Reg. V subpt N- SS-2025-FINAL

Supporting Statement for Information Collection
Regulation V, Subpart N (formerly, the Free Annual File Disclosures Rule)
12 CFR §§ 1022.130 - 1022.138
(OMB Control No. 3084-0128)
The Federal Trade Commission (“FTC” or “Commission”) seeks to extend, for three years,
the current Paperwork Reduction Act (“PRA”)1 clearance for the FTC’s shared enforcement with
the Consumer Financial Protection Bureau (“CFPB”) of the disclosure requirements in subpart N
of Regulation V (“subpart N” or “Rule”).
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act2 transferred
rulemaking authority for several consumer financial protection laws to the CFPB. Accordingly,
the Commission rescinded several rules under the Fair Credit Reporting Act (“FCRA”), including
the FTC’s Free Annual File Disclosures Rule that appeared under 16 C.F.R. Parts 610 and 698.
On December 21, 2011, the CFPB issued an interim final rule, Regulation V (Fair Credit
Reporting), 12 C.F.R. Part 1022, which incorporated within its subpart N (Duties of Consumer
Reporting Agencies Regarding Disclosures to Consumers), §§ 1022.130 - 1022.138, with only
minor changes (non-substantive, technical, formatting, and stylistic), the former Free Annual File
Disclosures Rule, and in Appendix L to Part 1022, the associated model notice.3 Subpart N of
Regulation V continues the disclosure requirements that had previously existed under the FTC’s
rescinded Free Annual File Disclosures Rule.
1. & 2. Necessity for and Use of the Information
Subpart N requires nationwide consumer reporting agencies and nationwide consumer
specialty reporting agencies to provide to consumers, upon request, one free file disclosure
within any 12-month period. Generally, it requires the nationwide consumer reporting agencies,
as defined in Section 603(p) of the FCRA, 15 U.S.C. § 1681a(p), to create and operate a
centralized source that provides consumers with the ability to request their free annual file
disclosures from each of the nationwide consumer reporting agencies through a centralized
Internet website, toll-free telephone number, and postal address. Subpart N also requires the
nationwide consumer reporting agencies to establish a standardized form for Internet and mail
requests for annual file disclosures, and provides a model standardized form that may be used to
comply with that requirement. It additionally requires nationwide specialty consumer reporting
agencies, as defined in Section 603(w) of the FCRA, 15 U.S.C. § 1681a(w), to establish a
streamlined process for consumers to request annual file disclosures. This streamlined process
must include a toll-free telephone number for consumers to make such requests.

1

44 U.S.C. Ch. 35.
Pub. L. 111-203, 124 Stat. 1376 (2010). Title X comprises sections 1001 - 1100H (collectively, the
“Consumer Financial Protection Act of 2010”).
3
76 Fed. Reg. 79,307 (Dec. 21, 2011).
2

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3.

Consideration of Using Improved Information Technology to Reduce Burden

Subpart N requires nationwide consumer reporting agencies to use information
technologies in complying with their disclosure obligations. Subpart N also contemplates that
nationwide specialty consumer reporting agencies may use information technologies in
complying with their disclosure obligations. Such technologies may help reduce the burden of
information collection. In addition, nothing in subpart N prohibits regulated entities from using
the least burdensome information technology to reduce compliance burdens. Consistent with the
Government Paperwork Reduction Elimination Act, 44 U.S.C. § 3504 note, nothing in subpart N
prescribes that disclosures be made, records filed or kept, or signatures executed, on paper or in
any particular format that would preclude the use of electronic methods to comply with subpart
N.
4.

Efforts to Identify Duplication/Availability of Similar Information

Subpart N does not duplicate, overlap, or conflict with any other federal statutes, rules, or
policies. To the extent some state laws also require free annual file disclosures, nationwide and
nationwide specialty consumer reporting agencies can comply with such state laws by complying
with Subpart N, thereby avoiding duplication.
5.

Efforts to Minimize Burdens on Small Businesses

Subpart N’s disclosure requirements are designed to impose the minimum burden on all
affected members of the industry, regardless of size. In addition, subpart N is unlikely to have a
significant economic impact on a substantial number of small entities. As noted above, subpart
N applies to two types of consumer reporting agencies: (1) nationwide consumer reporting
agencies, and (2) nationwide specialty consumer reporting agencies. The nationwide consumer
reporting agencies are not small entities. Furthermore, the economic impact on nationwide
specialty consumer reporting agencies is unlikely to be significant because there are relatively
few (estimated at less than 50) nationwide specialty consumer reporting agencies currently doing
business in the U.S.
6.

Consequences of Conducting Collection Less Frequently

Subpart N implements federal laws that do not permit less frequent disclosure. Less
frequent collection would violate federal law.
7.

Circumstances Requiring Disclosures Inconsistent with Guidelines

The collection of information required by the amended Rule is consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
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8.

Consultation Outside the Agency

As required by the PRA, the FTC provided opportunity for public comment before
requesting that OMB extend its existing clearance for subpart N. See 90 Fed. Reg. 9549 (Feb.
13, 2025). No public comments were received. Pursuant to PRA implementing regulations under
5 C.F.R. Part 1320, the Commission is providing a second opportunity for public comment on
the instant burden analysis contemporaneous with this submission.
9.

Payments/Gifts to Respondents
Not applicable.

10. & 11. Assurances of Confidentiality/Matters of a Sensitive Nature
No assurance of confidentiality is necessary because subpart N does not require affected
entities to register or file any documents with the FTC or CFPB. Moreover, subpart N does not
contain recordkeeping requirements.
12.

Estimated Hours and Labor Burden

Burden statement:
Because the FTC shares enforcement authority with the CFPB for subpart N, the two
agencies split between them the related estimate of PRA burden for firms under their coenforcement jurisdiction. The overall burden calculations attributable to the CFPB and the FTC are
set out below. In summary after splitting between the two agencies, the estimated annual burden
solely for FTC would be 121,818 hours and $3,135,077 in associated labor costs.
A.

Requests per Year from Consumers for Free Annual File Disclosures

When the FTC last sought clearance renewal for the Rule, we estimated 34 million requests
per year as a representative average to calculate PRA burden, and noted that the Commission was
seeking more recent estimates of the number of requests consumers are making for free credit
reports. Since that time, the Consumer Data Industry Association (“CDIA”) estimated that in 2023
and 2024, the nationwide consumer reporting agencies provided on average approximately 17
million free annual file disclosures through the centralized Internet website required to be
established by the FACT Act and subpart N. Based on its knowledge of the industry, FTC staff
projected that during this same time period of 2023 and 2024 the consumer reporting agencies
provided no more than 2 million free annual file disclosures through the centralized toll-free
telephone number and postal address required to be established by the FACT Act and subpart N.
We expect that the number of requests for free annual credit reports will rise over the next three
years because of increases in the population and consumer awareness that they are entitled to a free
annual report. As a proxy, we are now estimating 21 million requests per year as a representative
average year to estimate PRA burden for purposes of the instant analysis.
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The Commission seeks recent data on how these requests are being received – by Internet,
phone, or by mail.
B.

Annual File Disclosures Provided Through the Internet

Both nationwide and nationwide specialty consumer reporting agencies will likely handle
the overwhelming majority of consumer requests through Internet websites. The annual file
disclosure requests processed through the Internet will impose a de minimis hourly burden in
personnel costs per request on the nationwide and nationwide specialty consumer reporting
agencies, except for those requests that are redirected to the mail process.4 However, consumer
reporting agencies periodically will be required to adjust the Internet capacity needed to handle the
changing request volume. Consumer reporting agencies likely will make such adjustments by
negotiating or renegotiating outsourcing service contracts annually or as conditions change.
Trained personnel will need to spend time negotiating and renegotiating such contracts.
Commission staff estimates that negotiating such contracts will require a cumulative total of 8,320
hours and $684,819 in labor costs.5 Such activity is treated as an annual burden of maintaining and
adjusting the changing Internet capacity requirements.
C.

Annual File Disclosures Requested Over the Telephone

Most of the telephone requests for annual file disclosures will also be handled in an
automated fashion, with de minimis personnel costs needed to process the requests except for those
requests that are redirected to the mail process.6 As with disclosure requests processed through the
Internet, consumer reporting agencies will require additional time and investment to increase and
administer the automated telephone capacity for the expected increase in request volume. The
nationwide and nationwide specialty consumer reporting agencies will likely make such
adjustments by negotiating or renegotiating outsourcing service contracts annually or as conditions
change. Staff estimates that this will require a total of 6,240 hours at a cost of $513,614 in labor
costs.7 This activity also is treated as an annual recurring burden necessary to obtain, maintain, and
adjust automated call center capacity.
4

See infra note 8.
Based on the time necessary for similar activity in the federal government (including at the FTC), staff
estimates that such contracting and administration will require approximately 4 full-time equivalent
employees (FTE) for the web service contracts. Thus, staff estimates that administering the contract will
require four FTE, which is 8,320 hours per year (four FTE x 2,080 hours/year). The cost is based on the
most current Bureau of Labor Statistics median hourly rate ($82.31) for computer and information systems
managers. See Occupational Employment Statistics (released on April 2, 2025), Occupational Employment
and Wages – May 2024, Table 1, available at https://www.bls.gov/news.release/ocwage.t01.htm. Thus, the
estimated setup and maintenance cost for an Internet system is $684,819 per year (8,320 hours x
$82.31/hour).
6
See infra note 8.
7
Staff estimates that recurring contracting for automated telephone capacity will require approximately 3
FTE, a total of 6,240 hours (3 x 2,080 hours). Applying an hourly wage rate of $82.31 (see supra note 5),
estimated setup and maintenance cost is $513,614 (6,240 x $82.31) per year.
5

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D.

Annual File Disclosures Requiring Processing by Mail

Based on their knowledge of the industry, staff believes that no more than 1% of consumers
(1% x 21 million, or 210,000) will request an annual file disclosure through U.S. postal service
mail. Staff estimates that clerical personnel will require 10 minutes per request to handle these
requests, thereby totaling 35,000 hours of time. [(210,000 x 10 minutes)/60 minutes per hour =
35,000 hours]
In addition, whenever the requesting consumer cannot be identified using an automated
method (a website or automated telephone service), it will be necessary to redirect that consumer to
send identifying material along with the request by mail. Staff estimates that this will occur in
about 5% of the new requests (or 1,039,500)8 that were originally placed over the Internet or
telephone. Staff estimates that clerical personnel will require approximately 10 minutes per request
to input and process those redirected requests for a cumulative total of 173,250 clerical hours.
[(1,039,500 x 10 minutes)/60 minutes per hour = 173,250 hours]
E.

Instructions to Consumers

The Rule also requires that certain instructions be provided to consumers. See 12 C.F.R
§§ 1022.136(b)(2)(iv)(A-B), 1022.137(a)(2)(iii)(A-B). Minimal associated time or cost is involved,
however. Internet instructions to consumers are embedded in the centralized source website and do
not require additional time or cost for the nationwide consumer reporting agencies. Similarly, for
telephone requests, the automated phone systems provide the requisite instructions when
consumers select certain options. Some consumers who request their credit reports by mail might
additionally request printed instructions from the nationwide and nationwide specialty consumer
reporting agencies. Staff estimates that there will be a total of 1,249,500 requests each year for free
annual file disclosures by mail.9 Based on its knowledge of the industry, staff estimates that, of the
predicted 1,249,500 mail requests, 10% (or 124,950) will request instructions by mail. If printed
instructions are sent to each of these consumers by mail, requiring 10 minutes of clerical time per
consumer, this will total 20,825 hours. [(124,950 instructions x 10 minutes)/60 minutes per hour]
F.

Annual Labor Costs

Labor costs are derived by applying median hourly cost figures to the burden hours
described above. Staff anticipates that processing of requests for annual file disclosures and
instructions will be performed by clerical personnel and estimates that the processing will require
229,075 hours at an annual cost of $5,071,721. [(35,000 hours for handling initial mail requests +
173,250 hours for handling requests redirected to mail + 20,825 hours for handling instructions

8

This figure reflects five percent of all requests, net of the estimated one percent of all requests that might
initially be made by mail. That is, 0.05 x (21,000,000 - 210,000) = 1,039,500.
9
This figure includes both the estimated 1% of 21 million requests that will be made by mail each year
(210,000), and the estimated 1,039,500 requests initially made over the Internet or telephone that will be
redirected to the mail process (see supra note 8).

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mailed to consumers) x $22.14 per hour.10]
As elaborated on above, staff estimates that a total of 14,560 labor hours will be needed to
negotiate or renegotiate outsourced service contracts annually (or as conditions otherwise change)
to increase internet (8,320 hours) and telephone (6,240 hours) capacity requirements for internet
web services and the automated telephone call center. This will result in approximately $1,198,433
per year in labor costs. [14,560 hours x $82.31 per hour11]
Thus, estimated cumulative annual labor costs are $6,270,154.
G.

Net Burden for FTC, After 50:50 Split

After halving the updated estimates to split the PRA burden with the CFPB regarding the
Rule, the FTC’s burden totals are 121,818 hours and $3,135,077 in associated labor costs.
13.

Estimated Capital and Other Non-Labor Costs

As in the previous PRA clearance analysis, FTC staff believes it is likely that consumer
reporting agencies will use third-party contractors (instead of their own employees) to increase the
capacity of their systems. Because of the way these contracts are typically established, these costs
will likely be incurred on a continuing basis and will be calculated based on the number of requests
handled by the systems. Staff estimates that the total annual amount to be paid for services
delivered under these contracts is $8,021,000.12
After halving the updated estimates to split the PRA burden with the CFPB regarding the
Rule, the FTC’s burden total is $4,010,500 in capital/non-labor costs.
14.

Estimated Cost to the Federal Government

Staff estimates that the fiscal year cost to the FTC Bureau of Consumer Protection of
enforcing the Rule’s disclosure requirements will be approximately $200,000 per year. This
estimate is based on the assumption that 0.75 of an attorney work year (based on an annual
salary of $200,000) will be expended to enforce the Rule’s requirements relating to disclosure.
Approximately $50,000 of clerical and other support services are also included in this estimate.

10

See Occupational Employment and Wages – May 2024, Table 1, available at
https://www.bls.gov/news.release/pdf/ocwage.pdf (Office and administrative support workers, all others).
11
See supra notes 5 and 7.
12
This consists of an estimated $3,569,000 for automated telephone cost ($1.49 per request x 2,395,260
requests), an estimated $2,603,000 ($0.15 per request x 17,355,240 requests) for Internet web service cost,
and an estimated $1,849,000 for printing and mailing costs ($1.48 per request x 1,249,500 requests). Per
unit cost estimates are based on staff’s knowledge of the industry.

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15.

Program Changes or Adjustments

The updated burden estimates present decreases of 70,904 hours, $937,724 in labor costs
and $2,216,600 in capital/non-labor costs from the currently cleared FTC burden totals, after the
halving for shared interagency enforcement. The decreases are attributable to an estimated
decrease of the number of requests for free annual file disclosures from 34 million annually to 21
million annually.
16.

Publishing Results of the Collection of Information

Not applicable. There are no plans to publish for statistical use any information required
by the Rule.
17.

Display of Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certifications for PRA Submissions
Not applicable.

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