On June 10, the Federal Trade Commission (FTC) filed an amended complaint for civil money penalties and other relief under Section 5 of the FTC Act prohibiting “unfair or deceptive acts or practices” and Section 521 of the Gramm-Leach-Bliley Act (GLBA) prohibiting the use of fraudulent statements to obtain consumer information. Setting aside the substance of the allegations, the amended complaint is informative because while the initial complaint sought consumer redress under Section 13(b) of the FTC Act, the Supreme Court’s recent unanimous decision in AMG Capital Management foreclosed this avenue to consumer redress for the FTC, and thus the amended complaint removes that reference while otherwise replicating the substantive allegations of the initial complaint. Further, in a creative side-step to its Section 13(b) predicament, the FTC claims authority to obtain civil penalties under the GLBA because it empowers the FTC to enforce it “in the same manner and with the same power and authority as the [FTC] has under the Fair Debt Collection Practices Act [FDCPA].” 15 U.S.C. § 6822(a). In 2010, the Dodd-Frank Act amended the FDCPA stating that violations may be enforced “in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule.” 15 U.S.C. § 1692l(a). Continue Reading FTC Takes Novel Approach to Seek Civil Money Penalties in the Wake of AMG Capital Ruling
By a narrow 50-48 vote along party lines, Rohit Chopra was confirmed yesterday by the U.S. Senate to become the Director of the Consumer Financial Protection Bureau. Chopra previously served as the Bureau’s assistant director and was its first student loan ombudsman. Most recently, Chopra served as a commissioner of the Federal Trade Commission for the past three years where he conveyed his penchant for aggressive enforcement of larger institutional violators and advocated for monetary relief from violators outside of the authority provided under Section 13(b) of the FTC Act (we previously discussed Section 13(b) in earlier Consumer Finance & FinTech Blogs here, here, and here).
The U.S. District Court for the Northern District of Illinois recently used Section 19 of the FTC Act to impose a $5 million restitution award after the original restitution award under Section 13(b) was vacated by the Seventh Circuit based on its ruling that monetary relief was not available under Section 13(b).
On June 15, the Senate swore in President Biden nominee Lina Khan as Chair of the FTC following confirmation by vote of 69-28. Her current term on the Commission will expire on September 25, 2024. Khan noted that she looks forward to working with her colleagues “to protect the public from corporate abuse.” In her role as Chair, Khan replaces former Acting Chair, Rebecca Kelly Slaughter, who served in the role since January 2021. Prior to becoming Chair of the Commission, Khan was an Associate Professor of Law at Columbia Law School. She also previously served as counsel to the U.S. House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, legal adviser to FTC Commissioner Rohit Chopra, and legal director at the Open Markets Institute. Chopra, who is awaiting Senate confirmation as the Director of the CFPB, remarked in his official statement that the “overwhelming support in the Senate for Lina Khan’s nomination to serve on the [FTC] is a big win for fair competition in our country. There is a growing consensus that the FTC must turn the page on the failed policies spanning multiple administrations. Lina has an extraordinary record of achievement, and she will be instrumental in helping the Commission chart a new course grounded in rigor and reality.”