Tough fight in Senate for FTC to gain more regulatory authority

Tough fight in Senate for FTC to gain more regulatory authority

The Federal Trade Commission is facing an uphill battle in the Senate to gain regulatory power under sweeping financial legislation.

When the House approved a financial overhaul measure in December, the commission won big with faster rulemaking procedures and stronger enforcement powers. But Senate Banking Committee Chairman Chris Dodd’s (D-Conn.) overhaul proposal, which will be marked up in committee next week, so far lacks those measures.

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The commission, which has power only over non-depository institutions, like non-bank lenders and debt collectors, has been criticized for years for weak regulation.

As part of its effort to revamp financial regulations, the Obama administration backs boosting the power of the commission.

“The current rulemaking procedures … are complex, cumbersome and time-consuming, resulting in rulemaking proceedings lasting many years,” Jon Leibowitz, chairman of the FTC, said in February. The commission said the process of writing rules has sometimes taken eight to 10 years.

“We believe it’s critical to ensuring that consumers aren’t ripped off by agile scammers,” said Cecelia Prewett, director of public affairs at the FTC.

The Senate Commerce Committee, which has jurisdiction over the FTC, may consider the changes as part of the Senate financial bill or in separate legislation.

The scope of the FTC’s power has been a low-profile issue in a debate dominated by the headline issues of how to prevent future taxpayer-funded bailouts and how to create a new consumer protection office.

House and Senate lawmakers debating the financial overhaul have focused primarily on setting up the new office to oversee home loans, credit cards, payday loans and other financial products.

Banks and other financial interests have lobbied heavily against the consumer office’s scope, but there has been a similar, if little-noticed, campaign against changes to the FTC’s power.

A wide range of business interests, including the U.S. Chamber of Commerce, Consumer Electronics Association, Direct Marketing Association and National Retail Federation, have urged lawmakers against the changes.

The Chamber, which opposes the Dodd bill, has been critical of provisions related to the FTC. Andrew Pincus, a lawyer at Mayer Brown who works with the Chamber, said the FTC is on a campaign to gain power and resources on financial issues.

“The FTC has already staked out this area,” Pincus said this week.


About 20 trade associations cautioned senators earlier this year against supporting the commission’s proposed changes, which they said would “eliminate procedural safeguards” set up in the 1970s to rein in the commission.

Senate Commerce Committee Chairman Jay RockefellerJohn (Jay) Davison RockefellerSenate GOP rejects Trump’s call to go big on gun legislation Overnight Tech: Trump nominates Dem to FCC | Facebook pulls suspected baseball gunman's pages | Uber board member resigns after sexist comment Trump nominates former FCC Dem for another term MORE (D-W.Va.) said this week he is “not sure the criticism still stands,” adding his committee would look further into the issue.

House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) supported stronger provisions for the FTC when his panel marked up the House financial overhaul. “Its jurisdiction is limited and it has been hampered by a slow and burdensome rulemaking process,” Waxman said in October.

Lobbyists are already concerned that the changes could resurface, if not in the financial overhaul, then in the reauthorization process for the FTC.

Consumer advocacy organizations support setting up a new consumer financial protection office, and they say beefing up the FTC’s authority should happen at the same time.

Ed Mierzwinski, of the U.S. Public Interest Research Group, said the consumer office needs a “strong partner” in the FTC.

“It is time to modernize the FTC’s authorities so that it can respond to new threats to consumers and communities,” he said.