Regulation M - SS - 2024 - FINAL

Federal Trade Commission
Supporting Statement for Information Collection Provisions of Regulation M
(Consumer Leasing Act)
12 C.F.R. Part 213 (Federal Reserve Board); 12 C.F.R. Part 1013 (CFPB)
(OMB Control Number: 3084-0086)
The Federal Trade Commission (“FTC” or “Commission”) requests approval for a threeyear extension of an existing clearance relating to the information collection requirements under
Regulation M (Consumer Leasing Act), 12 C.F.R. Part 213, 12 C.F.R. Part 1013. There is no
change in the recordkeeping or disclosure requirements. Annual burden estimates for this period
remained the same while expected annual labor costs are projected to increase.
1.

Necessity for Collecting the Information

The Consumer Leasing Act, 15 U.S.C. 1667 et seq. (“CLA”), an amendment to the Truth
in Lending Act (“TILA”), 15 U.S.C. 1601 et seq., was enacted to foster comparison shopping
and informed decision making by requiring accurate disclosure of the costs and terms of leases to
consumers. Lessors are subject to disclosure requirements that apply to both open-end leases
(e.g., with a residual due at lease end) and closed-end leases (e.g., “walkaway” leases, with no
substantial amount due at lease end). The CLA now applies to consumer leases up to $58,300
plus an annual adjustment, based on changes made by the Dodd-Frank Wall Street Reform and
Consumer Protection Act (“Dodd-Frank Act”), Pub. L. 111-203, 124 Stat. 1376 (2010).
Subject to the discussion below, the Federal Trade Commission (“FTC” or
“Commission”) enforces the CLA as to all lessors and advertisers except those that are subject to
the regulatory authority of another federal agency (such as federally chartered or insured
depository institutions). The CLA 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 (“Federal Reserve Board” or
“Board”) promulgated the original Regulation M (12 C.F.R. Part 213) to implement the CLA, as
required by the statute. Under the Dodd-Frank Act, however, almost all rulemaking authority for
the CLA transferred from the Board to the Consumer Financial Protection Bureau (“CFPB”) on
July 21, 2011 (“transfer date”). Although the Dodd-Frank Act transferred most rulemaking
authority under CLA to the CFPB, the Board retained rulemaking authority for certain motor
vehicle dealers.1 The CFPB’s regulations for entities under its jurisdiction for Regulation M
appear in 12 C.F.R. Part 1013.2

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). 12 U.S.C. 5519(a), (c).
2

Because both the Board and the CFPB have certain rulemaking authority under Regulation M – as discussed
further below – citations to both aspects of the regulation are included in this document. Hence, 12 C.F.R. Part 213
refers to the Board-issued Regulation M; 12 C.F.R. Part 1013 refers to the CFPB-issued Regulation M. Generally,
these two aspects of Regulation M are virtually identical, other than occasional minor technical differences, and
citations.

As a result of the Dodd-Frank Act, the FTC and CFPB generally share the authority to
enforce Regulation M for entities for which the FTC had enforcement authority before the Act,
except for certain motor vehicle dealers3 and certain state-chartered credit unions.4 The FTC
generally has sole authority to enforce Regulation M regarding motor vehicle dealers
predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of
motor vehicles, or both.5
Recordkeeping
Sections 213.8/1013.8 of Regulation M requires lessors to retain evidence of compliance
with its requirements (other than its advertising rules), but it does not specify the particular
records to be kept. Entities subject to the regulation may choose the records they consider
adequate to show compliance, and each entity may interpret the requirement differently.
Records, however, must be retained for twenty-four months.
Disclosure
Regulation M imposes disclosure requirements on all types of lessors, including
automobile lessors (such as auto dealers, independent leasing companies, and manufacturers’
captive finance companies), computer lessors (such as computer dealers and other retailers),
furniture lessors, various electronic commerce lessors, and diverse types of lease advertisers, and
others. These requirements are intended to ensure that consumers are fully apprised of the terms
of leases prior to consummation of the transaction. The written disclosures required by
Regulation M are derived from statutory disclosures and directives mandated by the CLA. See
12 C.F.R. 213.4/12 C.F.R. 1013.4; 15 U.S.C. 1667a; 15 U.S.C. 1667f (written disclosures); 12
C.F.R. 213.7/12 C.F.R. 1013.7; 15 U.S.C. 1667c; 15 U.S.C. 1667f (advertising disclosures).
The Board and CFPB have issued model forms and clauses that can be used to comply
with the written disclosure (non-advertising) requirements of the CLA and Regulation M. See,
e.g., Appendices A-1 - A-3 to Regulation M; 12 C.F.R. pt. 213, Appendices A-1 - A-3; 12 C.F.R.
pt. 1013, Appendices A-1 - A-3. Correct use of these model forms and clauses insulates lessors
from liability for the respective requirements under the CLA and Regulation M. See Federal
3

See Dodd-Frank Act, § 1029(a), as limited by subsection (b) as to motor vehicle dealers. Subsection (b) does not
preclude CFPB 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.
4

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 CFPB 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 statechartered 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.
5

See Dodd-Frank Act, § 1029(a), (c). 12 U.S.C. 5519(a), (c).

2

Reserve Board Official Staff Commentary to Regulation M (“Board Commentary”), Appendix
C, Comment 1; 12 C.F.R. 213, Supp. I, Appendix C, Comment 1; CFPB Official Staff
Commentary to Regulation M (“CFPB Commentary”), Appendix C, Comment 1; 12 C.F.R.
1013, Supp. I, Appendix C, Comment 1.
2.

Use of the Information

Consumers rely upon the disclosures for information to comparison shop among leases,
as well as to ascertain the true costs and terms of lease offers. The FTC, other agencies, and
private litigants also use the recordkeeping information to determine whether accurate and
complete disclosures of the cost of leases have been provided to consumers prior to
consummation of the lease. This information provides the primary evidence of law violations in
CLA enforcement actions brought by the FTC and private actions brought by consumers.
Without the Regulation M recordkeeping requirement and required disclosures, the FTC’s (and
consumers’) ability to enforce the CLA would be significantly impaired.
3.

Consideration of the Use of Improved Information Technology

The Board and CFPB have issued rules to establish uniform standards for using
electronic communication to deliver disclosures required under Regulation M, within the context
of the Electronic Signatures in Global and National Commerce Act (“ESIGN”), 15 U.S.C. 7001
et seq., and Sections 213.3(a)/1013.3(a) of Regulation M. 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 M, by
enabling lessors to utilize more efficient electronic media for disclosures and compliance.
Regulation M also permits a lessor to retain records by microfilm or microfiche or by any
other method that reproduces records accurately (including computer programs). Lessors need
only retain enough information to reconstruct the required disclosure or other records. Section
213.8-1 of the Board Commentary; Section 1013.8-1 of the CFPB Commentary.
4.

Efforts to Identify Duplication/Availability of Similar Information

The recordkeeping requirement of Regulation M preserves the information provided by
the lessor to consumers considering the costs and terms of lease offers. The lessor is the only
source of this information. No other federal law, nor is staff aware of any state law, that
mandates retention of this information. Similarly, the disclosures required by the CLA and
Regulation M are not required by any other provision of law. Although some lease cost
information is contained in contractual documents, the information is not standardized. As a
result, consumers cannot use it efficiently to comparison shop or fully appreciate lease terms.
The lessor is the only source of this information. No other federal law mandates these
disclosures. State laws do not duplicate these requirements, although some states may have other
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rules applicable to consumer leases.
5.

Efforts to Minimize Burdens on Small Businesses

The Regulation M recordkeeping and disclosure requirements are imposed on all lessors.
The recordkeeping requirement is mandated by Regulation M. The disclosure requirements are
mandated jointly by the CLA and Regulation M. As previously noted, the FTC’s role in this area
is limited to enforcement because the CLA vested rulemaking authority in the Board and CFPB.
Nonetheless, as also noted above, Regulation M provides model forms and clauses that may be
used to comply with its disclosure requirements. Correct use of these forms and clauses insulates
a lessor 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 lease transactions. If the retention period
were shortened, consumers who sue under the CLA, and the administrative agencies, might find
that lessor records needed to prove violations of the CLA no longer exist.
The disclosure requirements are needed to facilitate comparison shopping and to spur
informed lease decision making. If these requirements were eliminated, consumers would not
have access to this critical information. Their right to sue under the CLA would be undermined,
and the FTC (and other administrative agencies) could not fulfill their mandate to enforce the
CLA.
7.

Circumstances Requiring Collection Inconsistent with Guidelines

The recordkeeping and disclosure requirements in Regulation M are consistent with the
applicable guidelines contained in 5 C.F.R. 1320.5(d)(2).
8.

Consultation Outside the Agency

The disclosure and recordkeeping requirements of Regulation M were issued by the
Federal Reserve Board and CFPB. 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 Commission sought public comment in connection with its latest PRA
clearance request for these regulations, in accordance with 5 C.F.R. 1320.8(d). See 89 Fed. Reg.
62,736 (Aug. 1, 2024). Eight comments were received. One comment supported the proposal
and stated that extension of clearance for these requirements and documentation of compliance is
essential for the protection of consumers. Seven comments were unrelated to the proposal (and
pertained to other issues such as antitrust topics). Consistent with 5 C.F.R. 1320.12(c), the FTC
is again seeking public comment contemporaneously with this submission.
4

9.

Payments or Gifts to Respondents
Not applicable.

10. & 11.

Assurances of Confidentiality/Matters of a Sensitive Nature

The required recordkeeping and written disclosures contain private financial information
about consumers who apply for and/or obtain consumer leases. Such information 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 exemptions of the Freedom of
Information Act, 5 U.S.C. 552(b), as applicable.
12.

Estimated Hours and Labor Cost Burden
Estimated Hours Burden: 101,953 (30,203 recordkeeping hours + 71,750 disclosure
hours)6

Given their generally shared enforcement jurisdiction for Regulation M,7 the CFPB and
FTC have divided the FTC’s previously-cleared PRA burden between them, except that the FTC
has wholly assumed the part of that burden associated with motor vehicle dealers and also, when
appropriate, regarding estimated burden for state-chartered credit unions.8 The division of PRA
burden hours not attributable to motor vehicle dealers and, when appropriate, state-chartered
credit unions, is reflected in the CFPB’s PRA clearance requests to OMB,9 as well as in the
FTC’s burden estimates below.
6

Recordkeeping and disclosure burden estimates for Regulation M are more substantial for motor vehicle leases
than for other leases, including burden estimates based on market changes and regulatory definitions of coverage.
As noted above, for purposes of burden calculations, and in view of the different types of motor vehicle dealers, the
FTC is including for itself the entire PRA burden for all motor vehicle dealers in the burden estimates below.

7

See supra notes 3 and 4 and accompanying text.

8
As of the fourth quarter of 2023, there were approximately 1,936 state-chartered credit unions which were
federally insured; there also have been an estimated 112 or more which were privately insured, and an estimated 100
or more in Puerto Rico which were 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 4 and
accompanying text), the FTC’s figures include PRA burden for all state-chartered credit unions, unless otherwise
noted. However, in view of fluctuations that began due to COVID-19 and have continued and to avoid
undercounting, we have retained the prior estimate of 2,300 state-chartered credit unions, unless otherwise stated.
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 CFPB oversight), the FTC staff’s
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 3170-0006 (Regulation M).

5

The following discussion and tables present FTC estimates under the PRA of
recordkeeping and disclosure average 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 M’s recordkeeping requirements affect approximately
30,203 firms within the FTC’s jurisdiction leasing products to consumers at an average annual
burden of one hour per firm, for a total of 30,203 hours.
Disclosure
Regulation M applies to automobile lessors (such as auto dealers, independent leasing
companies, and manufacturers’ captive finance companies), computer lessors (such as computer
dealers and other retailers), furniture lessors, various electronic commerce lessors, and diverse
types of lease advertisers, and others. Below is staff’s best estimate of burden applicable to this
very broad spectrum of covered entities.
Regulation M: Disclosures – Burden Hours

Disclosures

Motor Vehicle Leases1
Other Leases2
Advertising

--------------- 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)
26,690
3,513
14,615

1
.50
.50

26,690
1,757
7,308

4,000,000
60,000
578,960

Total

.50
.25
.25

33,333
250
2,412

Total
Burden
(hours)
60,023
2,007
9,720
71,750

1

This category focuses on consumer vehicle leases. Vehicle leases are subject to more lease disclosure requirements (pertaining to computation
of payment obligations) than other lease transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. § 1667(1);
12 C.F.R. § 1013.2(e)(1). Leases up to $69,500 plus an annual adjustment are now covered. .
2
This category focuses on all types of consumer leases other than vehicle leases. It includes leases for computers, other electronics, small
appliances, furniture, and other transactions. (Only consumer leases for more than four months are covered.) See 15 U.S.C. § 1667(1); 12 C.F.R.
§ 1013.2(e)(1). Leases up to $69,500 plus an annual adjustment are now covered.

10

PRA “burden” does not include “time, effort, and financial resources” expended in the normal course of business,
regardless of any regulatory requirement. 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 submission.

6

Associated labor costs: $6,535,193 ($1,936,018 recordkeeping costs + $4,599,175
disclosure costs)
Staff calculated labor costs by applying appropriate hourly cost figures to the burden
hours described above. The hourly rates used below ($66 for managerial or professional time,
$47 for skilled technical time, and $22 for clerical time) are averages.12
Recordkeeping
For the 30,203 recordkeeping hours, staff estimates that 90 percent of the burden hours
require managerial time and 10 percent require skilled technical time. As shown below, the total
recordkeeping cost is $1,936,018.
Disclosure
For each notice or information item listed, staff estimates that 90 percent of the burden
hours require managerial time and 10 percent require skilled technical time. As shown below,
the total disclosure cost is $4,599,175.
Regulation M: Recordkeeping and Disclosures – Cost
------Managerial------

-----Skilled Technical----- --------Clerical--------

Total

Required Task

Time
(hours)

Cost
($66/hr.)

Time
(hours)

Cost
($)

Recordkeeping

27,183

$1,794,078

3,020

$141,940

0

0

$1,936,018

54,021
1,806
8,748

$3,565,386
$119,196
$577,368

6,002
201
972

$282,094
$9,447
$45,684

0
0
0

0
0
0

$3,847,480
$128,643
$623.052
$4,599,175

Cost
($47/hr.)

Time
Cost
(hours) ($22/hr.)

Disclosures:
Motor Vehicle Leases
Other Leases
Advertising
Total Disclosures

Total Recordkeeping and Disclosures

13.

$6,535,193 .

Estimated Capital and Other Non-Labor Costs

The applicable requirements impose minimal start-up costs, as lessors and/or advertisers
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 M is
minimal. Staff anticipates that the requirements noted above necessitate ongoing, regular
training so that covered entities stay current and have a clear understanding of federal mandates.
12

These inputs are based broadly on mean hourly data found within the “Bureau of Labor Statistics, Economic
News Release,” April 3, 2024, Table 1, “National employment and wage data from the Occupational Employment
Statistics survey by occupation, May 2023.” http://www.bls.gov/news.release/ocwage.t01.htm.

7

However, this training 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 M.
14.

Estimated Cost to the Federal Government

The Board and CFPB issued the recordkeeping requirement of Regulation M, so there is
no cost to the FTC for that purpose. Enforcement of the recordkeeping requirement of
Regulation M is incidental to overall enforcement of the CLA. Staff estimates that enforcing this
requirement will cost the FTC Bureau of Consumer Protection no more than $105,597, which is
a representative year’s cost of enforcing Regulation M’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 support services are included in this estimate.
The Board and CFPB issued the Regulation M disclosure requirements, so there is no
cost to the FTC for that purpose. Regarding enforcement, staff estimates that the cost to the FTC
Bureau of Consumer Protection for these requirements will approximate $633,572. This
estimate is based on the assumption that three attorney work years will be expended. Clerical
and other support services are included in this estimate.
15.

Program Changes or Adjustments

There are no program changes. For this clearance renewal period, FTC staff have
adjusted the labor cost estimates to take into account updated BLS wage data.
16.

Publishing Results of the Collection of Information
Not applicable. There are no plans to publish any information for statistical use.

17.

Display of Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certification for PRA Submissions

The FTC certifies that this collection of information is consistent with the requirements
of 5 C.F.R. 1320.9, and the related provisions of 5 C.F.R. 1320.8(b)(3), and is not seeking an
exception to these certification requirements.

8