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ANA Says CFPA Bill Will Radically and Detrimentally Transform the FTC

The Association of National Advertisers (ANA) has told the House Financial Services Committee that the "Consumer Financial Protection Agency Act" (H.R. 3126) would create a new federal agency with sweeping new powers and radically transform and threaten the long-term health of the Federal Trade Commission (FTC).  In a letter to all the members of the Committee, ANA expressed serious concern about several changes the legislation would make in the jurisdiction and regulatory powers of the Commission as well as expanded powers for the new CFPA.   

Dan Jaffe, ANA Executive Vice President, stated: "The CFPA Act is one of the largest regulatory reorganization efforts of the financial sector since the great depression of the 1930's.  Due to the scope and complexity of the proposal, there has not been sufficient focus on how the legislation would impact the FTC.  We are very concerned that the proposal could create severe unintentional collateral damage to the FTC and the regulation of advertising in all other areas of the economy."

The ANA letter noted that H.R. 3126 would transfer virtually all of the FTC's current authority over financial practices and much of the Commission's authority over financial privacy issues to a powerful new agency: "This type of drastic regulatory transplant surgery is almost certain to adversely affect the efficacy of the consumer protection and privacy missions of the FTC."  ANA stated that: "the widespread excision of authority over financial issues will substantially hobble the Commission's ability to operate effectively."

Jaffe noted that the bill also would give the CFPA broad "unfairness" rulemaking authority that goes far beyond the current authority for the FTC: "Unfairness is a highly elusive and amorphous concept so Congress put important limitations on the rulemaking powers of the FTC.  Those limits are missing in this bill, so the CFPA would have nearly unfettered discretion to issue broad rules regulating the marketing of financial products and services based on ‘unfairness.'"

ANA also noted that the CFPA Act, by failing to impose federal preemption provisions, was certain to "balkanize" regulation of financial marketing and advertising and "will undermine the goal of consistent and coherent national regulation."

Finally, the ANA letter noted that H.R. 3126 would give the FTC expedited rulemaking authority to issue broad industry-wide rules in just 180 days, which could lead to a serious "rush to judgment" without adequate time for industry input.

Legislative and Regulatory Issues Tracking

ANA's Washington, DC office works to protect the ability of all marketers to communicate effectively with consumers.   The scope of legislation, regulations, and court cases impacting the marketing community continues to be extremely broad, extending to issues as diverse as online privacy, prescription drug advertising, restrictions on the tax deductibility of advertising costs and the regulatory powers of the Federal Trade Commission.

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Compendium of Legislative, Regulatory and Legal Issues

ANA's Washington, DC office plays a leading role in protecting the ability of all marketers to communicate effectively with consumers. At the end of each year, we prepare a Compendium which describes our efforts on the broad range of issues we have faced. 

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