Reg E 2021 Supporting Statement

Federal Trade Commission
Supporting Statement for Information Collection Provisions of Regulation E
(Electronic Fund Transfer Act)
12 C.F.R. Pt. 205; 12 C.F.R. Pt. 1005
(OMB Control Number: 3084-0085)
1.

Necessity for Collecting the Information

The Electronic Fund Transfer Act (“EFTA”), 15 U.S.C. 1693 et seq., requires accurate
disclosure of the costs, terms and rights relating to electronic fund transfer (“EFT”) services to
consumers. Entities offering EFT services must provide consumers with full and accurate
information regarding consumers’ rights and responsibilities in connection with EFT services.
These disclosures are intended to protect the rights of consumers using EFT and certain other
services, such as automated teller machine (“ATM”) transfers, telephone bill-payment services,
point-of-sale transfers at retail establishments, electronic check conversion, government benefit
accounts and prepaid accounts, preauthorized transfers from or to a consumer’s account,
overdraft protection, gift cards, remittance transfers, and others. The EFTA also establishes
error resolution procedures and limits consumer liability for unauthorized transfers in connection
with EFT services.
The Federal Trade Commission (“FTC” or “Commission”) enforces the EFTA as to all
entities providing EFT services except those that are subject to the regulatory authority of
another federal agency (such as federally chartered or insured depository institutions). The
EFTA also contains a private right of action with a one-year statute of limitations for aggrieved
consumers.
The Board of Governors of the Federal Reserve System (“Board”) promulgated the
original Regulation E (12 C.F.R. Part 205) to implement the EFTA, as required by the statute.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”),
Pub. L. 111-203, 124 Stat. 1376 (2010), however, almost all rulemaking authority for the EFTA
transferred from the Board to the Consumer Financial Protection Bureau (“CFPB”) on July 21,
2011 (“transfer date”). Although the Dodd-Frank Act transferred most rulemaking authority
under EFTA to the CFPB, the Board retained rulemaking authority for certain motor vehicle
dealers 1 and also for certain interchange-related requirements under EFTA. 2 The CFPB’s
regulations for entities under its jurisdiction for Regulation E appear in 12 C.F.R. Part 1005. 3
1

Generally, these are dealers “predominantly engaged in the sale and servicing of motor vehicles, the leasing and
servicing of motor vehicles, or both.” See Dodd-Frank Act, § 1029(a), (c), 12 U.S.C. 5519(a), (c).

2

See Dodd-Frank Act, § 1075, 15 U.S.C. 1693o-2 (these requirements are implemented through the Board’s
Regulation II, 12 C.F.R. Part 235, rather than EFTA’s implementing Regulation E).

3

Because both the Board and the CFPB have certain rulemaking authority under Regulation E – as discussed
further below – citations to both aspects of the regulation are included in this document. Hence, 12 C.F.R. Part 205
refers to the Board-issued Regulation E; 12 C.F.R. Part 1005 refers to the CFPB-issued Regulation E. These two
aspects of Regulation E are largely similar, but have separate citations. However, the CFPB-issued Regulation E
includes remittance transfer requirements, and also includes prepaid account requirements added by the CFPB in
November 2016, with amendments in January 2018; the Board-issued Regulation E does not.

As a result of the Dodd-Frank Act, the FTC and the CFPB generally share the authority
to enforce Regulation E for entities for which the FTC had enforcement authority before the Act,
except for certain motor vehicle dealers 4 and certain state-chartered credit unions. 5 The FTC
generally has sole authority to enforce Regulation E regarding motor vehicle dealers
predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both. 6
Recordkeeping
Section 205.13(b)/1005.13(b) of Regulation E requires entities subject to the EFTA to
retain for two years evidence of compliance with the regulation. Regulation E also provides that
any entity subject to the EFTA that is notified by the FTC (or other administrative agency) that it
is being investigated or is the subject of an enforcement proceeding, or that has been notified of a
private or criminal action being filed, shall retain evidence of compliance until final disposition
of the matter, or such earlier time as allowed by a court or agency order. The recordkeeping
requirement insures that records that might contain evidence of violations of the EFTA remain
available to the FTC and other agencies, as well as to private litigants.
Disclosure
The vast majority of Regulation E’s disclosure requirements are statutorily mandated by
the EFTA. See, e.g., consumer liability for unauthorized use, 12 C.F.R. 205.6, 12 C.F.R.
1005.6, 15 U.S.C. 1693g; initial disclosures, 12 C.F.R. 205.7, 12 C.F.R. 1005.7, 15 U.S.C.
1693c(a); change in terms, 12 C.F.R. 205.8, 12 C.F.R. 1005.8, 15 U.S.C. 1693c(b); receipts at
electronic terminals, 12 C.F.R. 205.9(a), 12 C.F.R. 1005.9(a), 15 U.S.C. 1693d(a); periodic
statements, 12 C.F.R. 205.9(b), 12 C.F.R. 1005.9(b), 15 U.S.C. 1693c; preauthorized transfers,
12 C.F.R. 205.10, 12 C.F.R. 1005.10, 15 U.S.C. 1693e; error resolution, 12 C.F.R. 205.11, 12
C.F.R. 1005.11, 15 U.S.C. 1693f; gift cards, 12 C.F.R. 205.20, 12 C.F.R. 1005.20, 15 U.S.C.
1693l-1; remittance transfers, 12 C.F.R. 1005.30-36, 15 U.S.C. 1693o-1.
The Board and CFPB have issued model forms and clauses that can be used to comply
See Dodd-Frank Act § 1029(a), as limited by subsection (b) as to motor vehicle dealers. Subsection (b) does not
preclude CFPB regulatory oversight regarding, among others, businesses that extend retail credit or retail leases for
motor vehicles in which the credit or lease offered is provided directly from those businesses to consumers, where
the contract is not routinely assigned to unaffiliated third parties.

4

The FTC’s enforcement authority includes state-chartered credit unions. In varying ways, other federal agencies
also have enforcement authority over state-chartered credit unions. For example, for large credit unions (exceeding
$10 billion in assets), the CFPB has certain authority. The National Credit Union Administration also has certain
authority for state-chartered federally insured credit unions, and it additionally provides insurance for certain statechartered credit unions through the National Credit Union Share Insurance Fund and examines state-chartered credit
unions for various purposes. See generally Dodd-Frank Act, §§ 1061, 1025, 1026.
5

6

See Dodd-Frank Act, § 1029(a), (c). 12 U.S.C. 5519(a), (c).

2

with the written disclosure requirements of the EFTA and Regulation E. See Appendix A to 12
C.F.R. Part 205; Appendix A to 12 C.F.R. Part 1005. Correct use of these model forms and
clauses protects entities from liability for the respective requirements under the EFTA and
Regulation E. Id.
2.

Use of the Information

The FTC, other agencies, and private litigants use the recordkeeping information to
ascertain whether accurate and complete disclosures of EFT services and other required actions
(for example, error resolution and limitation of consumer liability for unauthorized transfers)
have been provided. This information provides the primary evidence of law violations in EFTA
enforcement actions brought by the FTC. Without the Regulation E recordkeeping requirement,
the FTC’s ability to enforce the EFTA would be significantly impaired.
Consumers rely on the disclosures required by the EFTA and Regulation E to facilitate
informed EFT decisionmaking. Without this information, consumers would be severely
hindered in their ability to assess the true costs and terms of the transactions offered. Also,
without the special error resolution and limitation of consumer liability provisions, consumers
would be unable to detect and correct errors in their EFT transactions and fraudulent transfers.
These disclosures are necessary for the FTC and private litigants to enforce the EFTA.
3.

Consideration of the Use of Improved Information Technology

The Board and CFPB have issued rules to establish uniform standards for using
electronic communication to deliver disclosures required under Regulation E, within the context
of the Electronic Signatures in Global and National Commerce Act (“ESIGN”), 15 U.S.C. 7001
et seq., and Sections 205.4(a)/1005.4(a) of Regulation E. These rules enable businesses to
utilize electronic disclosures and compliance, consistent with the requirements of ESIGN. Use
of such electronic communications is also consistent with the Government Paperwork
Elimination Act (“GPEA”), codified at 44 U.S.C. 3504, note. ESIGN and GPEA serve to
reduce businesses’ compliance burden related to federal requirements, including Regulation E,
by enabling businesses to utilize more efficient electronic media for disclosures and compliance.
Regulation E also permits entities to retain records on microfilm, microfiche, magnetic
tape or other methods capable of accurately retaining and reproducing information. Business
entities need only retain evidence demonstrating that their procedures reasonably ensure the
consumer’s receipt of required disclosures and documentation; the entity need not retain records
of the actual disclosures and documentation given to each consumer. Section 205.13(b)-1 of the
Board Official Staff Commentary; Section 1005.13(b)-1 of the CFPB Official Staff
Commentary.

3

4.

Efforts to Identify Duplication/Availability of Similar Information

The recordkeeping requirement of Regulation E preserves the information an affected
entity uses in making disclosures and other required actions regarding EFT services. The entity
is the only source of this information. No other federal law mandates its retention. State laws
do not duplicate these requirements, although some states may have other rules applicable to
EFT services.
Similarly, covered entities are the only source of the information contained in the
disclosures required by the EFTA and Regulation E. No other federal law mandates these
disclosures. State laws do not duplicate these requirements, although some states may have
other rules applicable to EFT services.
5.

Efforts to Minimize Burdens on Small Businesses

The Regulation E recordkeeping and disclosure requirements are imposed on financial
institutions and entities offering EFT services. The recordkeeping requirement is mandated by
Regulation E. The disclosure requirements are mandated by the EFTA and/or Regulation E.
As previously noted, the FTC’s role in this area is limited to enforcement; the EFTA vested
rulemaking authority in the Board and CFPB.
As discussed above, entities need not retain every disclosure form provided to consumers
if they retain evidence demonstrating procedures that reasonably ensure the consumer’s receipt
of required disclosures and records. Further, financial institutions need not make a receipt
available at the time a consumer initiates an EFT of $15 or less at an electronic terminal. EFTA
also exempts preauthorized transfers to or from an account if the assets of the account-holding
financial institutions have $100 million or less in assets.
Additionally, as noted above, Regulation E provides model forms and clauses that may
be used in compliance with its requirements. Correct use of these forms and clauses insulates a
financial entity from liability for the respective requirements.
6.

Consequences of Conducting Collection Less Frequently

The current record retention period of two years supports the one-year statute of
limitations for private actions, and the FTC’s (and other administrative agencies’) need for
sufficient time to bring enforcement actions regarding EFT transactions. If the retention period
were shortened, consumers who sue under the EFTA, and the administrative agencies that
enforce the EFTA, might find that the records needed to prove EFTA violations no longer exist.
As previously noted, the current disclosure requirements are needed to foster informed
EFT decisionmaking and to identify errors and unauthorized transfers. Without these
requirements, consumers would not have access to this critical information, their right to sue
under the EFTA would be undermined, and the FTC and other administrative agencies charged
4

with enforcing the EFTA could not fulfill their mandates.
7.

Circumstances Requiring Collection Inconsistent with Guidelines

Regulation E’s recordkeeping and disclosure requirements are consistent with the
guidelines contained in 5 C.F.R. 1320.5(d)(2).
8.

Consultation Outside the Agency

The recordkeeping and disclosures requirements of Regulation E were issued by the
Board and CFPB. Before the regulation was initially issued and prior to each amendment, the
amendments were published for public comment in the Federal Register.
More recently, the FTC sought public comment in connection with its latest Paperwork
Reduction Act (“PRA”) clearance request for these regulations, in accordance with 5 C.F.R.
1320.8(d). See 86 Fed. Reg. 26,725 (May 17, 2021). No relevant comments were received.
Consistent with 5 C.F.R. 1320.12(c), the FTC is again seeking public comment
contemporaneously with this submission.
9.

Payments or Gifts to Respondents
Not applicable.

10. & 11.

Assurances of Confidentiality/Matters of a Sensitive Nature

The required recordkeeping and disclosures also contain private financial information
about consumers who use EFT services, which is protected by the Right to Financial Privacy
Act, 12 U.S.C. 3401 et seq. Such records may also constitute confidential customer lists. Any
of these records provided to the FTC would be covered by the protections of Sections 6(f) and 21
of the FTC Act, 15 U.S.C. 46(f) and 57b-2, by Section 4.10 of the Commission’s Rules of
Practice, 16 C.F.R. 4.10, and by the applicable exemptions under the Freedom of Information
Act, 5 U.S.C. 552(b).
12.

Estimated Hours and Labor Cost Burden
Estimated Hours Burden: 7,435,958 (251,053 recordkeeping hours + 7,184,905
disclosure hours)

Given their generally shared enforcement jurisdiction for Regulation E, 7 the FTC and
CFPB have divided the FTC’s previously cleared PRA burden estimates between them, except
7

See supra notes 4 and 5 and accompanying text.

5

that the FTC has assumed all of the burden estimates associated with motor vehicle dealers and
also, when appropriate, regarding estimated burden for state-chartered credit unions. 8 The
division of PRA burden hours not attributable to motor vehicle dealers and, when appropriate, to
state-chartered credit unions, is reflected in the CFPB’s PRA clearance requests to OMB, 9 as
well as in the FTC’s burden estimates below.
The following discussion and tables present FTC estimates under the PRA of
recordkeeping and disclosure time and labor costs, excluding that which the FTC believes
entities incur customarily in the normal course of business 10 and information compiled and
produced in response to FTC law enforcement investigations or prosecutions. 11
Recordkeeping
Staff estimates that Regulation E’s recordkeeping requirements affect 251,053 firms
offering EFT and certain other services to consumers and that are subject to the Commission’s
jurisdiction, at an average annual burden of one hour per firm, for a total of 251,053 hours.
Disclosure
Regulation E applies to financial institutions, retailers, gift card issuers and others that
provide gift cards, service providers, various federal and state agencies offering EFTs, remittance
transfer providers, prepaid account entities, etc. Below is staff’s best estimate of burden
applicable to this very broad spectrum of covered entities.

8
As of the fourth quarter of 2020, there were approximately 2,126 state-chartered credit unions – 1,1914 which
were federally insured, an estimated 112 or more which were privately insured, and an estimated 100 or more in
Puerto Rico which were insured by a quasi-governmental entity. Because of the difficulty in parsing out PRA
burden for such entities in view of agencies’ overlapping enforcement authority (see supra note 5 and accompanying
text), the FTC’s estimates include PRA burden for all state-chartered credit unions. However, in view of
fluctuations due to COVID-19 and to avoid undercounting, we have retained the prior estimate of 2,300 statechartered credit unions. Similarly, because it is not practicable for PRA purposes to estimate the portion of motor
vehicle dealers that engage in one form of financing versus another (and that would or would not be subject to CFPB
oversight), the FTC staff’s PRA burden analysis reflects a general estimated volume of motor vehicle dealers.
These attributions of burden estimation for motor vehicle dealers and state-chartered credit unions do not bear on
actual enforcement authority.
9

OMB Control Number 3170-0014 (Regulation E).

PRA “burden” does not include “time, effort, and financial resources” expended in the normal course of
business, regardless of any regulatory requirements. See 5 C.F.R. 1320.3(b)(2).
10

See 5 C.F.R. 1320.4(a) (excluding information collected in response to, among other things, a federal civil action
or “during the conduct of an administrative action, investigation, or audit involving an agency against specific
individuals or entities”).

11

6

Regulation E: Disclosures – Burden Hours

Disclosures

--------------- Setup/Monitoring ------------------------ Transaction-related--------Average
Total Setup/
Average
Total
Burden per
Monitoring
Number of Burden per Transaction
Respondents Respondent
Burden
Transactions Transaction
Burden
(hours)
(hours)
(minutes)
(hours)

Initial terms
27,300
.5
Change in terms
8,550
.5
Periodic statements
27,300
.5
Error resolution
27,300
.5
Transaction receipts
27,300
.5
Preauthorized transfers
258,553
.5
Service provider notices
20,000
.25
ATM notices
125
.25
Electronic check conversion
48,553
.5
Overdraft services
15,000
.5
Gift cards
15,000
.5
Remittance transfers
Disclosures
4,800
1.25
Error resolution
4,800
1.25
Agent compliance
4,800
1.25
Prepaid accounts and gov’t benefits
Disclosures
550 40x101
Disclosures - updates
138
1x10
Access to account information
550 20x103
Error resolution
300
4x4
Error resolution – followup4
N/A
Submission of agreements
138
2x1
Updates to agreements5
N/A
Total

Total
Burden
(hours)

13,650
4,275
13,650
13,650
13,650
129,277
5,000
31
24,277
7,500
7,500

273,000
11,286,000
327,600,000
273,000
1,375,000,000
6,463,825
200,000
25,000,000
728,295
1,500,000
750,000,000

.02
.02
.02
5
.02
.25
.25
.25
.02
.02
.02

91
3,762
109,200
22,750
458,333
26,933
833
104,167
243
500
250,000

13,741
8,037
122,850
36,400
471,983
156,210
5,833
104,198
24,520
8,000
257,500

6,000
6,000
6,000

96,000,000
120,960,000
96,000,000

.9
.9
.9

1,440,000
1,814,400
1,440,000

1,446,000
1,820,400
1,446,000

220,000
1,3802
110,000
4,800

2,750,000,000
02
916,667 1,136,667
N/A
1,380
1,100,000
.01
183
110,183
275,000
2
9,167
13,967
1,380
30
690
690
690
1
12
288
690
5
58
58
7,184,905

276

Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
This reflects prepaid accounts’ updates of additional fee type disclosures. Individual burden hours are listed first, followed by the number of
programs.
3
Burden hours are on a per program basis; individual burden hours are listed first, followed by the number of programs.
4
This pertains to prepaid accounts.
5
This pertains to prepaid accounts’ agreements.
1
2

Associated labor cost: $332,803,360 ($5,171,684 recordkeeping costs + $327,631,676
disclosure costs)
Staff calculated labor costs by applying appropriate hourly cost figures to the burden
hours described above. The hourly rates used below ($60 for managerial time, $44 for skilled
technical time, and $18 for clerical time) are averages. 12

These inputs are based broadly on mean hourly data found within the “Bureau of Labor Statistics, Economic
News Release,” March 31, 2021, Table 1, “National employment and wage data from the Occupational Employment
Statistics survey by occupation, May 2020.” http://www.bls.gov/news.release/ocwage.t01.htm.
12

7

Recordkeeping
For the 251,053 recordkeeping hours, staff estimates that 10 percent of the burden hours
require skilled technical time and 90 percent require clerical time. As shown below, the total
recordkeeping cost is $5,171,684.
Disclosure
For each notice or information item listed, staff estimates that 10 percent of the burden
hours require managerial time and 90 percent require skilled technical time. As shown below,
the total disclosure cost is $327,631,676.
Regulation E: Recordkeeping and Disclosures – Cost
Required Task

------Managerial-----Time
Cost
(hours)
($60/hr.)

Recordkeeping

0

$0

Disclosures:
Initial terms
1,374
$82,440
Change in terms
804
$48,240
Periodic statements
12,285
$737,100
Error resolution
3,640
$218,400
Transaction receipts
47,198 $2,831,880
Preauthorized transfers
15,621
$937,260
Service provider notices
583
$34,980
ATM notices
10,420
$625,200
Electronic check conversion
2,452
$147,120
Overdraft services
800
$48,000
Gift cards
25,750 $1,545,000
Remittance transfers
Disclosures
144,600 $8,676,000
Error resolution
182,040 $10,922,400
Agent compliance
144,600 $8,676,000
Prepaid accounts and gov’t. benefits
Disclosures
113,667 $6,820,020
Disclosures - updates
138$8,280
1,242
Access to account information
11,018
$661,080
Error resolution
1,397
$83,820
Error resolution – followup
69
$4,140
Submission of agreements
29
$1,740
Updates to agreements
6
$360
Total Disclosures

-----Skilled Technical----- --------Clerical-------Time
Cost
Time
Cost
(hours)
($44/hr.)
(hours)
($18/hr.)
25,105

$1,104,620

225,948

$4,067,064

$5,171,684

12,367
$544,148
7,233
$318,252
110,565 $4,864,860
32,760 $1,441,440
424,785 $18,690,540
140,589 $6,185,916
5,250
$231,000
93,778 $4,126,232 0
22,068
$970.992
7,200
$316,800
231,750 $10,197,000

0
0
0
0
0
0
0
$0
0
0
0

$0
$0
$0
$0
$0
$0
$0
$4,751,432
$0
$0
$0

$626.588
$366,492
$5,601,960
$1,5659,840
$21,522,420
$7,123,176
$265,980

1,301,400 $57,261,600
1,638,360 $72,087,840
1,301,400 $57,261,600

0
0
0

$0
$0
$0

$65,937,600
$83,010,240
$65,937,600

0

$0
$62,928
$0
$0
$0
$0
$0

$51,832,020

1,023,000
$54,648
99,165
12,570
621
259
52

45,012,000
0
$4,363,260
$553,080
$27,324
$11,396
$2,288

Total Recordkeeping and Disclosures

13.

Total
Cost
($)

$0

0
0
0
0
0

$1,118,112
$364,800
$11,742,000

$5,024,340
$636.900
$31,464
$13,136
$2,648
$327,631,676
$332,803,360

Estimated Capital and Other Non-Labor Costs

The applicable requirements impose minimal start-up costs, as financial entities generally
have or obtain necessary equipment for other business purposes. For the same reason, staff
believes that the cost of printing and copying needed to comply with Regulation E is minimal.
Staff anticipates that the requirements noted above necessitate ongoing, regular training so that
8

financial entities stay current and have a clear understanding of federal mandates. This training,
however, would be a small portion of and subsumed within the ordinary training that employees
receive apart from that associated with collecting information to comply with Regulation E.
14.

Estimated Cost to the Federal Government

The Board and CFPB issued the recordkeeping requirement of Regulation E, so there is
no cost to the FTC for that purpose. Enforcement of the recordkeeping requirement of
Regulation E is incidental to overall enforcement of the EFTA. In the course of compliance
investigations, staff routinely requests records of EFT disclosures and other required actions. If
the records requested are not available, it indicates that records are not being retained as
required. Staff estimates that the current fiscal year cost to the FTC Bureau of Consumer
Protection of implementing and administering this requirement will approximate $92,820, which
is a representative year’s cost of enforcing Regulation E’s requirement during the three-year
clearance period sought. This estimate is based on the assumption that one-half of one attorney
work year will be expended. Clerical and other support services are included in this estimate.
The Board and CFPB issued the disclosure requirements of Regulation E, so there is no
cost to the FTC for that purpose. Regarding the enforcement of the disclosure requirements for
Regulation E, staff estimates that the cost to the FTC Bureau of Consumer Protection will
approximate $928,196. This estimate is based on the assumption that five attorney work years
will be expended to enforce various aspects of the disclosure requirements. Clerical and other
support services are also included in this estimate.
15.

Program Changes or Adjustments

There are no program changes or adjustments. For this clearance renewal period, staff
has updated their labor cost estimates to take into account updated BLS wage data.
16.

Publishing Results of the Collection of Information
Not applicable. There are no plans to publish any information for statistical use.

17.

Display of Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certification for PRA Submissions

The FTC 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
exception to these certification requirements.

9