Reg E 2018 Supptg Stmt fin

Federal Trade Commission
Supporting Statement for Information Collection
Provisions of Regulation E
(Electronic Fund Transfer Act)
12 C.F.R. 205; 12 C.F.R. 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, gov’t 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.
Subject to the discussion below, 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 Bureau of Consumer Financial Protection (“BCFP”) on July 21,
2011 (“transfer date”). Although the Dodd-Frank Act transferred most rulemaking authority
under EFTA to the BCFP, the Board retained rulemaking authority for certain motor vehicle
dealers1 and also for certain interchange-related requirements under EFTA.2 The BCFP’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).
2

See Dodd-Frank Act, § 1075 (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 BCFP 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. 205
refers to the Board-issued Regulation E; 12 C.F.R. 1005 refers to the BCFP-issued Regulation E. These two aspects
of Regulation E are largely similar, but have separate citations. However, the BCFP-issued Regulation E includes

As a result of the Dodd-Frank Act, the FTC and the BCFP 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 dealers4 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.
remittance transfer requirements, and also includes prepaid account requirements added by the BCFP in November
2016, with amendments in January 2018; the Board-issued Regulation E does not.
4

See Dodd-Frank Act § 1029(a), as limited by subsection (b) as to motor vehicle dealers. Subsection (b) does not
preclude BCFP 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.
5

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 BCFP 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
state-chartered 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.
6

See Dodd-Frank Act, § 1029(a), -(c).

2

The Board and BCFP have issued model forms and clauses that can be used to comply
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 BCFP 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 BCFP 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 BCFP.
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
4

under the EFTA would be undermined, and the FTC and other administrative agencies charged
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 BCFP. 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 83 Fed. Reg. 14,273 (April 3, 2018). 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: 7,184,905 (251,947 recordkeeping hours: 233,947 + 17,106
carve-out + 7,184,905 disclosure hours: 7,165,931 + 18,974 carve-out)
Given their generally shared enforcement jurisdiction for Regulation E,7 the FTC and

7

See supra notes 4 and 5 and accompanying text.

5

BCFP have divided the FTC’s previously cleared PRA burden estimates between them, except
that the FTC has assumed all of the burden estimates associated with motor vehicle dealers and
now is also doing so, when appropriate, regarding estimated burden for state-chartered credit
unions (these respective assumptions of burden estimation are reflected in the burden summaries
below and immediately above as a “carve-out”).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 BCFP’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 business10 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 third quarter of 2017, there was approximately the following number of state-chartered credit unions:
2,347 state-chartered credit unions - 2,106 federally insured, 125 privately insured, and 116 in Puerto Rico 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 (rounded to 2,300). 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 BCFP oversight), the FTC staff’s “carve-out” for this 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).

10

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).
11

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”) pertinent to this PRA submission.

6

Regulation E: Disclosures – Burden Hours

Disclosures1

--------------- 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
Change in terms
8,550
Periodic statements
27,300
Error resolution
27,300
Transaction receipts
27,300
2
Preauthorized transfers
258,553
Service provider notices
20,000
ATM notices
125
Electronic check conversion3
48,553
Overdraft services
15,000
Gift cards
15,000
Remittance transfers
Disclosures
4,800
Error resolution
4,800
Agent compliance
4,800
Prepaid accounts and gov’t benefits4
Disclosures
550
Disclosures - updates
138
Access to account information
550
Error resolution
300
Error resolution – followup8
Submission of agreements
138
Updates to agreements9
Total

Total
Burden
(hours)

.5
.5
.5
.5
.5
.5
.25
.25
.5
.5
.5

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

1.25
1.25
1.25

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
1,3806
110,000
4,800

2,750,000,000
N/A
1,100,000
275,000
1,380
690
690

.02

916,667

.01
2
30
1
5

183
9,167
690
12
58

1,136,667
1,380
110,183
13,967
690
288
58
7,184,905

40x105
1x10
20x107
4x4
N/A
2x1
N/A

276

1

Except as noted below, most respondent tallies in this table have decreased due to business shifts and other market changes that result in fewer
entities under FTC jurisdiction. Accordingly, related transactions under FTC jurisdiction have also decreased.
2
Preauthorized transfers rules apply to “persons” and entities. The number of respondents and transactions by such persons have increased, as
these preauthorized transfers are used more commonly than previously.
3
The total number of electronic check conversion respondents and transactions has decreased, particularly due to declining check usage.
4
Prepaid accounts are now covered by Regulation E (and payroll cards are included in this area). Government benefit notices are included also in
this area, although some separate requirements for government benefits remain; these factors are accounted for in the estimates. The number of
government benefit entities also have declined given business shifts that have reduced the number of entities under FTC jurisdiction (and prepaid
entities under FTC jurisdiction are also few in number).
5
Burden hours are on a per program basis. Individual burden hours are listed first, followed by the number of programs.
6
This reflects prepaid accounts’ updates of additional fee type disclosures. Individual burden hours are listed first, followed by the number of
programs.
7
Burden hours are on a per program basis; individual burden hours are listed first, followed by the number of programs.
8
This pertains to prepaid accounts.
9
This pertains to prepaid accounts’ agreements.

7

Associated labor cost: $316,720,410 ($4,895,526 recordkeeping costs: $4,561,949 +
$333,577 carve-out + $311,824,884 disclosure costs: $310,999,818 + $825,066
carve-out)
Staff calculated labor costs by applying appropriate hourly cost figures to the burden
hours described above. The hourly rates used below ($56 for managerial time, $42 for skilled
technical time, and $17 for clerical time) are averages.12
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 $4,895,526.
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 $311,824,884.
Regulation E: Recordkeeping and Disclosures – Cost
Required Task
Recordkeeping
Disclosures:
Initial terms
Change in terms
Periodic statements
Error resolution
Transaction receipts
Preauthorized transfers
Service provider notices
ATM notices
Electronic check conversion
Overdraft services
Gift cards
Remittance transfers
Disclosures
Error resolution
Agent compliance
Prepaid accounts and gov’t. benefits
Disclosures
Disclosures - updates

------Managerial-----Time
Cost
(hours)
($56/hr.)
0

$0

1,374
804
12,285
3,640
47,198
15,621
583
10,420
2,452
800
25,750

$76,944
$45,024
$687,960
$203,840
$2,643,088
$874,776
$32,648
$583,520
$137,312
$44,800
$1,442,000

-----Skilled Technical------------Clerical-------Time
Cost
Time
Cost
(hours)
($42/hr.)
(hours)
($17/hr.)
25,105

$1,054,410

12,367
7,233
110,565
32,760
424,785
140,589
5,250
93,778
22,068
7,200
231,750

$519,414
$303,786
$4,643,730
$1,375,920
$17.840.970
$5,904,738
$220,500
$3,938,676
$926,856
$302,400
$9,733,500

Total
Cost
($)

225,948

$3,841,116

$4,895,526

0
0
0
0
0
0
0
0
0
0
0

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

$596,358
$348,810
$5,331,690
$1,579,760
$20,484,058
$6,779,514
$253,148
$4,522,196
$1,064,168
$347,200
$11,175,500

144,600 $8,097,600
182,040 $10,194,240
144,600 $8,097,600

1,301,400 $54,658,800
1,638,360 $68,811,120
1,301,400 $54,658,800

0
0
0

$0
$0
$0

$62,756,400
$79,005,360
$62,756,400

113,667
138

1,023,000
1,242

0
0

$0
$0

$49,331,352
$59,892

$6,365,352
$7,728

12

42,966,000
$52,164

These inputs are based broadly on mean hourly data found within the “Bureau of Labor Statistics, Economic
News Release,” March 31, 2017, Table 1, “National employment and wage data from the Occupational Employment
Statistics survey by occupation, May 2016.” http://www.bls.gov/news.release/ocwage.t01.htm.

8

Access to account information
Error resolution
Error resolution – followup
Submission of agreements
Updates to agreements
Total Disclosures

11,018
1,397
69
29
6

$617,008
$78,232
$3,864
$1,624
$336

99,165
12,570
621
259
52

$4,164,930
$527,940
$26,082
$10,878
$2,184

Total Recordkeeping and Disclosures

13.

0
0
0
0
0

$0
$0
$0
$0
$0

$4,781,938
$606,172
$29,946
$12,502
$2,520
$311,824,884
$316,720,410

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
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 BCFP 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 $86,805, 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 BCFP 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 $868,048. 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

Estimated yearly burden hours (7,435,958) is reduced 76,407 hours from the previously
cleared burden estimate (7,506,730). This is due to a reduced estimated number of entities
under FTC jurisdiction occasioned by business shifts and other market changes.

9

16.

Publishing Results of the Collection of Information
Not applicable.

17.

Display of Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certification for PRA Submissions
Not applicable.

10