Senate Begins Consideration of Financial Regulatory Reform Bill
Contact Key Senators to Oppose New FTC Powers
We need your immediate assistance to defeat legislation that would greatly expand the regulatory and enforcement powers of the Federal Trade Commission (FTC) over the entire business community. These enhanced powers are so sweeping that former FTC Chairman Jim Miller described them as "putting the FTC on steroids."
The Senate has begun consideration of the financial regulatory reform bill. There are several provisions buried in the House version of this legislation that have nothing to do with financial services reform. These provisions would greatly expand the regulatory authority of the FTC over almost every segment of the economy. The changes include:
- Repealing the Magnuson Moss rulemaking procedures (including the requirement that an activity be "prevalent" in an industry before Commission action) and allowing the FTC to promulgate broad industry-wide rules on any consumer protection matter in a highly expedited procedure - all done with a lower standard of judicial review;
- Expanding the FTC's authority to immediately impose potentially multi-million dollar civil monetary penalties for any violation of the FTC Act without the involvement of the Department of Justice;
- Providing new liability for "aiders and abettors" of companies that violate the FTC Act, potentially putting thousands of companies at risk by running ads.
These changes are not limited to the authority of the FTC over financial products and services. They would apply to the broad regulatory authority the FTC has over almost every segment of our economy.
These expanded powers are not included in the Senate Banking Committee's version of the financial reform bill. If these new authorities are to be granted to the FTC, it is critical that they be considered separately as part of legislation to reauthorize the FTC. They should not be included hastily in the Senate financial reform bill.
It is very important that marketers immediately contact the Senate leadership and members of the Senate Commerce Committee (particularly Senators Boxer, Nelson, Pryor, McCaskill, Klobuchar and Warner) to urge them to oppose these expanded FTC powers. If your company has substantial operations and employees in their home states, let them know. We have put together a background memo and talking points on these issues for use in your contacts. Contact information for the leadership can be found here and for the Senate Commerce Committee here.