A House committee on Thursday voted in favor of a bill that would give the federal consumer protection agency more authority to seek monetary relief from companies on behalf of wronged consumers, with committee Republicans and the U.S. Chamber of Commerce voicing their opposition, arguing the legislation lacks guardrails and gives the Federal Trade Commission (FTC) too much power.
The House Committee on Energy and Commerce “favorably reported” an amended version of HR 2668, or the Consumer Protection and Recovery Act, by a partisan vote of 30–22, with the bill now advancing to the House for a vote before potentially becoming law.
While Democrats hailed the committee’s approval of the bill, with the committee chairman arguing in a statement (pdf) that the legislation is “urgently needed” to protect consumers and “ensure lawbreakers do not get to profit from fraud, scams, and other illegal conduct,” Republicans on the committee decried it as “a partisan bill and process that fails to address key issues like privacy.”
The U.S. Chamber of Commerce also weighed in, arguing in a letter that it “strongly opposes” the bill over “serious concerns” that it grants the agency “unbound authority to seek monetary relief for all manner of business conduct well beyond traditional fraud cases.”
The bill amends Section 13(b) of the Federal Trade Commission Act to give the FTC express authority to obtain both injunctive and monetary relief for all violations of those laws that it enforces, like when companies are found to use deceptive practices. That authority was limited by a Supreme Court ruling in April in AMG Capital Management, LLC, et al v. Federal Trade Commission (pdf), which did not authorize the agency the seek monetary relief in court, instead allowing the FTC to seek an injunction pending administrative proceedings.
Prior to the Supreme Court ruling, the FTC used Section 13(b) to grant billions of dollars in relief for consumers over the past four decades. After the ruling, FTC acting chairwoman Rebecca Slaughter said in a statement that the high court had “ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” arguing that the move “has deprived the FTC of the strongest tool we had to help consumers when they need it most” and urging Congress “to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”
Energy and Commerce Committee chairman Rep. Frank Pallone (D-N.J.) hailed the passage of the bill in a statement Thursday.
“The Consumer Protection and Recovery Act will restore the FTC’s authority to go to court to get victimized consumers and businesses their money back from lawbreakers after the Supreme Court gutted the agency’s authority earlier this year. The Supreme Court’s decision swung the door wide open for crooks to target consumers and made clear Congress alone has the power to come together to fix this crisis,” Pallone said.
Republicans sought to focus the Consumer Protection and Recovery Act more narrowly and apply guardrails to prevent the FTC from abusing its authority.
“I want to protect consumers and make sure the @FTC has the tools it needs to fight scammers,” said Rep. Gus Bilirakis (R-Fla.), a member of the committee, in a tweet. “The partisan bill pushed through committee today is the wrong approach. It’s a shame Democrats just rejected my amendment and chose to continue down a partisan path.”
The U.S. Chamber of Commerce, too, said it supports giving the FTC the power it needs to pursue fraud cases and to seek monetary relief for genuinely harmed consumers, but argued that the bill “is not narrowly tailored to address these universally shared goals.”
“Instead, the bill would grant the FTC expansive new authorities without appropriate guardrails. The bill’s grant of blanket authority allows the FTC to seek monetary relief in cases where the consumer retains significant value from a product or service. It is important where fraud is not being alleged that such cases be treated in a more nuanced fashion when it comes to the FTC’s ability to seek monetary relief as a remedy,” the group wrote in the letter.
Besides giving the FTC the express authority to obtain both injunctive and monetary relief, it also expands the agency’s power to seek monetary relief to remedy past misconduct, currently limited to stopping ongoing or imminent legal violations.
In a further boost to the FTC, President Joe Biden’s proposed budget would give an 11 percent funding increase to the agency. Under the Biden budget, the FTC, which has about 1,140 people, would see its staff increase to about 1,250 in the 2022 fiscal year, which begins on Oct. 1.
The Biden budget for the next fiscal year envisions the agency spending $389.8 million, an increase from $351 million this year.