FR2835_FR2835a_20240521_omb_B

Supporting Statement Part B for the
Quarterly Report of Interest Rates on Selected Direct Consumer Installment Loans
and
Quarterly Report of Credit Card Plans
(FR 2835 and FR 2835a; OMB No. 7100-0085)
Summary
For all information collections that involve surveys or require a statistical methodology,
the Board of Governors of the Federal Reserve System (Board) is required to provide a complete
justification and explanation of the use of such a methodology. For collections that employ
surveys without such a methodology, the Board should be prepared to justify its decision not to
use statistical methods in any case where such methods might reduce burden or improve
accuracy of results.
Background
The data from these reports help the Board analyze current household financial
conditions and the implications of these conditions for household spending and, as such, these
data provide valuable input to the monetary policymaking process. The data are also used to
create aggregate statistics on consumer loan terms that are published in the Federal Reserve’s
monthly statistical releases G.19 Consumer Credit and G.20 Finance Companies, and in the
Federal Reserve Bulletin. Some of the aggregates are used by the Board in the calculation of the
aggregate household debt service and financial obligations ratios for the Federal Reserve’s
quarterly Household Debt Service and Financial Obligations Ratios statistical release and by the
Bureau of Economic Analysis to calculate interest paid by households as part of the National
Income and Product Accounts.
The Board has been the primary producer of aggregate statistics related to U.S. consumer
credit since 1942. This role stems from the Board’s need to make well-informed monetary policy
decisions and its public policy responsibilities related to consumer credit. Since the 1940s, the
Board has maintained programs for the direct collection of consumer credit data from commercial
banks and finance companies. It obtains its information on credit provided by other types of
financial institutions mainly through secondary sources.1
The Board has revised the consumer credit data collection program over the years to
lessen reporting burden, eliminate items of lesser importance, and focus on items of highest
priority for economic analysis. For example, in 1994, the Board removed a data item on credit
card interest rates from the FR 2835 and introduced the FR 2835a and thus was able to ask for
more detailed information from large issuers of credit cards without burdening the majority of
the FR 2835 respondents. In 2006, the Federal Reserve added a data item to the FR 2835 to
collect the most common interest rate on 60-month loans for new vehicles. This change was
motivated by the growing popularity of the 60-month loan term. In 2015, the FR 2835 added an
item to collect the most common rate on 72-month loans for new automobile loans.
1

Prior to 1963, the Federal Reserve also operated an extensive data collection and publication program covering
department store credit; that responsibility was subsequently transferred to the Bureau of the Census.

The Board’s long-standing interest in consumer credit issues arises from a need to
evaluate macroeconomic conditions and the probable consequences of monetary policy actions.
The amount that consumers borrow and the terms at which they are able to borrow are major
determinants of the general financial conditions of households. These conditions, in turn, play a
major role in supporting consumer spending, the largest component of gross domestic product
(more than two-thirds of the total). Moreover, some of the more volatile components of
consumer spending directly depend on the terms at which households can obtain consumer loans.
This information is not available from other sources.
Universe and Respondent Selection
The reporting panel for the FR 2835 consists of commercial banks. There are currently 81
commercial banks on the panel.2 Although some banks have merged or otherwise dropped out of
this voluntary survey, the Board has attempted to maintain the panel as close as possible to the
authorized size of 150. The FR 2835 panel is drawn from a sample of 150 member banks (most
large banks and a random sample of smaller banks).
The FR 2835a collects information on two measures of credit card interest rates from a
sample of commercial banks with $1 billion or more in credit card receivables and a
representative group of smaller issuers. The Board uses the data to analyze the credit card market
and draw implications for the household sector. Based on previous filings, there are currently 27
commercial banks on the panel.3 Although the current respondents represent the largest issuers of
bank credit cards, the Federal Reserve will continue its efforts to recruit additional respondents
to bring the panel up to its authorized size (50 commercial banks) so that the data will better
represent the entire industry. This panel design is used so that the data will be representative of
interest rates paid by consumers on bank credit cards. The outstanding balances of the
respondents represent about 60 percent of all owned and managed credit card receivables at
commercial banks.
Procedures for Collecting Information
The FR 2835 collects information from a sample of commercial banks on interest rates
charged on loans for new vehicles and loans for other consumer goods and personal expenses.
Interest rates on consumer loans made by commercial banks continue to be analytically
significant. Auto and personal loans are major components of bank consumer lending, and
changes in the terms of these loans represent an important input to analyses of the household
sector prepared for the Federal Reserve. The data are used for internal analysis of household
financial conditions.
The FR 2835 respondents are asked to provide “the most common rate,” meaning the rate
at which the largest dollar volume of loans of a particular type was made during the reporting
week. For adjustable-rate loans, the initial rate is reported. Respondents are also asked to provide
narrative explanations for large fluctuations in reported data.

2
3

As of May 2023.
As of May 2023.

2

The FR 2835a collects information on two measures of average credit card interest rates
from card-issuing commercial banks. One measure reflects the interest rate offered to credit
cardholders, and the other reflects finance charges paid by cardholders with balances.
The FR 2835 and FR 2835a are submitted in Reporting Central and flow through the
Receive Site Module to the Financial Data Repository.
Methods to Maximize Response
As described in above, all members of the selected panel provide a response, so there is
no need for additional efforts to maximize the response rate.
Testing of Procedures
There is no testing of procedures for this collection.

3