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January 24th, 2012
FTC and CFPB Team Up on Financial Products Oversight
Last week, the Federal Trade Commission ("FTC") and the Consumer Financial Protection Bureau (“CFPB”) entered into a memorandum of understanding in order to outline how the two agencies will share responsibility for protecting consumers in the financial products and services sector.
The CFPB, which was an agency born out of the 2010 financial collapse and the ensuing Dodd-Frank Wall Street Reform and Consumer Protection Act, is an autonomous federal agency located within and funded by the Federal Reserve. The focus of the CFPB, according to CFPB director, Richard Cordray, is “nonbank” financial companies — credit unions, mortgage brokers and servicers, foreclosure relief services, and credit card issuers, for example — that have historically fallen outside the purview of regulators and consumer protection agencies. The CFPB has authority to implement and enforce Federal consumer financial law, to conduct examinations, to collect and track consumer complaints about consumer financial goods and services, and to ensure that the markets for consumer financial products and services are fair, transparent and competitive. Businesses generally exempt from the Bureau’s jurisdiction include car dealers that sell, service and lease vehicles, merchants and retailers, real estate brokers, manufactured and modular home retailers, accountants and tax preparers, and lawyers.
The CFPB’s new memorandum of understanding with the FTC, signed on January 20, 2012, defines how the agencies will coordinate their enforcement efforts. Highlights of the memorandum include:
- an agreement that the FTC and CFPB will inform each other before they start an investigation of any consumer financial products or services company — other than a bank, thrift, federal credit union, or other entity that is excluded from the FTC's jurisdiction — so that they do not investigate the same company for the same reason;
- provisions to ensure that the FTC and the CFPB do not bring duplicative law enforcement actions;
- an agreement that the two agencies will provide each other with notice prior to initiating and settling lawsuits;
- an initiative to share information about financial products and services companies; and
- a deal to coordinate rulemaking and educational efforts.
In announcing the agreement, David Vladeck, the Director of the FTC’s Bureau of Consumer Protection, stated: "Consumers, businesses, and taxpayers can be assured we’re protecting consumers without wasting resources or imposing undue burdens on the marketplace."
If you have any questions about the FTC and CFPB’s new memorandum of understanding or any other advertising or consumer protection issues, please contact Hannah Taylor at (212) 705 4849 or email@example.com, Jeffrey A. Greenbaum at (212) 826 5525 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Advertising Group.
Other Advertising Law Alerts
Get Ready for California’s New “Automatic Renewal” Rules
California recently amended its Automatic Purchase Renewals law. The amended statute - effective July 1st -- require marketers to provide consumers of automatic renewal or continuous service offers with more information and easier ways to terminate. Read more.
June 22 2018
“Made in the U.S.A.” Claims Continue to be Scrutinized
In 2016, California amended Section 17533.7 of the California Business and Professions Code ("Section 17533"), liberalizing the standard for selling products labeled "Made in U.S.A" to California consumers. Read more.
June 4 2018
FTC Issues a $2 Million Reminder to Ad Agencies
The Federal Trade Commission ("FTC") and the State of Maine have announced a $2 million dollar settlement with ad agency Marketing Architects, Inc. ("MAI") for deceptive weight-loss claims. Read more.
February 12 2018