The House Energy and Commerce Committee is scheduled to start markup on H.R. 3126, the Consumer Financial Protection Agency Act on Thursday. The bill has passed the House Financial Services Committee. If the legislation is enacted as is, it will have significant implications for the advertising industry.
The bill as written would transfer much of the regulatory authority for financial products and services from the Federal Trade Commission to the new CFPA. However, the FTC would retain some authority in financial products and services matters. The bill would greatly expand the regulatory authority of both agencies. For example:
• The bill will grant the new CFPA rulemaking authority under the "unfairness" standard. This goes beyond the current authority of the FTC which is limited by Congress.
• The FTC will be given expedited rulemaking authority, doing away with many of the safeguards currently in place.
• The Commission will be granted expanded "aiding and abetting" authority that has the ability to implicate both advertising agencies and the media.
In addition, H.R. 3126 gives the states authority to enforce regulations adopted by the CFPA as well as enact their own laws. Financial advertisers may be subject to regulation by the CFPA, the FTC and numerous states under different and potentially contradictory standards.
It is important that the advertising industry contact members of the Energy and Commerce Committee and ask them to consider the implications of the bill that is before them, and consider language that would provide appropriate safeguards for both consumers and the industry.
Committee members can be reached through the Energy and Commerce website at http://energycommerce.house.gov/. Please do not hesitate to contact Clark Rector, Executive Vice President-Government Affairs if you have any comments or questions.
