Model Regulation Service - January 1987 RULES GOVERNING ADVERTISEMENTS OF ACCIDENT AND SICKNESS INSURANCE WITH INTERPRETIVE GUIDELINES Model Regulation Service - January 1987 RULES GOVERNING ADVERTISEMENTS OF ACCIDENT AND SICKNESS INSURANCE WITH INTERPRETIVE GUIDELINES Mr. LUKEN. Thank you. [Whereupon, at 1:52 p.m., the subcommittee recessed, to reconvene at the call of the Chair.] [The following letter was submitted for the record:] NATIONAL CREDIT UNION ADMINISTRATION, OFFICE OF THE CHAIRMAN, Washington, DC, May 27, 1987. Hon. THOMAS A. LUKEN, DEAR CHAIRMAN LUKEN: I would like to take this opportunity to advise you of the views of the National Credit Union Administration Board concerning a proposed amendment to the Federal Trade Commission Act. The amendment would exempt Federal credit unions from Federal Trade Commission jurisdiction to the same degree which banks and savings and loan associations have already been exempted. NCUA has been and continues to be very supportive of this initiative to eliminate the current duplicative regulatory scheme. Presently Federal credit unions are subject to both the jurisdiction of the Federal Trade Commission and the National Credit Union Administration with respect to investigatory and enforcement authority. In order to receive the same exemption which has previously been granted to banks and savings and loan associations, Sections 5, 6 and 18 of the Federal Trade Commission Act should be amended to exempt Federal credit unions. The language contained in section 11 of S. 1078—a bill which passed the Senate in the 99th Congress-has been reviewed by my staff, and we are convinced that such language would properly achieve that goal. The National Credit Union Administration is prepared to ensure proper compliance in such matters. Our authority under section 120 of the Federal Credit Union Act (12 U.S.C. 1766) and section 206 of the Federal Credit Union Act (12 U.S.C. 1786) is sufficient to protect the interests of Federal credit union members. NCUA will, of course, promulgated substantially similar rules to those promulgated by the Federal Trade Commission under section 18(F) of the Federal Trade Commission Act unless we determine that such acts or practices are not unfair or deceptive with respect to credit unions. I thank you for the opportunity to comment on this matter and would encourage you and your colleagues on the Committee to support amendatory language to the Federal Trade Commission Act exempting Federal credit unions from the jurisdiction of the Federal Trade Commission. With kindest personal regards, I am Sincerely, ROGER W. JEPSEN, Chairman. FEDERAL TRADE COMMISSION AUTHORIZATION TUESDAY, JUNE 2, 1987 HOUSE OF REPRESENTATIVES, AND HAZARDOUS MATERIALS, Washington, DC. The subcommittee met, pursuant to notice, at 11:10 a.m., in room 2325, Rayburn House Office Building, Hon. Thomas A. Luken (chairman) presiding. Mr. LUKEN. We thank you all for attending. This morning's hearing will be a continuation of the hearings on the Federal Trade Commission authorization request for the fiscal year 1988. Last week the subcommittee received the testimony of public witnesses and this morning the hearing will complete the scheduled set of hearings on the issue as we hear from the members of the Commission. The last FTC authorization bill enacted by the Congress was in 1980. It expired in October of 1982. The Commission has operated without an authorization bill for the last 5 years. As a result, a number of provisions which directly affect the authority of the Commission have to be attached to appropriations and continuing resolutions. The annual expiration of these authorities has created uncertainty about the Commission's authorities in a number of areas. One of the principal issues that needs to be addressed is the matter of the Commission's authority in commercial advertising. That has become a controversial matter. For the last few years the Commission has been prohibited from initiating any rulemaking activity relating to advertisements on the basis of a determination that such advertisement constitutes an unfair act or practice. The uncertainty caused by the annual consideration of this matter must be resolved by making this prohibition a part of the organic FTC Act. Advertising is a central means by which a seller communicates with a consumer in the marketplace. It is essential that the information contained in the advertising be truthful. Yet today there are frequent complaints that advertising is uninformative and that the consumer is misled by oversimplified claims of the benefits which can be derived from using a certain product or service. In many ways, this same criticism can be made of the statutory language which vests the Commission with the authority to regu (217) late commercial speech. I believe the existing law has failed to provide the Commission with sufficient guidance regarding the exercise of its authority over the regulation of commercial advertising, especially in view of the criteria established by the Supreme Court in the Central Hudson case. I believe it is essential that the authorization bill address the issue of what constitutes an unfair act or practice and that our work be directed towards establishing a standard that provides a consumer with accurate and reliable information without infringing upon the right of commercial speech. The Commission's authority over agricultural cooperatives and the study of the insurance industry are also matters which need to be legislatively resolved. I look forward to receiving the comments of the commissioners regarding these provisions in the Senate bill which is now before us. During the subcommittee's hearing last week, a number of witnesses complained about the lack of aggressive enforcement under the Commission's antitrust authority and the Robinson-Patman Act. While we may well schedule extensive hearings on these specific issues later this year, I think it is important that they be raised in the context of the authorization, in order to determine if there is a need to provide specific directions to the Commission to ensure that it is fully exercising its statutory responsibilities in those areas. I believe that periodic reports to the Congress on the enforcement practices of the Commission would be appropriate for inclusion in an authorization bill. Further, it is my hope that these hearings will provide an opportunity for the members of the subcommittee to explore with the witnesses those issues which should be addressed in an authorization bill, and that the record provides a basis for a consensus that will enable us to move forward with the authorization process. I thank the members of the Commission for attending this morning and look forward to receiving their testimony and the colloquies that will ensue. I call upon the gentleman from Kansas, Mr. Whittaker. Today the subcommittee is holding its second Federal Trade Commission reauthorization hearing. The subcommittee held its first hearing last week and received testimony from businessmen and attorneys general. That hearing laid the groundwork for today's hearing. As we all know, the Commission has not been reauthorized in 41⁄2 years. It is the Energy and Commerce Committee's responsibility to review the substantive authority of the Commission. Unfortunately, that responsibility has fallen into the lap of the Appropriations Committee during the past few Congresses. My colleagues and I plan to begin the negotiating process in the weeks following this hearing, so that the Energy and Commerce Committee can meet its responsibilities and report a bipartisan reauthorization bill in the near future. I am optimistic that the FTC reauthorization bill will be signed into law this Congress. |