Source:www.uschamber.com
June 20, 2011
In Letter to Geithner and Leibowitz, Chamber Calls for Drawing a Clear Line to Prevent Overlapping Jurisdiction Between the Two Agencies
WASHINGTON, D.C.—The U.S. Chamber of Commerce offered recommendations today on the enforcement coordination of the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) in order to provide clarity for both businesses and consumers. In a letter to Treasury Secretary Tim Geithner and FTC Chairman Jon Leibowitz, the Chamber urged the CFPB and FTC to expedite the drafting of a memorandum of understanding (MOU) to avoid overlapping, duplicative, and conflicting activities between the two agencies.
“It is in the best interests of consumers and businesses alike to draw a clear line between the CFPB and FTC,” said David Hirschmann, president and CEO of the Chamber’s Center for Capital Markets Competitiveness. “Without proper coordination, some businesses will face duplicative or conflicting regulators, consumers will not know where to take their complaints to get prompt resolution, and taxpayer funds will be wasted on overlapping activities between the two agencies. We are asking for a quick and transparent process to ensure the best possible outcome for all parties involved.”
As part of the Dodd-Frank Act, Congress anticipated the need for an agreement to clarify who is in charge and how the two agencies will coordinate their efforts. The law gives the CFPB and FTC a deadline of six months from the designated transfer date for the negotiation of a CFPB-FTC agreement on coordination of enforcement actions. The Chamber is calling for that process to be expedited to prevent duplication and ensure taxpayer dollars are used most efficiently. The Chamber recommends that the Consumer Bureau be responsible for companies whose principal business is to provide consumer credit and the Federal Trade Commission should be responsible for “Main Street” businesses that could be covered by the CFPB because they provide a consumer financial product as an adjunct to their otherwise non-financial business.
In its proposal, the Chamber cites four benefits to this approach:
1. Builds Upon the Agencies’ Respective Expertise
– The Bureau’s overall focus will necessarily be on financial services businesses while the Commission has experience in overseeing “Main Street” businesses operating in other sectors of the economy.
2. Consistent with the Rationale for Creation of the Bureau
– The Bureau’s proponents argued that the federal bank supervisory agencies had not sufficiently enforced consumer protection requirements and that consumer protection laws were not enforced sufficiently with respect to non-bank providers of credit.
3. Promotes Compliance with Federal Consumer Laws and Regulations
– If enforcement responsibility is allocated based on the nature of the business involved, legitimate businesses will know where to go to obtain this essential advice.
4. Enables Consumers to Determine Which Agency to Approach When They Have a Problem
– The suggested approach would provide an understandable division of responsibility that would prevent consumers from randomly choosing where to bring their concerns.
“We appreciate the fact that FTC Chairman Leibowitz opened this line of communication when he attended our event in January, and are encouraged by the ongoing dialogue between the Chamber and the agencies,” said Hirschmann. “With a commitment to making the coordination plan a transparent, expedited process, American businesses will know with certainty who is their watch-man. We look forward to continuing our work with the CFPB and FTC in developing the most effective division of authority possible.”
Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
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