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FTC, CFPB, DOA & State Review of 2021, Outlook for 2022

2021 has been a year of adaptation and preparation in expectation of a significant increase in 2022 regulatory oversight and enforcement.

The DOA, CFPB, FTC, and State agencies have made significant and, in some cases, sweeping changes to their rules and mission. Most are focused on protecting consumers from corporate misrepresentation and deceptive practices, data abuse and monopolies.

It can be argued that the Federal Trade Commission has undergone the most change, starting in April with the loss of their ability to obtain monetary relief through their enforcement of 13(b). This rule interpretation was decided in the Supreme Court case AMG Capital Management LLC v. FTC (1). It had enabled the FTC to acquire hundreds of millions of dollars from businesses through penalties and fees, much of which was issued back to consumers.

Subsequently in June, Ms. Lina Khan was sworn in as the FTC’s Chair and has shifted their focus to support a more aggressive stance(2). Within a month or so, the FTC voted to revise the Penalty Offense Authority rule, which will be used as a replacement for 13(b). It has severe penalties that can reach $43,000 per violation, with a ‘new’ violation on the same issue being generated each non-remediated day after a certain period(3).

The Consumer Financial Protection Bureau is not far behind, and has become more closely tied to the FTC through the addition of the former FTC commissioner Rohit Chopra as the new CFPB director. Mr. Chopra has a long history as an American consumer advocate and favors stronger oversight of banks and other financial institutions(4)

Early in 2021, the CFPB set the stage by releasing a report that makes approximately 100 recommendations to the Bureau, Congress and state/federal regulators to strengthen consumer protections(5).

Areas of interest for the CFPB have been predatory lending, debt collection practices, consumer discrimination, deceptive advertising, and identify theft.

The Department of Ed has also seen significant change starting with the confirmation of Dr. Miguel Cardona as Secretary of Education.

Prior to Dr. Cardona’s confirmation, President Biden said “He will also strive to eliminate long-standing inequities and close racial and socioeconomic opportunity gaps — and expand access to community college, training, and public four-year colleges and universities to improve student success and grow a stronger, more prosperous, and more inclusive middle class.(6)

Dr. Cardona has supported that vision and continues to push for more oversight within many areas of edu, including the For-Profit sector which will likely see more change in 2022.

States have also ramped up efforts to protect consumers. California has increased CCPA enforcement along with similar enforcement of laws in Colorado, Virginia, Nevada and Vermont(7). New York is actively protective and more states are considering new laws to address data use and privacy.

European countries are on the forefront of regulation (GDPR, UCPD, CRD) and many US regulators look to their laws when considering how to move forward US regulations. Often considered a leading indicator, organizations like the Advertising Standards Authority (UK) are actively addressing outdated laws and setting standards for the digital world.(8, 9)

All in all, 2022 is shaping up to be a year of adaptation and enforcement. Key sectors like Financial Services, Education, Insurance, Pharma, Direct Selling, CBD, and Online Gambling should expect increased oversight.

Regardless of sector, businesses which accurately and compliantly market their brand, manage consumer data and take steps to prove their efforts will mitigate much of the risk.

Be proactive, prepare for the possibility of regulatory or civil action and sleep well knowing that your company has positioned itself to address risk while fairly and openly connecting with your consumers.