The Federal Trade Commission’s new director of consumer protection has represented Facebook, Uber, and Equifax, among other companies, all of which have issues before the FTC.
The New York Times reported that Andrew Smith, who will be in charge of the FTC unit that has broad powers over private companies, plans to recuse himself from a slew of cases now that his position at the FTC has been confirmed. The paper noted that in 2012, Smith worked on the legal team that defended AMG Services, the payday lender that paid a $1.3 billion court-ordered settlement, the largest in the industry, over allegations it preyed on low-income borrowers.
“It’s outrageous the FTC would pick the lawyer for a criminally convicted racketeer’s payday loan company as consumer protection chief,” said Senator Elizabeth Warren (D, MA) in the New York Times report. “The agency should pick someone with a track record of protecting consumers, not companies that cheat people.” The appointment of Smith was confirmed by the FTC earlier this week with the three Republicans voting in favor of him and the two Democratic commissioners voting against him. Rebecca Kelly Slaughter, a Democratic FTC Commissioner, told The New York Times that she voted against Smith because the fact that he has to step aside from some of the big investigations at the FTC “undermines the public’s confidence in the commission’s ability to fulfill its mission.” Meanwhile, Joseph J. Simons, a Republican, told the paper he was “disappointed that two of my new colleagues have chosen to turn Mr. Smith’s appointment into a source of unnecessary controversy.”
In an interview with the NYT Smith said he would continue the mission currently in place at the Bureau of Consumer Protection. “I look forward to working with all the commissioners to do what’s best for consumers,” he said. “I obviously don’t think I’m disqualified because of prior client relationships. I have a long history of service to consumers, to the industry and the profession.” Smith, as a lawyer at Covington & Burling, has represented a slew of companies during the past two years, encompassing banks, lenders, credit reporting agencies and tech firms. That will result in him having to step aside for any investigations or enforcement against those companies, people with knowledge of the situation told the paper. His work on the AMG case has raised the most questions about his ability to run the unit that is in charge of policing payday lenders and other industries that have faced allegations they scam consumers.