Last Friday, President Biden issued an Executive Order on Promoting Competition in the American Economy. Much of the Order is directed at increasing competition in the labor market, transportation, agriculture, healthcare, and technology. It calls on the FTC, the DOJ, and other agencies to pursue vigorous enforcement of the antitrust laws. The Order also includes directives to the FTC and CFPB concerning data collection, data portability, and UDAAP enforcement.
First, as a way of addressing practices that inhibit competition, the Order encourages the FTC to consider rulemaking dealing with “unfair data collection and surveillance of practices that may damage consumer competition, consumer advocacy, and consumer privacy.” The Order is consistent with newly-confirmed FTC Chair Lina Khan’s swift actions to strengthen the FTC’s authority at her first FTC meeting (two weeks ago), during which she moved, and the Commission approved (by a narrow 3-2 vote), changes to streamline the FTC’s UDAP rulemaking process. The rulemaking changes include shifting oversight of the rulemaking process from an administrative law judge to the FTC Chair, eliminating the requirement to issue a staff report analyzing any rulemaking proceedings, and scaling back some of the previously required public comment periods. We expect President Biden’s choice to head the FTC to be aligned with the White House’s goals and to take steps to aggressively pursue its mandates for the FTC in the Executive Order.
Second, the Order encourages the CFPB “consistent with the pro-competition objectives stated in section 1021 of the Dodd-Frank Act” to consider:
- Rulemaking under Dodd-Frank Section 1033 “to facilitate the portability of consumer financial transaction data so consumers can more easily switch financial institutions and use new, innovative financial products,” and
- Enforcing the Dodd-Frank UDAAP prohibition “so as to ensure that actors engaged in unlawful activities do not distort the proper functioning of the competitive process or obtain an unfair advantage over competitors who follow the law.”
Section 1021 of Dodd-Frank directs the CFPB “to seek to implement, and where applicable, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive.”
While it will not be surprising to see the CFPB reference the Executive Order in future press releases about enforcement actions, the Order is unlikely to materially impact the CFPB’s use of its enforcement authority. However, the Order’s inclusion of UDAAP serves to confirm our expectations that the CFPB will pursue an aggressive UDAAP enforcement agenda under the Biden Administration and Director Chopra once confirmed.
With regard to Section 1033, the Executive Order could cause the CFPB to prioritize its rulemaking activities. Section 1033 of Dodd-Frank addresses consumers’ rights to access information about their own financial accounts, and permits the CFPB to prescribe rules concerning how a provider of consumer financial products or services must make a consumer’s account information available to him or her, “including information related to any transaction, or series of transactions, to the account including costs, charges, and usage data.” In November 2020, the Bureau issued an Advance Notice of Proposed Rulemaking in connection with its Section 1033 rulemaking. In it Spring 2021 rulemaking agenda, the Bureau gave an estimated April 2022 date for its next pre-rule steps.