Five new commissioners recently were appointed to the Federal Trade Commission, and they have expressed interest in holding senior decision makers responsible for conduct that occurs at a company, John Redding, partner at Buckley LLP, told Powersports Finance.
“Not that we haven’t heard that from others in the past but, based on what we’re seeing, there certainly appears to be that focus at the FTC,” Redding said. “So for those who are in senior roles with an ability to affect and to drive decisions on how things will be done at companies, there is an added layer of risk that I think needs to be taken into account.”
The FTC likely is operating under the idea that by holding individuals responsible for acts of the company, it will enhance the overall risk thus strengthening the focus on compliance, Redding said.
The Senate approved the nomination of the five commissioners of the FTC earlier this month. The commissioners are Republicans Noah Phillips and Christine Wilson, along with Democrats Rohit Chopra and Rebecca Slaughter. Joe Simons, a former parnter at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was appointed as the FTC chairman overseeing the other four commissioners.
This is the first time that five commissioners have been appointed at once since the FTC was established in 1914, Redding noted. As such, there is a level of uncertainty as to how the FTC will operate and what areas are of interest to the new commissioners.
Under its charter, the FTC has the authority to investigate any unfair or deceptive acts and practices in the consumer financial markets. This includes protecting consumers and making sure the consumers are remediated when harm occurs in consumer financial services.
Specifically, the FTC has authority to oversee areas such as telemarketing, false advertising, and automatic paying methods. While the new commissioners are unlikely to cause any serious changes in how the FTC operates, there will be a learning curve for lenders as to what to expect.
“We are all watching to see how the new commissioners will operate within their roles,” Redding said. “I don’t think that somehow there’s going to be massive shifts in the types of things that the FTC does, rather each commissioner is likely to have — or the commissioners as a group are likely to have — particular areas of interest to them. We can see some changes that occur as a result of that. I think the apparent focus on individuals is one good example of that.”