Federal Register Vol. 82, No.201,

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On August 29, 2017, the Department of Commerce (Department) initiated a countervailing duty (CVD) investigation on certain uncoated groundwood paper from Canada.1 Currently, the preliminary determination in this investigation is due no later than November 2, 2017.

Section 703(b)(1) of the Tariff Act of 1930, as amended (the Act), requires the Department to issue the preliminary determination in a CVD investigation within 65 days after the date on which the Department initiated the investigation. However, section 703(c)(1) of the Act permits the Department to postpone the preliminary determination until no later than 130 days after the date on which the Department initiated the investigation if: (A) The petitioner 2 makes a timely request for a postponement; or (B) the Department concludes that the parties concerned are cooperating, that the investigation is extraordinarily complicated, and that additional time is necessary to make a preliminary determination. Under 19 CFR 351.205(e), the petitioner must submit a request for postponement 25 days or more before the scheduled date of the preliminary determination and must state the reasons for the request. The Department will grant the request unless it finds compelling reasons to deny the request.

On September 21, 2017, the petitioner submitted a timely request that we postpone the CVD preliminary determination. In its request, the petitioner cited the need for the Department to have sufficient time to thoroughly investigate each of the alleged subsidies, including by issuing any supplemental questionnaires.3 In accordance with 19 CFR 351.205(e), the petitioner has stated the reasons for requesting a postponement of the preliminary determination, and the Department finds no compelling reason to deny the request. Therefore, pursuant to section 703(c)(1)(A) of the Act, we are extending the due date for the preliminary determination to no later than 130 days after the date on which this investigation was initiated, i.e., to January 8, 2018.4 Pursuant to section 705(a)(1) of the Act and 19 CFR 351.210(b)(1), the deadline for the final determination will continue to be 75 days after the date of the preliminary determination.

This notice is issued and published pursuant to section 703(c)(2) of the Act and 19 CFR 351.205(f)(1).

Background

On March 23, 2012, the Department published in the Federal Register its final determination in the less-than-fair value investigation of nails from the UAE.1 On May 10, 2012, following an affirmative injury determination by the International Trade Commission (ITC), the Department published its amended final determination and the antidumping duty Order on nails from the UAE.2

On April 3, 2017, the Department published the notice of initiation of the first sunset review of the Order, pursuant to section 751(c) of the Tariff Act of 1930, as amended (Act). The Department conducted the sunset review on an expedited basis, pursuant to section 751(c)(3)(B) of the Act and 19 CFR 351.218(e)(1)(ii)(C)(2), because it received a complete an adequate response from a domestic interested party, but no substantive responses from respondent interested parties.3 As a result of its expedited sunset review, the Department determined that revocation of the Order would likely lead to a continuation or recurrence of dumping.4 The Department, therefore, notified the ITC of the magnitude of the margins likely to prevail should the Order be revoked. On October 5, 2017, the ITC published notice of its determination, pursuant to section 751(c) of the Act, that revocation of the Order on nails from the UAE would likely lead to a continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.5

The merchandise covered by this Order includes certain steel nails having a shaft length up to 12 inches. Certain steel nails include, but are not limited to, nails made of round wire and nails that are cut. Certain steel nails may be of one piece construction or constructed of two or more pieces. Certain steel nails may be produced from any type of steel, and have a variety of finishes, heads, shanks, point types, shaft lengths and shaft diameters. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, whether by electroplating or hot-dipping one or more times), phosphate cement, and paint. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted shank styles. Screw-threaded nails subject to this Order are driven using direct force and not by turning the fastener using a tool that engages with the head. Point styles include, but are not limited to, diamond, blunt, needle, chisel and no point. Certain steel nails may be sold in bulk, or they may be collated into strips or coils using materials such as plastic, paper, or wire.

Certain steel nails subject to this Order are currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7317.00.55, 7317.00.65, and 7317.00.75.

Excluded from the scope of this Order are steel nails specifically enumerated and identified in ASTM Standard F 1667 (2011 revision) as Type I, Style 20 nails, whether collated or in bulk, and whether or not galvanized.

Also excluded from the scope of this Order are the following products:

• Non-collated (i.e., hand-drive or bulk), two-piece steel nails having plastic or steel washers (caps) already assembled to the nail, having a bright or galvanized finish, a ring, fluted or spiral shank, an actual length of 0.500″ to 8″, inclusive; an actual shank diameter of 0.1015″ to 0.166″, inclusive; and an actual washer or cap diameter of 0.900″ to 1.10″, inclusive;

• non-collated (i.e., hand-drive or bulk), steel nails having a bright or galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500″ to 4″, inclusive; an actual shank diameter of 0.1015″ to 0.166″, inclusive; and an actual head diameter of 0.3375″ to 0.500″, inclusive;

• wire collated steel nails, in coils, having a galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500″ to 1.75″, inclusive; an actual shank diameter of 0.116″ to 0.166″, inclusive; and an actual head diameter of 0.3375″ to 0.500″, inclusive;

• non-collated (i.e., hand-drive or bulk), steel nails having a convex head (commonly known as an umbrella head), a smooth or spiral shank, a galvanized finish, an actual length of 1.75″ to 3″, inclusive; an actual shank diameter of 0.131″ to 0.152″, inclusive; and an actual head diameter of 0.450″ to 0.813″, inclusive;

• corrugated nails. A corrugated nail is made of a small strip of corrugated steel with sharp points on one side;

• thumb tacks, which are currently classified under HTSUS 7317.00.10.00;

• fasteners suitable for use in powder-actuated hand tools, not threaded and threaded, which are currently classified under HTSUS 7317.00.20 and 7317.00.30;

• certain steel nails that are equal to or less than 0.0720 inches in shank diameter, round or rectangular in cross section, between 0.375 inches and 2.5 inches in length, and that are collated with adhesive or polyester film tape backed with a heat seal adhesive; and

• fasteners having a case hardness greater than or equal to 50 HRC, a carbon content greater than or equal to 0.5 percent, a round head, a secondary reduced-diameter raised head section, a centered shank, and a smooth symmetrical point, suitable for use in gas-actuated hand tools. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this Order is dispositive.

As a result of the determinations by the Department and the ITC that revocation of the Order would likely lead to a continuation or recurrence of dumping and material injury to an industry in the United States, pursuant to section 751(d)(2) of the Act and 19 CFR 351.218(a), the Department hereby orders the continuation of the Order on certain steel nails from the UAE. U.S. Customs and Border Protection will continue to collect cash deposits at the rates in effect at the time of entry for all imports of subject merchandise.

The effective date of the continuation of the Order will be the date of publication in the Federal Register of this notice of continuation. Pursuant to section 751(c)(2) of the Act, the Department intends to initiate the next five-year review of the Order not later than 30 days prior to the fifth anniversary of the effective date of continuation.

This five-year sunset review and this notice are in accordance with section 751(c) of the Act and published pursuant to section 777(i)(1) of the Act and 19 CFR 351.218(f)(4).

Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361 et seq.) direct the Secretary of Commerce (as delegated to NMFS) to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if certain findings are made and either regulations are issued or, if the taking is limited to harassment, a notice of a proposed authorization is provided to the public for review.

An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.

NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.

The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.

The MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, or sheltering (Level B harassment).The NDAA (Pub. L. 108-136) removed the “small numbers” and “specified geographical region” limitations indicated above and amended the definition of “harassment” as it applies to a “military readiness activity” to read as follows (Section 3(18)(B) of the MMPA): (i) Any act that injures or has the significant potential to injure a marine mammal or marine mammal stock in the wild (Level A Harassment); or (ii) Any act that disturbs or is likely to disturb a marine mammal or marine mammal stock in the wild by causing disruption of natural behavioral patterns, including, but not limited to, migration, surfacing, nursing, breeding, feeding, or sheltering, to a point where such behavioral patterns are abandoned or significantly altered (Level B Harassment).

To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. §§ 4321 et seq.) and NOAA Administrative Order (NAO) 216-6A, NMFS must review our proposed action (i.e., the issuance of an incidental harassment authorization) with respect to environmental consequences on the human environment.

The Navy is currently preparing an environmental assessment (EA) titled Environmental Assessment/Overseas Environmental Assessment for Ice Exercise. Once the EA is finalized, NMFS plans to adopt the Navy's EA, provided our independent evaluation of the document finds that it includes adequate information analyzing the effects on the human environment of issuing the IHA.

We will review all comments submitted in response to this notice prior to concluding our NEPA process or making a final decision on the IHA request.

On April 12, 2017, NMFS received a request from the Navy for the taking of marine mammals incidental to submarine training and testing activities including establishment of a tracking range on an ice floe in the Beaufort Sea and Arctic Ocean north of Prudhoe Bay, Alaska. The Navy's request is for take of ringed seals (Pusa hispida hispida) by Level B harassment. Neither the Navy nor NMFS expects Level A take or mortality to result from this activity and, therefore, an IHA is appropriate.

The Navy proposes to conduct submarine training and testing activities from an ice camp stationed on an ice floe in the Beaufort Sea and Arctic Ocean for six weeks between February and April 2018. Active acoustic transmissions (low, mid, and high-frequency) may result in the occurrence of temporary hearing impairment (temporary threshold shift (TTS)) and behavioral harassment of ringed seals.

The proposed action would occur over approximately a six-week period from February through April 2018, including deployment and demobilization of the ice camp. The submarine training and testing activities would occur over approximately four weeks during the six-week period. The proposed IHA would be valid from February 1, 2018 through May 1, 2018.

The ice camp would be established approximately 100-200 nmi (185-370 kilometers (km)) north of Prudhoe Bay, Alaska. The exact location cannot be identified ahead of time as required conditions (e.g., ice cover) cannot be forecasted until exercises are expected to commence. The vast majority of submarine training and testing would occur near the ice camp. The ice camp action area is comprised of 27,171 square miles (mi2) or 70,374 square kilometers (km2) of ice and open water. However, limited submarine training and testing may occur intermittently throughout the deep Arctic Ocean basin near the North Pole, within the total study area of 1,109,858 mi2 (2,874,520 km2) as shown in Figure 2-1 in the Application). The ice camp itself will be no more than 1 mi (1.6 km) in diameter and 0.77 mi2 (2 km2) in area.

ICEX18 includes the deployment of a temporary camp situated on an ice floe. The camp will consist of a series of portable tents. In the past, the Navy would construct temporary wooden structures at ICEX camps, but they no longer do so. A portable tracking range for submarine training and testing would be installed near the ice camp. Eight hydrophones, located on the ice and extending to 30 meters (m) below the ice, would be deployed by drilling holes in the ice and lowering the cable down into the water column. Four hydrophones would be physically connected to the command hut via cables (Figure 1-2 in Application) while the remaining four would transmit data via radio frequencies. Additionally, tracking pingers would be configured aboard each submarine to continuously monitor the location of the submarines. Acoustic communications with the submarines would be used to coordinate the training and testing schedule with the submarines; an underwater telephone would be used as a backup to the acoustic communications.

Submarine activities associated with ICEX18 are classified, but generally entail safety maneuvers, active sonar use and exercise torpedo use. These maneuvers and sonar use are similar to submarine activities conducted in other undersea environments. They are being conducted in the Arctic to test their performance in a cold environment.

Submarine training and testing activities generate acoustic transmissions that may impact marine mammals. Some acoustic sources either are above the known hearing range of marine species or have narrow beam widths and short pulse lengths that would not result in effects to marine species. Potential effects from these de minimis sources are analyzed qualitatively in accordance with current Navy policy. Navy acoustic sources are categorized into “bins” based on frequency, source level, and mode of usage, as previously established by the Navy (Department of the Navy 2015). The acoustic transmissions associated with submarine training fall within bins HF1 (hull-mounted submarine sonars that produce high-frequency (greater than 10 kilohertz (kHz) but less than 200 kHz) signals)), M3 (mid-frequency (1-10 kHz) acoustic modems greater than 190 decibel (dB) re 1micropascal (μPa)), and TORP2 (heavyweight torpedo). As, described below, transmissions are associated with discrete events that may last up to 24 hours. Time between events would not have acoustic transmissions.

Active buoys and moored sources would be used during ICEX18. One active buoy would be the Autonomous Reverberation Measurement System, which would be attached to the bottom of the ice and may be active for up to 30 days of ICEX18. Additionally, a Massachusetts Institute of Technology/Lincoln Lab vertical line array would be deployed through a hole in the ice to a source depth of 150 meters (m). This array would have continuous wave and chirp transmission capability. The continuous wave and chirp transmissions would both be active for no more than 8 days during ICEX18. Over one day of testing (i.e., 24-hour period), he continuous wave source will continuously transmit for 4 hours, the chirp will then transmit for 15 seconds on and 45 seconds off for 4 hours, and the sources will then be silent for 16 hours.

The Naval Research Laboratory would also utilize an unmanned underwater vehicle for the deployment of a synthetic aperture source (SAS), which would transmit for 24 hours per day for up to 4 days. The SAS would be used to make measurements of the acoustic interaction with the ice/water interface. Source parameters, including active sonar transmissions from submarines and torpedoes, are classified. Additional details for the active sources described above can be found in Table 1.

Proposed mitigation, monitoring, and reporting measures are described in detail later in this document (please see “Proposed Mitigation” and “Proposed Monitoring and Reporting”).

Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of ringed seals (Pusa hispida hispida), which is the only potentially affected species. Other marine mammal species that may occur in the study area include bowhead whales (Balaena mysticetus), beluga whales (Delphinapterus leucas), and bearded seals (Erignathus barbatus). Bowhead whales migrate annually from wintering areas (December to March) in the northern Bering Sea, through the Chukchi Sea in the spring (April through May), to the eastern Beaufort Sea, where they spend much of the summer (June through early to mid-October) before returning again to the Bering Sea (Muto et al., 2017). They are unlikely to be found in the ICEX18 study area during the February through April ICEX18 timeframe. Beluga whales follow a similar pattern, as they tend to spend winter months in the Bering Sea and migrate north to the eastern Beaufort Sea during the summer months. In the fall and winter, Bearded seals also move south with the advancing ice edge through the Bering Strait into the Bering Sea where they spend the winter (Muto et al. 2016). While these species are often observed in areas of sea ice, they require access to some open water (e.g. leads, polynyas) in order to breath. The Navy proposes to establish its ice camp and conduct operations in late winter when the extent and thickness of the Arctic ice pack is peaking. The ice camp will be located on a multi-year ice floe without cracks or leads that can support a runway for aircraft. Only ringed seals are able to create and maintain their own breathing holes and, therefore, may inhabit areas featuring thick multi-year ice. Additional information regarding population trends and threats may be found in NMFS's Stock Assessment Reports (SAR; www.nmfs.noaa.gov/pr/sars/) and more general information about this species (e.g., physical and behavioral descriptions) may be found on NMFS's Web site (www.nmfs.noaa.gov/pr/species/mammals/).

Table 2 lists all of the species that could occur in the project area and summarizes information related to the population or stock, including regulatory status under the MMPA and the Endangered Species Act (ESA) and potential biological removal (PBR). Only the ringed seal, however, is expected to occur in the project area during the time of year when project activities would take place. For taxonomy, we follow Committee on Taxonomy (2016). PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS's SARs). While no mortality is anticipated or authorized here, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.

The marine mammal abundance estimates presented in this document represents the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS's stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. The managed stocks in this region are assessed in NMFS's U.S. Alaska SARs (Muto et al., 2017). All values presented in Table 2 are the most recent available at the time of publication and are available in the 2016 SARs (Muto et al., 2017) (available online at: www.nmfs.noaa.gov/pr/sars/)

The only species that could potentially occur in the proposed survey area is the ringed seal. Total sea ice coverage is expected across the study area during the study period which precludes the presence of other arctic marine mammal species. As described below, ringed seals temporally and spatially co-occur with the activity to the degree that take is reasonably likely to occur, and therefore we have proposed authorizing take.

Ringed seals are found in seasonally and permanently ice-covered waters of the Northern Hemisphere (North Atlantic Marine Mammal Commission 2004). The Alaska stock of ringed seals is found in the study area. Though a reliable population estimate for the entire Alaska stock is not available, research programs have recently developed new survey methods and partial, but useful, abundance estimates. In spring of 2012 and 2013, U.S. and Russian researchers conducted aerial abundance and distribution surveys of the entire Bering Sea and Sea of Okhotsk (Moreland et al., 2013). The data from these image-based surveys are still being analyzed, but Conn et al. (2014), using a very limited sub-sample of the data collected from the U.S. portion of the Bering Sea in 2012, calculated an abundance estimate of about 170,000 ringed seals in the U.S. EEZ of the Bering Sea in late April. This estimate does did not account for availability bias, and did not include ringed seals in the shorefast ice zone, which were surveyed using a different method. Thus, the actual number of ringed seals in the U.S. sector of the Bering Sea is likely much higher, perhaps by a factor of two or more. Using data from surveys by Bengtson et al. (2005) and Frost et al. (2004) in the late 1990s and 2000, Kelly et al. (2010) estimated the total population in the Alaska Chukchi and Beaufort seas to be at least 300,000 ringed seals (Muto et al., 2017). This is likely an underestimate since the Beaufort Sea surveys were limited to within 40 km of shore. Current and reliable data on trends in population abundance for the Alaska stock of ringed seals are unavailable. A minimum population estimate (Nmin) and PBR value are also unavailable. A PBR for only those ringed seals in the U.S. portion of the Bering Sea is 5,100 ringed seals. The total estimated annual level of human-caused mortality and serious injury is 1,062 (Muto et al., 2016). Since the level of human-caused mortality is considerably less than the PBR, the stock is not likely to be declining due to direct human actions (e.g. subsistence hunting) and the stock is not listed under the MMPA as strategic. Note, however, that other non-anthropogenic factors (e.g. disease, decline is sea ice coverage) may influence overall stock abundance and population trends.

Throughout their range, ringed seals have an affinity for ice-covered waters and are well adapted to occupying both shore-fast and pack ice (Kelly 1988b). Ringed seals can be found further offshore than other pinnipeds since they can maintain breathing holes in ice thickness greater than 2 m (Smith and Stirling 1975). Breathing holes are maintained by ringed seals' sharp teeth and claws on their fore flippers. They remain in contact with ice most of the year and use it as a platform for molting in late spring to early summer, for pupping and nursing in late winter to early spring, and for resting at other times of the year.

Ringed seals have at least two distinct types of subnivean lairs: haul-out lairs and birthing lairs (Smith and Stirling 1975). Haul-out lairs are typically single-chambered and offer protection from predators and cold weather. Birthing lairs are larger, multi-chambered areas that are used for pupping in addition to protection from predators. Ringed seal populations pup on both land-fast ice as well as stable pack ice. Lentfer (1972) found that ringed seals north of Barrow, Alaska (west of the ice camp), build their subnivean lairs on the pack ice near pressure ridges. Since subnivean lairs were found north of Barrow, Alaska, in pack ice, they are also assumed to be found within the sea ice in the ice camp proposed action area. Ringed seals excavate subnivean lairs in drifts over their breathing holes in the ice, in which they rest, give birth, and nurse their pups for 5-9 weeks during late winter and spring (Chapskii 1940; McLaren 1958; Smith and Stirling 1975). Snow depths of at least 50-65 centimeters (cm) are required for functional birth lairs (Kelly 1988a; Lydersen 1998; Lydersen and Gjertz 1986; Smith and Stirling 1975), and such depths typically are found only where 20-30 cm or more of snow has accumulated on flat ice and then drifted along pressure ridges or ice hummocks (Hammill 2008; Lydersen et al., 1990; Lydersen and Ryg 1991; Smith and Lydersen 1991). Ringed seals are born beginning in March, but the majority of births occur in early April. About a month after parturition, mating begins in late April and early May.

In Alaskan waters, during winter and early spring when sea ice is at its maximal extent, ringed seals are abundant in the northern Bering Sea, Norton and Kotzebue Sounds, and throughout the Chukchi and Beaufort Seas (Frost 1985; Kelly 1988b) and, therefore, are found in the study area (Figure 2-1 in Application). Passive acoustic monitoring of ringed seals from a high frequency recording package deployed at a depth of 240 m in the Chukchi Sea 120 km north- northwest of Barrow, Alaska, detected ringed seals in the area between mid- December and late May over the four year study (Jones et al., 2014). With the onset of the fall freeze, ringed seal movements become increasingly restricted and seals will either move west and south with the advancing ice pack with many seals dispersing throughout the Chukchi and Bering Seas, or remain in the Beaufort Sea (Crawford et al., 2012; Frost and Lowry 1984; Harwood et al., 2012). Kelly et al, (2010) tracked home ranges for ringed seals in the subnivean period (using shorefast ice); the size of the home ranges varied from less than 1 up to 27.9 km2; (median is 0.62 km2 for adult males and 0.65 km2 for adult females). Most (94 percent) of the home ranges were less than 3 km2 during the subnivean period (Kelly et al., 2010). Near large polynyas, ringed seals maintain ranges up to 7,000 km2 during winter and 2,100 km2 during spring (Born et al., 2004). Some adult ringed seals return to the same small home ranges they occupied during the previous winter (Kelly et al., 2010). The size of winter home ranges can, however, vary by up to a factor of 10 depending on the amount of fast ice; seal movements were more restricted during winters with extensive fast ice, and were much less restricted where fast ice did not form at high levels. Ringed seals may occur within the study area throughout the year and during the proposed action.

In general, ringed seals prey on fish and crustaceans. Ringed seals are known to consume up to 72 different species in their diet; their preferred prey species is the polar cod (Jefferson et al., 2008). Ringed seals also prey upon a variety of other members of the cod family, including Arctic cod (Holst et al., 2001) and saffron cod, with the latter being particularly important during the summer months in Alaskan waters (Lowry et al., 1980). Invertebrate prey seems to become prevalent in the ringed seals diet during the open-water season and often dominates the diet of young animals (Holst et al., 2001; Lowry et al., 1980). Large amphipods (e.g., Themisto libellula), krill (e.g., Thysanoessa inermis), mysids (e.g., Mysis oculata), shrimps (e.g., Pandalus spp., Eualus spp., Lebbeus polaris, and Crangon septemspinosa), and cephalopods (e.g., Gonatus spp.) are also consumed by ringed seals.

Hearing is the most important sensory modality for marine mammals underwater, and exposure to anthropogenic sound can have deleterious effects. To appropriately assess the potential effects of exposure to sound, it is necessary to understand the frequency ranges marine mammals are able to hear. Current data indicate that not all marine mammal species have equal hearing capabilities (e.g., Richardson et al., 1995; Wartzok and Ketten, 1999; Au and Hastings, 2008). To reflect this, Southall et al. (2007) recommended that marine mammals be divided into functional hearing groups based on directly measured or estimated hearing ranges on the basis of available behavioral response data, audiograms derived using auditory evoked potential techniques, anatomical modeling, and other data. Note that no direct measurements of hearing ability have been successfully completed for mysticetes (i.e., low-frequency cetaceans). Subsequently, NMFS (2016) described generalized hearing ranges for these marine mammal hearing groups. Generalized hearing ranges were chosen based on the approximately 65 dB threshold from the normalized composite audiograms, with the exception for lower limits for low-frequency cetaceans where the lower bound was deemed to be biologically implausible and the lower bound from Southall et al. (2007) retained. The functional groups and the associated frequencies are indicated below (note that these frequency ranges correspond to the range for the composite group, with the entire range not necessarily reflecting the capabilities of every species within that group):

• Low-frequency cetaceans (mysticetes): Generalized hearing is estimated to occur between approximately 7 Hz and 35 kHz, with best hearing estimated to be from 100 Hz to 8 kHz;

• Mid-frequency cetaceans (larger toothed whales, beaked whales, and most delphinids): Generalized hearing is estimated to occur between approximately 150 Hz and 160 kHz, with best hearing from 10 to less than 100 kHz;

• High-frequency cetaceans (porpoises, river dolphins, and members of the genera Kogia and Cephalorhynchus; including two members of the genus Lagenorhynchus, on the basis of recent echolocation data and genetic data): Generalized hearing is estimated to occur between approximately 275 Hz and 160 kHz;

• Pinnipeds in water; Phocidae (true seals): Generalized hearing is estimated to occur between approximately 50 Hz to 86 kHz, with best hearing between 1-50 kHz;

• Pinnipeds in water; Otariidae (eared seals): Generalized hearing is estimated to occur between 60 Hz and 39 kHz, with best hearing between 2-48 kHz.

The pinniped functional hearing group was modified from Southall et al. (2007) on the basis of data indicating that phocid species have consistently demonstrated an extended frequency range of hearing compared to otariids, especially in the higher frequency range (Hemilä et al., 2006; Kastelein et al., 2009b; Reichmuth and Holt, 2013).

For more detail concerning these groups and associated frequency ranges, please see NMFS (2016) for a review of available information. As noted previously a single phocid species, ringed seal, has the reasonable potential to co-occur with the proposed survey activities.

This section includes a summary and discussion of the ways that components of the specified activity may impact marine mammals and their habitat. The “Estimated Take by Incidental Harassment” section later in this document will include a quantitative analysis of the number of individuals that are expected to be taken by this activity. The “Negligible Impact Analysis and Determination” section considers the content of this section, the “Estimated Take by Incidental Harassment” section, and the “Proposed Mitigation” section, to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals and how those impacts on individuals are likely to impact marine mammal species or stocks.

Here, we first provide background information on marine mammal hearing before discussing the potential effects of the use of active acoustic sources on marine mammals.

Sound travels in waves, the basic components of which are frequency, wavelength, velocity, and amplitude. Frequency is the number of pressure waves that pass by a reference point per unit of time and is measured in hertz (Hz) or cycles per second. Wavelength is the distance between two peaks of a sound wave; lower frequency sounds have longer wavelengths than higher frequency sounds and attenuate (decrease) more rapidly in shallower water. Amplitude is the height of the sound pressure wave or the `loudness' of a sound and is typically measured using the decibel (dB) scale. A dB is the ratio between a measured pressure (with sound) and a reference pressure (sound at a constant pressure, established by scientific standards). It is a logarithmic unit that accounts for large variations in amplitude; therefore, relatively small changes in dB ratings correspond to large changes in sound pressure. When referring to sound pressure levels (SPLs; the sound force per unit area), sound is referenced in the context of underwater sound pressure to 1 microPascal (μPa). One pascal is the pressure resulting from a force of one newton exerted over an area of one square meter. The source level (SL) represents the sound level at a distance of 1 m from the source (referenced to 1 μPa). The received level is the sound level at the listener's position. Note that all underwater sound levels in this document are referenced to a pressure of 1 µPa and all airborne sound levels in this document are referenced to a pressure of 20 µPa.

Root mean square (rms) is the quadratic mean sound pressure over the duration of an impulse. RMS is calculated by squaring all of the sound amplitudes, averaging the squares, and then taking the square root of the average (Urick 1983). Rms accounts for both positive and negative values; squaring the pressures makes all values positive so that they may be accounted for in the summation of pressure levels (Hastings and Popper 2005). This measurement is often used in the context of discussing behavioral effects, in part because behavioral effects, which often result from auditory cues, may be better expressed through averaged units than by peak pressures.

When underwater objects vibrate or activity occurs, sound-pressure waves are created. These waves alternately compress and decompress the water as the sound wave travels. Underwater sound waves radiate in all directions away from the source (similar to ripples on the surface of a pond), except in cases where the source is directional. The compressions and decompressions associated with sound waves are detected as changes in pressure by aquatic life and man-made sound receptors such as hydrophones.

Even in the absence of sound from the specified activity, the underwater environment is typically loud due to ambient sound. Ambient sound is defined as environmental background sound levels lacking a single source or point (Richardson et al.,1995), and the sound level of a region is defined by the total acoustical energy being generated by known and unknown sources. These sources may include physical (e.g., waves, earthquakes, ice, atmospheric sound), biological (e.g., sounds produced by marine mammals, fish, and invertebrates), and anthropogenic sound (e.g., vessels, dredging, aircraft, construction). A number of sources contribute to ambient sound, including the following (Richardson et al., 1995):

• Wind and waves: The complex interactions between wind and water surface, including processes such as breaking waves and wave-induced bubble oscillations and cavitation, are a main source of naturally occurring ambient noise for frequencies between 200 Hz and 50 kHz (Mitson, 1995). Under sea ice, noise generated by ice deformation and ice fracturing may be caused by thermal, wind, drift and current stresses (Roth et al., 2012).

• Precipitation: Sound from rain and hail impacting the water surface can become an important component of total noise at frequencies above 500 Hz, and possibly down to 100 Hz during quiet times. In the ice-covered study area, precipitation is unlikely to impact ambient sound.

• Biological: Marine mammals can contribute significantly to ambient noise levels, as can some fish and shrimp. The frequency band for biological contributions is from approximately 12 Hz to over 100 kHz.

• Anthropogenic: Sources of ambient noise related to human activity include transportation (surface vessels and aircraft), dredging and construction, oil and gas drilling and production, seismic surveys, sonar, explosions, and ocean acoustic studies. Shipping noise typically dominates the total ambient noise for frequencies between 20 and 300 Hz. In general, the frequencies of anthropogenic sounds are below 1 kHz and, if higher frequency sound levels are created, they attenuate rapidly (Richardson et al., 1995). Sound from identifiable anthropogenic sources other than the activity of interest (e.g., a passing vessel) is sometimes termed background sound, as opposed to ambient sound. Anthropogenic sources are unlikely to significantly contribute to ambient underwater noise during the late winter and early spring in the study area as most anthropogenic activities will not be active due to ice cover (e.g. seismic surveys, shipping) (Roth et al., 2012).

The sum of the various natural and anthropogenic sound sources at any given location and time—which comprise “ambient” or “background” sound—depends not only on the source levels (as determined by current weather conditions and levels of biological and shipping activity) but also on the ability of sound to propagate through the environment. In turn, sound propagation is dependent on the spatially and temporally varying properties of the water column and sea floor, and is frequency-dependent. As a result of the dependence on a large number of varying factors, ambient sound levels can be expected to vary widely over both coarse and fine spatial and temporal scales. Sound levels at a given frequency and location can vary by 10-20 dB from day to day (Richardson et al., 1995). The result is that, depending on the source type and its intensity, sound from the specified activity may be a negligible addition to the local environment or could form a distinctive signal that may affect marine mammals.

Underwater sounds fall into one of two general sound types: Pulsed and non-pulsed (defined in the following paragraphs). The distinction between these two sound types is important because they have differing potential to cause physical effects, particularly with regard to hearing (e.g., Ward, 1997 in Southall et al., 2007). Please see Southall et al., (2007) for an in-depth discussion of these concepts.

Pulsed sound sources (e.g., explosions, gunshots, sonic booms, impact pile driving) produce signals that are brief (typically considered to be less than one second), broadband, atonal transients (ANSI 1986; Harris 1998; NIOSH 1998; ISO 2003; ANSI 2005) and occur either as isolated events or repeated in some succession. Pulsed sounds are all characterized by a relatively rapid rise from ambient pressure to a maximal pressure value followed by a rapid decay period that may include a period of diminishing, oscillating maximal and minimal pressures, and generally have an increased capacity to induce physical injury as compared with sounds that lack these features. There are no pulsed sound sources associated with any planned ICEX18 activities.

Non-pulsed sounds can be tonal, narrowband, or broadband, brief or prolonged, and may be either continuous or non-continuous (ANSI 1995; NIOSH 1998). Some of these non-pulsed sounds can be transient signals of short duration but without the essential properties of pulses (e.g., rapid rise time). Examples of non-pulsed sounds include those produced by vessels, aircraft, machinery operations such as drilling or dredging, vibratory pile driving, and active sonar systems such as those planned for use by the U.S. Navy as part of the proposed action. The duration of such sounds, as received at a distance, can be greatly extended in a highly reverberant environment.

Modern sonar technology includes a variety of sonar sensor and processing systems. In concept, the simplest active sonar emits sound waves, or “pings,” sent out in multiple directions, and the sound waves then reflect off of the target object in multiple directions. The sonar source calculates the time it takes for the reflected sound waves to return; this calculation determines the distance to the target object. More sophisticated active sonar systems emit a ping and then rapidly scan or listen to the sound waves in a specific area. This provides both distance to the target and directional information. Even more advanced sonar systems use multiple receivers to listen to echoes from several directions simultaneously and provide efficient detection of both direction and distance. In general, when sonar is in use, the sonar `pings' occur at intervals, referred to as a duty cycle, and the signals themselves are very short in duration. For example, sonar that emits a 1-second ping every 10 seconds has a 10 percent duty cycle. The Navy's most powerful hull-mounted mid-frequency sonar source typically emits a 1-second ping every 50 seconds representing a 2 percent duty cycle. The Navy utilizes sonar systems and other acoustic sensors in support of a variety of mission requirements.

Please refer to the information given previously regarding sound, characteristics of sound types, and metrics used in this document. Anthropogenic sounds cover a broad range of frequencies and sound levels and can have a range of highly variable impacts on marine life, from none or minor to potentially severe responses, depending on received levels, duration of exposure, behavioral context, and various other factors. The potential effects of underwater sound from active acoustic sources can potentially result in one or more of the following: temporary or permanent hearing impairment, non-auditory physical or physiological effects, behavioral disturbance, stress, and masking (Richardson et al., 1995; Gordon et al., 2004; Nowacek et al., 2007; Southall et al., 2007; Gotz et al., 2009). The degree of effect is intrinsically related to the signal characteristics, received level, distance from the source, and duration of the sound exposure. In general, sudden, high level sounds can cause hearing loss, as can longer exposures to lower level sounds. Temporary or permanent loss of hearing will occur almost exclusively for noise within an animal's hearing range. In this section, we first describe specific manifestations of acoustic effects before providing discussion specific to the proposed activities in the next section.

Permanent Threshold Shift—Marine mammals exposed to high-intensity sound, or to lower-intensity sound for prolonged periods, can experience hearing threshold shift (TS), which is the loss of hearing sensitivity at certain frequency ranges (Finneran 2015). TS can be permanent (PTS), in which case the loss of hearing sensitivity is not fully recoverable, or (TTS, in which case the animal's hearing threshold would recover over time (Southall et al., 2007). Repeated sound exposure that leads to TTS could cause PTS. In severe cases of PTS, there can be total or partial deafness, while in most cases the animal has an impaired ability to hear sounds in specific frequency ranges (Kryter 1985).

When PTS occurs, there is physical damage to the sound receptors in the ear (i.e., tissue damage), whereas TTS represents primarily tissue fatigue and is reversible (Southall et al., 2007). In addition, other investigators have suggested that TTS is within the normal bounds of physiological variability and tolerance and does not represent physical injury (e.g., Ward, 1997). Therefore, NMFS does not consider TTS to constitute auditory injury.

Relationships between TTS and PTS thresholds have not been studied in marine mammals—PTS data exists only for a single harbor seal (Kastak et al., 2008)—but are assumed to be similar to those in humans and other terrestrial mammals. PTS typically occurs at exposure levels at least several decibels above (a 40-dB threshold shift approximates PTS onset; e.g., Kryter et al., 1966; Miller, 1974) that inducing mild TTS (a 6-dB threshold shift approximates TTS onset; e.g., Southall et al., 2007). Based on data from terrestrial mammals, a precautionary assumption is that the PTS thresholds for impulse sounds (such as impact pile driving pulses as received close to the source) are at least six dB higher than the TTS threshold on a peak-pressure basis and PTS cumulative sound exposure level thresholds are 15 to 20 dB higher than TTS cumulative sound exposure level thresholds (Southall et al., 2007).

Temporary threshold shift—TTS is the mildest form of hearing impairment that can occur during exposure to sound (Kryter, 1985). While experiencing TTS, the hearing threshold rises, and a sound must be at a higher level in order to be heard. In terrestrial and marine mammals, TTS can last from minutes or hours to days (in cases of strong TTS). In many cases, hearing sensitivity recovers rapidly after exposure to the sound ends.

Marine mammal hearing plays a critical role in communication with conspecifics, and interpretation of environmental cues for purposes such as predator avoidance and prey capture. Depending on the degree (elevation of threshold in dB), duration (i.e., recovery time), and frequency range of TTS, and the context in which it is experienced, TTS can have effects on marine mammals ranging from discountable to serious. For example, a marine mammal may be able to readily compensate for a brief, relatively small amount of TTS in a non-critical frequency range that occurs during a time where ambient noise is lower and there are not as many competing sounds present. Alternatively, a larger amount and longer duration of TTS sustained during time when communication is critical for successful mother/calf interactions could have more serious impacts.

Currently, TTS data only exist for four species of cetaceans (bottlenose dolphin (Tursiops truncatus), beluga whale (Delphinapterus leucas), harbor porpoise, and Yangtze finless porpoise (Neophocoena asiaeorientalis)) and three species of pinnipeds (northern elephant seal (Mirounga angustirostris), harbor seal, and California sea lion (Zalophus californianus)) exposed to a limited number of sound sources (i.e., mostly tones and octave-band noise) in laboratory settings (Finneran 2015). In general, harbor seals and harbor porpoises have a lower TTS onset than other measured pinniped or cetacean species. Additionally, the existing marine mammal TTS data come from a limited number of individuals within these species. There are no data available on noise-induced hearing loss for mysticetes. For summaries of data on TTS in marine mammals or for further discussion of TTS onset thresholds, please see Southall et al. (2007), Finneran and Jenkins (2012), and Finneran et al. (2015).

Behavioral effects—Behavioral disturbance may include a variety of effects, including subtle changes in behavior (e.g., minor or brief avoidance of an area or changes in vocalizations), more conspicuous changes in similar behavioral activities, and more sustained and/or potentially severe reactions, such as displacement from or abandonment of high-quality habitat. Behavioral responses to sound are highly variable and context-specific and any reactions depend on numerous intrinsic and extrinsic factors (e.g., species, state of maturity, experience, current activity, reproductive state, auditory sensitivity, time of day), as well as the interplay between factors (e.g., Richardson et al., 1995; Wartzok et al., 2003; Southall et al., 2007; Weilgart, 2007; Archer et al., 2010). Behavioral reactions can vary not only among individuals but also within an individual, depending on previous experience with a sound source, context, and numerous other factors (Ellison et al., 2012), and can vary depending on characteristics associated with the sound source (e.g., whether it is moving or stationary, number of sources, distance from the source). Please see Appendices B-C of Southall et al. (2007) for a review of studies involving marine mammal behavioral responses to sound.

Habituation can occur when an animal's response to a stimulus wanes with repeated exposure, usually in the absence of unpleasant associated events (Wartzok et al., 2003). Animals are most likely to habituate to sounds that are predictable and unvarying. It is important to note that habituation is appropriately considered as a “progressive reduction in response to stimuli that are perceived as neither aversive nor beneficial,” rather than as, more generally, moderation in response to human disturbance (Bejder et al., 2009). The opposite process is sensitization, when an unpleasant experience leads to subsequent responses, often in the form of avoidance, at a lower level of exposure. As noted, behavioral state may affect the type of response. For example, animals that are resting may show greater behavioral change in response to disturbing sound levels than animals that are highly motivated to remain in an area for feeding (Richardson et al. 1995; NRC 2003; Wartzok et al. 2003). Controlled experiments with captive marine mammals have showed pronounced behavioral reactions, including avoidance of loud sound sources (Ridgway et al. 1997; Finneran et al. 2003). Observed responses of wild marine mammals to loud pulsed sound sources (typically seismic airguns or acoustic harassment devices) have been varied but often consist of avoidance behavior or other behavioral changes suggesting discomfort (Morton and Symonds 2002; see also Richardson et al., 1995; Nowacek et al., 2007).

Available studies show wide variation in response to underwater sound; therefore, it is difficult to predict specifically how any given sound in a particular instance might affect marine mammals perceiving the signal. If a marine mammal does react briefly to an underwater sound by changing its behavior or moving a small distance, the impacts of the change are unlikely to be significant to the individual, let alone the stock or population. However, if a sound source displaces marine mammals from an important feeding or breeding area for a prolonged period, impacts on individuals and populations could be significant (e.g., Lusseau and Bejder 2007; Weilgart 2007; NRC 2003). However, there are broad categories of potential response, which we describe in greater detail here, that include alteration of dive behavior, alteration of foraging behavior, effects to breathing, interference with or alteration of vocalization, avoidance, and flight.

Changes in dive behavior can vary widely, and may consist of increased or decreased dive times and surface intervals as well as changes in the rates of ascent and descent during a dive (e.g., Frankel and Clark 2000; Costa et al., 2003; Ng and Leung, 2003; Nowacek et al., 2004; Goldbogen et al., 2013). Variations in dive behavior may reflect interruptions in biologically significant activities (e.g., foraging) or they may be of little biological significance. The impact of an alteration to dive behavior resulting from an acoustic exposure depends on what the animal is doing at the time of the exposure and the type and magnitude of the response.

Disruption of feeding behavior can be difficult to correlate with anthropogenic sound exposure, so it is usually inferred by observed displacement from known foraging areas, the appearance of secondary indicators (e.g., bubble nets or sediment plumes), or changes in dive behavior. As for other types of behavioral response, the frequency, duration, and temporal pattern of signal presentation, as well as differences in species sensitivity, are likely contributing factors to differences in response in any given circumstance (e.g., Croll et al., 2001; Nowacek et al.; 2004; Madsen et al., 2006; Yazvenko et al., 2007). A determination of whether foraging disruptions incur fitness consequences would require information on or estimates of the energetic requirements of the affected individuals and the relationship between prey availability, foraging effort and success, and the life history stage of the animal.

Variations in respiration naturally vary with different behaviors and alterations to breathing rate as a function of acoustic exposure can be expected to co-occur with other behavioral reactions, such as a flight response or an alteration in diving. However, respiration rates in and of themselves may be representative of annoyance or an acute stress response. Various studies have shown that respiration rates may either be unaffected or could increase, depending on the species and signal characteristics, again highlighting the importance in understanding species differences in the tolerance of underwater noise when determining the potential for impacts resulting from anthropogenic sound exposure (e.g., Kastelein et al., 2001, 2005b, 2006; Gailey et al., 2007).

Marine mammals vocalize for different purposes and across multiple modes, such as whistling, echolocation click production, calling, and singing. Changes in vocalization behavior in response to anthropogenic noise can occur for any of these modes and may result from a need to compete with an increase in background noise or may reflect increased vigilance or a startle response. For example, in the presence of potentially masking signals, humpback whales and killer whales have been observed to increase the length of their songs (Miller et al., 2000; Fristrup et al., 2003; Foote et al., 2004), while right whales have been observed to shift the frequency content of their calls upward while reducing the rate of calling in areas of increased anthropogenic noise (Parks et al., 2007b). In some cases, animals may cease sound production during production of aversive signals (Bowles et al., 1994).

Avoidance is the displacement of an individual from an area or migration path as a result of the presence of a sound or other stressors, and is one of the most obvious manifestations of disturbance in marine mammals (Richardson et al., 1995). For example, gray whales are known to change direction—deflecting from customary migratory paths—in order to avoid noise from seismic surveys (Malme et al., 1984). Avoidance may be short-term, with animals returning to the area once the noise has ceased (e.g., Bowles et al., 1994; Goold, 1996; Morton and Symonds, 2002; Gailey et al., 2007). Longer-term displacement is possible, however, which may lead to changes in abundance or distribution patterns of the affected species in the affected region if habituation to the presence of the sound does not occur (e.g., Blackwell et al., 2004; Bejder et al., 2006).

A flight response is a dramatic change in normal movement to a directed and rapid movement away from the perceived location of a sound source. The flight response differs from other avoidance responses in the intensity of the response (e.g., directed movement, rate of travel). Relatively little information on flight responses of marine mammals to anthropogenic signals exist, although observations of flight responses to the presence of predators have occurred (Connor and Heithaus 1996). The result of a flight response could range from brief, temporary exertion and displacement from the area where the signal provokes flight to, in extreme cases, marine mammal strandings (Evans and England 2001). However, it should be noted that response to a perceived predator does not necessarily invoke flight (Ford and Reeves 2008), and whether individuals are solitary or in groups may influence the response.

Behavioral disturbance can also impact marine mammals in more subtle ways. Increased vigilance may result in costs related to diversion of focus and attention (i.e., when a response consists of increased vigilance, it may come at the cost of decreased attention to other critical behaviors such as foraging or resting). These effects have generally not been demonstrated for marine mammals, but studies involving fish and terrestrial animals have shown that increased vigilance may substantially reduce feeding rates (e.g., Beauchamp and Livoreil,1997; Fritz et al., 2002; Purser and Radford 2011). In addition, chronic disturbance can cause population declines through reduction of fitness (e.g., decline in body condition) and subsequent reduction in reproductive success, survival, or both (e.g., Harrington and Veitch 1992; Daan et al., 1996; Bradshaw et al., 1998). However, Ridgway et al. (2006) reported that increased vigilance in bottlenose dolphins exposed to sound over a five-day period did not cause any sleep deprivation or stress effects.

Many animals perform vital functions, such as feeding, resting, traveling, and socializing, on a diel cycle (24-hour cycle). Disruption of such functions resulting from reactions to stressors such as sound exposure are more likely to be significant if they last more than one diel cycle or recur on subsequent days (Southall et al., 2007). Consequently, a behavioral response lasting less than one day and not recurring on subsequent days is not considered particularly severe unless it could directly affect reproduction or survival (Southall et al., 2007). Note that there is a difference between multi-day substantive behavioral reactions and multi-day anthropogenic activities. For example, just because an activity lasts for multiple days does not necessarily mean that individual animals are either exposed to activity-related stressors for multiple days or, further, exposed in a manner resulting in sustained multi-day substantive behavioral responses.

For non-impulsive sounds (i.e., similar to the sources used during the proposed action), data suggest that exposures of pinnipeds to sources between 90 and 140 dB re 1 μPa do not elicit strong behavioral responses; no data were available for exposures at higher received levels for Southall et al. (2007) to include in the severity scale analysis. Reactions of harbor seals were the only available data for which the responses could be ranked on the severity scale. For reactions that were recorded, the majority (17 of 18 individuals/groups) were ranked on the severity scale as a 4 (defined as moderate change in movement, brief shift in group distribution, or moderate change in vocal behavior) or lower; the remaining response was ranked as a 6 (defined as minor or moderate avoidance of the sound source). Additional data on hooded seals (Cystophora cristata) indicate avoidance responses to signals above 160-170 dB re 1 μPa (Kvadsheim et al., 2010), and data on grey (Halichoerus grypus) and harbor seals indicate avoidance response at received levels of 135-144 dB re 1 μPa (Götz et al., 2010). In each instance where food was available, which provided the seals motivation to remain near the source, habituation to the signals occurred rapidly. In the same study, it was noted that habituation was not apparent in wild seals where no food source was available (Götz et al. 2010). This implies that the motivation of the animal is necessary to consider in determining the potential for a reaction. In one study aimed to investigate the under-ice movements and sensory cues associated with under-ice navigation of ice seals, acoustic transmitters (60-69 kHz at 159 dB re 1 μPa at 1 m) were attached to ringed seals (Wartzok et al., 1992a; Wartzok et al., 1992b). An acoustic tracking system then was installed in the ice to receive the acoustic signals and provide real-time tracking of ice seal movements. Although the frequencies used in this study are at the upper limit of ringed seal hearing, the ringed seals appeared unaffected by the acoustic transmissions, as they were able to maintain normal behaviors (e.g., finding breathing holes).

Seals exposed to non-impulsive sources with a received sound pressure level within the range of calculated exposures, (142-193 dB re 1 μPa), have been shown to change their behavior by modifying diving activity and avoidance of the sound source (Götz et al., 2010; Kvadsheim et al., 2010). Although a minor change to a behavior may occur as a result of exposure to the sources in the Proposed Action, these changes would be within the normal range of behaviors for the animal (e.g., the use of a breathing hole further from the source, rather than one closer to the source, would be within the normal range of behavior) (Kelly et al. 1988).

Adult ringed seals spend up to 20 percent of the time in subnivean lairs during the timeframe of the proposed action (Kelly et al., 2010a). Ringed seal pups spend about 50 percent of their time in the lair during the nursing period (Lydersen and Hammill 1993). Ringed seal lairs are typically used by individual seals (haul-out lairs) or by a mother with a pup (birthing lairs); large lairs used by many seals for hauling out are rare (Smith and Stirling 1975). Although the exact amount of transmission loss of sound traveling through ice and snow is unknown, it is clear that sound attenuation would occur due to the environment itself. Due to the significant attenuation of sound through the water (ice)/air interface, any potential sound entering a lair would be below the behavioral threshold and would not result in take. In-air (i.e., in the subnivean lair), the best hearing sensitivity for ringed seals has been documented between 3 and 5 kHz; at higher frequencies, the hearing threshold rapidly increases (Sills et al., 2015).

If the acoustic transmissions are heard and are perceived as a threat, ringed seals within subnivean lairs could react to the sound in a similar fashion to their reaction to other threats, such as polar bears (Ursus maritimus) and Arctic foxes (Vulpes lagopus), although the type of sound would be novel to them. Responses of ringed seals to a variety of human-induced noises (e.g., helicopter noise, snowmobiles, dogs, people, and seismic activity) have been variable; some seals entered the water and some seals remained in the lair (Kelly et al., 1988). However, in all instances in which observed seals departed lairs in response to noise disturbance, they subsequently reoccupied the lair (Kelly et al., 1988).

Ringed seal mothers have a strong bond with their pups and may physically move their pups from the birth lair to an alternate lair to avoid predation, sometimes risking their lives to defend their pups from potential predators (Smith 1987). Additionally, it is not unusual to find up to three birth lairs within 100 m of each other, probably made by the same female seal, as well as one or more haul-out lairs in the immediate area (Smith et al., 1991). If a ringed seal mother perceives the acoustic transmissions as a threat, the network of multiple birth and haul-out lairs allows the mother and pup to move to a new lair (Smith and Hammill 1981; Smith and Stirling 1975). However, the acoustic transmissions are unlike the low frequency sounds and vibrations felt from approaching predators. Additionally, the acoustic transmissions are not likely to impede a ringed seal from finding a breathing hole or lair, as captive seals have been found to primarily use vision to locate breathing holes and no effect to ringed seal vision would occur from the acoustic transmissions (Elsner et al., 1989; Wartzok et al., 1992a). It is anticipated that a ringed seal would be able to relocate to a different breathing hole relatively easily without impacting their normal behavior patterns.

Stress responses—An animal's perception of a threat may be sufficient to trigger stress responses consisting of some combination of behavioral responses, autonomic nervous system responses, neuroendocrine responses, or immune responses (e.g., Seyle 1950; Moberg 2000). In many cases, an animal's first and sometimes most economical (in terms of energetic costs) response is behavioral avoidance of the potential stressor. Autonomic nervous system responses to stress typically involve changes in heart rate, blood pressure, and gastrointestinal activity. These responses have a relatively short duration and may or may not have a significant long-term effect on an animal's fitness.

Neuroendocrine stress responses often involve the hypothalamus-pituitary-adrenal system. Virtually all neuroendocrine functions that are affected by stress—including immune competence, reproduction, metabolism, and behavior—are regulated by pituitary hormones. Stress-induced changes in the secretion of pituitary hormones have been implicated in failed reproduction, altered metabolism, reduced immune competence, and behavioral disturbance (e.g., Moberg, 1987; Blecha, 2000). Increases in the circulation of glucocorticoids are also equated with stress (Romano et al., 2004).

The primary distinction between stress (which is adaptive and does not normally place an animal at risk) and “distress” is the cost of the response. During a stress response, an animal uses glycogen stores that can be quickly replenished once the stress is alleviated. In such circumstances, the cost of the stress response would not pose serious fitness consequences. However, when an animal does not have sufficient energy reserves to satisfy the energetic costs of a stress response, energy resources must be diverted from other functions. This state of distress will last until the animal replenishes its energetic reserves sufficient to restore normal function.

Relationships between these physiological mechanisms, animal behavior, and the costs of stress responses are well-studied through controlled experiments and for both laboratory and free-ranging animals (e.g., Holberton et al., 1996; Hood et al., 1998; Jessop et al., 2003; Krausman et al., 2004; Lankford et al., 2005). Stress responses due to exposure to anthropogenic sounds or other stressors and their effects on marine mammals have also been reviewed (Fair and Becker, 2000; Romano et al., 2002b) and, more rarely, studied in wild populations (e.g., Romano et al., 2002a). These and other studies lead to a reasonable expectation that some marine mammals will experience physiological stress responses upon exposure to acoustic stressors and that it is possible that some of these would be classified as “distress.” In addition, any animal experiencing TTS would likely also experience stress responses (NRC, 2003).

Auditory masking—Sound can disrupt behavior through masking, or interfering with, an animal's ability to detect, recognize, or discriminate between acoustic signals of interest (e.g., those used for intraspecific communication and social interactions, prey detection, predator avoidance, navigation) (Richardson et al., 1995). Masking occurs when the receipt of a sound is interfered with by another coincident sound at similar frequencies and at similar or higher intensity, and may occur whether the sound is natural (e.g., snapping shrimp, wind, waves, precipitation) or anthropogenic (e.g., shipping, sonar, seismic exploration) in origin. The ability of a noise source to mask biologically important sounds depends on the characteristics of both the noise source and the signal of interest (e.g., signal-to-noise ratio, temporal variability, direction), in relation to each other and to an animal's hearing abilities (e.g., sensitivity, frequency range, critical ratios, frequency discrimination, directional discrimination, age or TTS hearing loss), and existing ambient noise and propagation conditions.

Under certain circumstances, marine mammals experiencing significant masking could also be impaired from maximizing their performance fitness in survival and reproduction. Therefore, when the coincident (masking) sound is man-made, it may be considered harassment when disrupting or altering critical behaviors. It is important to distinguish TTS and PTS, which persist after the sound exposure, from masking, which occurs during the sound exposure. Because masking (without resulting in TS) is not associated with abnormal physiological function, it is not considered a physiological effect, but rather a potential behavioral effect.

The frequency range of the potentially masking sound is important in determining any potential behavioral impacts. For example, low-frequency signals may have less effect on high-frequency echolocation sounds produced by odontocetes but are more likely to affect detection of mysticete communication calls and other potentially important natural sounds such as those produced by surf and some prey species. The masking of communication signals by anthropogenic noise may be considered as a reduction in the communication space of animals (e.g., Clark et al., 2009) and may result in energetic or other costs as animals change their vocalization behavior (e.g., Miller et al., 2000; Foote et al., 2004; Parks et al., 2007b; Di Iorio and Clark, 2009; Holt et al., 2009). Masking can be reduced in situations where the signal and noise come from different directions (Richardson et al., 1995), through amplitude modulation of the signal, or through other compensatory behaviors (Houser and Moore, 2014). Masking can be tested directly in captive species (e.g., Erbe, 2008), but in wild populations it must be either modeled or inferred from evidence of masking compensation. There are few studies addressing real-world masking sounds likely to be experienced by marine mammals in the wild (e.g., Branstetter et al., 2013).

Masking affects both senders and receivers of acoustic signals and can potentially have long-term chronic effects on marine mammals at the population level as well as at the individual level. Low-frequency ambient sound levels have increased by as much as 20 dB (more than three times in terms of SPL) in the world's ocean from pre-industrial periods, with most of the increase from distant commercial shipping (Hildebrand 2009). All anthropogenic sound sources, but especially chronic and lower-frequency signals (e.g., from vessel traffic), contribute to elevated ambient sound levels, thus intensifying masking.

Potential Effects of Sonar on Prey—Ringed seals feed on marine invertebrates and fish. Marine invertebrates occur in the world's oceans, from warm shallow waters to cold deep waters, and are the dominant animals in all habitats of the study area. Although most species are found within the benthic zone, marine invertebrates can be found in all zones (sympagic (within the sea ice), pelagic (open ocean), or benthic (bottom dwelling)) of the Beaufort Sea (Josefson et al., 2013). The diverse range of species include oysters, crabs, worms, ghost shrimp, snails, sponges, sea fans, isopods, and stony corals (Chess and Hobson 1997; Dugan et al., 2000; Proctor et al., 1980).

Hearing capabilities of invertebrates are largely unknown (Lovell et al., 2005; Popper and Schilt 2008). Outside of studies conducted to test the sensitivity of invertebrates to vibrations, very little is known on the effects of anthropogenic underwater noise on invertebrates (Edmonds et al., 2016). While data are limited, research suggests that some of the major cephalopods and decapods may have limited hearing capabilities (Hanlon 1987; Offutt 1970), and may hear only low-frequency (less than 1 kHz) sources (Offutt 1970), which is most likely within the frequency band of biological signals (Hill 2009). In a review of crustacean sensitivity of high amplitude underwater noise by Edmonds et al. (2016), crustaceans may be able to hear the frequencies at which they produce sound, but it remains unclear which noises are incidentally produced and if there are any negative effects from masking them. Acoustic signals produced by crustaceans range from low frequency rumbles (20-60 Hz) to high frequency signals (20-55 kHz) (Henninger and Watson 2005; Patek and Caldwell 2006; Staaterman et al., 2016). Aquatic invertebrates that can sense local water movements with ciliated cells include cnidarians, flatworms, segmented worms, urochordates (tunicates), mollusks, and arthropods (Budelmann 1992a, 1992b; Popper et al., 2001). Some aquatic invertebrates have specialized organs called statocysts for determination of equilibrium and, in some cases, linear or angular acceleration. Statocysts allow an animal to sense movement and may enable some species, such as cephalopods and crustaceans, to be sensitive to water particle movements associated with sound (Goodall et al., 1990; Hu et al., 2009; Kaifu et al., 2008; Montgomery et al., 2006; Popper et al., 2001; Roberts and Breithaupt 2016; Salmon 1971). Because any acoustic sensory capabilities, if present at all, are limited to detecting water motion, and water particle motion near a sound source falls off rapidly with distance, aquatic invertebrates are probably limited to detecting nearby sound sources rather than sound caused by pressure waves from distant sources.

Studies of sound energy effects on invertebrates are few, and identify only behavioral responses. Non-auditory injury, permanent threshold shift, temporary threshold shift, and masking studies have not been conducted for invertebrates. Both behavioral and auditory brainstem response studies suggest that crustaceans may sense frequencies up to 3 kHz, but best sensitivity is likely below 200 Hz (Goodall et al., 1990; Lovell et al., 2005; Lovell et al., 2006). Most cephalopods likely sense low-frequency sound below 1 kHz, with best sensitivities at lower frequencies (Budelmann 2010; Mooney et al., 2010; Offutt 1970). A few cephalopods may sense higher frequencies up to 1,500 Hz (Hu et al., 2009).

It is expected that most marine invertebrates would not sense the frequencies of the sonar associated with the proposed action. Most marine invertebrates would not be close enough to active sonar systems to potentially experience impacts to sensory structures. Any marine invertebrate capable of sensing sound may alter its behavior if exposed to sonar. Although acoustic transmissions produced during the proposed action may briefly impact individuals, intermittent exposures to sonar are not expected to impact survival, growth, recruitment, or reproduction of widespread marine invertebrate populations.

The fish species located in the study area include those that are closely associated with the deep ocean habitat of the Beaufort Sea. Nearly 250 marine fish species have been described in the Arctic, excluding the larger parts of the sub-Arctic Bering, Barents, and Norwegian Seas (Mecklenburg et al., 2011). However, only about 30 are known to occur in the Arctic waters of the Beaufort Sea (Christiansen and Reist 2013). Largely because of the difficulty of sampling in remote, ice-covered seas, many high-Arctic fish species are known only from rare or geographically patchy records (Mecklenburg et al., 2011). Aquatic systems of the Arctic undergo extended seasonal periods of ice cover and other harsh environmental conditions. Fish inhabiting such systems must be biologically and ecologically adapted to surviving such conditions. Important environmental factors that Arctic fish must contend with include reduced light, seasonal darkness, ice cover, low biodiversity, and low seasonal productivity.

All fish have two sensory systems to detect sound in the water: The inner ear, which functions very much like the inner ear in other vertebrates, and the lateral line, which consists of a series of receptors along the fish's body (Popper and Fay 2010; Popper et al., 2014). The inner ear generally detects relatively higher-frequency sounds, while the lateral line detects water motion at low frequencies (below a few hundred Hz) (Hastings and Popper 2005). Lateral line receptors respond to the relative motion between the body surface and surrounding water; this relative motion, however, only takes place very close to sound sources and most fish are unable to detect this motion at more than one to two body lengths distance away (Popper et al., 2014). Although hearing capability data only exist for fewer than 100 of the 32,000 fish species, current data suggest that most species of fish detect sounds from 50 to 1,000 Hz, with few fish hearing sounds above 4 kHz (Popper 2008). It is believed that most fish have their best hearing sensitivity from 100 to 400 Hz (Popper 2003). Permanent hearing loss has not been documented in fish. A study by Halvorsen et al. (2012) found that for temporary hearing loss or similar negative impacts to occur, the noise needed to be within the fish's individual hearing frequency range; external factors, such as developmental history of the fish or environmental factors, may result in differing impacts to sound exposure in fish of the same species. The sensory hair cells of the inner ear in fish can regenerate after they are damaged, unlike in mammals where sensory hair cells loss is permanent (Lombarte et al., 1993; Smith et al., 2006). As a consequence, any hearing loss in fish may be as temporary as the timeframe required to repair or replace the sensory cells that were damaged or destroyed (Smith et al., 2006), and no permanent loss of hearing in fish would result from exposure to sound.

Fish species in the study area are expected to hear the low-frequency sources associated with the proposed action, but most are not expected to detect sounds above this threshold. Only a few fish species are able to detect mid-frequency sonar above 1 kHz and could have behavioral reactions or experience auditory masking during these activities. These effects are expected to be transient and long-term consequences for the population are not expected. Fish with hearing specializations capable of detecting high-frequency sounds are not expected to be within the study area. If hearing specialists were present, they would have to be in close vicinity to the source to experience effects from the acoustic transmission. Human-generated sound could alter the behavior of a fish in a manner that would affect its way of living, such as where it tries to locate food or how well it can locate a potential mate; behavioral responses to loud noise could include a startle response, such as the fish swimming away from the source, the fish “freezing” and staying in place, or scattering (Popper 2003). Auditory masking could also interfere with a fish's ability to hear biologically relevant sounds, inhibiting the ability to detect both predators and prey, and impacting schooling, mating, and navigating (Popper 2003). If an individual fish comes into contact with low-frequency acoustic transmissions and is able to perceive the transmissions, they are expected to exhibit short-term behavioral reactions, when initially exposed to acoustic transmissions, which would not significantly alter breeding, foraging, or populations. Overall effects to fish from active sonar sources would be localized, temporary, and infrequent.

Effects to Physical and Foraging Habitat—Unless the sound source is stationary and/or continuous over a long duration in one area, neither of which applies to ICEX18 activities, the effects of the introduction of sound into the environment are generally considered to have a less severe impact on marine mammal habitat compared to any physical alteration of the habitat. Acoustic exposures are not expected to result in long-term physical alteration of the water column or bottom topography as the occurrences are of limited duration and would occur intermittently. Acoustic transmissions also would have no structural impact to subnivean lairs in the ice. Furthermore, since ice dampens acoustic transmissions (Richardson et al., 1995) the level of sound energy that reaches the interior of a subnivean lair will be less than that ensonifying water under surrounding ice.

Non-acoustic Impacts—Deployment of the ice camp could potentially affect ringed seal habitat by physically damaging or crushing subnivean lairs. These non-acoustic impacts could result in ringed seal injury or mortality. However, seals usually choose to locate lairs near pressure ridges and the ice camp will be deployed in an area without pressure ridges in order to allow operation of an aircraft runway. Further, portable tents will be erected for lodging and operations purposes. Tents do not require building materials or typical construction methods. The tents are relatively easy to mobilize and will not be situated near areas featuring pressure ridges. Finally, the camp buildup will be gradual, with activity increasing over the first five days. This approach allows seals to move to different lair locations outside the ice camp area. Based on this information, we do not anticipate any damage to subnivean lairs that could result in ringed seal injury or mortality.

ICEX18 personnel will be actively conducting testing and training operations on the sea ice and will travel around the camp area, including the runway, on snowmobiles. Although the Navy does not anticipate observing any seals on the ice, it is possible that the presence of active humans could behaviorally disturb ringed seals that are in lairs or on the ice. As discussed above, the camp will not be deployed in areas with pressure ridges and seals will have opportunity to move away from disturbances associated with human activity. Furthermore, camp personnel will maintain a 100-meter avoidance distance for all marine mammals on the ice. Based on this information, we do not believe the presence of humans on ice will result in take.

Our preliminary determination of effects to the physical environment includes minimal possible impacts to ringed seals and ringed seal habitat from camp operation or deployment activities. In summary, given the relatively short duration of submarine testing and training activities, relatively small area that would be affected, and lack of physical impacts to habitat, the proposed actions are not likely to have a permanent, adverse effect on populations of prey species or marine mammal habitat. Therefore, any impacts to marine mammal habitat are not expected to cause significant or long-term consequences for individual ringed seals or their populations.

This section provides an estimate of the number of incidental takes proposed for authorization through this IHA, which will inform the negligible impact determination.

Harassment is the only type of take expected to result from these activities. For this military readiness activity, the MMPA defines “harassment” as: (i) Any act that injures or has the significant potential to injure a marine mammal or marine mammal stock in the wild (Level A Harassment); or (ii) Any act that disturbs or is likely to disturb a marine mammal or marine mammal stock in the wild by causing disruption of natural behavioral patterns, including, but not limited to, migration, surfacing, nursing, breeding, feeding, or sheltering, to a point where such behavioral patterns are abandoned or significantly altered (Level B Harassment).

Authorized takes would be by Level B harassment only, in the form of disruption of behavioral patterns and TTS, for individual marine mammals resulting from exposure to acoustic transmissions. Based on the nature of the activity, Level A harassment is neither anticipated nor proposed to be authorized. However, as described previously, no serious injury or mortality is anticipated or proposed to be authorized for this activity. Below we describe how the take is estimated.

Described in the most basic way, we estimate take by considering: (1) Acoustic thresholds above which NMFS believes the best available science indicates marine mammals will be behaviorally harassed or incur some degree of permanent hearing impairment; (2) the area or volume of water that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) and the number of days of activities. For the proposed IHA, the Navy employed a sophisticated model known as the Navy Acoustic Effects Model (NAEMO) for assessing the impacts of underwater sound.

Using the best available science, NMFS recommends acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to incur PTS of some degree (equated to Level A harassment), TTS, or behavioral harassment (Level B harassment). The thresholds used to predict occurrences of each type of take are described below.

Behavioral harassment—In coordination with NMFS, the Navy developed behavioral harassment thresholds to support Phase III environmental analyses and MMPA Letter of Authorization renewals for the Navy's testing and training military readiness activities; these behavioral harassment thresholds are being proposed for use here to evaluate the potential effects of this proposed action. The response of a marine mammal to an anthropogenic sound will depend on the frequency, duration, temporal pattern and amplitude of the sound as well as the animal's prior experience with the sound and the context in which the sound is encountered (i.e., what the animal is doing at the time of the exposure). The distance from the sound source and whether it is perceived as approaching or moving away can also affect the way an animal responds to a sound (Wartzok et al. 2003). For marine mammals, a review of responses to anthropogenic sound was first conducted by Richardson et al. (1995). Reviews by Nowacek et al. (2007) and Southall et al. (2007) address studies conducted since 1995 and focus on observations where the received sound level of the exposed marine mammal(s) was known or could be estimated. Multi-year research efforts have conducted sonar exposure studies for odontocetes and mysticetes (Miller et al. 2012; Sivle et al. 2012). Several studies with captive animals have provided data under controlled circumstances for odontocetes and pinnipeds (Houser et al. 2013a; Houser et al. 2013b). Moretti et al. (2014) published a beaked whale dose-response curve based on passive acoustic monitoring of beaked whales during U.S. Navy training activity at Atlantic Underwater Test and Evaluation Center during actual Anti-Submarine Warfare exercises. This new information necessitated the update of the Navy's behavioral response criteria for the Phase III environmental analyses.

Southall et al. (2007) synthesized data from many past behavioral studies and observations to determine the likelihood of behavioral reactions at specific sound levels. While in general, the louder the sound source the more intense the behavioral response, it was clear that the proximity of a sound source and the animal's experience, motivation, and conditioning were also critical factors influencing the response (Southall et al. 2007). After examining all of the available data, the authors felt that the derivation of thresholds for behavioral response based solely on exposure level was not supported because context of the animal at the time of sound exposure was an important factor in estimating response. Nonetheless, in some conditions, consistent avoidance reactions were noted at higher sound levels depending on the marine mammal species or group allowing conclusions to be drawn. Phocid seals showed avoidance reactions at or below 190 dB re 1 µPa @1m; thus, seals may actually receive levels adequate to produce TTS before avoiding the source.

The Navy's Phase III proposed pinniped behavioral threshold has been updated based on controlled exposure experiments on the following captive animals: Hooded seal, gray seal, and California sea lion (Götz et al. 2010; Houser et al. 2013a; Kvadsheim et al. 2010). Overall exposure levels were 110-170 dB re 1 μPa for hooded seals, 140-180 dB re 1 μPa for gray seals and 125-185 dB re 1 μPa for California sea lions; responses occurred at received levels ranging from 125 to 185 dB re 1 μPa. However, the means of the response data were between 159 and 170 dB re 1 μPa. Hooded seals were exposed to increasing levels of sonar until an avoidance response was observed, while the grey seals were exposed first to a single received level multiple times, then an increasing received level. Each individual California sea lion was exposed to the same received level ten times. These exposure sessions were combined into a single response value, with an overall response assumed if an animal responded in any single session. Because these data represent a dose-response type relationship between received level and a response, and because the means were all tightly clustered, the Bayesian biphasic Behavioral Response Function for pinnipeds most closely resembles a traditional sigmoidal dose-response function at the upper received levels and has a 50% probability of response at 166 dB re 1 μPa. Additional details regarding the Phase III criteria may be found in the technical report, Criteria and Thresholds for U.S. Navy Acoustic and Explosive Effects Analysis (2017a) which may be found at: http://aftteis.com/Portals/3/docs/newdocs/Criteria%20and%20Thresholds_TR_Submittal_05262017.pdf. This technical report was as part of the Navy's Atlantic Fleet Training and Testing Draft Environmental Impact Statement/Overseas Environmental Impact Statement (EIS/OEIS) (Navy 2017b) which is located at: http://www.aftteis.com/. NMFS is proposing the use of this dose response function to predict behavioral harassment of pinnipeds for this activity.

Level A harassment and TTS—NMFS' Technical Guidance for Assessing the Effects of Anthropogenic Sound on Marine Mammal Hearing (Technical Guidance, 2016) identifies dual criteria to assess auditory injury (Level A harassment) to five different marine mammal groups (based on hearing sensitivity) as a result of exposure to noise from two different types of sources (impulsive or non-impulsive).

These thresholds were developed by compiling and synthesizing the best available science and soliciting input multiple times from both the public and peer reviewers to inform the final product. The references, analysis, and methodology used in the development of the thresholds are described in NMFS 2016 Technical Guidance, which may be accessed at: http://www.nmfs.noaa.gov/pr/acoustics/guidelines.htm.

The PTS/TTS analyses begins with mathematical modeling to predict the sound transmission patterns from Navy sources, including sonar. These data are then coupled with marine species distribution and abundance data to determine the sound levels likely to be received by various marine species. These criteria and thresholds are applied to estimate specific effects that animals exposed to Navy-generated sound may experience. For weighting function derivation, the most critical data required are TTS onset exposure levels as a function of exposure frequency. These values can be estimated from published literature by examining TTS as a function of sound exposure level (SEL) for various frequencies.

To estimate TTS onset values, only TTS data from behavioral hearing tests were used. To determine TTS onset for each subject, the amount of TTS observed after exposures with different SPLs and durations were combined to create a single TTS growth curve as a function of SEL. The use of (cumulative) SEL is a simplifying assumption to accommodate sounds of various SPLs, durations, and duty cycles. This is referred to as an “equal energy” approach, since SEL is related to the energy of the sound and this approach assumes exposures with equal SEL result in equal effects, regardless of the duration or duty cycle of the sound. It is well known that the equal energy rule will over-estimate the effects of intermittent noise, since the quiet periods between noise exposures will allow some recovery of hearing compared to noise that is continuously present with the same total SEL (Ward 1997). For continuous exposures with the same SEL but different durations, the exposure with the longer duration will also tend to produce more TTS (Finneran et al., 2010; Kastak et al., 2007; Mooney et al., 2009a).

As in previous acoustic effects analysis (Finneran and Jenkins 2012; Southall et al., 2007), the shape of the PTS exposure function for each species group is assumed to be identical to the TTS exposure function for each group. A difference of 20 dB between TTS onset and PTS onset is used for all marine mammals including pinnipeds. This is based on estimates of exposure levels actually required for PTS (i.e., 40 dB of TTS) from the marine mammal TTS growth curves, which show differences of 13 to 37 dB between TTS and PTS onset in marine mammals. Details regarding these criteria and thresholds can be found in NMFS' Technical Guidance (NMFS 2016).

Table 3 below provides the weighted criteria and thresholds used in this analysis for estimating quantitative acoustic exposures of marine mammals from the proposed action.

The Navy performed a quantitative analysis to estimate the number of mammals that could be harassed by the underwater acoustic transmissions during the proposed action. Inputs to the quantitative analysis included marine mammal density estimates, marine mammal depth occurrence distributions (Navy 2017a), oceanographic and environmental data, marine mammal hearing data, and criteria and thresholds for levels of potential effects.

The density estimate used to estimate take is derived from habitat-based modeling by Kaschner et al., (2006) and Kaschner (2004). The area of the Arctic where the proposed action will occur (100-200 nm north of Prudhoe Bay, Alaska) has not been surveyed in a manner that supports quantifiable density estimation of marine mammals. In the absence of empirical survey data, information on known or inferred associations between marine habitat features and (the likelihood of) the presence of specific species have been used to predict densities using model-based approaches. These habitat suitability models include relative environmental suitability (RES) models. Habitat suitability models can be used to understand the possible extent and relative expected concentration of a marine species distribution. These models are derived from an assessment of the species occurrence in association with evaluated environmental explanatory variables that results in defining the RES suitability of a given environment. A fitted model that quantitatively describes the relationship of occurrence with the environmental variables can be used to estimate unknown occurrence in conjunction with known habitat suitability. Abundance can thus be estimated for each RES value based on the values of the environmental variables, providing a means to estimate density for areas that have not been surveyed. Use of the Kaschner's RES model resulted in a value of 0.3957 animals per km2 in the cold season (defined as December through May). The density numbers are assumed static throughout the ice camp proposed action area for this species. The density data generated for this species was based on environmental variables known to exist within the proposed ice camp action area during the late winter/early springtime period.

Note that while other surveys by Frost et al. (2004) and Bengston et al. (2005) provided ringed seal density estimates for areas near or within the Beaufort Sea, the Navy felt that those findings were not applicable to the proposed action area. Frost et al. (2004) only surveyed ringed seals out to 40 km from shore in the Beaufort Sea. A small portion of the surveys from Bengston et al. (2005) were out to a maximum extent of 185 km (100 nm) from shore, but the surveys were located within the Chukchi Sea, not the Beaufort Sea. Frost et al. (2004) also stated the highest densities of ringed seals were in water depths from 5-25 m (1-1.33 seals per km2). Lower densities were seen in waters greater than 35 m in depth (0-0.77 seals per km2).The proposed action area where acoustic transmissions would occur is 3,000 to 4,000 m deep (International Bathymetric Chart of the Arctic Ocean 2015), which makes the bathymetric nature of the areas different enough to be non-comparable. Furthermore, the ice camp is located on multi-year ice and would not be located near the ice edge. Frost et al. (2004), and Bengston et al. (2005) both had a high percentage of fast or pack ice in their survey area which would not be present in the proposed action area. Additionally, there were areas of cracked ice that were part of the surveys. As previously noted, the ice camp needs to be situated in an area without cracks in the ice. After reviewing both Frost et al. (2004) and Bengston et al. (2005) NMFS agrees with the Navy that the density data from the RES model provides the most appropriate density values to be assessed for acoustic transmissions during ICEX18.

The quantitative analysis consists of computer modeled estimates and a post-model analysis to determine the number of potential animal exposures. The model calculates sound energy propagation from the proposed active acoustic sources, the sound received by animat (virtual animal) dosimeters representing marine mammals distributed in the area around the modeled activity, and whether the sound received by a marine mammal exceeds the thresholds for effects.

The Navy developed a set of software tools and compiled data for estimating acoustic effects on marine mammals without consideration of behavioral avoidance or Navy's standard mitigations. These tools and data sets serve are integral components of NAEMO. In NAEMO, animats are distributed nonuniformly based on species-specific density, depth distribution, and group size information and animats record energy received at their location in the water column. A fully three-dimensional environment is used for calculating sound propagation and animat exposure in NAEMO. Site-specific bathymetry, sound speed profiles, wind speed, and bottom properties are incorporated into the propagation modeling process. NAEMO calculates the likely propagation for various levels of energy (sound or pressure) resulting from each source used during the training event.

NAEMO then records the energy received by each animat within the energy footprint of the event and calculates the number of animats having received levels of energy exposures that fall within defined impact thresholds. Predicted effects on the animats within a scenario are then tallied and the highest order effect (based on severity of criteria; e.g., PTS over TTS) predicted for a given animat is assumed. Each scenario or each 24-hour period for scenarios lasting greater than 24 hours is independent of all others, and therefore, the same individual marine animal could be impacted during each independent scenario or 24-hour period. In few instances, although the activities themselves all occur within the study area, sound may propagate beyond the boundary of the study area. Any exposures occurring outside the boundary of the study area are counted as if they occurred within the study area boundary. NAEMO provides the initial estimated impacts on marine species with a static horizontal distribution.

There are limitations to the data used in the acoustic effects model, and the results must be interpreted within these context. While the most accurate data and input assumptions have been used in the modeling, when there is a lack of definitive data to support an aspect of the modeling, modeling assumptions believed to overestimate the number of exposures have been chosen:

• Animats are modeled as being underwater, stationary, and facing the source and therefore always predicted to receive the maximum sound level (i.e., no porpoising or pinnipeds' heads above water);

• Animats do not move horizontally (but change their position vertically within the water column), which may overestimate physiological effects such as hearing loss, especially for slow moving or stationary sound sources in the model;

• Animats are stationary horizontally and therefore do not avoid the sound source, unlike in the wild where animals would most often avoid exposures at higher sound levels, especially those exposures that may result in PTS;

• Multiple exposures within any 24-hour period are considered one continuous exposure for the purposes of calculating the temporary or permanent hearing loss, because there are not sufficient data to estimate a hearing recovery function for the time between exposures; and

• Mitigation measures that are implemented were not considered in the model. In reality, sound-producing activities would be reduced, stopped, or delayed if marine mammals are detected by submarines via passive acoustic monitoring.

Because of these inherent model limitations and simplifications, model-estimated results must be further analyzed, considering such factors as the range to specific effects, avoidance, and the likelihood of successfully implementing mitigation measures. This analysis uses a number of factors in addition to the acoustic model results to predict acoustic effects on marine mammals.

For non-impulsive sources, NAEMO calculates the sound pressure level (SPL) and SEL for each active emission over the entire duration of an event. These data are then processed using a bootstrapping routine to compute the number of animats exposed to SPL and SEL in 1 dB bins across all track iterations and population draws. (Bootstrapping is a type of resampling where large numbers of smaller samples of the same size are repeatedly drawn, with replacement, from a single original sample.) SEL is checked during this process to ensure that all animats are grouped in either an SPL or SEL category. A mean number of SPL and SEL exposures are computed for each 1 dB bin. The mean value is based on the number of animats exposed at that dB level from each track iteration and population draw. The behavioral risk function curve is applied to each 1 dB bin to compute the number of behaviorally exposed animats per bin. The number of behaviorally exposed animats per bin is summed to produce the total number of behavior exposures.

Mean 1 dB bin SEL exposures are then summed to determine the number of PTS and TTS exposures. PTS exposures represent the cumulative number of animats exposed at or above the PTS threshold. The number of TTS exposures represents the cumulative number of animats exposed at or above the TTS threshold and below the PTS threshold. Animats exposed below the TTS threshold were grouped in the SPL category.

Platforms such as a submarine using one or more sound sources are modeled in accordance with relevant vehicle dynamics and time durations by moving them across an area whose size is representative of the training event's operational area. For analysis purposes, the Navy uses distance cutoffs, which is the maximum distance a Level B take would occur, beyond which the potential for significant behavioral responses is considered unlikely. For animals located beyond the range to effects, no significant behavioral responses are predicted. This is based on the Navy's Phase III environmental analysis (Navy 2017a). The Navy referenced Southall et al. (2007) who reported that pinnipeds do not exhibit strong reactions to SPLs up to 140 dB re 1 µPa from steady state (non-impulsive) sources. In some cases, pinnipeds tolerate impulsive exposures up to 180 dB re 1 µPa with limited avoidance noted (Southall et al., 2007), and no avoidance noted at distances as close as 42 m (Jacobs & Terhune 2002). While limited data exists on pinniped behavioral responses beyond 3 km in the water, the data that is available suggest that most pinnipeds likely do not exhibit significant behavioral reactions to sonar and other transducers beyond a few kilometers, independent of received levels of sound (Navy 2017a). Therefore, in the Navy's Phase III environmental analysis, the range to effects for pinnipeds is set at 5 km for moderate source level, single platform training and testing events and 10 km for all other events with multiple sonar platforms or sonar with source levels at or exceeding 215 dB re 1 µPa @1 m. Regardless of the source level, take beyond 10 km is not anticipated. These ranges are expected to reasonably contain the anticipated effects predicted by the behavioral response dose curve threshold reference above.

For ICEX18 unclassified sources (i.e. Autonomous Reverberation Measurement System and MIT/Lincoln Labs continuous wave/chirp), the Navy models calculated a propagation loss measurement of 13.5 km from the source to the 120 dB re 1 µPa SPL isopleth; 1.5 km from the source to the 130 dB re 1 µPa SPL isopleth; and 400 m from the source to the 140 dB dB re 1 µPa SPL isopleth. Propagation loss measurements cannot be provided for classified sources. However, the ranges in Table 4 provide realistic maximum distances over which the specific effects from the use of all active acoustic sources during the proposed action would be possible. Based on the information provided, NMFS is confident that the 10km zone safely encompasses the area in which Level B harassment can be expected from all active acoustic sources.

As discussed above, within NAEMO animats do not move horizontally or react in any way to avoid sound. Furthermore, mitigation measures that are implemented during training or testing activities that reduce the likelihood of physiological impacts are not considered in quantitative analysis. Therefore, the current model overestimates acoustic impacts, especially physiological impacts near the sound source. The behavioral criteria used as a part of this analysis acknowledges that a behavioral reaction is likely to occur at levels below those required to cause hearing loss (TTS or PTS). At close ranges and high sound levels approaching those that could cause PTS, avoidance of the area immediately around the sound source is the assumed behavioral response for most cases.

In previous environmental analyses, the Navy has implemented analytical factors to account for avoidance behavior and the implementation of mitigation measures. The application of avoidance and mitigation factors has only been applied to model-estimated PTS exposures given the short distance over which PTS is estimated. Given that no PTS exposures were estimated during the modeling process for this proposed action, the implementation of avoidance and mitigation factors were not included in this analysis.

Utilizing the NAEMO model, the Navy projected that there will be 1,665 behavioral Level B harassment takes and an additional 11 Level B takes due to TTS for a total of 1,676 takes of ringed seals. All takes would be underwater. Note that these quantitative results should be regarded as conservative estimates that are strongly influenced by limited marine mammal population data.

In order to issue an IHA under Section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, “and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking” for certain subsistence uses. NMFS' regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)). The NDAA for FY 2004 amended the MMPA as it relates to military readiness activities and the incidental take authorization process such that “least practicable adverse impact” shall include consideration of personnel safety, practicality of implementation, and impact on the effectiveness of the military readiness activity.

In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, we carefully weigh two primary factors:

(1) The manner in which, and the degree to which, implementation of the measure(s) is expected to reduce impacts to marine mammal species or stocks, their habitat, and their availability for subsistence uses (where relevant). This analysis will consider such things as the nature of the potential adverse impact (such as likelihood, scope, and range), the likelihood that the measure will be effective if implemented, and the likelihood of successful implementation; and

(2) The practicability of the measures for applicant implementation. Practicability of implementation may consider such things as cost, impact on operations, and, in the case of a military readiness activity, specifically considers personnel safety, practicality of implementation, and impact on the effectiveness of the military readiness activity (16 U.S.C. 1371(a)(5)(A)(ii)).

The following general mitigation actions are proposed for ICEX18 to avoid any take of ringed seals on the ice floe:

• Camp deployment would begin in mid-February and would be completed by March 15, which is well before ringed seal pupping season begins. Pups are weaned and then mating occurs in April and May. Completing camp deployment before ringed seal pupping begins will allow ringed seals to avoid the camp area prior to pupping and mating seasons, reducing potential impacts.

• Camp location will not be in proximity to pressure ridges in order to allow camp deployment and operation of an aircraft runway. This will minimize physical impacts to subnivean lairs.

• Camp deployment will gradually increase over five days, allowing seals to relocate to lairs that are not in the immediate vicinity of the camp.

• Passengers on all on-ice vehicles would observe for marine and terrestrial animals; any marine or terrestrial animal observed on the ice would be avoided by 328 ft (100 m). On-ice vehicles would not be used to follow any animal, with the exception of actively deterring polar bears if the situation requires.

• Personnel operating on-ice vehicles would avoid areas of deep snowdrifts near pressure ridges, which are preferred areas for subnivean lair development.

• All material (e.g., tents, unused food, excess fuel) and wastes (e.g., solid waste, hazardous waste) would be removed from the ice floe upon completion of ICEX18.

The following mitigation actions are proposed for ICEX18 activities involving acoustic transmissions:

• For activities involving active acoustic transmissions from submarines and torpedoes, passive acoustic sensors on the submarines will listen for vocalizing marine mammals prior to the initiation of exercise activities. If a marine mammal is detected, the submarine will delay active transmissions, including the launching of torpedoes, and not restart until after 15 minutes have passed with no marine mammal detections. If there are no animal detections, it is assumed that the vocalizing animal is no longer in the immediate area and is unlikely to be subject to harassment. Ramp up procedures will not be required as they would result in an unacceptable impact on readiness and on the realism of training.

Based on our evaluation of the applicant's proposed measures, NMFS has preliminarily determined that the proposed mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.

In order to issue an IHA for an activity, Section 101(a)(5)(D) of the MMPA states that NMFS must set forth, “requirements pertaining to the monitoring and reporting of such taking.” The MMPA implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the proposed action area. Effective reporting is critical both to compliance as well as to ensuring that the most value is obtained from the required monitoring.

Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:

• Occurrence of marine mammal species or stocks in the area in which take is anticipated (e.g., presence, abundance, distribution, density);

• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (e.g., source characterization, propagation, ambient noise); (2) affected species (e.g., life history, dive patterns); (3) co-occurrence of marine mammal species with the action; or (4) biological or behavioral context of exposure (e.g., age, calving or feeding areas);

• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;

• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;

• Effects on marine mammal habitat (e.g., marine mammal prey species, acoustic habitat, or other important physical components of marine mammal habitat); and

• Mitigation and monitoring effectiveness.

The U.S. Navy has coordinated with NMFS to develop an overarching program plan in which specific monitoring would occur. This plan is called the Integrated Comprehensive Monitoring Program (ICMP) (U.S. Department of the Navy 2011). The ICMP has been created in direct response to Navy permitting requirements established in various MMPA Final Rules, ESA consultations, Biological Opinions, and applicable regulations. As a framework document, the ICMP applies by regulation to those activities on ranges and operating areas for which the Navy is seeking or has sought incidental take authorizations. The ICMP is intended to coordinate monitoring efforts across all regions and to allocate the most appropriate level and type of effort based on set of standardized research goals, and in acknowledgement of regional scientific value and resource availability.

The ICMP is focused on Navy training and testing ranges where the majority of Navy activities occur regularly as those areas have the greatest potential for being impacted. ICEX18 in comparison is a short duration exercise that occurs approximately every other year. Due to the location and expeditionary nature of the ice camp, the number of personnel onsite is extremely limited and is constrained by the requirement to be able to evacuate all personnel in a single day with small planes. As such, a dedicated monitoring project would not be feasible as it would require additional personnel and equipment to locate, tag and monitor the seals.

The Navy is committed to documenting and reporting relevant aspects of training and research activities to verify implementation of mitigation, comply with current permits, and improve future environmental assessments. All sonar usage will be collected via the Navy's Sonar Positional Reporting System database and reported. If any injury or death of a marine mammal is observed during the ICEX18 activity, the Navy will immediately halt the activity and report the incident consistent with the stranding and reporting protocol in the Atlantic Fleet Training and Testing stranding response plan (Navy 2013). This approach is also consistent with other Navy documents including the Atlantic Fleet Training and Testing Environmental Impact Statement/Overseas Environmental Impact Statement.

The Navy will provide NMFS with a draft exercise monitoring report within 90 days of the conclusion of the proposed activity. The draft exercise monitoring report will include data regarding sonar use and any mammal sightings or detection will be documented. The report will also include information on the number of sonar shutdowns recorded. If no comments are received from NMFS within 30 days of submission of the draft final report, the draft final report will constitute the final report. If comments are received, a final report must be submitted within 30 days after receipt of comments.

NMFS has defined negligible impact as “an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival” (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (i.e., population-level effects). An estimate of the number of takes alone is not enough information on which to base an impact determination. In addition to considering estimates of the number of marine mammals that might be “taken” through harassment, NMFS considers other factors, such as the likely nature of any responses (e.g., intensity, duration), the context of any responses (e.g., critical reproductive time or location, migration), as well as effects on habitat, and the likely effectiveness of the mitigation. We also assess the number, intensity, and context of estimated takes by evaluating this information relative to population status. Consistent with the 1989 preamble for NMFS's implementing regulations (54 FR 40338; September 29, 1989), the impacts from other past and ongoing anthropogenic activities are incorporated into this analysis via their impacts on the environmental baseline (e.g., as reflected in the regulatory status of the species, population size and growth rate where known, ongoing sources of human-caused mortality, or ambient noise levels).

Underwater acoustic transmissions associated with ICEX18, as outlined previously, have the potential to result in Level B harassment of ringed seals in the form of TTS and behavioral disturbance. No serious injury, mortality or Level A takes are anticipated to result from this activity. At close ranges and high sound levels approaching those that could cause PTS, avoidance of the area immediately around the sound source would be ringed seals' likely behavioral response. NMFS anticipates that there will be 11 Level B takes due to TTS and 1,665 behavioral Level B harassment takes, for a total of 1,676 ringed seal takes.

Note that there are only 11 Level B takes due to TTS since the TTS range to effects is small at only 100 meters or less while the behavioral effects range is significantly larger extending up to 10 km. TTS is a temporary impairment of hearing and TTS can last from minutes or hours to days (in cases of strong TTS). In many cases, however, hearing sensitivity recovers rapidly after exposure to the sound ends. Though TTS may occur in up to 11 animals, the overall fitness of these individuals is unlikely to be affected and negative impacts to the entire stock are not anticipated.

Effects on individuals that are taken by Level B harassment could include alteration of dive behavior, alteration of foraging behavior, effects to breathing, interference with or alteration of vocalization, avoidance, and flight. More severe behavioral responses are not anticipated due to the localized, intermittent use of active acoustic sources and mitigation by passive acoustic monitoring which will limit exposure to sound sources. Most likely, individuals will simply be temporarily displaced by moving away from the sound source. As described previously in the behavioral effects section seals exposed to non-impulsive sources with a received sound pressure level within the range of calculated exposures, (142-193 dB re 1 µPa), have been shown to change their behavior by modifying diving activity and avoidance of the sound source (Götz et al., 2010; Kvadsheim et al., 2010). Although a minor change to a behavior may occur as a result of exposure to the sound sources associated with the proposed action, these changes would be within the normal range of behaviors for the animal (e.g., the use of a breathing hole further from the source, rather than one closer to the source, would be within the normal range of behavior). Thus, even repeated Level B harassment of some small subset of the overall stock is unlikely to result in any significant realized decrease in fitness for the affected individuals, and would not result in any adverse impact to the stock as a whole.

The Navy's proposed activities are localized and of relatively short duration. While the total project area is large, the Navy expects that most activities will occur within the ice camp action area in relatively close proximity to the ice camp. The larger study area depicts the range where submarines may maneuver during the exercise. The ice camp will be in existence for up to six weeks with acoustic transmission occurring intermittently over four weeks. The Autonomous Reverberation Measurement System would be active for up to 30 days; the vertical line array would be active for up to four hours per day for no more than eight days, and; the unmanned underwater vehicle used for the deployment of a synthetic aperture source would transmit for 24 hours per day for up to eight days.

The project is not expected to have significant adverse effects on marine mammal habitat. The project activities are limited in time and would not modify physical marine mammal habitat. While the activities may cause some fish to leave the area of disturbance, temporarily impacting marine mammals' foraging opportunities, this would encompass a relatively small area of habitat leaving large areas of existing fish and marine mammal foraging habitat unaffected. As such, the impacts to marine mammal habitat are not expected to cause significant or long-term negative consequences.

For on-ice activity, neither take nor mortality of seals are expected due to measures followed during the exercise. Foot and snowmobile movement on the ice will be designed to avoid pressure ridges, where ringed seals build their lairs; runways will be built in areas without pressure ridges; snowmobiles will follow established routes; and camp buildup is gradual, with activity increasing over the first five days providing seals the opportunity to move to a different lair outside the ice camp area. The Navy will also employ its standard 100-meter avoidance distance from any arctic animals. Implementation of these measures should ensure that ringed seal lairs are not crushed or damaged during ICEX18 activities.

The ringed seal pupping season on the ice lasts for five to nine weeks during late winter and spring. Ice camp deployment would begin in mid-February and be completed by March 15, before the pupping season. This will allow ringed seals to avoid the ice camp area once the pupping season begins, thereby reducing potential impacts to nursing mothers and pups. Furthermore, ringed seal mothers are known to physically move pups from the birth lair to an alternate lair to avoid predation. If a ringed seal mother perceives the acoustic transmissions as a threat, the local network of multiple birth and haul-out lairs would allow the mother and pup to move to a new lair.

The estimated population of the Alaska stock of ringed seals in the Bering Sea is 170,000 animals (Muto et al., 2016). The estimated population in the Alaska Chukchi and Beaufort Seas is at least 300,000 ringed seals, which is likely an underestimate since the Beaufort Sea surveys were limited to within 40 km from shore (Kelly et al., 2010). Given these population estimates, only a limited percent of the stock affected would be taken (i.e. between 0.98 and 0.56 percent).

In summary and as described above, the following factors primarily support our preliminary determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:

• No serious injury or mortality is anticipated or authorized;

• Impacts will be limited to Level B harassment;

• A small percentage (<1 percent) of the Alaska stock of ringed seals would be subject to Level B harassment;

• TTS is expected to affect only a limited number of animals;

• There will be no loss or modification of ringed seal prey or habitat;

• Physical impacts to ringed seal subnivean lairs will be avoided; and

• Ice camp activities would not affect animals during the pupping season.

Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from the proposed activity will have a negligible impact on all affected marine mammal species or stocks.

Impacts to subsistence uses of marine mammals resulting from the proposed action are not anticipated. The proposed action would occur outside of the primary subsistence use season (i.e., summer months), and the study area is 100-200 nmi seaward of known subsistence use areas. Harvest locations for ringed seals extend up to 80 nmi from shore during the summer months while winter harvest of ringed seals typically occurs closer to shore. Based on this information, NMFS has preliminarily determined that there will not be an unmitigable adverse impact on subsistence uses from the Navy's proposed activities.

Section 7(a)(2) of the ESA of 1973 (16 U.S.C. 1531 et seq.) requires that each Federal agency insure that any action it authorizes, funds, or carries out is not likely to jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of designated critical habitat. To ensure ESA compliance for the issuance of IHAs, NMFS consults internally with our ESA Interagency Cooperation Division whenever we propose to authorize take for endangered or threatened species.

No incidental take of ESA-listed species is proposed for authorization or expected to result from this activity. Therefore, NMFS has determined that formal consultation under section 7 of the ESA is not required for this action.

As a result of these preliminary determinations, NMFS proposes to issue an IHA to the Navy for conducting submarine training and testing provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated. This section contains a draft of the IHA itself. The wording contained in this section is proposed for inclusion in the IHA (if issued).

1. This Authorization is valid from February 1, 2018 through May 1, 2018.

2. This Authorization is valid only for activities associated with submarine training and testing in the Beaufort Sea and Arctic Ocean.

3. General Conditions.

(a) A copy of this IHA must be in the possession of the Navy, its designees, and work crew personnel operating under the authority of this IHA.

(b) The number of animals and species authorized for taking by Level B harassment is 1,676 ringed seals.

4. Prohibitions.

(a) The taking, by incidental harassment only, is limited to the species and number listed under condition 3(b). The taking by death of these species or the taking by harassment, injury or death of any other species of marine mammal is prohibited and may result in the modification, suspension, or revocation of this Authorization.

5. Mitigation Measures.

The holder of this Authorization is required to implement the following mitigation measures.

(a) Shutdown Measures.

(i) The Navy shall implement shutdown measures if a marine mammal is detected by submarines via passive acoustics during use of active sonar transmissions from submarines and torpedoes.

(ii) The Navy shall not restart acoustic transmissions until after 15 minutes have passed with no marine mammal detections.

(b) The Navy shall avoid on-ice take by implementing the following:

(i) Foot and snowmobile movement shall avoid pressure ridges;

(ii) The ice camp, including runway, shall be built on multi-year ice without pressure ridges;

(iii) Snowmobiles shall follow established routes;

(iv) Camp deployment shall be gradual with activity increasing over the first five days and shall be completed by March 15, 2018.

(vi) Implementation of 100-meter avoidance distance of all marine mammals.

6. Reporting.

The holder of this Authorization is required to:

(a) Submit a draft exercise monitoring report within 90 days of the completion of proposed training and testing activities.

(b) The draft exercise monitoring report will include data regarding sonar use and any marine mammal sightings or detection. It will also include information on the number of sonar-related shutdowns recorded.

(c) If no comments are received from NMFS within 30 days of submission of the draft final report, the draft final report will constitute the final report. If comments are received, a final report must be submitted within 30 days after receipt of comments.

(d) Reporting injured or dead marine mammals:

(i) In the unanticipated event that the specified activity clearly causes the take of a marine mammal in a manner prohibited by this IHA, such as an injury (Level A harassment), serious injury, or mortality, the Navy shall immediately cease the specified activities and report the incident to the Office of Protected Resources, NMFS, and the Alaska Regional Stranding Coordinator, NMFS. The Navy shall adhere to protocols outlined in the Stranding Response Plan for Atlantic Fleet Training and Testing (AFTT) Study Area (November 2013).

7. This Authorization may be modified, suspended or withdrawn if the holder fails to abide by the conditions prescribed herein, or if NMFS determines the authorized taking is having more than a negligible impact on the species or stock of affected marine mammals.

We request comment on our analyses, the draft authorization, and any other aspect of this Notice of Proposed IHA for the Navy's proposed ICEX18 training and testing activities. Please include with your comments any supporting data or literature citations to help inform our final decision on the request for MMPA authorization.

The purpose of the meeting is to discuss items on the agenda of the November Pacific Council meeting, being held November 14-20, 2017 in Costa Mesa, CA. These may include exempted fishing permit proposals, methodology review proposals, and administrative matters. The CPSAS and CPSMT may develop reports to the Pacific Council on those items, and public comment may be taken at the discretion of the CPSMT and CPSAS Chairs.

Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.

This public listening station is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt ([email protected]); (503) 820-2411 at least 10 days prior to the meeting date.

This request is for extension of a current information collection.

In 1989, the National Marine Mammal Tissue Bank (NMMTB) was established by the National Marine Fisheries Service (NMFS) Office of Protected Resources (OPR) in collaboration with the National Institute of Standards and Technology (NIST), Minerals Management Service (MMS), and the U.S. Geological Survey/Biological Resources Division (USGS/BRD). The NMMTB provides protocols, techniques, and physical facilities for the long-term storage of tissues from marine mammals. Scientists can request tissues from this repository for retrospective analyses to determine environmental trends of contaminants and other substances of interest. The NMMTB collects, processes, and stores tissues from specific indicator species (e.g., Atlantic bottlenose dolphins, Atlantic white sided dolphins, pilot whales, harbor porpoises), animals from mass strandings, animals that have been obtained incidental to commercial fisheries, animals taken for subsistence purposes, biopsies, and animals from unusual mortality events through two projects, the Marine Mammal Health and Stranding Response Program (MMHSRP) and the Alaska Marine Mammal Tissue Archival Project (AMMTAP).

The purposes of this collection of information are: (1) To enable NOAA to allow the scientific community the opportunity to request tissue specimen samples from the NMMTB and, (2) to enable the Marine Mammal Health and Stranding Response Program (MMHSRP) of NOAA to assemble information on all specimens submitted to the National Institute of Standards and Technology's Marine Environmental Specimen Bank (Marine ESB), which includes the NMMTB.

Respondents must complete a specimen banking information sheet for every sample submitted to the Bank. Methods of submitting reports include Internet, mail and facsimile transmission of paper forms. Those requesting samples send the information, and their research findings, mainly via email.

OMB Control Number: 0648-0468.

Form Number(s): None.

Type of Review: Regular submission (extension of a current information collection).

Affected Public: Individuals or households; business or other for-profit organizations; not-for-profit institutions; state, local, or tribal government; federal government.

Estimated Number of Respondents: 105: 100 specimen submission forms (from ~20 different organizations); 5 requests for tissue samples.

Estimated Time per Response: Request for tissue sample, 2 hours; specimen submission form, 45 minutes.

Estimated Total Annual Burden Hours: 85.

Estimated Total Annual Cost to Public: $152 in recordkeeping/reporting costs.

Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.

1. Introduction

The Consumer Financial Protection Bureau is committed to a consumer financial marketplace that is fair, transparent, and competitive, and that works for all consumers. The Bureau supervises both bank and nonbank institutions to help meet this goal. The findings reported here reflect information obtained from supervisory activities that were generally completed between January 2017 and June 2017 (unless otherwise stated). In some instances, not all corrective actions, including through enforcement, have been completed at the time of this report's publication.

CFPB supervisory reviews and examinations typically involve assessing a supervised entity's compliance management system and compliance with Federal consumer financial laws. When Supervision determines that a supervised entity has violated a statute or regulation, Supervision directs the entity to undertake appropriate corrective measures, such as implementing new policies, changing written communications, improving training or monitoring, or otherwise changing conduct to ensure the illegal practices cease. Supervision also directs the entity to send refunds to consumers, pay restitution, credit borrower accounts, or take other remedial actions as appropriate.

Recent supervisory resolutions have resulted in total restitution payments of approximately $14 million to more than 104,000 consumers during the review period. In addition to these nonpublic supervisory activities, the Bureau also resolves violations using public enforcement actions.1 CFPB's recent supervisory activities have either led to or supported two recent public enforcement actions, resulting in about $1.15 million in consumer remediation and an additional $1.75 million in civil money penalties.

Please submit any questions or comments to [email protected].

Recent supervisory observations are reported in the areas of automobile loan servicing, credit card account management, debt collection, deposits, mortgage origination, mortgage servicing, remittances, service provider program, short-term small-dollar lending, and fair lending.

In the Bureau's recent auto servicing examinations, examiners reviewed how servicers are overseeing repossession agents and how repossessions are conducted. Through that work, examiners identified an unfair practice relating to repossession at one or more automobile servicers.

To secure an auto loan, borrowers give creditors a security interest in their vehicles. When a borrower defaults, a creditor can exercise its rights under the contract and repossess the secured vehicle. Many auto servicers provide options to borrowers to avoid repossession once a loan is delinquent or in default. Servicers may have formal extension agreements that allow borrowers to forbear payments for a certain period of time or may cancel a repossession order once a borrower makes a payment.

In one or more recent exams, examiners found that one or more entities were repossessing vehicles after the repossession was supposed to be cancelled. In these instances, the servicer(s) wrongfully coded the account as remaining delinquent, customer service representatives did not timely cancel the repossession order after borrowers made sufficient payments or entered an agreement with the servicer to avoid repossession, or repossession agents had not checked the documentation before repossessing and thus did not learn that the repossession had been cancelled.

Bureau examiners concluded that it was an unfair practice to repossess vehicles where borrowers had brought the account current, entered an agreement with the servicer to avoid repossession, or made a payment sufficient to stop the repossession, where reasonably practicable given the timing of the borrower's action.

Supervision directed the servicer(s) to stop the practice. In response to our examiners' findings, the servicer(s) informed Supervision that the affected consumers were refunded the repossession fees. The servicer(s) also implemented a system that requires repossession agents to verify that the repossession order is still active immediately prior to repossessing the vehicle, for example, through a specially designed mobile application for that purpose.

Supervision reviewed the credit card account management operations of one or more supervised entities over the past few months. Typically, examiners assess advertising and marketing, account origination, account servicing, payments and periodic statements, dispute resolution, and the marketing, sale and servicing of credit card add-on products. Bureau examiners found that supervised entities generally are complying with Federal consumer financial laws. However, in one or more recent examinations, examiners observed that one or more entities violated Regulation Z and committed the deceptive practices as described below.

Examiners observed that one or more credit card issuers violated Regulation Z by failing to provide the requisite tabular disclosures with the account opening materials provided to numerous cardholders.2 Specifically, the account-opening disclosures were missing the table set forth in Appendix G-17 of Regulation Z, resulting in consumers receiving incomplete disclosures.3 At one or more entities, management attributed this violation to an employee's incorrect entry of source code for printing disclosures, controls that were not appropriately structured to detect errors, and the entity's lack of an independent disclosure review. After acknowledging the violations with examiners, one or more entities initiated a review to ensure that the errors were limited, the root causes were further identified, and corrective actions were developed.

During one or more examinations, credit card companies provided consumers with the opportunity to pay their credit card bills by mail, online, or in person free of charge or by using one of two pay-by-phone services. The first pay-by-phone service permitted consumers to make an expedited payment for a predetermined fee, credited the same day or the following business day. The second pay-by-phone service allowed consumers to arrange future payments options free of charge to be credited to the consumer's account as soon as two days after the call. Customer service representatives were given a call script to read to consumers describing both the fee-based expedited payment option and the free future payments option.

A review of calls between customer service representatives and consumers revealed that in one or more examinations representatives did not follow the script in its entirety and often read the script for expedited payments only. Typically, customer service representatives did not inform consumers of any free payment options until after the consumer authorized the expedited phone payment and the customer service representatives did not inform consumers that the payment could be paid free of charge by phone by not expediting when the payment was credited. This practice resulted in consumers incurring fees for expedited payments that could have been avoided. Supervision found this practice was deceptive because these customer service representatives made an implied misrepresentation to consumers paying over the phone that all of the pay-by-phone services carried a fee.4

Supervision directed the entity(ies) to establish effective controls over communications to consumers, ensure representatives informed consumers of free payment options prior to authorization of an expedited phone payment, and reimburse fees to consumers impacted by the deceptive representations about the costs and availability of pay-by-phone options.

One or more entities provided its customer service representatives with call scripts that contained basic information about debt cancellation credit card add-on product(s). A review of calls by examiners indicated that customer service representatives often did not read the entire script, and in some instances, did not read the script at all. In one or more instances, the customer service representatives did not correct consumers' stated erroneous assumptions concerning the benefits of the product(s), misrepresented the potential fees, and assured consumer(s) that the product(s) would avoid the accrual of late fees or other penalties.

Supervision found such practices constituted deceptive marketing and sales practices by misrepresenting product features, such as the cost and coverage of the optional debt cancellation add-on product.5 Supervision directed these entities to establish effective controls over marketing and sales practices for the debt cancellation credit card add-on products, ensure representatives make accurate disclosure of the add-on product's terms, conditions, and costs, and to reimburse the costs of the credit card add-on products to impacted consumers.

Regulation Z requires credit card issuers to follow an error resolution process when a cardholder submits a billing error notice and provides that, during resolution, the cardholder may withhold payment for the disputed amount and the issuer shall not report the disputed amount as delinquent.6 In addition, Regulation Z also limits the amount a cardholder can be held liable for any unauthorized use.7

During one or more examinations, examiners observed that entities: (1) Failed to provide consumers with a timely written acknowledgement of receipt of a billing error notice; 8 (2) generally failed to timely comply with the billing error resolution procedures; 9 (3) failed to limit the liability of cardholders for unauthorized use to the lesser of $50 or the amount of money, property, labor or services obtained by the unauthorized use before the card issuer is notified; 10 (4) before a billing error was resolved, made or threatened to make an adverse credit report concerning the consumer's credit standing, or that the amount or account was delinquent, because the consumer failed to pay the disputed amount or applicable related finance or other charges; 11 (5) failed to timely correct billing errors and credit consumers' accounts with disputed amounts or related finance or other charges, as applicable; 12 (6) failed to send, or failed to timely send, consumers a correction notice where the issuer concluded that the billing error occurred as asserted; 13 (7) failed to conduct, or failed to timely conduct, a reasonable investigation before determining that no billing error occurred; 14 or (8) failed to provide, or failed to timely provide, consumers with a written explanation for its determination as to why it concluded that a billing error did not occur.15

The root cause of these regulatory violations can, among other things, be attributed to weak oversight of service providers that handle dispute resolution for the card issuers. At one or more entities, management failed to perform sufficient due diligence of a service provider hired to perform intake of incoming phone calls from customers who reported billing errors and other disputes, and ceased doing business with the service provider because of increasing complaints about the service provider's customer service. One or more entities failed to have sufficient documentation of its monitoring of service providers and did not audit its oversight of service providers.

Supervision directed one or more entities to develop a plan that ensures the handling of billing error disputes is corrected, identifies all impacted consumers, and remediates harmed consumers. One or more entities were directed to revise their service provider program(s) to require document retention relating to service provider monitoring and risk assessment reviews.

The Bureau's Supervision program covers certain bank and nonbank creditors that originate and collect their own debt, as well as nonbanks that are larger participants in the debt collection market. These reviews, among other things, evaluate the adequacy of the relevant entities' compliance management systems and communications with consumers. At one or more entities, examiners' review of these systems and practices included activities conducted in a foreign country. During recent examinations of larger participants, examiners identified several violations of the Fair Debt Collection Practices Act (FDCPA),16 including unauthorized communications with third parties, false representations made to authorized credit card users regarding their liability for debts, false representations regarding credit reports, and communications with consumers at inconvenient times.

At one or more entities, examiners discovered that debt collectors followed client instructions that led to violations of the FDCPA. Entities can mitigate the risk of an FDCPA violation if they determine whether client instructions would violate the FDCPA before following them.

Under section 805(b) of the FDCPA, a debt collector generally may not communicate with a person other than the consumer in connection with the collection of a debt without permission from the consumer. Examiners determined that one or more entities did not confirm that the correct party had been contacted prior to beginning collection activities. As a result, one or more entities communicated with a third party in connection with the collection of a debt by discussing the debt with an authorized user of a credit card who was not financially responsible for the debt (and who was not otherwise a “consumer” under section 805(b)). In response to these findings, one or more entities enhanced consumer verification processes to include the verification of first and last names, and confirmation of date of birth or the last four digits of Social Security number, before disclosing the debt or the nature of the call to the consumer. Additionally, one or more entities revised their processes to discuss the debt with an authorized user only after explicit authorization from the cardholder. Lastly, the entities trained their collection agents on the enhanced policies and procedures.

Under section 807(10) of the FDCPA, a debt collector may not use false representations or deceptive means to collect or attempt to collect any debt. Examiners determined that one or more entities violated the FDCPA by attempting to collect a debt directly from the authorized user of a credit card even though the authorized user was not financially responsible for the debt. The practice of soliciting payment from a non-obligated user in a manner that implies that the authorized user is personally responsible for the debt constitutes a deceptive means to collect a debt in violation of the FDCPA. One or more entities have undertaken remedial and corrective actions regarding these violations, which are under review by Supervision.

As noted above, a debt collector may not use false representations or deceptive means to collect or attempt to collect any debt under section 807(10) of the FDCPA. Examiners found that one or more entities made false representations to consumers about the effect on their credit score of paying a debt in full rather than settling the debt for less than the full amount. As the CFPB explained in a 2013 bulletin, representations about the impact of paying a debt on a consumer's credit score may be deceptive. The bulletin states that “in light of the numerous factors that influence an individual consumer's credit score, such payments may not improve the credit score of the consumer to whom the representation is being made. Consequently, debt owners or third-party debt collectors may well deceive consumers if they make representations that paying debts in collection will improve a consumer's credit score.” 17 In response to these findings, one or more entities amended training materials to remove references to how a consumer's credit score may be affected by either settling the debt in full or paying the debt in full.

Under section 805(a)(1) of the FDCPA, a debt collector may not communicate with a consumer in connection with the collection of any debt at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. Examiners discovered that consumers were contacted by one or more entities outside of the hours of 8:00 a.m. to 9:00 p.m. (which, in the absence of knowledge to the contrary, may be assumed to be convenient) or at times consumers had previously informed the entities were inconvenient. These violations were caused by the failure to accurately update account notes and the use of auto dialers that based call parameters solely on the consumer's area code, rather than also considering the consumer's last known address. Supervision directed one or more entities to enhance compliance monitoring for dialer systems to ensure that they input system parameters accurately and to ensure that they properly monitor collectors for inputting and adhering to account notations.

The CFPB continues to examine banks for compliance with Regulation E as well as review for any unfair, deceptive, or abusive acts or practices (UDAAPs) in connection with deposit accounts. As described in more detail below, CFPB examiners continue to find deceptive acts or practices related to deposit disclosures and representations that incorrectly inform consumers about fees, including conditions when certain fees will apply. Separately, Supervision concluded that one or more institutions were engaging in deceptive acts or practices by misrepresenting deposit overdraft protection products. Examiners also found unfair acts or practices related to conditions where one or more institutions froze deposit accounts. Finally, examiners continue to find issues associated with Regulation E error resolution investigations.

In all cases where examiners found UDAAPs or violations of Regulation E, Supervision directed institutions to make appropriate changes to address the underlying issue(s), as well as enhance compliance management systems to prevent future violations and, where appropriate, to remediate consumers for harm they experienced.

Examiners found that one or more institutions engaged in unfair acts or practices by placing hard holds on customer accounts to stop all activity when the institution(s) observed suspicious activity. These hard holds resulted in the consumers' accounts being locked, resulting in payments not being honored, deposits being rejected, and the consumer lacking access to his or her funds for as long as two weeks. Examiners also found that one or more institutions failed to clearly, consistently, and promptly communicate information about the nature and status of these hard holds to consumers. Examiners found that less drastic measures would have sufficiently addressed the suspicious activity concern in many instances. Even where the hard holds were appropriate, the failure to properly communicate with consumers prevented consumers from being able to take measures to mitigate the injury.

Supervision directed the institution(s) to cease unnecessarily placing hard holds on consumer deposit accounts and to develop and implement policies and procedures to clearly, consistently, and promptly communicate with consumers with respect to hard holds placed on their accounts.

Examiners found that one or more institutions engaged in deceptive acts or practices by representing in deposit account fee schedules that monthly account service fees would be waived under circumstances in which those fees, in fact, would be assessed. One or more institutions offered a deposit product that contained a monthly service fee. The service fee was waived if consumers met certain qualifications. One such qualification—as described in the fee schedules—was if the consumer made ten or more payments from the checking account during a statement cycle. In fact, only debit card purchases and debit card payments qualified toward the fee waiver threshold, and other payments from a consumer's checking account, such as ACH payments, did not qualify. Moreover, only payments that “posted” during the statement cycle qualified toward the waiver and payments that were initiated but not posted during the statement cycle did not qualify. The representations that the institution(s) made in the fee schedules could lead a reasonable consumer to believe that all checking-account payments initiated during the statement cycle would qualify toward the ten-payment fee waiver threshold, a material aspect of the product or service. As a result, Supervision cited the institution(s) for deceptive acts or practices. Supervision directed the institution(s) to ensure that all disclosures regarding the fee waivers include accurate and non-misleading information.

Supervision continues to find violations of Regulation E's error resolution requirements. As noted in the Fall 2014 edition of Supervisory Highlights, Regulation E, which implements the Electronic Fund Transfer Act, imposes specific requirements on financial institutions for how to resolve error allegations reported by consumers related to electronic fund transfers. Among other requirements, Regulation E requires financial institutions to promptly investigate error allegations, to provide timely provisional credit to consumers, to promptly provide consumers with notice of the findings of the financial institution's investigation, and to allow consumers to review the documentation the financial institution relied upon in the course of the investigation.18

Examiners found that one or more institutions violated several of the error resolution provisions of Regulation E. Among other things, examiners observed that one or more entities prematurely closed investigations and denied claims when consumers failed to submit, or delayed in submitting, supplemental information beyond that which financial institutions may require under Regulation E.19 Examiners also found that the institution(s) failed to investigate claims and to provide provisional credit within 10 business days of receiving notice of the alleged error.20 Examiners further observed that one or more institutions refused consumers' requests to review material relied upon by the institution(s) in denying error claims, and incorrectly informed consumers that subpoenas would be required to review that material.21 With respect to these types of violations, Supervision directed the relevant entities to take measures to ensure compliance with the error resolution provisions of Regulation E.

In 2010, Federal rules took effect that prohibited banks and credit unions from charging overdraft fees on ATM and one-time debit card transactions unless consumers affirmatively opted in.22 Many depository institutions provide a variety of overdraft products that may cover consumer transactions that overdraw accounts.

Supervision determined that one or more institutions engaged in a deceptive act or practice by misrepresenting their opt-in deposit overdraft protection products when answering inbound telephone calls from consumers, including that:

The overdraft protection product applied to check, automated clearing house (ACH), and recurring bill payment transactions, when the overdraft protection product did not apply to those transactions;

The overdraft protection product would allow a consumer to withdraw more than the daily ATM cash withdrawal limit and be subject to only one overdraft fee. In actuality, a consumer would not have been allowed to surpass the daily ATM cash withdrawal limit, regardless of enrollment in the overdraft protection product, and it was not possible to do so while incurring only one overdraft fee; and

The overdraft protection product would take effect on the same day as enrollment, when the product would not actually take effect until the next day.

Supervision determined that these representations misled or were likely to mislead a reasonable consumer regarding a material aspect of the overdraft protection product and that account opening disclosures or subsequent enrollment disclosures did not cure the misleading representations. Supervision directed one or more depository institutions to cease misrepresenting features of their overdraft protection products.

Supervision assessed the mortgage origination operations of one or more supervised entities for compliance with applicable Federal consumer financial laws. Examiners identified instances of regulatory violations and one or more instances where supervised entities engaged in a deceptive practice, as described below.

Supervision has completed its first round of mortgage origination examinations for compliance with the Know Before You Owe mortgage disclosure rule. The Bureau stated that it would be sensitive to the progress made by supervised entities focused on making good faith efforts to come into compliance with the rule upon the effective date of October 3, 2015. Initial examination findings and observations conclude that, for the most part, supervised entities, both banks and nonbanks, were able to effectively implement and comply with the Know Before You Owe mortgage disclosure rule changes. However, examiners did find some violations. Listed below are violations found by examiners relating to the content and timing of Loan Estimates and Closing Disclosures:

Amounts paid by the consumer at closing exceeded the amount disclosed on the Loan Estimate beyond the applicable tolerance threshold; 23

The entity(ies) failed to retain evidence of compliance with the requirements associated with the Loan Estimate; 24

The entity(ies) failed to obtain and/or document the consumer's intent to proceed with the transaction prior to imposing a fee in connection with the consumer's application; 25

Waivers of the three-day review period did not contain a bona fide personal financial emergency; 26

The entity(ies) failed to provide consumers with a list identifying at least one available settlement service provider, if the creditor permits the consumer to shop for a settlement service; 27

The entity(ies) failed to disclose the amount payable into an escrow account on the Loan Estimate and Closing Disclosure when the consumer elected to escrow taxes and insurance; 28

Loan Estimates did not include the date and time at which estimated closings cost expire; 29 and

The entity(ies) failed to properly disclose on the Closing Disclosure fees the consumer paid prior to closing.30

Examiners worked in a collaborative manner with one or more entities to identify the root cause of these violations and determine appropriate corrective actions, including reimbursement to consumers where tolerance violations occurred.

At one or more entities, pursuant to certain disclosure language a specified service deposit was collected from consumers but unused portions were not reimbursed when consumers withdrew their applications. This would constitute unfair acts or practices in those cases where the loans did not proceed to closing due to the entity's unreasonable actions or inactions. Supervision directed each entity to conduct a review to identify impacted consumers. Refunds were provided to consumers where the loan files could not support retention of the service deposit.

Under Regulation Z, a contract or other agreement for a consumer credit transaction secured by a dwelling (including a home equity line of credit secured by the consumer's principal dwelling) may not include terms that require arbitration or any other non-judicial procedure to resolve any controversy or settle any claims arising out of the transaction.31

Despite this prohibition, at one or more entities examiners identified template language for certain residential loan document(s) containing a notice that the note is subject to arbitration. Supervision concluded that use of the arbitration-related notice constitutes a deceptive act or practice since it is likely to mislead a reasonable consumer into believing that a claim arising under the residential loan document must be submitted to arbitration. After having viewed the notice, a consumer would have been more likely to agree to post-dispute arbitration or to fail to pursue judicial remedies under the mistaken belief that arbitration was required. Supervision directed one or more of the entities to cease further use of the template.

Regulation X provides important process protections for borrowers in financial distress who apply for a foreclosure alternative. Specifically, it requires mortgage servicers to exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application.32 A complete loss mitigation application includes all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower.33

While Regulation X permits a servicer to offer a loss mitigation option based on a borrower's incomplete application under certain circumstances,34 the servicer still must act with reasonable diligence to collect the information needed to complete the application.35 For example, in the context of a short-term payment forbearance program offered based on an incomplete loss mitigation application, reasonable diligence could include notifying the borrower that the borrower is being offered a payment forbearance program based on an evaluation of an incomplete application and that the borrower retains the option of completing the application to receive a full evaluation of all loss mitigation options available to the borrower.36 Near the end of the program, and prior to the end of the forbearance period, it may also be necessary for the servicer to contact the borrower to determine if the borrower wishes to complete the application and proceed with a full loss mitigation evaluation.37 Generally, the reasonable diligence requirement helps address the concern that borrowers offered a short-term payment forbearance program or short-term repayment plan may be experiencing a hardship, for which other, longer-term loss mitigation solutions might be more appropriate given their individual circumstances.

In recent exams, examiners found that one or more servicers received oral incomplete loss mitigation applications and pre-approved borrowers for short-term payment forbearance programs based on those applications. However, the servicer(s) did not notify borrowers of their right to complete the application and did not separately request other information needed to evaluate for all the other loss mitigation options offered by the owner or assignee of the loan. And near the end of the program, and prior to the end of the short-term payment forbearance period, the servicer(s) failed to conduct outreach to determine whether borrowers wished to complete the application and proceed with a full loss mitigation evaluation.

Supervision determined that the servicer(s) violated Regulation X by failing to exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application.38 Supervision directed the servicer(s) to implement policies and procedures to ensure that the servicer(s) exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application for borrowers entering into short term payment forbearance programs based on incomplete applications, including by contacting the borrowers near the end of the program, and prior to the end of the forbearance period.

Supervision previously identified broad waiver of rights clauses in forbearance, loan modification and other loss mitigation options as violating the Dodd-Frank Act's prohibition against unfair or deceptive acts or practices.39 Supervision determined such waivers to be deceptive where reasonable consumers could construe the waivers as barring them from bringing claims in court—including Federal claims—related to their mortgages. Regulation Z states that a “contract or other agreement relating to a consumer credit transaction secured by a dwelling . . . may not be applied or interpreted to bar a consumer from bringing a claim in court pursuant to any provision of law for damages or other relief in connection with any alleged violation of any Federal law.” 40 Supervision also determined broad waivers to be unfair insofar as they are offered in a “take it or leave it” fashion in the ordinary course of offering loss mitigation agreements, rather than in the context of resolution of a contested claim or another individualized analysis of the servicer's risks and the consumer's potential claims.41

Supervision continues to find broad waivers of rights in loss mitigation agreements. For example, in exchange for a short sale agreement, one or more servicers required consumers to completely waive, release, and relinquish any claims of any nature against the servicer(s) arising out of or relating to the mortgage note and any obligations thereunder, and to agree that they had no defenses to payment in full under the note. Supervision determined the waiver to be deceptive and required the servicer(s) to remove it from the agreements.

In one or more servicing exams, Supervision also identified blanket waivers in cash-for-keys agreements that gave borrowers the opportunity to receive a payment in exchange for their commitment to vacate the property by a date certain, thereby avoiding eviction proceedings. The servicer(s) presented the waivers as take-it-or-leave-it boilerplate and a reasonable borrower would have construed them to broadly waive all claims or defenses including any in connection with the original credit transaction that the borrower might have asserted against the servicer(s). Supervision determined the waiver to be deceptive and unfair, and directed the servicer(s) to remove all such waivers from the agreements.

The CFPB continues to examine both large banks and nonbanks for compliance with the CFPB's amendments to Regulation E governing international money transfers (or remittances).42 Regulation E, Subpart B (or the Remittance Rule) provides protections, including disclosure requirements, and error resolution and cancellation rights to consumers who send remittance transfers to other consumers or businesses in a foreign country.43 The amendments implement statutory requirements set forth in the Dodd-Frank Act.

CFPB's examination program for both bank and nonbank remittance providers assesses the adequacy of each entity's CMS for remittance transfers. These reviews also check for providers' compliance with the Remittance Rule and other applicable Federal consumer financial laws. Supervision directed entities to make appropriate changes to compliance management systems to prevent future violations and, where appropriate, to remediate consumers for harm they experienced.

Examiners found that one or more supervised entities violated section 919(a)(1) 44 of EFTA and applicable provisions of Regulation E by failing to treat international mobile top-up services in excess of $15 as a remittance transfer. An international mobile top-up service converts funds from consumers in the United States to airtime on a phone account based on the usage and rate plan selected by the owner of the phone residing in a foreign country. The entirety of these transactions occurs exclusively in currencies up until the point funds are received by the international cellphone carrier. The entity(ies) failed to provide the disclosures, cancellation, or error resolution rights to international top-up consumers required by EFTA and Regulation E.

Similarly, one or more institutions violated section 919(a)(1) of EFTA and applicable provisions of Regulation E by failing to treat international bill payment services in excess of $15 as remittance transfers and, as a result, failed to comply with the required disclosure, error resolution, and cancellation requirements of the Remittance Rule. Supervision directed entities to make appropriate changes to their CMS in order to prevent future violations.

The Spring 2017 edition of Supervisory Highlights described Supervision's service provider program, which involves the direct examination of service providers, particularly in the mortgage origination and mortgage servicing markets. Examiners are focusing on the structure, operations and compliance management systems of various service providers, as well as certain other targeted areas.

Examiners reviewed whether one or more service provider(s) adequately considered certain requirements of the Title XIV Final Rule in developing products for mortgage servicers.45 Examiners found that the service provider(s) developed a mortgage servicing information technology (IT) system functionality that failed to implement certain Regulation Z requirements for periodic statements. The service provider(s)' billing files failed to list the total sum of any fees or charges imposed, and the transaction activity that occurred since the last statement.46 Moreover, the service provider(s) did not adequately consider client concerns about the issue. Supervision concluded that these weaknesses contributed to the clients' violations of Regulation Z and directed the service provider(s) to implement policies and procedures that span systems design and application controls to ensure that the billing files made available through the mortgage servicing IT system functionality enable compliance with Regulation Z. In addition, Supervision directed the service provider(s) to ensure that when clients communicate potential regulatory issues, the service provider(s) analyze and implement changes as appropriate to enable users of the mortgage servicing IT system functionality to comply with Regulation Z.

The Bureau's Supervision program covers entities that offer or provide payday loans. Such entities often offer other short-term, small dollar (STSD) products to consumers as well such as single payment, installment, or auto or vehicle title loans. During the examinations of STSD entities, examiners identified CMS weaknesses and violations of Federal consumer financial law, including the Dodd-Frank Act's prohibition on UDAAPs. Highlighted below are some of the UDAAP findings in recent examinations regarding collection practices, marketing representations, representations regarding use of references, and payment practices.

As noted in the Spring 2014 Supervisory Highlights, a continued focus of the CFPB's short-term, small-dollar lending examination program is how lenders collect consumer debt. Since then, we have learned that 11 percent of consumers who indicated that they had been contacted about a debt in collection reported attempts to collect on a payday loan.47 Nearly ten percent of all debt collection complaints handled by the CFPB are related to payday loans.48 Examiners have identified a range of illegal collections practices by small-dollar lenders, some of which are highlighted below.

Examiners found that one or more entities, in the course of collecting their own debt, called borrowers at their places of employment. The entity(ies) placed repeated calls to borrowers at work even after borrowers asked the lenders to stop calling them at work or told the lenders that the borrowers' employers did not allow such calls. Examiners determined that this collection activity constituted an unfair act or practice. The practice of continuing to call borrowers repeatedly at the workplace after requests to stop causes or is likely to cause substantial injury because continued contact may result in negative employment consequences to the borrower. Borrowers cannot avoid the injury when the lenders continue to make repeated calls after the borrowers requested that they stop. Where the lender has been expressly told to stop contacting the consumer at work or that the employer prohibits such calls, the harm to consumers from continued calling outweighs any countervailing benefits to consumers and competition. One or more lenders have undertaken remedial and corrective actions regarding these violations, which are under review by Supervision.

Examiners observed one or more entities routinely making repeated calls to third parties, including personal and work references that borrowers listed on their loan applications. In some instances, one or more entities repeatedly requested that the third parties relay messages to delinquent borrowers in a manner that disclosed or risk disclosing the debt. The loan applications required consumers to list the names and numbers of third parties and, in some instances, disclosures provided to consumers conveyed that the individuals listed would be contacted by the entity(ies) only as part of the origination and underwriting process. The collection calls to third parties were not made for the purpose of locating the borrowers.

Supervision determined that these collection activities constituted unfair acts or practices. Through these calls, the entity(ies) caused or was likely to cause substantial injury because the entity(ies) either disclosed or risked disclosing borrowers' default or delinquency to third parties. The consumer injury associated with the calls could not be reasonably avoided because the borrowers were not aware that the lenders would contact references or other third parties for debt collection purposes, nor were they aware that one or more lenders would continue to call such references after requests to stop. The benefits to consumers and to competition did not outweigh the injury; the entities had the borrower's location information and therefore had other ways to reach consumers without disclosing or risking disclosure of the borrowers' default or delinquency to third parties. One or more entities have undertaken remedial and corrective actions regarding these violations, which are under review by Supervision.

Examiners observed one or more entities in the course of collecting delinquent or defaulted loans making statements to borrowers that they must immediately contact the lenders to avoid additional collection activity, including being visited at home or work. In fact, the entity(ies) did not actually conduct such in-person collection visits. Supervision concluded these representations constituted deceptive acts or practices. Delinquent consumers could reasonably interpret the entity(ies)' statements to mean that in-person visits to the consumers' place of employment or home would take place if the consumers did not immediately contact the entity(ies). The representations were material to consumers because they could cause consumers to change their behavior to avoid the promised visits. One or more entities agreed to modify their collection practices to comply with Federal consumer financial laws.

Examiners observed that one or more entities advertised that consumers could receive loans without undergoing credit checks. However, these entity(ies) obtained consumer reports from specialty consumer reporting companies during their underwriting processes and sometimes denied loans to consumers based on the information in the reports. Supervision concluded that this conduct constituted deceptive acts or practices. The advertisements were deceptive because they were likely to mislead reasonable consumers into believing that no credit inquiries would be conducted and thus, they could receive a loan without a credit check. These misrepresentations were likely to influence consumers' decisions to choose to apply for the loans. Supervision directed the one or more entities to cease advertising that consumers could receive loans without credit checks.

Examiners observed that one or more entities advertised products and services in outdoor signage that the entity(ies) did not, in fact, offer. They consisted of products and services that the lenders had not offered for several years but would be of interest to payday loan customers. Supervision concluded that by advertising products and services the entity(ies) did not, in fact, offer, the lenders engaged in deceptive acts or practices. A reasonable consumer could interpret the outdoor advertising to mean that the consumers who wished to purchase the advertised services could do so inside the stores. The representations were material because they impacted a consumer's conduct in terms of whether to visit the stores. Supervision directed the one or more entities to cease advertising products and services that they did not offer.

Examiners observed one or more entities advertising that many of their products and services had substantially lower fees than their competitors' products and services. The entity(ies), however, did not have substantiation to support these claims. The entity(ies) relied on out-of-date internal analyses that only covered fees for a small number of products and services and did not reflect current rates, products, or services or those of their competitors. Supervision concluded that by making these misleading comparisons, the entity(ies) engaged in deceptive acts or practices. The representations were likely to mislead reasonable consumers into believing that the entity(ies) had a basis for claiming that consumers would pay lower fees for the products and services identified in the advertisement. This misrepresentation was material because it likely influenced consumers' decisions to obtain these products and services from the entity(s) over other short-term, small-dollar lenders. Supervision directed one or more entities to cease advertising that their fees were lower than their competitors, absent adequate substantiation.

Examiners observed one or more entities representing on their Web sites that consumers may “apply online” by completing lengthy online forms. The forms solicited all or most of the information that a consumer would typically submit in order to apply for a short-term, small-dollar loan. The forms also permitted consumers to list most states as their home State, suggesting that an application for an online loan was available to consumers nationwide. In fact, consumers could not apply online because the entity(ies) only originate loans at their physical store front locations and do not originate loans based on the purported online loan applications. Consumers could only receive a loan from the lenders if they visited storefront locations. In addition, the entity(ies) only extends credit in a small number of States where they operate, not nationwide. Supervision determined that the entity(ies)' representations constituted deceptive acts or practices. Consumers acting reasonably were likely to view the “apply online” advertisements on the lenders' Web sites and comprehensive online applications as invitations to apply for, and receive, loans online. The representations were material because had consumers understood that they could not obtain a loan from the entity(ies) based on where they lived or that would be required to visit a storefront location to obtain a loan, many consumers would decide not to submit the purported application forms with detailed contact and financial information, and instead seek out other loan options. Supervision directed the one or more entities to revise their Web sites and other marketing materials.

Examiners observed one or more entities making false representations regarding the use of information provided by consumers in loan applications. The entity(ies) required applicants to provide names of references, including work colleagues, neighbors, and family members, on the loan applications. On its loan applications, the entity(ies) represented, directly and by implication, that the references would only be contacted to verify information and evaluate creditworthiness in connection with the consumers' loans. However, the entity(ies) also contacted the applicants' references to market loan products to them. Supervision concluded that the entity(ies), by misleading consumers about how they would use the consumers' references, engaged in deceptive acts or practices. A consumer acting reasonably under the circumstances could interpret the loan applications to mean that the entity(ies) would only contact references in connection with the consumers' loans and that the entity(ies) would not market their services to the individuals identified by consumers as references. The representations were material because they were likely to impact consumer behavior. For example, if borrowers were aware that the entity(ies) makes marketing calls to the references listed on applications, borrowers may provide different references or not apply for the loan at all. Supervision directed one or more lenders to ensure that all disclosures regarding the collection and use of references do not include any false or misleading information.

Examiners also observed one or more entities representing, directly or by implication, in loan applications that the reference information provided by borrowers would be used only to contact references regarding the borrowers' loan applications. The entity(ies) indicated that these references would be “checked,” implying that they would be contacted only at loan origination. Instead, the entity(ies) repeatedly contacted the references when the borrowers' loans became delinquent. Supervision concluded that these representations constituted deceptive acts or practices. The entity(ies) applications were likely to mislead consumers acting reasonably under the circumstances by creating the net impression that references would be contacted only at origination. This representation was material because borrowers might have supplied other names of references or not applied for loans at all if they had known their references would be contacted for debt collection purposes. Supervision directed one or more entities to review all disclosures regarding the collection and use of references, including references listed by borrowers on loan applications, and to ensure that the disclosures do not include any false or misleading information.

Examiners observed that one or more entities debited the accounts of borrowers who had already paid their debts. Under the applicable loan agreements, the entity(ies) was permitted to initiate ACH debits from the accounts of borrowers whose loans were past due. However, one or more entities sought payment through the ACH system from the accounts of borrowers who had already paid their loans by making cash payments at branch locations. Supervision concluded that failing to implement adequate processes to reasonably avoid unauthorized charges of, debits to, and overpayments by borrowers constituted unfair acts or practices. The failure to prevent successful and unsuccessful payment attempts to the accounts of borrowers who paid their debts caused substantial injury in the form of overpayments and fees. Consumers could not avoid this injury because they were not aware, regardless of whether they were making payments in response to collection efforts, that ACH debits had been initiated. The injury to consumers from failing to have adequate processes to avoid the unauthorized charges, debits and overpayments outweighs the benefits to consumers or competition, given that implementing such processes would not involve excessive costs to the entity(ies). One or more entities have undertaken remedial and corrective actions regarding these violations, which are under review by Supervision.

One or more entities also failed to implement adequate processes to accurately and promptly identify and refund borrowers who paid more than they owed, either in person at stores or via the ACH network. Several consumers did not receive refunds until examiners alerted the entity(ies) to the overpayments, which in some cases was almost a year after the borrowers made the overpayments. Supervision concluded that by failing to implement adequate processes to accurately and promptly monitor, identify, correct, and refund overpayments by consumers, the entity(ies) engaged in unfair acts or practices. The acts or practices caused injury to borrowers who have paid their debts because a number of consumers were deprived of their funds for extended periods of time. They could not avoid the injury because they were unaware that the entity(ies) would double debit their accounts and the consumers have no control over the lenders' refund process. The injury to borrowers from failing to have adequate processes to refund borrowers outweighs the benefits to them or to competition, given that implementing such processes would not involve excessive costs to the entity(ies). One or more entities have undertaken remedial and corrective actions regarding these violations, which are under review by Supervision.

As part of its fair lending work, the Bureau seeks to ensure that creditworthy consumers have access to the full array of appropriate options when they have trouble paying their mortgages, without regard to any prohibited basis. Mortgage servicing, and specifically default servicing, may introduce fair lending risks because of the complexity of certain processes, the range of default servicing options, and the discretion that can sometimes exist in evaluating and selecting among available default servicing options.

In mortgage servicing, our supervisory work has included use of the Mortgage Servicing Exam Procedures and the ECOA Baseline Modules, both of which are part of the CFPB Supervision and Examination Manual. Examination teams use these procedures to conduct ECOA Baseline Reviews, which evaluate institutions' compliance management systems (CMS), or ECOA Targeted Reviews, which are more in-depth reviews of activities that may pose heightened fair lending risks to consumers. As discussed in the Mortgage Servicing Special Edition of Supervisory Highlights, 49 published in June 2016, these exam procedures contain questions about, among other things, the fair lending training of servicing staff, fair lending monitoring of servicing, and servicing of consumers with limited English proficiency.

In one or more ECOA targeted reviews of mortgage servicers, CFPB examiners found weaknesses in fair lending CMS. In general, examiners found deficiencies in oversight by board and senior management, monitoring and corrective action processes, compliance audits, and oversight of third-party service providers.

In one or more examinations, data quality issues, which were related to a lack of complete and accurate loan servicing records, made certain fair lending analyses difficult or impossible to perform. Examiners attributed these data quality issues to significant weaknesses in CMS-related policies, procedures, and service provider oversight.

Separately, fair lending analysis at one or more mortgage servicers was affected by a lack of readily-accessible information concerning a borrower's ethnicity, race, and sex information that had been collected pursuant to Regulation B or Regulation C and transferred to the servicer. One or more mortgage servicers acknowledged the importance of retaining in readily-accessible format—for the express purpose of performing future fair lending analyses—ethnicity, race, and sex data that it had received in the borrower's origination file.

On June 7, 2017, the CFPB announced an enforcement action against Fay Servicing for failing to provide mortgage borrowers with certain protections against foreclosure that are required by law.50 The Bureau found that Fay violated the CFPB's servicing rules by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief. As part of the requirements for keeping borrowers informed, servicers generally must send an acknowledgement notice when they receive an application for foreclosure relief. The notice must state whether and what additional documents or information are required from the borrower to complete the application. After a borrower completes the application, servicers must also generally send an evaluation notice spelling out what foreclosure relief options they are offering, the deadline to accept or reject the offer, and the rights borrowers have to appeal a servicer's decision to deny certain types of relief.

Fay Servicing failed to send or timely send both acknowledgment and evaluation notices with the relevant, correct information, putting the onus on borrowers to try to determine what else they had to do to attempt to save their homes or otherwise avoid foreclosure. The Bureau also found instances where the servicer illegally launched or moved forward with the foreclosure process while borrowers were actively seeking help to save their homes. The CFPB has ordered Fay Servicing to provide timely and accurate acknowledgment and evaluation notices, to solicit certain consumers for available loss mitigation options and pay up to $1.15 million to harmed borrowers.

On March 15, 2017, the Bureau announced an enforcement action against Nationstar Mortgage LLC, d/b/a Mr. Cooper (Nationstar) for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data from 2012 through 2014, under the version of the HMDA rule that predates the creation of the CFPB.

Through its supervision process, the Bureau found that Nationstar's HMDA compliance systems were flawed and generated mortgage lending data with significant, preventable errors. Nationstar also failed to maintain detailed HMDA data collection and validation procedures, and failed to implement adequate compliance procedures. It also created reporting discrepancies by failing to maintain consistent data definitions among its various lines of business.

Nationstar has a history of HMDA non-compliance. In 2011, the Commonwealth of Massachusetts Division of Banks reached a settlement with Nationstar to address HMDA compliance deficiencies. The loan file samples reviewed by the Bureau showed substantial error rates in three consecutive reporting years, even after the settlement with the Massachusetts Division of Banks. In the samples reviewed, the Bureau found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.

The Bureau's consent order requires Nationstar to pay a $1.75 million penalty to the Bureau's Civil Penalty Fund. Nationstar must also review, correct, and make available its corrected HMDA data from 2012-14. In addition, Nationstar must assess and undertake any necessary improvements to its HMDA compliance management system to prevent future violations. The action includes the largest HMDA civil penalty imposed by the Bureau to date, which stems from Nationstar's market size, the substantial magnitude of its errors, and its history of previous violations.

In addition to the public enforcement actions above, recent supervisory activities have resulted in approximately $14 million in restitution to more than 104,000 consumers. These nonpublic supervisory actions generally have been the product of CFPB supervision and examinations, often involving either examiner findings or self-reported violations of Federal consumer financial law during the course of an examination. Recent nonpublic resolutions were reached in auto finance origination matters.

In the Summer 2015 edition of Supervisory Highlights, the Bureau provided information on its Potential Action and Request for Response (PARR) letter process and the Action Review Committee (ARC) process. The ARC process is used by senior executives in the Bureau's Division of Supervision, Enforcement, and Fair Lending to determine through a deliberative and rigorous process whether matters that originate from examinations will be resolved through confidential supervisory action or be further investigated for possible public enforcement action.51

In June 2017, the Bureau released a blog which noted that in fiscal year 2016, about one-third of those examinations that were considered through the ARC process were determined appropriate for further investigation for possible public enforcement action. This equated to approximately 10 percent of all examinations in fiscal year 2016.52

More detailed information on the number of ARC decisions is presented in Table 1 below. This table reflects the total number of ARC decisions and their outcomes for the fiscal years 2012 through 2016. The numbers in the table do not reflect all supervisory examinations or all enforcement investigations in any given year. Instead, they show the ARC decisions made on the subset of matters that go through the ARC process, which are generally those examinations in which the exam team found evidence of significant violations of Federal consumer financial law. These numbers are also reflective in part of the Bureau's risk-based approach to supervision. Pursuant to that approach, the Bureau concentrates its efforts on institutions and product lines that it determines through its analytical prioritization process pose the greatest risk to consumers.

As reflected in the table, since 2014, the number of matters raising issues that trigger the ARC process and the number of those matters that are determined appropriate for further investigation for possible public enforcement action moving to enforcement—in whole or in part—have remained somewhat consistent. Taken together, about a third of the ARC decisions in fiscal years 2014 to 2016 were determined appropriate for further investigation for possible public enforcement action. Any violations identified in the remaining matters were determined appropriate to be resolved through confidential supervisory action.

The Bureau commits to publishing ARC data going forward at the conclusion of each fiscal year, beginning with the data for fiscal year 2017 in the next edition of Supervisory

As reported in previous editions of Supervisory Highlights, beginning with Home Mortgage Disclosure Act (HMDA) data collected in 2017 and submitted in 2018, responsibility to receive and process HMDA data will transfer from the Federal Reserve Board (FRB) to the CFPB.53 The HMDA agencies have agreed that a covered institution filing HMDA data collected in or after 2017 with the CFPB will be deemed to have submitted the HMDA data to the appropriate Federal agency.54

The effective date of the change in the Federal agency that receives and processes the HMDA data does not coincide with the effective date for the new HMDA data to be collected and reported under the Final Rule amending Regulation C published in the Federal Register on October 28, 2015. The Final Rule's new data requirements will apply to data collected beginning on January 1, 2018. The data fields for data collected in 2017 have not changed.

Additional information about HMDA, the HMDA Filing Instructions Guide (FIG) and other data submission resources are located at: http://www.consumerfinance.gov/data-research/hmda/.

As part of its supervision of very large banks and nonbank mortgage lenders, the CFPB reviews the accuracy of HMDA data and the adequacy of HMDA compliance programs. In 2013, the CFPB issued a bulletin reminding mortgage lenders about the importance of submitting correct mortgage loan data. The CFPB has conducted HMDA reviews at dozens of bank and nonbank mortgage lenders, and has found that many lenders have adequate compliance systems and produce HMDA data with few errors. Moreover, while some lenders have been required to resubmit their HMDA data because their errors exceeded the relevant resubmission thresholds, most of those matters have been addressed through a supervisory resolution.

As noted above, the 2015 Final Rule's new data requirements will apply to data collected beginning on January 1, 2018. Given the recent updates to the rule, the Bureau's current principal focus is on providing regulatory implementation support to financial institutions, to assist them in operationally implementing the recent changes to the HMDA requirements. After the rule takes effect, consistent with our approach to the implementation of other Bureau rules requiring significant systems and operational changes, our approach will generally be diagnostic and corrective, not punitive. In our initial examinations for compliance with the rule, we intend to consider whether companies have made good faith efforts to come into compliance with the rule in a timely manner. Specifically, we will be evaluating a company's overall efforts to come into compliance, including assessing the compliance management system and conducting transaction testing. If errors are identified, we will work with the institution to determine the root cause of the issue and determine what corrective actions, if any, are necessary.

In August 2017, the FFIEC, of which the Bureau is a member agency, released the FFIEC HMDA Examiner Transaction Testing Guidelines (Guidelines).55 For HMDA data collected by financial institutions in or after 2018, these new FFIEC Guidelines replace the Bureau's HMDA Resubmission Schedule and Guidelines which was released in October 2013.

When examining financial institutions, federal supervisory agencies may check the accuracy of HMDA data within a sample of reported transactions. If examiners find that the number of errors in the sample exceeds certain thresholds, the lender is directed to correct and resubmit its HMDA data.

In light of the new data fields that will be required beginning in 2018, the new Guidelines:

Eliminate the file error resubmission threshold under which a financial institution would be directed to correct and resubmit its entire Loan Application Register (LAR) if the total number of sample files with one or more errors equaled or exceeded a certain threshold.

Establish, for the purpose of counting errors toward the field error resubmission threshold, allowable tolerances for certain data fields.

Provide a more lenient 10 percent field error resubmission threshold for financial institutions with LAR counts of 100 or less, many of which are community banks and credit unions.

At the same time, the Guidelines ensure HMDA data integrity by maintaining field error resubmission thresholds that safeguard the accuracy of each data field, and thus all data, reported under HMDA. Furthermore, under the Guidelines, examiners may direct financial institutions to change their policies, procedures, audit processes, or other aspects of its compliance management system to prevent the reoccurrence of errors.

The Guidelines represent a joint effort by the Bureau, the FRB, the OCC, the FDIC, and the NCUA to provide—for the first time—uniform guidelines across all Federal HMDA supervisory agencies. This collaboration began with the Bureau issuing a Request for Information 56 and holding outreach meetings in which the other supervisory agencies participated. The agencies then worked together to develop the Guidelines.

Information about HMDA and other data submission resources are located at http://www.consumerfinance.gov/adata-research/hmda/.

On August 30, 2017, the CFPB released revised Compliance Management Review examination procedures. The procedures were updated in order to reflect changes to the FFIEC Interagency Consumer Compliance Ratings System (CC Ratings System), which became effective March 31, 2017. These procedures do not reflect any new or additional expectations of institutions regarding their CMS, nor do they change the examiner's assessment from that which examiners have been conducting in the past: They only reorganize the procedures to align with the CC Ratings System and formalize current CMS review processes.

As revised, the CMS examination procedures are divided into five Modules:

In general, all CFPB reviews will include Modules 1, 2, 3, and 5. Module 4 will generally be included in targeted reviews of individual product lines, as well as examinations that will result in the institution receiving a consumer compliance rating. The CMS review for target reviews will generally be limited to reviewing aspects of CMS pertaining to the product line under review. To the extent that CMS for a particular product line or a specific institution has been previously reviewed, CFPB examiners may evaluate CMS by reviewing previous conclusions and assessing only the changes to the current CMS program.

The CFPB is committed to providing guidance on its supervisory priorities to industry and members of the public.

On July 31, 2017, the Bureau released Bulletin 2017-01,57 which provides guidance to covered persons and service providers regarding fee assessments for pay-by-phone services. The bulletin provides examples of conduct observed during supervisory examinations and enforcement investigations that may violate the Dodd-Frank Act prohibition on engaging in UDAAPs, as well as the FDCPA. The bulletin clarifies that the Bureau is not mandating specific pay-by-phone disclosure requirements, but states that the Bureau expects supervised entities to review their practices on charging phone pay fees for potential risks of violating Federal consumer financial laws. To that end, the bulletin offers a number of suggestions for entities assessing whether their practices violate these laws and further recommends having in place a corrective action program to address any violations identified and reimburse consumers when appropriate.

The Bureau recognizes the value of communicating its program findings to CFPB-supervised entities to help them comply with Federal consumer financial law, and to other stakeholders to foster a better understanding of the CFPB's work.

To this end, the Bureau remains committed to publishing its Supervisory Highlights report periodically to share information about general supervisory and examination findings (without identifying specific institutions, except in the case of public enforcement actions), to communicate operational changes to the program, and to provide a convenient and easily accessible resource for information on the Bureau's guidance documents.

The EA complies with 32 Code of Federal Regulations part 651, Environmental Analysis of Army Actions (AR 200-2), and DLA's regulation for NEPA compliance, DLA Regulation 1000.22, Environmental Considerations in DoD Actions. However, because DLA is a tenant on Red River Army Depot, a U.S. Army-supported installation, this EA is subject to compliance with U.S. Army implementing regulations for NEPA. DLA has determined that the Proposed Action would not have a significant impact on the human environment within the context of NEPA. Therefore, the preparation of an environmental impact statement is not required.

Comments received by the end of the 30-day period will be considered when preparing the final version of the documents. The EA is available electronically at the Federal eRulemaking Portal at http://www.regulations.gov, and in hardcopy at the County Clerk's Office at the Bowie County Courthouse, 710 James Bowie Drive, New Boston, TX 75570.

The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.

Title of Collection: Personal Authentication Service (PAS) for FSA ID.

OMB Control Number: 1845-0131.

Type of Review: An extension of an existing information collection.

Respondents/Affected Public: Individuals or Households.

Total Estimated Number of Annual Responses: 55,300,000.

Total Estimated Number of Annual Burden Hours: 14,715,000.

Abstract: Federal Student Aid (FSA) replaced the PIN system with the Personal Authentication Service (PAS) which will employ an FSA ID, a standard user name and password solution. In order to create an FSA ID to gain access to certain FSA systems (FAFSA on the Web, NSLDS, StudentLoans.gov, etc.) a user must register on-line for an FSA ID account. The FSA ID allows the customer to have a single identity, even if there is a name change or change to other personally identifiable information. The information collected to create the FSA ID enables electronic authentication and authorization of users for FSA web-based applications and information and protects users from unauthorized access to user accounts on all protected FSA sites.