Chamber: FTC, CFPB Need Fine-Tuning

Concerned by the risk that new regulatory infrastructure may duplicate existing financial rules, the ""U.S. Chamber of Commerce"":http://www.uschamber.com/ sent a letter to the ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx and ""Federal Trade Commission"":http://www.ftc.gov/ (FTC) on Monday outlining recommendations to minimize overlap between the former and the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB).

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Addressing Treasury Secretary Timothy Geithner and ""FTC"":http://www.ftc.gov/ Chairman Jon Leibowitz, the letter called for a Memorandum of Understanding (MOU) in order to strike out duplicative rules by the ""FTC"":http://www.ftc.gov/ and ""CFPB"":http://www.consumerfinance.gov/ and separate the two institutions.

""The ""Chamber"":http://www.uschamber.com/ urges the ""CFPB"":http://www.consumerfinance.gov/ and the ""FTC"":http://www.ftc.gov/ to accelerate their efforts to formalize a coordination plan through a [MOU], so as to avoid duplication, maximize enforcement resources, and provide clarity to both companies and consumers,"" David Hirschmann, president of the ""Chamber"":http://www.uschamber.com/, said in the letter.

Responding to the letter, ""FTC"":http://www.ftc.gov/ spokesperson Peter Kaplan said, ""The ""FTC"":http://www.ftc.gov/ agrees with the ""Chamber"":http://www.uschamber.com/ that the ""CFPB"":http://www.consumerfinance.gov/ and the ""FTC"":http://www.ftc.gov/ should coordinate and cooperate in their activities to avoid unnecessary duplication and conflict and to protect consumers.""

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He added that the ""FTC"":http://www.ftc.gov/ and ""CFPB"":http://www.consumerfinance.gov/ will develop a MOU to help meet the objectives that Hirschmann laid out.

Hirschmann identified several areas of overlap, including joint authority in the enforcement of laws prohibiting unfair and deceptive practices, shared jurisdictions, and the ability by both agencies to enforce consumer protection laws that fall outside of the Dodd-Frank Act.

The ""Chamber"":http://www.uschamber.com/ president went on to say that ""the ""FTC"":http://www.ftc.gov/ vigorously exercised its authority in the financial services area"" prior to Dodd-Frank, which, upon passage, ""expanded the [""FTC's"":http://www.ftc.gov/] enforcement authority in this area"" and made it very likely that the ""FTC"":http://www.ftc.gov/ and ""CFPB"":http://www.consumerfinance.gov/ will share and duplicate powers.

Speaking on behalf of the ""Chamber"":http://www.uschamber.com/, Hirschmann recommended the re-organization of the agencies along lines of comparable yet separate authority before the six-month deadline for implementation. He specifically recommended tasking ""CFPB"":http://www.consumerfinance.gov/ with the oversight of financial services and consumer credit institutions while leaving regulation of all other businesses to the ""FTC"":http://www.ftc.gov/.

Hirschmann argued that making the ""CFPB"":http://www.consumerfinance.gov/ an exclusive financial and consumer credit services regulatory agency would enhance the expertise of the two organizations, make their roles more consistent with the spirit of the Dodd-Frank Act, ensure compliance with federal rules and regulations, and allow consumers to choose which agency best serves their needs.

Kaplan declined to speculate about whether the lack of a director at the ""CFPB"":http://www.consumerfinance.gov/ might delay a MOU or any other understanding between the agencies over the next six months. Recent reports put the ""CFPB"":http://www.consumerfinance.gov/ on track to begin formal operations in July, even while embattled nominee Elizabeth Warren faces an unlikely confirmation amid opposition from Senate Republicans.