The party-line vote sends the bill, introduced after a U.S. Supreme Court ruling on the FTC Act, to the Senate.
The House of Representatives passed a bill Wednesday challenging a unanimous ruling from the U.S. Supreme Court concerning the Federal Trade Commission’s ability to seek financial restitution under the FTC Act.
The Consumer Protection and Recovery Act, H.R. 2668, passed 221-205 with significant support from Democrat members of Congress, The Hill reports.
Following the Supreme Court’s decision in April, U.S. Rep. Tony Cárdenas, D-Calif., vice chair of the House Energy and Commerce Committee, introduced H.R. 2668 to amend Section 13(b) of the FTC Act to provide the FTC with express authority to obtain both injunctive and monetary equitable relief for all violations of the laws it enforces, ACA International previously reported.
In June, the committee voted 30-22 to pass the legislation.
Before the committee’s vote to send the bill to the House, H.R. 2668 presented some partisan controversy amid negotiations on the statute of limitations and interpretations of law to alter the appropriate legal standard of applicable fraud. Republican committee members felt five years was appropriate for the statute of limitations, while Democrat members supported keeping it at 10 years as described in the bill, ACA previously reported.
H.R. 2668 is cosponsored by U.S. Reps. Frank Pallone, D-N.J., chairman of the committee, Janice Schakowsky, D-Ill., Bobby Rush, D-Ill., Kathy Castor, D-Fla., Lori Trahan, D-Mass., Jerry McNerney, D-Calif., Yvette Clarke, D-Calif., Debbi Dingell, D-Mich., Robin Kelly, D-Ill., Darren Soto, D-Fla., Kathleen Rice, D-N.Y., Angie Craig, D-Minn., and Lizzie Fletcher, D-Texas. This represents all Democrat members on the House Subcommittee on Consumer Protection and Commerce.
“Today the House took decisive action to restore the FTC’s authority to help return money to consumers and businesses that have been defrauded by scammers,” Pallone and Schakowsky said in a joint statement. “Congressional action is necessary following the Supreme Court’s April ruling that undermined the agency’s longstanding consumer protection powers.”
The bill adds a new subsection (e) to section 13 of the FTC Act that specifies types of equitable relief the FTC may pursue: restitution for losses, contract reformation and recission, money refunds and the return of property. The new subsection (e) also provides the FTC disgorgement authority to seek court orders requiring bad actors to repay unjust gains acquired in violation of the law. The bill applies to any currently pending FTC action or proceeding in addition to those commenced on or after the date of enactment.
Republican lawmakers raised concerns about the bill.
“I do think we can all agree that both Republicans and Democrats want to protect people from malicious actors and that the FTC should have the necessary tools to do so,” said U.S. Rep. Cathy McMorris Rodgers, R-Wash., Republican leader of the House Energy and Commerce Committee in a news release. “H.R. 2668 grants FTC brand new authorities under section 13(b) of the FTC Act to seek financial penalties for what it alleges is fraud and anti-competitive behavior. It does so without the inclusion of guardrails to protect due process. This was also a huge missed opportunity to enact a national privacy standard.”
The bill now heads to the U.S. Senate for consideration.
Meanwhile, the House Energy and Commerce Committee will hold a legislative hearing with the FTC at 10:30 a.m. Wednesday, July 28. The hearing, “Transforming the FTC: Legislation to Modernize Consumer Protection,” will feature testimony from the FTC as well as consumer protection advocates, according to the hearing notice.