BNA’s ATRR Snapshot (“Enforcement FTC and CFPB Sign Memorandum of Understanding (‘MOU’) to Pledge Coordination for Protection of Consumers”) highlightedTrade Regulation Attorney Barry Cutler’s comments on the MOU between the new Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) signed on January 20 to promote effective cooperation in their dual roles of protecting consumers.
By statute, the two agencies are obligated to “prevent duplication of efforts, provide consistency and ensure a vibrant marketplace for consumer financial products or services.” The provisions of the MOU require the FTC and CFPB to coordinate law enforcement activities, potential court actions and administrative proceedings, all of which will minimize duplication, maximize efficiencies and resources, and eliminate redundancies.
The article quoted Cutler as saying that the terms of the MOU “are not as important as how it will work out in actual practice.” Cutler, who served as Director of the FTC's Bureau of Consumer Protection from 1990 to 1993, pointed out that it's hard to predict the likelihood of success with this MOU because of several key differences from other longstanding agreements.
The MOU between the FTC and Food and Drug Administration, he noted, divides enforcement responsibilities for which both agencies have statutory jurisdiction—for example, ads and labels for OTC drugs versus prescription drugs. By contrast, he said, FTC and the CFPB created no such division in the new MOU. Rather, Cutler cited, it contains “a remarkable sharing of information about studies, rules, and law enforcement—in many cases, before they become public.”
Cutler cautioned that, in Washington, D.C., a city legendary for “leaks” of government information, this could mean a lot of “sensitive financial and law enforcement information shared between both agencies, neither of which will likely be able to withhold it from Congress.” Given that agency oversight will be conducted by different standing committees (Senate Banking versus Senate Commerce), the agencies may experience tag-team efforts by congressional staffs to achieve “back-door access” to the FTC's work on CFPB projects or the CFPB's work on FTC projects, he warned.
The informal relationships developed between agency staffers and legislators are another unpredictable element, Cutler posited. In contrast to hostile relations between Capitol Hill and the FTC in the 1970s and 1980s, the FTC for more than two decades has experienced “seamless transitions” and enjoyed “good relations with the Hill.” By comparison, he pointed out, the FCPB has seemed to be operating under a “standing 8-count” from Congress since before an agency head, Richard Cordray, had to be appointed as a recess appointment.
Finally, Cutler cited the benefits of the migration of “many very talented FTC staffers … to the FCPB in the last year or so.” He predicted that the influx of veteran FTC staffers “should ensure good relations between the two agencies as well as giving the FCPB an “inside view” of how a mature agency like the FTC handles all aspects of its work—political, administrative, enforcement.”