The conference committee on H.R. 4173 resumes at noon today (schedule), and far more than just expanded regulation of the financial services sector is under consideration. The House position in the negotiations is, let the Federal Trade Commission be unleashed!
From a June 10 letter to the conferees from 48 trade associations, including the National Association of Manufacturers.
The proposed expansion of FTC authority envisioned in H.R. 41731 would eliminate procedural safeguards that were imposed upon FTC rulemaking decades ago, after Congress determined the Commission had repeatedly overstepped its regulatory authority. These provisions couple unrestrained rulemaking authority with enforcement powers to seek civil penalties for unfair or deceptive acts or practices; to seek such penalties without coordinating with the Justice Department; and to pursue companies that allegedly provide “substantial assistance” in an FTC Act violation, even without actual knowledge of the violation. Granting such sweeping powers to the Commission would enable it to act essentially as an unelected legislature, governing industries and sectors that had nothing to do with the financial crisis.
Particularly given their potentially far-reaching effects, these provisions received remarkably little attention during the legislative process, largely overshadowed by debate about the creation of a new agency focused on consumer financial protection. The House Energy & Commerce Committee reported H.R. 4173 after very brief consideration in committee markup and without affording affected industries any opportunity to present their concerns regarding the included proposal for FTC expansion.
Another pending issue is the “proxy access” language, meant to expand the ability of outside activists — unions, environmentalist, single-issue groups — to force their political agendas onto publicly trade corporations contrary to the interests of the shareholders. Stephen M. Bainbridge, a UCLA corporate law professor, covers the issue at his Professor Bainbridge blog, an entry, “Gut Proxy Access.”
Conference Chairmen Frank and Dodd have posted a summary of last week’s actions here. More on what remains from The Washington Post, “Thorny issues remain as Congress negotiates financial regulatory overhaul,” and The Hill, “Lawmakers to tackle toughest issues remaining on Wall Street reform.”