New FTC Enforcement Powers Not Included in Wall Street Reform Bill
Senate and House conferees have approved the final version of the Wall Street reform legislation. That bill does not include the sweeping new enforcement powers for the Federal Trade Commission (FTC) that were included in the House version.
The House passed its version of the financial regulatory reform bill last December. Buried in that bill were three critical changes in FTC authority:
- 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 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 were not limited to the authority of the FTC over financial products and services. They would have applied to the broad regulatory authority the FTC has over almost every segment of our economy including antitrust.
These expanded powers were not included in the Senate's version of the financial reform bill. ANA and our member companies and other industry groups met with all of the conferees and more than a hundred other members of both the Senate and House to argue that these sweeping changes should be separately considered as part of FTC reauthorization rather than being added to the Wall Street reform bill.
House Energy and Commerce Committee Chairman Henry Waxman aggressively pushed for these changes at several points during the conference. Each time, Senate Banking Committee Chairman Chris Dodd and other Senate conferees held firm in opposition to these provisions.
While our victory in the conference is important, it is clear that these issues will not go quietly into the night. ANA and other industry groups met earlier this week with Senate Commerce Committee Chairman Jay Rockefeller to discuss these issues. Chairman Rockefeller stated that he will continue to aggressively push for new enforcement powers for the FTC during this Congress. We expect Chairman Waxman to join that effort and it is likely to begin very soon.
We believe this was one of the most concerted across-the-board efforts of the ad community. We should feel very proud of this success, which was not certain until the last minutes of the conference.