FRM_20210816_omb

Supporting Statement for the
Disclosure Requirements Associated with CFPB’s Regulation M
(FR M; OMB No. 7100-0202)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the Disclosure Requirements Associated with CFPB’s Regulation M (FR M;
OMB No. 7100-0202). Since 2011, the Consumer Financial Protection Bureau (CFPB) has been
responsible for issuing Consumer Leasing Act (CLA)1 regulations that apply to depository
institutions and other lessors. However, the Board continues to be responsible under the
Paperwork Reduction Act (PRA)2 for renewing every three years the information collections
mandated by the CFPB’s regulation for institutions supervised by the Board.3
The estimated total annual burden for the FR M is 259 hours.
Background and Justification
The CLA and Regulation M are intended to provide consumers with meaningful
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 CLA and
Regulation M also contain rules about advertising consumer leases and limit the size of balloon
payments in consumer lease transactions.
The CFPB’s Regulation M applies to all types of lessors of personal property (except
motor vehicle dealers excluded from the CFPB’s authority under Dodd-Frank Act section 1029,
which are covered by the Board’s Regulation M).4 The CLA and Regulation M require lessors
uniformly to disclose to consumers the costs, liabilities, and terms of consumer lease
transactions. Disclosures are provided to consumers before they enter into lease transactions and
in advertisements that state the availability of consumer leases on particular terms. The
regulation generally applies to consumer leases of personal property in which the contractual
obligation does not exceed $50,000, adjusted annually for inflation, and has a term of more than
four months. 5 The CLA does not provide exemptions for small entities.

1

The CLA was enacted in 1976 as an amendment to the Truth in Lending Act (TILA) and is codified at 15 U.S.C.
§§ 1667-1667f.
2
44 U.S.C. § 3501 et seq.
3
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking
authority for the CLA to the CFPB except for certain motor vehicle dealers that are excluded from the CFPB’s
authority, which remain subject to the Board’s Regulation M. Supervisory authority for these motor vehicle dealers
rests with the Federal Trade Commission (FTC). See section 1029 of the Dodd-Frank Act, Pub. L. 111-203, 124
Stat. 1376 (2010), 12 U.S.C. §§ 5512, 5519, 5581. The CFPB’s Regulation M is published at 12 CFR Part 1013 and
the Board’s Regulation M is published at 12 CFR Part 213.
4
See 12 U.S.C. § 5519; 12 CFR Part 213.
5
For 2021, the Regulation M threshold is $58,300.

Description of Information Collection
The information collection under Regulation M is triggered by specific events. All
disclosures must be provided to the lessee prior to the consummation of the lease and when the
availability of consumer leases on particular terms is advertised. No reporting forms are
associated with Regulation M, but certain disclosures must be provided in a manner substantially
similar to the applicable model form in the appendix to the regulation. To ease the compliance
cost (particularly for small entities) model forms are appended to the regulation. Lessors are
required to “retain evidence of compliance” for 24 months, but the regulation does not specify
the types of records that must be retained. Regulation M’s disclosure requirements are described
in greater detail below.
Section 1013.4 - Lease disclosures.
Under the CLA and Regulation M, lessors are required to provide certain key information
to consumers before they enter into a transaction to lease personal property for consumer (not
business) purposes. Lessors are persons who regularly lease, offer to lease, or arrange to lease
personal property to consumers. The costs and terms of the lease must be disclosed to consumers
clearly and conspicuously and must be in writing in a form the consumer may keep. Disclosures
may be in electronic form, subject to the consumer consent and other provisions of the Electronic
Fund Transfer Act (E-Sign Act).6 Lessors must disclose, among other things, the total amount
due at lease signing or delivery; the number, amount, due dates or periods of payments under the
lease, and the total amount of these payments; and other terms relating to the rights and
responsibilities of both parties to the lease.
Section 1013.7 - Advertising rules.
The advertising requirements apply to all persons that promote consumer leases through
commercial messages in any form, including messages in print or 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.
Respondent Panel
The FR M panel comprises state member banks with assets of $10 billion or less that are
not affiliated with an insured depository institution with assets over $10 billion (irrespective of
the consolidated assets of any holding company); non-depository affiliates of such state member
banks; and non-depository affiliates of bank holding companies that are not affiliated with an
insured depository institution with assets over $10 billion.7 Notwithstanding the foregoing, the
6

See 15 U.S.C. § 1693 et seq.
The CFPB and FTC also have administrative enforcement authority over non-depository entities for compliance
with the CFPB’s Regulation M. See 12 U.S.C. §§ 5514–5516. Accordingly, the CFPB allocates to itself half of the
estimated burden to non-depository entities under the CFPB’s Regulation M, with the other half allocated to the
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CFPB and not the Board has supervisory authority for Regulation M with respect to automobile
leasing over non-banks defined as “larger participants” in the automobile finance market
pursuant to 12 U.S.C. § 5514 (implemented by 12 CFR 1090.108).
Time Schedule for Information Collection
The information collection pursuant to Regulation M is triggered by specific events.
Disclosures must be provided to the lessee prior to the consummation of the lease and when the
availability of consumer leases on particular terms is advertised. There is no reporting form
associated with the requirements of Regulation M. Lease-specific disclosures are not collected
by the Board, are not publicly available, and are not published. Disclosures of lease terms that
appear in advertisements are available to the public.
Public Availability of Data
There is no data related to this information collection available to the public.
Legal Status
The FR M is authorized pursuant to sections 105(a) and 187 of TILA (15 U.S.C. §§
1604(a) and 1667f), which require that the CFPB prescribe regulations regarding the disclosure
requirements relating to consumer lease transactions. The FR M is mandatory.
Because the disclosures and records comprising the FR M are maintained at each banking
organization, the Freedom of Information Act (FOIA) would only be implicated if the Board
obtained such records as part of the examination or supervision of a banking organization. In the
event the records are obtained by the Board as part of an examination or supervisio n of a
financial institution, this information may be considered confidential pursuant to exemption 8 of
the FOIA, which protects information contained in “examination, operating, or condition
reports” obtained in the bank supervisory process (5 U.S.C. § 552(b)(8)).
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On April 16, 2021, the Board published an initial notice in the Federal Register (86 FR
20155) requesting public comment for 60 days on the extension, without revision, of the FR M.
The comment period for this notice expired on June 15, 2021. The Board did not receive any
comments. The Board adopted the extension, without revision of the FR M as originally
proposed. On July 19, 2021, the Board published a final notice in the Federal Register (86 FR
38089).
FTC. As noted, supervisory authority for motor vehicle dealers subject to the Board’s Regulation M under the DoddFrank Act rests with the FTC, which accounts for Regulation M burden for those motor vehicle dealers. See section
1029 of the Dodd-Frank Act, Pub. L. 111-203, 124 Stat. 1376 (2010), 12 U.S.C. §§ 5512, 5519, 5581.

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Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR M is 259
hours. The Board estimates that only four Board-supervised institutions engage in consumer
leasing8 with an estimated average of 572 transactions per institution per year. The Board also
estimates that the four Board-supervised institutions advertise their leasing program
approximately four times per year. These disclosure requirements represent less than 1 percent of
the Board’s total paperwork burden.
No paperwork burden is deemed to be associated with the recordkeeping requirement in
Regulation M that lessors “retain evidence of compliance” for a minimum of two years after the
date disclosures are required to be made (section 1013.8). The regulation does not specify the
kind of records that must be retained for this purpose.
Estimated
Annual
number of
frequency
respondents9

FR M
Disclosure
Section 1013.4
Lease disclosures
Section 1013.7
Advertising rules

Estimated
average hours
per response

Estimated
annual burden
hours

4

572

0.11

252

4

4

0.42

7
259

Total
The estimated total annual cost to the public for the FR M is $15,320.10
Sensitive Questions

These collections of information contain no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing this
information collection is negligible.
8

Federal Financial Institutions Examination Council Consolidated Reports of Condition and Income (Call Reports)
(FFIEC 031 and FFIEC 041; OMB No. 7100-0036), Schedule RC-C, data item 10.a, Leases to individuals for
household, family, and other personal expenditures.
9
Of these respondents, one is considered a small entity as defined by the Small Business Administration (i.e.,
entities with less than $600 million in total assets), https://www.sba.gov/document/support--table-size-standards.
10
Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $ 20, 45% Financial Managers at
$73, 15% Lawyers at $72, and 10% Chief Executives at $95). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2020, published March 31, 2021, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

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