[Federal Register Volume 74, Number 233 (Monday, December 7, 2009)]
[Unknown Section]
[Pages 64363-64371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X09-281207]
[[Page 64363]]
FEDERAL TRADE COMMISSION (FTC)
Statement of Regulatory Priorities
I. REGULATORY PRIORITIES
Background
The Federal Trade Commission (FTC or Commission) is an independent
agency charged with protecting American consumers from ``unfair methods
of competition'' and ``unfair or deceptive acts or practices'' in the
marketplace. The Commission strives to ensure that consumers benefit
from a vigorously competitive marketplace. The Commission's work is
rooted in a belief that competition, based on truthful and non-
misleading information about products and services, brings the best
choice of products and services at the lowest prices for consumers.
The Commission pursues its goal of promoting competition in the
marketplace through two different, but complementary, approaches. Fraud
and deception injure both consumers and honest competitors alike and
undermine competitive markets. Through its consumer protection
activities, the Commission seeks to ensure that consumers receive
accurate, truthful, and non-misleading information in the marketplace.
At the same time, for consumers to have a choice of products and
services at competitive prices and quality, the marketplace must be
free from anticompetitive business practices. Thus, the second part of
the Commission's basic mission--antitrust enforcement--is to prohibit
anticompetitive mergers or other anticompetitive business practices
without unduly interfering with the legitimate activities of
businesses. These two complementary missions make the Commission unique
insofar as it is the Nation's only Federal agency to be given this
combination of statutory authority to protect consumers.
The Commission is, first and foremost, a law enforcement agency. It
pursues its mandate primarily through case-by-case enforcement of the
Federal Trade Commission Act and other statutes. In addition, the
Commission is also charged with the responsibility of issuing and
enforcing regulations under a number of statutes. Pursuant to the FTC
Act, for example, the Commission currently has in place sixteen trade
regulation rules. The Commission also has adopted a number of voluntary
industry guides. Most of the regulations and guides pertain to consumer
protection matters and are generally intended to ensure that consumers
receive the information necessary to evaluate competing products and
make informed purchasing decisions.
Industry Self-Regulation and Compliance Partnerships with Industry
The Commission vigorously protects consumers through a variety of tools
including both regulatory and non-regulatory approaches. To that end,
it has encouraged industry self-regulation, developed a corporate
leniency policy for certain rule violations, and established compliance
partnerships where appropriate. The Commission has held workshops and
issued reports that encourage industry self-regulation and compliance
partnerships in several areas. As detailed below, information privacy
and security, the evolving nature of technology, consumer credit and
finance, and health care issues continue to be at the forefront of the
Commission's consumer protection and competition programs. By subject
area, we discuss the major workshops and reports\1\ the FTC has issued
since the 2008 Regulatory Plan was published.
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\1\ The FTC also prepares a number of annual and periodic reports on
the statutes it administers. These are not discussed in this plan.
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(a) Protecting Personal Information. The Commission convened a number
of workshops in interrelated areas associated with protecting personal
information, consumer privacy, and identity theft. They include:
On November 13, 2008, the FTC and the Southern Methodist
University Dedman School of Law co-hosted a workshop on how
businesses can secure personal information and protect the
privacy of consumers and employees. The workshop was
presented in partnership with the International Association
of Privacy Professionals which provides guidance to
businesses on data security, privacy, and responses to data
breaches.
On March 16-17, 2009, the FTC, along with the Asia-Pacific
Economic Cooperation forum and the Organization for
Economic Cooperation and Development, co-hosted an
international conference on how companies can manage
personal data security issues in a global information
environment where data can be stored and accessed from
multiple jurisdictions.
On April 29, 2009, the FTC held a workshop to help businesses
implement data security practices to deter identity thieves
and recognize telltale signs - or red flags - that thieves
are trying to use personal information they have obtained.
Beginning December 7, 2009, the Commission will hold three
roundtables to explore the privacy challenges posed by 21st
century technology and business practices that collect and
use company data. The goal of the roundtables is to
determine how best to protect consumers while supporting
beneficial uses of the information and technological
innovation.
As an outgrowth of an April 2007 federal government strategic plan
which contained 31 recommendations to address identity theft, the
President's Identity Task Force (co-chaired by the Attorney General and
the FTC's Chairman) released an October 2008 report on the progress
made in implementing the recommendations.\2\ The report discusses the
FTC's workshops, training seminars, and extensive outreach with public,
private, and non-government organizations on preventing identity theft.
Related to this, and following a December 2007 workshop on the use of
Social Security numbers, the Commission issued a December 2008 report
``Security in Numbers: Social Security and Identity Theft: A Federal
Trade Commission Report Providing Recommendations on Social Security
Number Use in the Private Sector.''\3\
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\2\ See ``The President's Identity Theft Task Force Report'' at http://
www.ftc.gov/os/2008/10/081021taskforcereport.pdf.
\3\ The complete report is at http://www.ftc.gov/os/2008/12/
P075414ssnreport.pdf.
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As a result of a November 2007 town hall on issues related to online
behavioral advertising - the practice of tracking an individual's
online activities in order to deliver advertising tailored to his or
her interests - and how best to protect consumer privacy, the FTC staff
put out for comment a set of four principles in December 2007. The
principles were transparency and consumer control, reasonable security
for consumer collected data, express consumer consent to material
changes in privacy policy, express consumer consent to use of sensitive
data. After considering the comments, the Commission issued a report in
February 2009, ``Self-Regulatory Principles for Online Behavioral
Advertising,'' which revised and retained the principles governing
self-regulation by advertisers.\4\
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\4\ This can be found at http://www.ftc.gov/os/2009/02/
P085400behavadreport.pdf.
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[[Page 64364]]
(b) Mobile Marketplace. In May 2008, the Commission held a town hall
meeting to assess the evolving mobile commerce marketplace and its
implications for consumer protection policies. As a result of that
meeting and based on further review, the FTC staff issued an April 2009
report ``Beyond Voice: Mapping the Mobile Marketplace.''\5\ The report
found that cost disclosures about mobile services continue to generate
consumer complaints and that the increased use of smartphones to access
the mobile Web presented unique privacy concerns, especially regarding
children. The report also highlighted the need to monitor the impact of
unwanted mobile text messages, malware, and spyware and the substantial
cost to carriers (and potentially consumers) of blocking them.
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\5\ This is located at www.ftc.gov/reports/mobilemarketplace/
mobilemktgfinal.pdf.
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(c) Debt Collection. In October 2007, the Commission held a two-day
workshop to explore how collection industry changes have affected
consumers and businesses. In February 2009, in addition to its annual
report on the Fair Debt Collection Practices Act (FDCPA), the FTC
issued ``Collecting Consumer Debts: The Challenges of Change.''\6\ The
report found that major problems in the flow of information in the
collection chain and recommended that consumers be provided better
information on debts and their rights. The report also recommended that
debt collection laws should be modernized to reflect changes in
technology and that Congress authorize the FTC to issue rules under the
FDCPA.
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\6\ This is at http://www.ftc.gov/bcp/workshops/debtcollection/
dcwr.pdf.
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The report further notes that the FTC lacked sufficient information on
debt collection proceedings. On August 5-6, September 29-30, and
December 4, 2009, the Commission has held or will hold roundtables
examining consumer protection issues involving debt collections, both
in litigation and arbitration proceedings.
(d) Health Care. On November 21, 2008, the Commission held roundtables
on two distinct health care issues involving competition and consumer
protection issues: competition between health care providers based on
quality information, and competition which may be provided by an
abbreviated regulatory approval for follow-on biologics (FOBs).
In June 2009, the Commission issued two reports on health care issues.
The first, ``Follow-On Biologic Drug Competition,''\7\ was a result of
the November workshop. After discussing the differences between FOB
drugs and branded-generic drugs and noting that competition by FOBs is
unlikely to be similar to brand-generic competition (substantial FOB
costs, limited competition, lack of automatic substitution, FOB
difficulty gaining market share), the report concludes that patent
protection and market-based pricing will promote competition by FOBs
and recommends legislation to put in place an abbreviated FDA approval
process for FOBs. The second report, ``Authorized Generics: An Interim
Report,''\8\ analyzes price reductions when authorized generic (AG)
drugs compete with first-to-file generics during 180-day exclusivity
and the impact of brand-generic patent litigation settlements that
contain provisions on launching an AG drug. The FTC's report was
prepared in response to requests from Congress and is relevant to
health care reform initiatives.
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\7\ The link is http://www.ftc.gov/os/2009/06/
P083901biologicsreport.pdf.
\8\ The link is www.ftc.gov/os/2009/06/
P062105authorizedgenericsreport.pdf.
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(e) Competition. On February 17-19 and May 20-21, 2009, the Commission
hosted public workshops on resale price maintenance under the Sherman
Act and the FTC Act, focusing on how best to distinguish resale price
maintenance that benefits consumers from that which does not. The
workshops discussed theories of economic benefits and harms, featured
panel presentations, and allowed for audience questions. On October 17,
2008, the FTC held a workshop on the scope of ``unfair methods of
competition'' in section 5 of the FTC Act. The Commission considered
the history of the provision, FTC and court interpretations,
contemporary business conduct, and issues concerning standard-setting
organizations.
In addition, beginning December 3, 2009, and ending January 26, 2010,
the Commission and the Department of Justice will hold a series of five
joint public workshops to explore updating the guidelines used to
evaluate the potential competitive effects of mergers and acquisitions.
The purpose of the review is to consider guideline revisions to more
accurately reflect agency practice and result in a more efficient
review process. The agencies have requested comments on twenty
questions related to competitive effects; market definition, share, and
concentration; and the price and non-price effects of mergers.
(f) Intellectual Property. The Commission held a series of five
hearings on the ``Evolving Intellectual Property (IP) Marketplace.''
The hearings generally focused on examining changes in intellectual
property law, patent-related business models, and new information
regarding the operation of the IP marketplace since the issuance of the
FTC's October 2003 report, ``To Promote Innovation: The Proper Balance
of Competition and Patent Law and Policy.''
Overview Hearing. On December 5, 2008, three panels provided
an overview of developing business models, recent and
proposed changes in IP remedies law, and changes in legal
doctrines affecting the value and licensing of patents.
Remedies. On February 11-12, 2009, the Commission held
hearings on damages in patent cases and recent changes in
permanent injunction and willful infringement standards in
the wake of recent court decisions.
Operation of IP Markets. The hearings on March 18-19, 2009
explored how different industries use patents, the economic
and legal perspectives on IP and technology markets, and
the notice role of patents.
Markets for Intellectual Property. This April 17, 2009 hearing
addressed new business models in the IP market; strategies
for buying, selling, and licensing patents; and the role of
secondary markets.
Industry Focus. On May 4-5, 2009, in conjunction with the
Berkeley Center for Law and Technology and the Berkeley
Center for Competition Policy, the Commission considered
how markets for patents and technology operate in different
industries and how patent policy might be adjusted to
respond to problems and better promote innovation and
competition.
In addition to these five IP hearings, the Commission and the
Technology Law and Public Policy Clinic at the University of Washington
School of Law hosted a ``Digital Rights Management'' (DRM) conference
on March 25, 2009. The conference addressed the use of DRM
technologies, practices which are expected to become more prevalent in
U.S. markets.
[[Page 64365]]
(g) Journalism and the Internet. On December 1-2, 2009, the FTC will
host a two-day workshop titled ``From Town Criers to Bloggers: How Will
Journalism Survive the Internet Age?'' 74 FR 51605 (Oct. 7, 2009). The
workshop will broadly consider the economics of journalism; the wide
variety of new business and non-profit models for journalism; the
financial, technological, and other challenges facing the news
industry; and a variety of government policies, including antitrust,
copyright, and tax policy, bearing on journalism. Witnesses will
include journalists and representatives of news organizations, new
media representatives, direct marketers, academics, and consumer
advocates.
(h) Other Workshops. The FTC hosted a ``Fraud Forum'' on February 25-
26, 2009. The first day was open to the public and addressed the many
aspects of fraud today. The second day was open only to domestic and
international law enforcement officials and focused on improving
interagency coordination in consumer fraud cases. On March 12, 2009,
the FTC staff conducted a forum to gather information for an upcoming
education campaign involving advertising and marketing to children.
Then-Chairman William E. Kovacic also issued a report that considered
basic questions and future directions as the Commission approaches its
100-year anniversary in 2014.\9\ The report was based on seven months
of agency self-assessment and numerous consultations with officials in
the public and private sector, and concluded, ``The progress of the
Federal Trade Commission in its modern era has built heavily upon the
willingness of its people to assess their work critically and explore
possibilities for improvement. Critical self-study and external
consultations not only have helped identify paths to achieving
greatness, but also have renewed the institution's commitment to
fulfill the destiny that Congress in 1914 wished it to achieve.'' The
report, the latest element of that tradition, seeks to ingrain in the
agency a habit of periodic self-assessment to illuminate the way to
future improvements.
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\9\ See Chairman William E. Kovacic, ``The Federal Trade Commission at
100: Into Our 2nd Century - The Continuing Pursuit of Better Practices,
A Report by Federal Trade Commission'' (January 2009), available at
http://www.ftc.gov/os/2009/01/ftc100rpt.pdf.
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In other areas, like the entertainment industry, the Commission has
encouraged industry groups to improve their self-regulatory programs to
discourage the marketing to children of movies, games, and music that
the industries' rating or labeling systems say are inappropriate for
children or warrant parental caution due to their violent content. The
motion picture, electronic game and music industries have each
established self-regulatory systems that rate or label products in an
effort to help parents seeking to limit their children's exposure to
violent materials. Since 1999, the Commission has issued six reports on
these three industries, examining the industries' compliance with their
own voluntary marketing guidelines.\10\
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\10\ For the most recent report, see ``Federal Trade Commission,
Marketing Violent Entertainment to Children: A Fifth Follow-Up Review
of Industry Practices in the Motion Picture, Music Recording &
Electronic Game Industries A Report to Congress'' (April 2007),
available at www.ftc.gov/reports/violence/
070412MarketingViolentEChildren.pdf.
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Staff is currently working on the development of a mall intercept study
of parental awareness and use of rating information on movie DVDs and
on a telephone survey on parental awareness and attitudes toward the
marketing and sale of Unrated ``Director's Cut'' DVDs. The results of
this research will be reported in the Commission's seventh media
violence report, with an anticipated release in the Fall of 2009.
Regarding advertising for alcoholic products, the Commission plans to
issue each year orders requiring two to four suppliers to provide
information about advertising and marketing practices and compliance
with self-regulatory guidelines. In June 2009, the Commission issued
orders pursuant to FTC Act Section 6(b) to three alcohol companies,
asking for information about advertising and marketing practices. In
the coming year, FTC will review the companies' responses to the orders
in light of the provisions of the alcohol industry self-regulatory
codes. The FTC will continue to monitor advertising and marketing
efforts by other industry members. It will also continue to promote the
``We Don't Serve Teens'' consumer education program, supporting the
legal drinking age.\11\
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\11\ More information can be found at http://www.dontserveteens.gov/.
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The Commission will continue to examine issues related to food
marketing to youth. In July 2008, the Commission published a report to
Congress on this topic\12\ based on the responses of 44 members of the
food and beverage industry to Special Orders issued by the Commission
in 2007 under Section 6(b) of the FTC Act. The Commission's report
found that, in 2006, the surveyed companies spent more than $1.6
billion in youth-directed marketing, often employing a variety of
integrated techniques such as traditional media, digital- and Internet-
based platforms, packaging and in-store marketing, and cross-promotions
with media and entertainment companies including the use of licensed
characters. Among the report recommendations were that food companies
adopt meaningful nutrition-based standards for marketing products to
children and that companies define ``marketing to children'' to
encompass the full spectrum of advertising and promotional techniques.
After receipt of 2009 data from the companies during 2010, the
Commission intends to conduct a follow-up study to assess the extent to
which recommendations from the 2008 report have been implemented and
whether additional measures are needed.
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\12\ See ``Marketing Food to Children and Adolescents: A Review of
Industry Expenditures, Activities, and Self-Regulation'' (July 2008),
available at http://www.ftc.gov/os/2008/07/P064504foodmktingreport.pdf.
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The Commission is also spearheading an Interagency Working Group on
Food Marketed to Children, made up of members of the FTC, the Food and
Drug Administration, the Centers for Disease Control and Prevention,
and the Department of Agriculture. The working group was established in
response to a provision in the FY 2009 Omnibus Appropriations Act (H.R.
1105) and is charged with conducting a study and developing
recommendations for nutritional standards for foods marketed to
children ages 17 and under. Findings and recommendations will be
submitted in a report to Congress by July 2010.
Additionally, in the industry self-regulation area, the Commission
continues to apply the Textile Corporate Leniency Policy Statement for
minor and inadvertent violations of the Textile or Wool Rules that are
self-reported by the company. 67 FR 71566 (Dec. 2, 2002). Generally,
the purpose of the Textile Corporate Leniency Policy is to help
increase overall compliance with the rules while also minimizing the
burden on business of correcting (through relabeling) inadvertent
labeling errors that are not likely to cause injury to consumers. Since
the Textile Corporate Leniency Program was announced, 160 companies
have been granted ``leniency'' for self-reported minor violations of
FTC textile regulations.
Finally, the Commission also has engaged industry in compliance
partnerships in at least two areas
[[Page 64366]]
involving the funeral and franchise industries. Specifically, the
Commission's Funeral Rule Offender Program, conducted in partnership
with the National Funeral Directors Association, is designed to educate
funeral home operators found in violation of the requirements of the
Funeral Rule, 16 CFR 453, so that they can meet the rule's disclosure
requirements. Nearly 300 funeral homes have participated in the program
since its inception in 1996. In addition, the Commission established
the Franchise Rule Alternative Law Enforcement Program in partnership
with the International Franchise Association (IFA), a nonprofit
organization that represents both franchisors and franchisees. This
program is designed to assist franchisors found to have a minor or
technical violation of the Franchise Rule, 16 CFR 436, in complying
with the rule. Violations involving fraud or other section 5 violations
are not candidates for referral to the program. The IFA teaches the
franchisor how to comply with the rule and monitors its business for a
period of years. Where appropriate, the program offers franchisees the
opportunity to mediate claims arising from the law violations. Since
December 1998, twenty-one companies have agreed to participate in the
program.
Rulemakings that Have International Effects
The OMB has requested that agencies discuss the international effects
of their rulemakings in the regulatory plan narrative per the
recommendation of the OMB Secretariat General of the European
Commission joint report to the U.S.-European Union (EU) High Level
Regulatory Cooperation Forum
And Transatlantic Economic Council (TEC).\13\ The Commission has
statutory authority and implementing regulatory authority to prevent
unfair or deceptive acts or practices in commerce among the states or
with foreign nations. The Commission's Rules apply to foreign-based
corporations doing business in the United States. As explained below,
to the extent that foreign companies do business in the United States
or their conduct from outside causes or is likely to cause reasonably
foreseeable injury within the United States, these foreign entities are
required to comply with the applicable statutes and rules.
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\13\ See ``Review of the Application of EU and US Regulatory Impact
Assessment Guidelines on the Analysis of Impacts on International Trade
and Investment'' (May 2008), available at http://www.whitehouse.gov/
omb/assets/regulatory_matters_pdf/sg_omb_final.pdf.
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The Commission enforces Section 5(a) of the FTC Act, which provides
that ``unfair or deceptive acts or practices in or affecting commerce
... are ... declared unlawful.'' Recently, the ``Undertaking Spam,
Spyware, And Fraud Enforcement With Enforcers beyond Borders Act of
2006'' (or the ``U.S. SAFE WEB Act of 2006'' or ``SAFE WEB'') (Pub. L.
No. 109-455, codified to the FTC Act, 15 U.S.C. Sec. 41 et seq.)
amended Sec. 5(a)'s ``unfair or deceptive acts or practices'' to
include such acts or practices involving foreign commerce that cause or
are likely to cause reasonably foreseeable injury within the United
States or involve material conduct occurring within the United States.
This amendment expressly confirmed the FTC's authority to redress harm
in the United States caused by foreign actors and harm abroad caused by
U.S. actors. This also clarified the factors for Commission
consideration in establishing Trade Regulation Rules to remedy unfair
or deceptive acts or practices that occur on an industry-wide basis.
Under Section 18 of the FTC Act, the Commission is authorized to
prescribe ``rules which define with specificity acts or practices which
are unfair or deceptive acts or practices in or affecting commerce''
within the meaning of Section 5(a)(1) of the Act.
Turning to specific rules and rulemakings and their international
effects or of potential international interest, the Premerger
Notification Rules, 16 CFR 801-803, for example, apply to mergers or
acquisitions reaching a certain size threshold and where one or both
parties are of a certain size. In addition, the Energy Independence and
Security Act of 2007 provided the Commission with authority to
promulgate a rule addressing manipulation of wholesale prices for
petroleum products and authorizes rule provisions prohibiting persons
from supplying misleading or deceptive information or data to certain
entities. As discussed within Final Actions below, the Commission
announced a final rule on August 6, 2009.
For the Commission's consumer protection mission, some of the rules
currently being reviewed may have effects on international companies
doing business in the United States or on U.S. businesses regarding
their dealings with foreigners. These include, among other things, the
provisions of the recently promulgated Health Breach Notification Rule,
16 CFR 318, which applies to foreign vendors of personal health records
and related entities. Other rules that are pending or under review and
that may have an effect on international commerce include: the
Regulations under the Comprehensive Smokeless Tobacco Health Education
Act of 1986, 16 CFR 307; Trade Regulation Rules adopted pursuant to the
Telephone Disclosure and Dispute Resolution Act of 1992 (900 Number
Rule), 16 CFR 308; Telemarketing Sales Act, which prohibit calls to
persons listed on the Do-Not-Call list, 16 CFR 310; the rulemakings on
Mortgage Acts and Practices and Mortgage Assistance Relief Services, to
be codified at 16 CFR 321, 322; Power Output Claims for Amplifiers Used
in Home Entertainment Systems, 16 CFR 432; and the Trade Regulation
Rule on Mail or Telephone Order Merchandise, which covers purchases on
the Internet, 16 CFR 435.
In addition, many of the FTC Guides also apply to foreign entities
doing business in the United States or are of interest to such foreign
entities. These include among others: Guides for the Jewelry, Precious
Metals, and Pewter Industries, 16 CFR 23; the Guides Concerning the Use
of Endorsements and Testimonials in Advertising, 16 C.F.R. 255; Guides
Concerning Fuel Economy Advertising for New Automobiles, 16 CFR 259;
and the Guides for the Use of Environmental Marketing Claims, 16 CFR
260. The FTC also issued and applies an Enforcement Statement on the
use of Made in USA and other U.S. origin claims in advertising and
labeling.\14\ The principles set forth in this enforcement policy
statement apply to U.S. origin claims included in labeling,
advertising, other promotional materials, and all other forms of
marketing, including marketing through digital or electronic means such
as the Internet or electronic mail.\15\
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\14\ See http://www.ftc.gov/os/statutes/usajump.shtm.
\15\ The Made in USA Enforcement Statement does not cover products
specifically subject to the country-of-origin labeling requirements of
the Textile Fiber Products Identification Act, the Wool Products
Labeling Act, the Fur Products Labeling Act, or the American Automobile
Labeling Act.
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Rulemakings and Studies Required by Statute
The Congress has enacted laws requiring the Commission to undertake
rulemakings and studies. They include at least 15 new rulemakings and
eight studies required by the Fair and Accurate Credit Transactions Act
of 2003, Pub. L. No. 108-159 (FACTA or the FACT Act) and the related
Credit
[[Page 64367]]
Card Accountability Responsibility and Disclosure Act of 2009, Pub. L.
No. 111-24 (CARD Act); the rulemaking pursuant to the Federal Deposit
Insurance Corporation Improvements Act of 1991, Pub. L. No. 102-242
(FDICIA); model privacy notices under the Gramm-Leach-Bliley Act; the
rulemakings concerning gasoline price manipulation and energy labeling
for lamps required or authorized by the Energy Security and
Independence Act of 2007, Pub. L. No. 110-140; temporary breach
notification requirements for vendors of personal health records under
the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5; and
a rulemaking on mortgage loans pursuant to the Omnibus Appropriations
Act of 2009, Pub. L. No. 111-8. The Final Actions section below
describes actions taken on the required rulemakings and studies since
the 2008 Regulatory Plan was published.
FACTA Rules. The Commission has already issued nearly all of the rules
required by FACTA. These rules are codified in several parts of 16 CFR
600 et seq. The remaining active FACTA rulemakings are:
1. Credit Bureau Charge for Credit Scores-The Commission was required
to determine a fair and reasonable fee to be charged by a
consumer reporting agency for providing the credit score
information required under FACTA. On November 8, 2004, the
Commission issued an NPRM on reasonable fees for credit
scores. 69 FR 64698. The comment period ended on January 5,
2005. Staff reviewed the comments and is monitoring the
credit score market, where prices have continued to remain
reasonable and competitive.
2. Risk Based Pricing Rule-The Commission jointly with the Federal
Reserve published a risk-based pricing proposal for comment
on May 19, 2008. 73 FR 28966. The comment period ended on
August 18, 2008. Risk-based pricing refers to the practice
of setting or adjusting the price and other terms of credit
offered or extended to a particular consumer to reflect the
risk of nonpayment by that consumer. This statutorily-
required rulemaking would address the form, content, time,
manner, definitions, exceptions, and model of a risk-based
pricing notice. The agencies anticipate issuing a final
rule in December 2009.
3. Furnisher Rules-On July 1, 2009, the Agencies issued furnisher
accuracy and dispute rules which are discussed under
Completed Actions below. On the same date, the Agencies
also issued an advance notice of proposed rulemaking
(``ANPRM'') that seeks to obtain information that would
assist in determining whether it would be appropriate to
propose an addition to one of the guidelines that would
delineate the circumstances under which a furnisher would
be expected to provide an account opening date, or any
other types of information, to a consumer reporting agency
to promote the integrity of the information. 74 FR 31529.
The comment period closed on August 31, 2009.
4. Advertising Disclosure Rule for Free Credit Reports-Section 205 of
the CARD Act requires the Commission to issue a rule to
prevent deceptive marketing of ``free credit reports.'' On
October 7, 2009, the Commission issued an NPRM to amend the
Free Credit Reports Rule to require prominent disclosures
in advertising for ``free credit reports'' and to address
practices which interfere with consumers' ability to obtain
file disclosures from consumer reporting agencies. 74 FR
52915 (Oct. 15, 2009). Comments on the NPRM are due on
November 30, 2009.
FACTA Study on Insurance Scores. On March 27, 2009, the Commission
issued Amended Orders to File a Special Report amending the compulsory
process resolution dated May 16, 2008 titled ``Resolution Directing Use
of Compulsory Process to Study the Effects of Credit Scores and Credit-
Based Insurance Scores Under Section 215 of the FACT Act.'' This
Amended Order requires certain insurance companies to produce
information for a study on the use and effect of credit-based insurance
scores on consumers of homeowner's insurance. The Amended Orders were
served on nine of the largest private providers of homeowners insurance
on or about April 6, 2009; it is anticipated the insurers will have
fully complied with the Amended Orders by the middle of September,
2009. Staff has begun reviewing the data produced by the insurers and
is working to identify a sample set of data to be used for the study.
FACTA Study on Credit Reports. Pending approval from the Office of
Management and Budget, the FTC plans to conduct a national study of the
accuracy of consumer reports in connection with Section 319 of the FACT
Act. This study is a follow-up to the Commission's two previous pilot
studies that were undertaken to evaluate a potential design for a
national study. Section 319 required the FTC to study the accuracy and
completeness of information in consumers' credit reports and to
consider methods for improving the accuracy and completeness of such
information. Section 319 also required the Commission to issue a series
of biennial reports to Congress over a period of eleven years from the
date of enactment (2003).
FDICIA Rule. The FDICIA assigns to the Commission responsibilities for
certain non-federally insured depository institutions (``DIs'') and
private deposit insurers of such DIs. The FTC is required to prescribe
by regulation or order, the manner and content of certain disclosures
required of DIs that lack federal deposit insurance. From 1993-2003,
the Commission was statutorily barred on an annual basis from
appropriating funds for purposes of complying with FDICIA. The
Consolidated Appropriations Act of 2004 and subsequent yearly
appropriations have not imposed the same funding prohibition and the
Commission issued an NPRM on March 16, 2005, 70 FR 12823, and a revised
NPRM on March 14, 2009. 74 FR 10843. Staff is reviewing the comments on
the revised NPRM and expects to forward a recommendation to the
Commission by the end of 2009.
Gramm-Leach-Bliley (GLB) Rule. Please see Final Actions for information
about a final GLB Rule.
Energy Security and Independence Act Rules. Several sections of the
Energy Security and Independence Act of 2007 (ESIA), require or
authorize, among other things, that the Commission promulgate rules
concerning gas price manipulation and labeling requirements for various
categories of biodiesel fuels, as well as energy labeling requirements
for certain appliances including light bulbs.\16\ The active
rulemakings under ESIA are discussed below and, for the Market
Manipulation Rulemaking, in the Final Actions section.\17\
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\16\ The rulemaking concerning labeling for biofuels was completed in
2008.
\17\ In addition, this act provides the Commission with authority to
promulgate energy labeling rules for consumer electronics; and the
Commission issued an ANPRM in May 2009. See Ongoing Reviews below.
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Section 321 of the ESIA requires the Commission to conduct a rulemaking
to consider the effectiveness of current energy labeling for lamps
(commonly referred to as ``light bulbs'') and to consider alternative
labeling approaches. In response to that
[[Page 64368]]
directive, the Commission issued an ANPRM on July 17, 2008, seeking
comments on the effectiveness of current labeling requirements for lamp
packages and possible alternatives to those requirements. 73 FR 40988.
As part of this effort, the Commission held a public roundtable meeting
on September 15, 2008; and the comment period ended on September 29,
2008. The Commission announced an NPRM on October 27, 2009, seeking
comments about proposed labeling requirements for light bulbs. 74 FR
57950 (Nov. 10, 2009). Comments are due by December 28, 2009. The
Commission will take final action before June 2010.
Mortgage Loans Rule. Section 626 of the Omnibus Appropriations Act of
2009 directed the Commission to initiate a rulemaking proceeding with
respect to mortgage loans and prescribed that any violation of the rule
shall be treated as a violation of a rule under section 18 of the
Federal Trade Commission Act regarding unfair or deceptive acts or
practices. On June 1, 2009, the Commission published an ANPRM in two
parts: (1) Mortgage Acts and Practices through the life cycle of the
mortgage loan (i.e., loan advertising, marketing, origination,
appraisals, and servicing), 74 FR 26118, and (2) Mortgage Assistance
Relief Services (practices of entities providing assistance to
consumers in modifying mortgage loans or avoiding foreclosure), 74 FR
26130. The comment periods for the ANPRMs have closed. Staff is
reviewing the comments and expects to send a recommendation to the
Commission by fall 2009 relating to further proposed actions.
Please see Final Actions below for information about the statutorily
required Temporary Breach Notification Rule.
Ten-Year Review Program
In 1992, the Commission implemented a program to review its rules and
guides regularly. The Commission's review program is patterned after
provisions in the Regulatory Flexibility Act, 5 USC 601-612. Under the
Commission's program, rules have been reviewed on a ten-year schedule
as resources permit. For many rules, this has resulted in more frequent
reviews than is generally required by section 610 of the Regulatory
Flexibility Act. This program is also broader than the review
contemplated under the Regulatory Flexibility Act, in that it provides
the Commission with an ongoing systematic approach for seeking
information about the costs and benefits of its rules and guides and
whether there are changes that could minimize any adverse economic
effects, not just a ``significant economic impact upon a substantial
number of small entities.'' 5 USC 610. The program's goal is to ensure
that all of the Commission's rules and guides remain in the public
interest. It complies with the Small Business Regulatory Enforcement
Act of 1996, Pub. L. No. 104-121. This program is consistent with the
Administration's ``smart'' regulation agenda to streamline regulations
and reporting requirements and section 5(a) of Executive Order 12866,
58 FR 51735 (Sept. 30, 1993).
As part of its continuing ten-year review plan, the Commission examines
the effect of rules and guides on small businesses and on the
marketplace in general. These reviews may lead to the revision or
rescission of rules and guides to ensure that the Commission's consumer
protection and competition goals are achieved efficiently and at the
least cost to business. In a number of instances, the Commission has
determined that existing rules and guides were no longer necessary nor
in the public interest.
Calendar Year 2008-09 Reviews
Most of the matters currently under review pertain to consumer
protection and are intended to ensure that consumers receive the
information necessary to evaluate competing products and make informed
purchasing decisions. On February 5, 2009, the Commission published its
modified ten-year schedule of review and announced that it would
initiate the review of two rules and one guide during 2009: (1) the
Automotive Fuel Ratings, Certification, and Posting Rule (Fuel Ratings
Rule), 16 CFR 306, (2) the Rule Concerning Prenotification Negative
Option Plans (Negative Option Rule), 16 CFR 425, and (3) the Guides for
Private Vocational and Distance Education Schools (Vocational School
Guides), 16 CFR 254. 74 FR 6129 (Feb. 5, 2009). Discussion of these
three reviews follows.
Fuel Ratings Rule. The Fuel Ratings Rule sets out a uniform method for
determining the octane rating of gasoline from the refiner through the
chain of distribution to the point of retail sale. The rule enables
consumers to buy gasoline with an appropriate octane rating for their
vehicle and establishes standard procedures for determining,
certifying, and posting octane ratings. On March 3, 2009, the
Commission published an ANPRM and requested comments on the rule as
part of its systematic periodic review of current rules and guides. 74
FR 9054. Staff anticipates that the Commission will issue an NPRM
during December 2009.
Negative Option Rule. The Negative Option Rule governs the operation of
prenotification subscription plans. Under these plans, sellers ship
merchandise automatically to their subscribers and bill them for the
merchandise within a prescribed time. The rule protects consumers by
requiring the disclosure of the terms of membership clearly and
conspicuously and establishes procedures for administering the
subscription plans. An ANPRM was published on May 14, 2009, 74 FR
22720, and the comment period ended on July 27, 2009. Several states, a
county government agency, and an industry trade association filed
requests seeking to extend the comment period but the requests were so
close to the end of the comment period we could not extend the period.
On August 7, 2009, the Commission granted the requests to reopen and
extended the comment period until October 13, 2009.
Vocational Schools Guides. The Commission is seeking public comments on
its Private Vocational and Distance Education Schools Guides, commonly
known as the Vocational Schools Guides. 74 FR 37973 (July 30, 2009).
Issued in 1972 and most recently amended in 1998 to add a provision
addressing misrepresentations related to post-graduation employment,
the guides advise businesses offering vocational training courses -
either on the school's premises or through distance education, such as
correspondence courses or the Internet - how to avoid unfair and
deceptive practices in the advertising, marketing, or sale of their
courses. The comment period closed on October 16, 2009.
Ongoing Reviews
Since the publication of the 2008 Regulatory Plan, the Commission has
initiated two rulemaking proceedings and is continuing review of a
number of rules and guides. The two new rulemaking proceedings are
discussed first under (a) Rules, followed by the other rule reviews and
then (b) Guides.
(a) Rules
Consumer Electronics Rule. The Commission has authority under section
325 of the ESIA to promulgate energy labeling rules for consumer
electronics (Consumer Electronics Rule). On March 16, 2009, the
Commission published an ANPRM seeking comments on whether it should
require labels for consumer
[[Page 64369]]
electronics, including televisions, computers, video recorder boxes,
and certain other equipment; the disclosures, need, and format of
labels; and appropriate test procedures. 74 FR 11045. The comment
period ended on May 14, 2009. Staff is currently reviewing the comments
and anticipates sending a recommendation to the Commission by the end
of 2009.
Debt Relief Services TSR Rule. On July 30, 2009, the Commission
approved an NPRM seeking comments on a proposal to amend the
Telemarketing Sales Rule (TSR) to address the sale of debt relief
services, including: for-profit credit counselors; debt settlement
companies that promise to obtain substantially reduced, lump sum
settlements of consumers' debts; and debt negotiators that offer to
obtain interest rate reductions or other concessions to lower
consumers' monthly payments (Debt Relief Services TSR Rule) 74 FR 41988
(Aug. 19, 2009). The proposed amendments would define ``debt relief
services,'' to ensure that telemarketing transactions involving these
services would be subject to the TSR, mandate certain disclosures, and
prohibit misrepresentations and the request or receipt of payment for
these services until services have been performed and documented. The
comment period was initially set to close on October 9, 2009, but was
extended to October 26, 2009. Staff held a public forum on November 4,
2009, which afforded Commission staff and interested parties an
opportunity to discuss the proposed amendments as well as any issues
raised in comments in response thereto.
Mail Order Rule. The Mail or Telephone Order Merchandise Rule (or the
Mail Order Rule), 16 CFR 435, requires that, when sellers advertise
merchandise, they must have a reasonable basis for stating or implying
that they can ship within a certain time. The Commission sought
comments about non-substantive changes to the rule to bring it into
conformity with changing conditions; including consumers' usage of
means other than the telephone to access the Internet when ordering,
consumers paying for merchandise by demand draft or debit card, and
merchants using alternative methods to make prompt rule-required
refunds. 72 FR 51728 (Sept. 11, 2007). Staff has reviewed the comments
and anticipates sending a recommendation to the Commission by early
2010.
Business Opportunity Rule. The proposed Business Opportunity Rule stems
from the recently concluded review of the Franchise Rule, where staff
recommended that the rule be split into two parts; one part addressing
franchise issues and another part addressing business opportunity
issues. After reviewing the comments from an NPRM, 71 FR 19054 (Apr.
12, 2006), the Commission issued a revised NPRM on March 26, 2008, that
would require business opportunity sellers to furnish prospective
purchasers with specific information that is material to the consumer's
decision as to whether to purchase a business opportunity and which
should help the purchaser identify fraudulent offerings. 73 FR 16110.
The revised NPRM comment period ended on May 27, 2008, and the rebuttal
comment period ended on June 16, 2008. A public workshop was held on
June 1, 2009, to explore changes to the proposed rule and a related
comment period closed on June 30, 2009. The Commission plans to issue a
staff report on the Business Opportunity Rule in early 2010 and seek
comment on the report.
Hart-Scott-Rodino Rules. For the Hart-Scott-Rodino Premerger
Notification Rules (HSR Rules), 16 CFR 801-803, Bureau of Competition
staff is continuing to review various HSR Rule provisions. Staff is
also reviewing the HSR Form and anticipates sending a recommendation to
the Commission in January 2010.
Used Car Rule. The Used Motor Vehicle Trade Regulation Rule (Used Car
Rule), 16 CFR 455, sets out the general duties of a used vehicle
dealer, requires that a completed Buyers Guide be posted at all times
on the side window of each used car a dealer offers for sale, and
mandates disclosure of whether the vehicle is covered by a warranty,
and if so, the type and duration of the warranty coverage, or whether
the vehicle is being sold ``as is - no warranty.'' The Commission
published a notice seeking public comments on the effectiveness and
impact of the rule. 73 FR 42285 (July 21, 2008). The notice seeks
comments on a range of issues including, among others, whether a
bilingual Buyers Guide would be useful or practicable, as well as what
form such a Buyers Guide should take. Second, the notice seeks comments
on possible changes to the Buyers Guide that reflect new warranty
products such as certified used car warranties, that have become
increasingly popular since the rule was last reviewed. Finally, the
notice seeks comments on other issues including the continuing need for
the rule and its economic impact, the effect of the rule on deception
in the used car market, and the rule's interaction with other
regulations. The comment period ended on September 19, 2008, and staff
anticipates sending its recommendation to the Commission during fall
2009.
Amplifier Rule. The Amplifier Rule, 16 CFR 432, assists consumers in
purchasing by standardizing the measurement and disclosure of various
performance attributes of power amplification equipment for home
entertainment purposes. The rule makes it an unfair or deceptive act or
practice for manufacturers and sellers of sound power amplification
equipment for home entertainment purposes to fail to disclose certain
performance information in connection with direct or indirect
representations of power output, power band, frequency or distortion
characteristics. The rule also sets out standard test conditions for
performing the measurements that support the required performance
disclosures. On February 27, 2008, the Commission published a request
for comments including a number of specific issues related to changes
in technology and products. 73 FR 10403. The comment period ended on
May 12, 2008, and staff anticipates sending a recommendation to the
Commission by fall 2009.
Cooling-Off Rule. The Cooling-Off Rule requires that a consumer be
given a three-day right to cancel certain sales greater than $25.00
that occur at a place other than a seller's place of business. The rule
also requires a seller to notify buyers orally of the right to cancel;
to provide buyers with a dated receipt or copy of the contract
containing the name and address of the seller and notice of
cancellation rights; and to provide buyers with forms which buyers may
use to cancel the contract. An ANPRM seeking comment was published on
April 21, 2009. 74 FR 18170. The comment period was supposed to close
on June 22, 2009, but was extended to September 25, 2009. 74 FR 36972
(July 27, 2009). Staff is reviewing the comments and expects to prepare
a recommendation for the Commission during the early part of 2010.
Smokeless Tobacco Regulations. The Commission's review of the
Regulations Under the Comprehensive Smokeless Tobacco Health Education
Act of 1986 (Smokeless Tobacco Regulations), 16 CFR 307, is ongoing.
The Smokeless Tobacco Regulations govern the format and display of
statutorily-mandated health warnings on all packages and advertisements
for smokeless tobacco. Staff anticipates Commission action
[[Page 64370]]
regarding review of this rule by early 2010.
Pay-Per-Call Rule. The Commission's review of the Pay-Per-Call Rule, 16
CFR 308, is continuing. The Commission has held workshops to discuss
proposed amendments to this rule, including provisions to combat
telephone bill ``cramming'' - inserting unauthorized charges on
consumers' phone bills - and other abuses in the sale of products and
services that are billed to the telephone including voicemail, 900-
number services, and other telephone based information and
entertainment services. The most recent workshop focused on the use of
800 and other toll-free numbers to offer pay-per-call services, the
scope of the rule, the dispute resolution process, the requirements for
a pre-subscription agreement, and the need for obtaining express
authorization from consumers before placing charges on their telephone
bills. The review record has remained open to encourage additional
comments on expansion of the rule's coverage. Staff anticipates
forwarding its recommendation to the Commission by December 2010.
(b) Guides
Fuel Economy Guide. The Fuel Economy Guide for new automobiles, 16 CFR
259, was adopted in 1975 to prevent deceptive fuel economy advertising
and to facilitate the use of fuel economy information in advertising.
As part of its regular review of all rules and guides, the Commission
issued a request for comments on May 9, 2007, on whether to retain or
amend the guide. 72 FR 72328. The Commission sought comments on, among
other things, whether there is a continuing need for the guide and, if
so, what changes should be made to it, if any, in light of
Environmental Protection Agency amendments to fuel economy labeling
requirements for automobiles. On April 28, 2009, the Commission
published proposed amendments to the Guide. The deadline for comments
was June 16, 2009. Staff is reviewing the comments and expects to make
a recommendation by the end of 2009.
Jewelry, Precious Metals and Pewter Guides. After issuing a staff
advisory opinion indicating that the Commission's current Guides for
Jewelry, Precious Metals and Pewter Industries, 16 CFR 23, did not
address descriptions of new platinum alloy products, the Commission
issued a Request for Public Comments on whether the platinum section of
the Guides for Jewelry, Precious Metals and Pewter Industries, should
be amended to provide guidance on how to non-deceptively mark or
describe products containing between 500 and 850 parts per thousand
(ppt) pure platinum and no other platinum group metals. 70 FR 38834
(July 6, 2005). After reviewing the comments, the Commission issued a
notice seeking comment on proposals to amend the platinum section of
the Guides to address the new platinum alloys. 73 FR 10190 (Feb. 26,
2008). The extended comment period ended August 25, 2008. Staff expects
that the Commission will amend the Guides during late 2009 to provide
that marketers may non-deceptively mark and describe an alloy of
platinum and non-precious metals consisting of at least 500 parts per
thousand (ppt), but less than 850 ppt, pure platinum and less than 950
ppt total platinum group metals (PGM) as ``platinum,'' provided they
make certain disclosures.
Green Guides. The Commission previously announced that it would review
the Green Guides, 16 CFR 260. 73 FR 66091 (Nov. 27, 2007). The Green
Guides outline general principles that apply to all environmental
marketing claims and provide guidance regarding specific environmental
claims. The Commission sought comment on the need for the guides and
their economic impact, the effect of the guides on the accuracy of
various environmental claims, and the interaction of the guides with
other environmental marketing regulations. As part of its review,
during 2008, the Commission held workshops and received comments in
three specific areas: 1) carbon offsets and renewable energy
certificates (Jan. 8, 2008); 2) environmental packaging claims and
green packaging (April 30, 2008); and 3) developments in green building
and textiles claims and consumer perception of such claims (July 15,
2008). Staff is reviewing the comments the Commission has received and
is conducting consumer research.
FCRA Commentary. Finally, the Commission anticipates issuing a notice
requesting comments on the Statement of General Policy or
Interpretations under the Fair Credit Reporting Act (also known as FCRA
Commentary) by the middle of 2010.
Final Actions
Since the publication of the 2008 Regulatory Plan, the Commission has
issued the following final rules:
Call Abandonment TSR Amendments. The Commission issued a final rule
implementing proposed Call Abandonment amendments to the TSR. 73 FR
51164 (Aug. 29, 2008). The amendments expressly prohibited
telemarketing sales calls that deliver prerecorded messages, whether
answered in person by a consumer or by an answering machine or
voicemail service, unless the seller has previously obtained the
recipient's signed, written agreement to receive such calls. The
amendments also changed the method for measuring the maximum allowable
call abandonment rate in the call abandonment safe harbor provision
from ``3 percent per day per calling campaign'' to ``3 percent per 30-
day period per calling campaign.'' The Commission also ended its
temporary policy during the rulemaking of forbearing from bringing
enforcement actions against sellers and telemarketers who placed
prerecorded calls that meet certain specified conditions that would be
inconsistent with the new requirements. There was a phase-in of various
effective dates, with the last one being the provision requiring
permission from consumers to receive such calls, which became effective
September 1, 2009.
Market Manipulation Rule. Section 811 of the ESIA prohibits any
manipulative or deceptive device or contrivance in connection with the
wholesale purchase, or sale of crude oil, gasoline, or other petroleum
distillate in contravention of rules or regulations the Commission may
prescribe (Market Manipulation Rule). Section 813 specifies the methods
of enforcing such a rule. The Commission announced an ANPRM requesting
comments on the manner in which it should carry out its
responsibilities to promulgate regulations under these sections. 73 FR
25614 (May 7, 2008). After considering the comments, the Commission
issued an NPRM on August 19, 2008, 73 FR 53393, and held a workshop on
November 6, 2008. The Commission issued a revised NPRM on April 22,
2009, 74 FR 18304; and the comment period on the revised NPRM ended on
May 20, 2009. On August 6, 2009, the Commission announced a final rule
that prohibits fraud or deceit in wholesale markets for petroleum
products, and intentional omissions of material information that are
likely to distort market conditions for any such product. 74 FR 40686
(Aug. 12, 2009). The rule was effective on November 4, 2009. On
November 13, 2009, the FTC issued its Compliance Guide for these
Petroleum Market Manipulation Regulations. The Guide answers commonly
asked questions and examines various scenarios to help those trading in
wholesale petroleum markets comply
[[Page 64371]]
with the regulations. The Guide is available on the FTC's Web site at:
www.ftc.gov/ftc/oilgas/rules.htm.
Health Breach Notification Rule. Section 13407 of the American Recovery
and Reinvestment Act of 2009 required the Commission to issue rules
requiring vendors of personal health records and third parties that
offer products or services through the web sites of vendors to notify
individuals when the security of their individually identifiable health
information is breached. The Commission published an NPRM on April 20,
2009 (74 FR 17914), seeking comments. The Commission announced the
final rule on August 17, 2009. 74 FR 42962 (Aug. 25, 2009).
FACTA Furnisher Rule. The Commission also published one final rule
mandated by FACTA, the Furnisher Rule. The Commission is required, in
coordination with the banking agencies and National Credit Union
Administration, to issue guidelines and rules concerning the accuracy
of information furnished to consumer reporting agencies, and rules
relating to the ability of consumers to dispute information directly
with furnishers of information. The Commission and the other agencies
published final rules on July 1, 2009. 74 FR 31484.
Endorsements and Testimonials in Advertising Guides. On January 16,
2007, the Commission requested public comments on the overall costs,
benefits, and regulatory and economic impact of its Guides Concerning
the Use of Endorsements and Testimonials in Advertising, 16 CFR 255.
The Commission also released consumer research it commissioned
regarding the messages conveyed by consumer endorsements, and sought
comment both on this research and upon several other specific
endorsement-related issues. 72 FR 2214 (Jan. 18, 2007). After reviewing
the comments, the Commission proposed changes to the guides and
requested public comments. 73 FR 72374 (Nov. 28, 2008). The proposed
revisions address consumer endorsements, expert endorsements,
endorsement by organizations, and disclosure of material connections
between advertisers and endorsers. On the issue of consumer
endorsements, the proposed revisions explain that when ads using
consumer testimonials convey that the endorser's experience is
representative of what consumers will generally achieve and the
advertiser does not possess adequate substantiation for this
representation, the advertiser should clearly and conspicuously
disclose the results consumers actually can expect to achieve. The
initial comment period ended on January 30, 2009, but was subsequently
extended to March 2, 2009. 74 FR 5810 (Feb. 2, 2009). On October 5,
2009, the Commission announced it would retain a revised version of the
guides, effective on December 1, 2009. 74 FR 53124 (Oct. 15, 2009).
Gramm-Leach-Bliley Rule. Pursuant to Section 728 of the Financial
Services Relief Act of 2006, P. L. No.109-351, which added section
503(e) to the Gramm-Leach-Bliley Act (or GLB Act), the Commission
together with seven other federal agencies\18\ is directed to propose a
model form that may be used at the option of financial institutions for
the privacy notices required under GLB. The 2006 amendment provided
that the agencies must propose the model form within 280 days after
enactment, or by April 11, 2007. On March 29, 2007, the GLB agencies
issued an NPRM proposing as the model form the prototype privacy notice
developed during the consumer testing research project undertaken by
first six, and then seven, of these agencies. 72 FR 14940. On November
17, 2009, the Agencies announced a model privacy form that financial
institutions may rely on as a safe harbor to provide disclosures under
the privacy rules. In addition, the Agencies other than the SEC are
eliminating the safe harbor permitted for notices based on the Sample
Clauses currently contained in the privacy rules if the notice is
provided after December 31, 2010.
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\18\ The agencies are the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, the Office of Thrift Supervision, the
National Credit Union Administration, the Securities and Exchange
Commission, and the Commodity Futures Trading Corporation.
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Summary
In both content and process, the FTC's ongoing and proposed regulatory
actions are consistent with the President's priorities. The actions
under consideration inform and protect consumers and reduce the
regulatory burdens on businesses. The Commission will continue working
toward these goals. The Commission's ten-year review program is
patterned after provisions in the Regulatory Flexibility Act and
complies with the Small Business Regulatory Enforcement Fairness Act of
1996. The Commission's ten-year program also is consistent with section
5(a) of E.O. 12866, which directs executive branch agencies to develop
a plan to reevaluate periodically all of their significant existing
regulations. 58 FR 51735 (Sept. 30, 1993). In addition, the final rules
issued by the Commission continue to be consistent with the President's
Statement of Regulatory Philosophy and Principles, Executive Order
12866, section 1(a), which directs agencies to promulgate only such
regulations as are, inter alia, required by law or are made necessary
by compelling public need, such as material failures of private markets
to protect or improve the health and safety of the public.
The Commission continues to identify and weigh the costs and benefits
of proposed actions and possible alternative actions, and to receive
the broadest practicable array of comment from affected consumers,
businesses, and the public at large. In sum, the Commission's
regulatory actions are aimed at efficiently and fairly promoting the
ability of ``private markets to protect or improve the health and
safety of the public, the environment, or the well-being of the
American people.'' E.O. 12866, section 1.
II. REGULATORY ACTIONS
The Commission has one proposed rule that would be a ``significant
regulatory action'' under the definition in Executive Order 12866.\19\
This is the FACTA Risk Based Pricing Final Rule, which staff
anticipates being approved by the Commission during early 2010. There
is further information about this under the prior heading of
Rulemakings and Studies Required by Statute.
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\19\ Section 3(f) of the Executive Order defines a regulatory action to
be ``significant'' if it is likely to result in a rule that may: (1)
Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities; (2) Create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) Materially alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof; or (4)
Raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in this Executive
Order.
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BILLING CODE 6750-01-S
