On March 12, 2015, the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB), the two agencies in charge of the federal government's consumer protection mission, reauthorized their Memorandum of Understanding (MOU) for three more years. The FTC and CFPB originally entered into the MOU in 2012 for a term of three years. The agencies made no substantive changes to the MOU in its reauthorization, and the FTC vote to re-authorize was 5-0.
The reauthorization serves as a bellwether for a progressive CFPB agenda, including increased enforcement actions in all industry segments that provide a consumer financial service or product and active rulemaking that may reach well beyond the traditional notion of financial entities, and intense examinations or audits.
The CFPB, still a relatively new agency, looks to FTC enforcement strategies and investigatory protocols as it wields its enforcement authority in the marketplace. To that end, the two agencies agreed to coordinate efforts to avoid duplication of their law enforcement and regulatory efforts, and jointly pursue their shared mission of protecting consumers by preventing or halting fraudulent, deceptive, and unfair business practices. The reauthorization signals that the CFPB will continue to look to FTC protocol and precedent; FTC jurisprudence concerning advertising and marketing (such as the Guides on Testimonials and Endorsements and Dot Com Disclosures) will likely guide the CFPB's analysis of what constitutes "deception."
The MOU memorializes information sharing and coordination between the two agencies on a number of topics, including:
- enforcement actions
- consumer complaints
- consumer education
- operational planning
The two agencies agreed to consult no later than sixty days before publication of advanced notices of proposed rulemaking, as well as on advisory opinions, guidance documents, and other legal commentaries that address unfair, deceptive, or abusive acts or practices. The agencies agreed to continued use of the Consumer Sentinel Network, an investigative cyber tool that allows the two enforcement agencies to share consumer complaints and identify targets for investigations. The two agencies shall confer "no less than quarterly" to discuss future law enforcement activities.
The reauthorization goes beyond simply being a signal that the two agencies intend to work together and have benefitted from their past cooperation; the reauthorization provides helpful insight into the CFPB's enforcement strategy and agenda.