific Occupational
Employment and Wage Estimates does not include health benefits and other non-monetary
benefits. According to the March 2020 Employer Cost of Employee Compensation data
compensation rates for health and other benefits are 33.9 percent of total compensation.
Additionally, the wage has been adjusted for inflation according BLS data on the Consumer Price
Index for Urban Consumers (CPI-U) so that it is contemporaneous with the non-wage
compensation statistic. The inflation rate was 0.67 percent between May 2019 and June 2020.

13.

Capital/Start-up and Operation/Maintenance Cost
None.

14.

Cost to Government
None.

15.

Reason for Change in Burden
There is no change in the method or substance of the collection. The 2,475 reduction
in burden hours is a result of (1) economic fluctuation and (2) an updated estimate
(based on historical information) of state nonmember banks and state savings
associations engaged in consumer leasing. In particular, the number of respondents
has decreased while the hours per response remain the same.

16.

Publication
Not applicable.

17.

Display of Expiration Dates

1 Occupation (SOC Code): Management Occupations (110000).
2 Occupation (SOC Code): Compliance Officers (131040).
3 Occupation (SOC Code): Financial and Investment Analysts, Financial Risk Specialists, and Financial Specialists,
All Other (132098).
4 Occupation (SOC Code): Office and Administrative Support Occupations (430000).

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Not applicable.
18.

Exceptions to Certification
None.

B.

STATISTICAL METHODS
Not applicable.

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