Rule2021-19826
Affiliate Marketing Rule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 16, 2021
Effective
October 18, 2021
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission (``FTC'' or ``Commission'') is issuing a final rule (``Final Rule'') to amend its Affiliate Marketing Rule to correspond to changes made to the Fair Credit Reporting Act (``FCRA'') by the Dodd-Frank Act.
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 177 (Thursday, September 16, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Rules and Regulations]
[Pages 51609-51611]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-19826]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
16 CFR Part 680
RIN 3084-AB63
Affiliate Marketing Rule
AGENCY: Federal Trade Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') is
issuing a final rule (``Final Rule'') to amend its Affiliate Marketing
Rule to correspond to changes made to the Fair Credit Reporting Act
(``FCRA'') by the Dodd-Frank Act.
DATES: This rule is effective October 18, 2021.
FOR FURTHER INFORMATION CONTACT: David Lincicum (202-326-2773),
Division of Privacy and Identity Protection, Bureau of Consumer
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Affiliate Marketing Rule
The Fair and Accurate Credit Transactions Act of 2003 (``FACT
Act'') was signed into law on December 4, 2003. Public Law 108-159, 117
Stat. 1952. Section 214 of the FACT Act added a new section 624 to the
FCRA. This provision gives consumers the right to restrict a person
from using certain information obtained from an affiliate to make
solicitations to that consumer. Section 624 generally provides that if
a person receives certain consumer eligibility information from an
affiliate, the person may not use that information to make
solicitations to the consumer about its products or services, unless
the consumer is given notice and an opportunity (via a simple method)
to opt out of such use of the information, and the consumer does not
opt out. The statute also provides that Section 624 does not apply, for
example, to a person using eligibility information: (1) To make
solicitations to a consumer with whom the person has a pre-existing
business relationship; (2) to perform services for another affiliate
subject to certain conditions; (3) in response to a communication
initiated by the consumer; or (4) to make a solicitation that has been
authorized or requested by the consumer. Unlike the FCRA affiliate
sharing opt-out (15 U.S.C. 1681a(d)(2)(A)(iii)) and the opt-out of
sharing with non-affiliated third parties under the Gramm-Leach-Bliley
Act (``GLBA''), 15 U.S.C. 6801 et seq., which apply indefinitely,
Section 624 provides that a consumer's affiliate marketing opt-out
election must be effective for a period of at least five years. Upon
expiration of the opt-out period, the consumer must be given a renewal
notice and an opportunity to renew the opt-out before information
received from an affiliate may be used to make solicitations to the
consumer.
The Commission published regulations implementing Section 624, the
Affiliate Marketing Rule, 16 CFR part 680, on October 30, 2007.\1\
---------------------------------------------------------------------------
\1\ 72 FR 61423 (October 30, 2007). Model forms for opt-out
notices are published at 16 CFR part 698, appendix B.
---------------------------------------------------------------------------
B. Dodd-Frank Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act
(``Dodd-Frank Act'') was signed into law in 2010.\2\ The Dodd-Frank Act
substantially changed the federal legal framework for financial
services providers. Among the changes, the Dodd-Frank Act transferred
to the Consumer Financial Protection Bureau (``CFPB'') the Commission's
rulemaking authority under portions of the FCRA.\3\ Accordingly, in
2012, the Commission rescinded several of its FCRA rules, which had
been replaced by rules issued by the CFPB.\4\ The FTC retained
rulemaking authority for other rules promulgated under the FCRA to the
extent the rules apply to motor vehicle dealers described in section
1029(a) of the Dodd-Frank Act \5\ predominantly engaged in the sale and
servicing of motor vehicles, the leasing and servicing of motor
vehicles, or both (``motor vehicle dealers'').\6\ The rules for which
the FTC retains rulemaking authority include the Affiliate Marketing
Rule, which now applies only to motor vehicle dealers.\7\ Entities that
are not motor vehicle dealers are covered by the CFPB's Regulation V,
subpart C, which is substantially similar to the Commission's rule.\8\
---------------------------------------------------------------------------
\2\ Public Law 111-203 (2010).
\3\ 15 U.S.C. 1681 et seq. The Dodd-Frank Act does not transfer
to the CFPB rulemaking authority for section 615(e) of the FCRA
(``Red Flag Guidelines and Regulations Required'') and section 628
of the FCRA (``Disposal of Records''). See 15 U.S.C. 1681s(e).
\4\ 77 FR 22200 (April 13, 2012).
\5\ 12 U.S.C. 5519.
\6\ 77 FR 22200 (April 13, 2012).
\7\ Id.
\8\ 12 CFR 1022.20 through 1022.27. There are no substantive
differences between the two rules, but the two rules are organized
differently and, in some cases, use different examples. See, e.g.,
12 CFR 1022.20(b)(4)(iii).
---------------------------------------------------------------------------
II. Regulatory Review of the Affiliate Marketing Rule
On September 22, 2020, the Commission solicited comments on the
Affiliate Marketing Rule as part of its periodic review of its rules
and guides.\9\ The Commission sought information about the costs and
benefits of the rule, and its regulatory and economic impact. In
addition, the Commission proposed amending the rule to narrow its scope
to motor vehicle dealers excluded from CFPB jurisdiction as described
in the Dodd-Frank Act.\10\ The Commission received no comments.
---------------------------------------------------------------------------
\9\ 85 FR 59466 (September 22, 2020).
\10\ 12 U.S.C. 5519.
---------------------------------------------------------------------------
III. Overview of Final Rule
The Commission promulgated the Affiliate Marketing Rule at a time
when it had rulemaking authority for a broader group of entities. While
the Dodd-Frank Act did not change the Commission's enforcement
authority for the Affiliate Marketing Rule, it did narrow the
Commission's rulemaking authority with respect to the rule. It now
covers only motor vehicle dealers. The amendments in the Dodd-Frank Act
necessitate a technical revision to the Affiliate Marketing Rule to
ensure the regulation is consistent with the text of the amended FCRA.
Accordingly, the Commission amends the Affiliate Marketing Rule to
properly reflect the rule's scope.
The amendment to Sec. 680.1(b) narrows the scope description of
the Affiliate Marketing Rule to the entities excluded from CFPB
jurisdiction as described in the Dodd-Frank Act.\11\ It does so by
replacing the broad term ``person'' with the term ``motor vehicle
dealer,'' as defined in amended Sec. 680.3.
---------------------------------------------------------------------------
\11\ Id.
---------------------------------------------------------------------------
The amendment to Sec. 680.3 adds a definition of ``motor vehicle
dealer'' that defines motor vehicle dealers as those entities excluded
from CFPB jurisdiction as described in the Dodd-Frank Act.\12\
---------------------------------------------------------------------------
\12\ Id.
---------------------------------------------------------------------------
The amendments do not change the substantive provisions of the rule
or the examples in the rule, even where those provisions and examples
involve entities covered by the CFPB's rule rather than the
Commission's rule. The
[[Page 51610]]
primary reason for retaining these provisions and examples is that the
rule addresses the relationship between covered motor vehicle dealers
and their affiliates, which may not be motor vehicle dealers. The
obligations and exceptions set forth by the rule are inextricably
linked to a consumer's relationship and actions in relation to all
affiliates, both motor vehicle dealers and non-motor vehicle dealers.
In order for the rule to apply meaningfully, it must address both types
of entities, even those not directly covered by the rule. This will not
create any conflict with the CFPB's corresponding rule, as the
Commission's Affiliate Marketing Rule and the CFPB's rule are
substantially similar and impose the same obligations and exceptions on
entities they cover.
IV. Paperwork Reduction Act
The Affiliate Marketing Rule contains information collection
requirements as defined by 5 CFR 1320.3(c), the definitional provision
within the Office of Management and Budget (``OMB'') regulations that
implement the Paperwork Reduction Act (``PRA''). 44 U.S.C. 3501 et seq.
OMB has approved the rule's existing information collection
requirements through February 28, 2023 (OMB Control No. 3084-0131).
Under the existing clearance, the FTC has attributed to itself the
estimated burden regarding all motor vehicle dealers and shares equally
the remaining estimated PRA burden with the CFPB for other persons for
which both agencies have enforcement authority.
The Final Rule amends 16 CFR part 680. The amendments do not modify
or add to information collection requirements previously approved by
OMB. The amendments make no substantive changes to the rule, other than
to clarify that the scope of the rule is limited to motor vehicle
dealers. The rule's OMB clearance already reflects that scope.
Therefore, the Commission does not believe the amendments substantially
or materially modify any ``collections of information'' as defined by
the PRA.
V. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996, requires an
agency to either provide an Initial Regulatory Flexibility Analysis
(``IRFA'') with a proposed rule, or certify that the proposed rule will
not have a significant impact on a substantial number of small
entities.\13\ The Commission published an Initial Regulatory
Flexibility Analysis in order to inquire into the impact of the
proposed rule on small entities.\14\ The Commission received no
responsive comments.
---------------------------------------------------------------------------
\13\ 5 U.S.C. 603-605.
\14\ 85 FR 59466, 59469 (Sept. 22, 2020).
---------------------------------------------------------------------------
The Commission does not believe these amendments have the threshold
impact on small entities. The amendments effectuate changes to the
Dodd-Frank Act and will not impose costs on small motor vehicle dealers
because the amendments are for clarification purposes and will not
result in any increased burden on any motor vehicle dealer. Thus, a
small entity that complies with current law need not take any different
or additional action under the Final Rule. Therefore, the Commission
certifies that amending the Affiliate Marketing Rule will not have a
significant economic impact on a substantial number of small
businesses.
Although the Commission certifies under the RFA that the Final Rule
will not have a significant impact on a substantial number of small
entities, and hereby provides notice of that certification to the Small
Business Administration, the Commission nonetheless has determined
publishing a final regulatory flexibility analysis (``FRFA'') is
appropriate to ensure the impact of the rule is fully addressed.
Therefore, the Commission has prepared the following analysis:
A. Need for and Objectives of the Final Rule
To address the Dodd-Frank Act's changes to the Commission's
rulemaking authority, the amendments clarify that the rule applies only
to motor vehicle dealers.
B. Significant Issues Raised in Public Comments in Response to the IRFA
The Commission did not receive any comments that addressed the
burden on small entities. In addition, the Commission did not receive
any comments filed by the Chief Counsel for Advocacy of the Small
Business Administration (``SBA'').
C. Estimate of Number of Small Entities to Which the Final Rule Will
Apply
The Commission anticipates many covered motor vehicle dealers may
qualify as small businesses according to the applicable SBA size
standards. As explained in the IRFA, however, determining a precise
estimate of the number of small entities is not readily feasible. No
commenters addressed this issue. Nonetheless, as discussed above, these
amendments do not add any additional burdens on any covered small
businesses.
D. Projected Reporting, Recordkeeping, and Other Compliance
Requirements, Including Classes of Covered Small Entities and
Professional Skills Needed To Comply
The amendments impose no new reporting, recordkeeping, or other
compliance requirements.
E. Description of Steps Taken To Minimize Significant Economic Impact,
if any, on Small Entities, Including Alternatives
The Commission did not propose any specific small entity exemption
or other significant alternatives because the amendments will not
increase reporting requirements and will not impose any new
requirements or compliance costs.
VI. Other Matters
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).
List of Subjects in 16 CFR Part 680
Consumer protection, Credit, Trade practices.
For the reasons stated above, the Federal Trade Commission amends
part 680 of title 16 of the Code of Federal Regulations as follows:
PART 680--AFFILIATE MARKETING
0
1. Revise the authority citation for part 680 to read as follows:
Authority: 12 U.S.C. 5519(d); 15 U.S.C. 1681s-3; 15 U.S.C.
1681s-3 note.
0
2. In Sec. 680.1, revise paragraph (b) to read as follows:
Sec. 680.1 Purpose and scope.
* * * * *
(b) Scope. This part applies to any motor vehicle dealer as defined
in Sec. 680.3 that uses information from its affiliates for the
purpose of marketing solicitations, or provides information to its
affiliates for that purpose.
0
3. In Sec. 680.3, redesignate paragraphs (i) through (l) as paragraphs
(j) through (m) and add a new paragraph (i) to read as follows:
Sec. 680.3 Definitions.
* * * * *
(i) Motor vehicle dealer. The term ``motor vehicle dealer'' means
any person excluded from Consumer Financial Protection Bureau
jurisdiction as described in 12 U.S.C. 5519.
* * * * *
[[Page 51611]]
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2021-19826 Filed 9-15-21; 8:45 am]
BILLING CODE 6750-01-P
</pre></body>
</html>Indexed from Federal Register on September 16, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.