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Nov 14 -- The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, without revision, the Quarterly Report of Interest Rates on Selected Direct Consumer Installment Loans and the Quarterly Report of Credit Card Plans (FR 2835 and FR 2835a; OMB No. 7100–0085). Comments must be submitted on or before January 16, 2024.

The FR 2835 collects information on interest rates on loans for new vehicles and loans for other consumer goods and personal expenses from a sample of commercial banks. The FR 2835a collects information on interest rates, finance charges, and loan balances for credit card accounts from a sample of commercial banks. The data from these reports help the Board analyze current household financial conditions and the implications of these conditions for household spending and, as such, these data provide valuable input to the monetary policymaking process. The data are also used to create aggregate statistics on consumer loan terms that are published in the Federal Reserve's monthly statistical releases, G.19 Consumer Credit and G.20 Finance Companies, and in the Federal Reserve Bulletin. Some of the aggregates are used by the Board in the calculation of the aggregate household debt service and financial obligations ratios for the Federal Reserve's quarterly Household Debt Service and Financial Obligations Ratios statistical release and by the Bureau of Economic Analysis to calculate interest paid by households as part of the National Income and Product Accounts.

The Board has been the primary producer of aggregate statistics related to U.S. consumer credit since 1942. This role stems from the Board’s need to make well-informed monetary policy decisions and its public policy responsibilities related to consumer credit. Since the 1940s, the Board has maintained programs for the direct collection of consumer credit data from commercial banks and finance companies. It obtains its information on credit provided by other types of financial institutions mainly through secondary sources.

The Board’s long-standing interest in consumer credit issues arises from a need to evaluate macroeconomic conditions and the probable consequences of monetary policy actions. The amount that consumers borrow and the terms at which they are able to borrow are major determinants of the general financial conditions of households. These conditions, in turn, play a major role in supporting consumer spending, the largest component of gross domestic product (more than two-thirds of the total). Moreover, some of the more volatile components of consumer spending directly depend on the terms at which households can obtain consumer loans. This information is not available from other sources.

The two consumer credit reports gather data from commercial banks on loan rates, balances, and collection experience. The Board understands that respondents use information technology to comply with these provisions, including submitting data via Reporting Central.

Quarterly Report of Interest Rates on Selected Direct Consumer Installment Loans (FR 2835) -- The FR 2835 collects information from a sample of commercial banks on interest rates charged on loans for new vehicles and loans for other consumer goods and personal expenses. Interest rates on consumer loans made by commercial banks continue to be analytically significant. Auto and personal loans are major components of bank consumer lending, and changes in the terms of these loans represent an important input to analyses of the household sector prepared for the Federal Reserve. The data are used for internal analysis of household financial conditions.

The FR 2835 respondents are asked to provide “the most common rate,” meaning the rate at which the largest dollar volume of loans of a particular type was made during the reporting week. For adjustable-rate loans, the initial rate is reported. Respondents are also asked to provide narrative explanations for large fluctuations in reported data.   

The reporting panel for the FR 2835 consists of commercial banks. There are currently 81 commercial banks on the panel. Although some banks have merged or otherwise dropped out of this voluntary survey, the Board has attempted to maintain the panel as close as possible to the authorized size of 150. The FR 2835 panel is drawn from a sample of 150 member banks (most large banks and a random sample of smaller banks).

Quarterly Report of Credit Card Plans (FR 2835a) -- The FR 2835a collects information on credit card finance rates and balances from cardissuing commercial banks. The Board uses the information collected on credit card finance rates to calculate two different measures of these rates. One measure is the average nominal finance rate offered to credit cardholders and the total number of accounts. The other measure reflects finance charges billed in a period and total balances on which finance charges are computed for accounts with finance charges and is internally referred to as the “average computed finance rate.” The form also collects data on end-of-year balances on credit cards by asking the total ending balances for all accounts and for accounts with finance charges. The Board uses the data to analyze the credit card market and draw implications for the household sector.

Respondents: The FR 2835 panel comprises a sample of commercial banks. The FR 2835a panel comprises a sample of commercial banks with $1 billion or more in credit card receivables and a representative group of smaller issuers.

Total estimated number of respondents: 200.

FR 2835 reporting forms: https://www.federalreserve.gov/apps/reportingforms/Report/Index/FR_2835
FR 2835a reporting forms: https://www.federalreserve.gov/apps/reportingforms/Report/Index/FR_2835a
Supporting statement: https://www.federalreserve.gov/reportforms/formsreview/FR%202835%20FR%202835a%20OMB%20SS%202023.pdf
FRN: https://www.federalregister.gov/d/2023-25094

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