FTC, CFPB Sorting Out Respective Roles in Reducing Financial Fraud

Law.com
September 15, 2011
Greene, Jenna

Just seven weeks after the new Consumer Financial Protection Bureau opened its doors, the Federal Trade Commission shows no signs of ceding any of its own overlapping jurisdiction over financial fraud. The agency recently brought suit against a payday lender that allegedly tried to garnish consumers' wages without obtaining the required court order. Earlier this month, the FTC also amended its complaint against U.S. Mortgage Funding, charging the company with falsely promising financially strapped consumers that they would get loan modifications to make their mortgages more affordable. Meanwhile, the CFPB is still gearing up and has yet to issue a single enforcement action. It is unclear how the two agencies will split up the responsibility. "The FTC and the CFPB will have joint enforcement over deceptive marketing of payday loans and a range of other financial products," according to FTC spokeswoman Betsy Lordan, who said details on how the agencies will split joint enforcement efforts will be made clear in a Memorandum of Understanding, set to be complete by Jan. 21, 2012. But one FTC commissioner, J. Thomas Rosch, has challenged why the CFPB is even necessary, as the two agencies have so much overlapping jurisdiction. "The proposed new agency has no track record in protection consumers from deceptive and unfair practices in the financial marketplace," he said.
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