Overview
Title
Agency Information Collection Activities; Proposed Collection; Comment Request; Extension
Agencies
ELI5 AI
The FTC wants people to tell them if things are working well when getting free yearly credit reports from big companies that share your credit information, as they work with another group called the CFPB. They also want to know if there are ways to make this process better.
Summary AI
The Federal Trade Commission (FTC) seeks public comments on its shared enforcement with the Consumer Financial Protection Bureau (CFPB) regarding consumer reporting agencies' responsibilities under a specific rule. This rule ensures consumers can request a free annual file disclosure from nationwide consumer reporting agencies. The FTC estimates that there will be about 21 million requests for these reports each year. The FTC is also asking for comments on the effectiveness and accuracy of these procedures and the potential ways to improve them. Comments must be submitted by April 14, 2025.
Abstract
The information collection requirements described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act (PRA). The FTC seeks public comments on the agency's shared enforcement with the Consumer Financial Protection Bureau (CFPB) of the information collection requirements in CFPB's rule on Duties of Consumer Reporting Agencies Regarding Disclosures to Consumers (Rule). That clearance expires on April 30, 2025.
Keywords AI
Sources
AnalysisAI
General Summary
The document under review is an official notice from the Federal Trade Commission (FTC). It outlines the FTC's request for public comments concerning its responsibility, shared with the Consumer Financial Protection Bureau (CFPB), regarding rules that require consumer reporting agencies to provide free annual credit reports to consumers. The notice details estimated costs, labor, and processes involved in implementing and maintaining these services, with the goal of ensuring consumer access to these disclosures. It also outlines the avenues for public input on the existing processes and the forecast of related burdens.
Significant Issues and Concerns
One notable issue with the document is its use of technical language and complex fiscal calculations that the general public might find difficult to understand. This could limit accessibility and hinder meaningful public participation in the comment process. Moreover, the breakdown of cost and labor estimates lacks clear, straightforward explanation, making it challenging to assess the numbers comprehensively. Concerns also arise from the seemingly annual, repetitive expense for capacity adjustments without strong justification for the lack of efficiency improvements.
The 50:50 cost and labor split between the FTC and CFPB is mentioned, but the document does not provide an explanation or rationale for this division. This absence of transparency could foster doubts about the fairness and justifiability of the approach. Additionally, while a rise in requests for free annual reports is predicted, the document does not substantiate this expectation with robust, data-driven reasoning, which introduces a risk of misestimating the required resources.
Impact on the Public
For the general public, the document’s proposals play a crucial role in ensuring their right to access personal credit information freely once a year. However, the overly technical and specialized content might exclude laypeople from effectively engaging in the comment process. Without simpler language and more context, crucial public feedback could be lost or left unheard, which is a lost opportunity for refining the process to better serve consumers.
Stakeholder Impact
For consumer reporting agencies, the document’s proposals suggest continued compliance obligations and potential operational adjustments to meet service demands. These stakeholders could face financial and staffing pressures to maintain systems that allow consumers to request and receive their credit reports efficiently.
Conversely, consumers benefit from guaranteed access to their credit information, which can aid in making informed financial decisions. However, inefficiencies in the system highlighted in the document could result in wasted resources, potentially passing unnecessary costs indirectly down to consumers.
In conclusion, while the effort to involve the public in evaluating and shaping the enforcement framework is commendable, the document would greatly benefit from increased transparency and clarity. This would ensure more informed and effective public participation, aiding in the thoughtful evolution of consumer information governance.
Financial Assessment
The document in question details the financial considerations associated with the Federal Trade Commission's (FTC) shared enforcement responsibilities with the Consumer Financial Protection Bureau (CFPB) concerning consumer reporting agencies. It highlights several financial allocations and projections related to fulfilling the requirements set forth under regulation.
Summary of Financial Allocations
The document outlines various labor and contract costs associated with processing requests for free annual file disclosures from consumer reporting agencies. The FTC estimates that the total labor costs required to handle these requests amount to $5,946,819 annually. This includes separate components:
- $678,080 is allocated for negotiating and renegotiating internet service contracts to maintain required capacity.
- $508,560 is attributed to similar contracting activities necessary to manage telephone request volumes.
These contracts are considered essential to ensure adequate system capacity to accommodate consumer requests via internet and phone channels.
Additionally, it is projected that an annual total of $8,021,000 will be paid to third-party contractors for services necessary for managing these request systems. This amount includes costs for automated telephone services, internet web services, and printing and mailing tasks.
After dividing responsibilities and costs with the CFPB, the FTC's share is calculated at 121,818 hours, $2,973,410 in labor costs, and $4,010,500 in non-labor expenses.
Relation to Identified Issues
The financial references in the document correspond to several identified issues:
Complex Language and Technical Terms: The document's financial details may not be easily accessible to readers with limited technical understanding, thus inhibiting clear comprehension. The breakdown of labor and non-labor costs might overwhelm or confuse a general audience due to the use of specific jargon and statistical references.
Transparency in Cost Calculations: The rationale behind the labor and non-labor cost estimates is not straightforward, potentially leading to difficulties in understanding or verifying these allocations. Although specific wage rates and hour costs are provided, the document does not fully explain the mechanisms behind calculating these estimates. This opacity might raise concerns about transparency in financial planning and resource allocation.
Recurring Contract Costs: There is no robust justification provided for the recurring nature of third-party contract costs. This might suggest a potential area for cost optimization or questions regarding why these expenses can't be streamlined over time.
Fairness in Cost-Splitting with the CFPB: The exact reasoning behind a 50:50 cost split with the CFPB is not clarified, which might prompt scrutiny over whether the division of financial responsibility aligns proportionately with each agency's involvement in enforcement actions.
Potential Over-Estimation of Request Volume: The financial estimates hinge upon projected increases in consumer requests for disclosures. Without concrete data backing these projections, there's a risk of misalignment between anticipated and actual demand, leading to over- or under-allocation of resources.
Printed Instructions and Associated Costs: The labor costs linked to printed instructions for disclosures could be a focus for potential reductions. Enhancing online and phone-based resources might lessen the need for physical instructional materials, thereby reducing associated expenditures.
Overall, the document presents extensive financial details, yet it would benefit from more explicit explanations and justifications to align better with efficiency and transparency expectations.
Issues
• The document uses complex language and numerous technical terms that may not be easily understood by the general public, potentially reducing accessibility and comprehension.
• The document does not provide a clear, understandable breakdown of how the estimations for labor and non-labor costs were calculated, which could lead to difficulties in assessment or verification.
• There is a potential for wasteful spending in the estimated costs of third-party contracts for system capacity increases, which seem to be recurring annually without clear justification for why they cannot be made more efficient.
• The division of labor and cost estimates between the FTC and CFPB is mentioned, but the rationale behind the exact 50:50 split is not explained, potentially raising questions about fairness and transparency in cost-sharing.
• The estimated rise in requests for free annual credit reports is not thoroughly justified with concrete data or trends, which could result in over- or under-estimating associated costs and labor.
• The need for printed instructions and the associated labor costs could be potentially reduced or avoided with more effective online and phone resources, which could represent an area of inefficient spending.
• The section requesting public comments suggests constraints on the type of information that can be included, but without clear guidance on managing or protecting such sensitive personal information prior to submission.
• The document references external sources for labor wage estimates and volume statistics without incorporating a mechanism to update these estimates dynamically according to economic changes over time.