Senate Passes Wall Street Reform Conference Report
The Senate has just passed the conference report for H.R.4173, the “Dodd-Frank Wall Street Reform and Consumer Protection Act,” by a vote of 60 to 39. The House passed the conference report on June 30th so the bill will be signed by President Obama in the next few days.
The legislation will create a powerful new Consumer Financial Protection Bureau, to be housed at the Federal Reserve. That new bureau will have sweeping regulatory and enforcement power over the marketing of all consumer financial products and services, broadly defined. The Federal Trade Commission (FTC) will also share jurisdiction with the bureau in this area.
Of critical importance to the entire marketing community, the conference report does not include the sweeping new enforcement powers for the FTC that were included in the original 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.
Working with other industry groups, we were successful in keeping these expanded powers out of 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. Senate Commerce Committee Chairman Jay Rockefeller has 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.