Proposed consumer financial legislation under active consideration by Congress contains a proposal to significantly expand the Federal Trade Commission's (FTC) powers that, to date, have received little attention. H.R. 3126, the Consumer Financial Protection Agency Act (CFPA Act) would confer upon the FTC sweeping powers, many of which were stripped from the agency decades ago. Specifically, the CFPA Act would:

  • Allow the FTC to use streamlined notice and comments procedures to promulgate rules on consumer protection issues without specific statutory authority from Congress;
  • Authorize the FTC to impose civil penalties where "unfair" and "deceptive" trade practices are identified;
  • Make it unlawful to aid and abet "unfair" and "deceptive" trade practices, even without actual knowledge of the violation;
  • Confer on the FTC independent litigating authority to seek civil penalties in federal court without conferring with the Department of Justice; and
  • Eliminate the current prohibition on ex parte communications with FTC commissioners.

These proposed changes to the scope of the FTC's authority should be of interest to all companies subject to FTC jurisdiction. The text of H.R. 3126 may be found here.