Federal Register: December 10, 2007 (Volume 72, Number 236)
DOCID: fr10de07-121 FR Doc 07-5998
DEPARTMENT OF THE TREASURY
Thrift Supervision Office
NOTICE: NOTICES
DOCID: fr10de07-121
DOCUMENT ACTION: Joint information collection to be submitted to OMB for review and approval under the Paperwork Reduction Act of 1995 (PRA).
SUBJECT CATEGORY:
FEDERAL RESERVE SYSTEM
DATES: Comments must be submitted on or before January 9, 2008.
DOCUMENT SUMMARY:
Pursuant to the Paperwork Reduction Act, the OCC, FDIC, OTS, NCUA, and FTC are submitting for Office of Management and Budget (OMB) review the information collection associated with a proposed study that will use a written survey to be completed by financial institutions and other persons who are creditors or users of consumer reports. The Board has approved this information collection under its delegated authority from OMB. The Agencies will use the Survey responses to prepare the initial report to the Congress (the Report) on information sharing practices by financial institutions, creditors, or users of consumer reports with their affiliates. The Agencies are statutorily required to jointly submit the Report with any recommendations for legislative or regulatory action. To conduct the Survey, the OCC, FDIC, OTS, NCUA, and FTC first seek additional public comment regarding this notice, which is the second of two notices required by the PRA, and will seek OMB review of, and clearance for, the collection of information discussed herein.
SUMMARY:
Agency information collection activities; proposals, submissions, and approvals,
DOCUMENT BODY 2:
FEDERAL DEPOSIT INSURANCE CORPORATION
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
NATIONAL CREDIT UNION ADMINISTRATION
FEDERAL TRADE COMMISSION
Agency Information Collection Activities: Submission for OMB
Review; Joint Comment Request
SUPPLEMENTAL INFORMATION
Title: Survey of Information Sharing Practices with Affiliates (``Survey'').
Frequency of Response: Every three years.
Affected Public: Business or other for profit.
Type of Review: New collection.
OCC
OMB Number: 1557NEW.
Form Number: N/A.
Estimated Number of Respondents: 40.
Estimated Average Time per Response: 10 hours.
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Estimated Total Annual Burden: 400 hours.
Board
OMB Number: 7100NEW.
Form Number: FR 3214e.
Estimated Number of Respondents: 60.
Estimated Average Time per Response: 10 hours.
Estimated Total Annual Burden: 600 hours.
FDIC
OMB Number: 3064NEW.
Form Number: N/A.
Estimated Number of Respondents: 100.
Estimated Average Time per Response: 10 hours.
Estimated Total Annual Burden: 1,000 hours.
OTS
OMB Number: 1550NEW.
Form Number: N/A.
Estimated Number of Respondents: 30.
Estimated Average Time per Response: 10 hours.
Estimated Total Annual Burden: 300 hours.
NCUA
OMB Number: 3133NEW.
Form Number: N/A.
Estimated Number of Respondents: 50.
Estimated Average Time per Response: 10 hours.
Estimated Total Annual Burden: 500 hours.
FTC
OMB Number: 3084NEW.
Form Number: N/A.
Estimated Number of Respondents: 20.
Estimated Average Time per Response: 10 hours.
Estimated Total Annual Burden: 200 hours.
General Description of Report
This information collection is voluntary for financial institution respondents and authorized pursuant to 12 U.S.C. 481 and 484 (national banks); 12 U.S.C. 248(a)(1) (state member banks); 12 U.S.C. 1463 and 1464 (savings associations); 12 U.S.C. 1766(a) and 1789(a) (credit unions); and 12 U.S.C. 1819(a) (Eighth) (state nonmember banks and state branches of any foreign bank). The FTC's authority to collect this information is 15 U.S.C. 46(b). Under this section, the FTC may issue compulsory process to persons, partnerships, and corporations from which it seeks to collect information. Confidentiality will be determined on a casebycase basis under applicable Federal law. Confidentiality for respondents under the FTC's jurisdiction will be protected in accordance with the Federal Trade Commission Act, 15 U.S.C. 41 et seq. (``FTC Act''), and the FTC's Rules of Practice. Abstract
The Agencies will gather information by means of a survey to be
completed by financial institutions and other persons that are
creditors or users of consumer reports (``respondents'').\1\ The
Agencies will use the Survey responses to prepare the Report on the
information sharing practices by financial institutions, creditors, or
users of consumer reports with their affiliates. The Agencies are
required to jointly submit the Report together with any recommendations
for legislative or regulatory action, pursuant to Section 214(e) of the
Fair and Accurate Credit Transactions Act of 2003 (``FACT Act'' or the ``Act'') Pub. L. 108159, 117 Stat. 1952.
\1\ See section 214(e) of the FACT Act for a description of the type of information that will be collected.
Summary of Comments
On August 31, 2006, pursuant to the PRA, 44 U.S.C. 35013521, the Agencies published a notice in the Federal Register (71 FR 51888) requesting public comment for 60 days on a proposed information collection concerning the Survey. The comment period for this notice expired on October 30, 2006. The Agencies received five comment letters from four trade associations and one individual. Currently, the OCC, FDIC, OTS, NCUA, and FTC are soliciting comment on the implementation of the proposed information collection. The Board has approved this information collection under its delegated authority from OMB. Survey Methodology
One commenter requested that the Agencies describe the methods they would use to conduct the Survey and the methods they would use to analyze the results. Each Agency will conduct a nonstatistical, qualitative survey of a limited number of regulated entities under its supervision.
Commenters also requested clarification as to: (i) Which institution or affiliate in an organization would be asked to respond to the Survey and (ii) whether that respondent would be asked to provide information regarding not only the sharing of information with, but also the receipt of information from, its affiliates.
Respondents will not be asked to provide data regarding information
sharing practices on a combined basis for it, its affiliates, and its
corporate parent; rather the Survey will ask only about sharing for
that particular respondent.\2\ The Agencies note that the Survey will
focus on a respondent's general practices and will ask a respondent to
provide information not only about its sharing of information with its
affiliates, but also about its receipt of information from its affiliates.
\2\ The OCC, however, because of the way some national banks are
structured, may collect information from a single respondent regarding more than one affiliated national bank.
Survey Information
Some commenters stated that the Survey should include definitions and instructions. The commenters also noted that the draft Survey assumes that an organization has only one policy on information sharing practices with all affiliates, when in fact such practices might vary by affiliate, by product, or by state. For example, one commenter noted that the draft did not take into account numerous variations in affiliate sharing practices within a single firm and, as a result, in many cases, the response options provided were inapplicable, inaccurate, or incomplete.
One commenter suggested the Survey include definitions of important terms, such as affiliate, consumer, customer, personally identifiable transaction or experience information, and purposes related to employment or hiring, because some of these are terms of art with which Survey respondents will be unfamiliar.
In many cases where commenters specified the need for specific definitions or instructions, the Agencies have incorporated such suggestions. Additional space will be provided on the Survey instrument for supplemental responses, such as information on varying practices by affiliate or state.
A commenter noted that questions do not specify the time frame to be used for completing the Survey, and asked if the Agencies intend to capture a snapshot. The instructions will be specific and direct respondents to provide information on their current information sharing practices with affiliates.
Some commenters suggested collecting additional information, such
as information to determine whether the perceived risks of information
sharing (for example, increased level of identity theft) in fact exist. Commenters noted
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that the Survey should focus on the underlying purpose for affiliate
sharing practices. One commenter suggested the primary purpose for
which companies share information with affiliates is to provide
benefits to consumers, including providing them with an array of
products and services at as low a cost as possible. In general, the
Agencies will limit the Survey to the information that section 214(e)
of the FACT Act requires to be included in the Report. For that reason,
the Agencies do not plan to collect other information, such as data
regarding the benefits, or perceived risks of information sharing with affiliates.
Confidential and Voluntary Status
Commenters indicated that the Agencies should guarantee confidential treatment to respondents, in all cases and not merely provide it on a casebycase basis, in order to encourage voluntary and informative responses. In addition, some commenters noted that certain requested survey information is proprietary (e.g., the percentage of customers that opt out and the use of shared information for underwriting) and thus should receive confidential treatment. Finally, while commenters commended the financial regulatory agencies for conducting a voluntary survey, they asked that the FTC also conduct a voluntary survey instead of using its compulsory authority to gather information.
In cases where questions of confidentiality arise, as mentioned in the initial notice, the Agencies will grant confidential treatment on a casebycase basis under applicable Federal law. Responses to survey questions that institutions are already required to publicly disclose would not be protected from disclosure under the Freedom of Information Act, 5 U.S.C. 552 (FOIA). However, it is possible that some information collected on this Survey may be exempt from disclosure. To the extent an institution can establish the potential for substantial competitive harm, those responses would be protected by FOIA Exemption 4, 5 U.S.C. 552(b)(4) (exempting from disclosure ``trade secrets and commercial or financial information obtained from a person and privileged and confidential''). Further, section 6(f) of the FTC Act, 15 U.S.C. 46(f), bars the Commission from publicly disclosing trade secrets or confidential commercial or financial information it receives from persons pursuant to, among other methods, special orders authorized by section 6(b) of the FTC Act.
In the event of a FOIA request for information, an Agency may claim Exemption 4 or other protections to the extent legally permissible as a basis for withholding the information. OTS will follow Treasury Department Rule, which is 31 CFR 1.6 contained in the Department's rule on Disclosure of Records. If the Commission has determined that the information does not constitute trade secrets or confidential commercial or financial information under FTC Act section 6(f), a respondent who designates a submission as confidential is entitled to 10 days' advance notice of any anticipated public disclosure by the Commission under section 21(c) of the FTC Act, 15 U.S.C. 57b2(c). The FTC Act and the Commission's rules authorize disclosure of nonpublic material in limited circumstances (e.g., official requests by Congress, requests from other agencies for law enforcement purposes, or administrative or judicial proceedings). Even in those limited contexts, however, the Commission's rules may afford protections to the submitter, such as advance notice to seek a protective order in litigation. See 15 U.S.C. 57b2; 16 CFR 4.94.11.
In the case of surveys administered by the financial regulatory agencies, the Agencies believe the ongoing supervisory relationships that these agencies have with supervised institutions will help to facilitate a high level of voluntary responses. In contrast, the FTC does not have the same type of supervisory relationships with its regulated entities; therefore, the FTC may elect to use compulsory authority to obtain information that will be necessary for preparation of the Report should its entities choose not to participate voluntarily.
Burden Estimates
Commenters indicated that a respondent would likely need significantly more time than 10 hours to collect and organize information to produce responses, in part due to items in the Board's draft Survey that they believed were unclear. Commenters expressed concern that the time necessary to respond to the Survey would exceed the Agencies' estimates if the answers to the Survey were to be based on an organization's historical information sharing practices or the information sharing practices for multiple entities and/or multiple lines of business that exist throughout a complex organization.
The Agencies believe that the final Survey instructions, with expanded definitions and a clarification that respondents should report only on current, not historical, practices will focus the responses such that the burden estimate of 10 hours per institution is reasonable.
PreSurvey Testing
Commenters recommended that the Agencies consult institutions for their suggestions on recrafting the questions to capture a more meaningful representation of affiliate sharing practices and to reduce burden on respondents. In response to these comments, the Board, on behalf of the other agencies, conducted testing (through telephone interviews) with three financial institutions. In general, the test institutions indicated that the draft Survey would not cause undue burden on respondents. In addition, the test institutions provided feedback on the format, instructions, and content of the Survey. As a result, the Agencies have modified the final Survey instrument and instructions.
Request for Comment
Comments on the foregoing, including comments regarding the necessity and practical utility of the proposed collection of information, the accuracy of the Agencies' estimates, and ways to enhance the quality, utility, and clarity of the information sought may be directed to the agencies as set out below.
FOR FURTHER INFORMATION CONTACT
Please contact any of the individuals named below. In addition, copies of the Board's draft Survey instrument and related instructions will be made available on the Board's public Web site at: http://www.federalreserve.gov/boarddocs/reportforms/review.cfm under ``Recently Approved and Pending Implementation'' (see entry for FR 3214e). Please contact the other agencies to request a copy of their draft Survey instrument and instructions.