Consumer Protection and Recovery Act
Floor Speech
Mr. Speaker, I rise in opposition to this legislation.
Mr. Speaker, I had hoped to stand before you today urging my colleagues to support this legislation. Sadly, I must oppose because the expansive authority included here goes way beyond the new agency power I and my colleagues were willing to put into statute to ensure the FTC has the ability to get financial restitution to constituents who were victimized by scams as quickly as possible. So, we do agree on the concept but not the details.
Instead, this bill before us will provide the FTC with new authorities that far outpace the need supported by a consensus of the FTC Commissioners.
Even more concerning, Mr. Speaker, as we heard from the former head of the FTC's Consumer Protection Bureau, who testified before our subcommittee, it signals a return to the broad overreach we saw with the FTC in previous decades, a situation so bad that a Democratic Congress crippled the FTC's funding and stripped it of its authority at that particular time. But, alas, here we go again. History is repeating itself if this piece of legislation is passed.
Separately, H.R. 2668 has been riddled with process fouls and has ignored well-founded concerns from Republicans, including the lack of needed transparency reform and the lack of a national privacy standard, which will protect consumers. We are overdue for this, and we must have a national privacy standard as soon as possible, Mr. Speaker.
I have heard from my colleagues. They claim this bill only establishes a statute of limitations, but that simply is not the case. In fact, if you listened to the rhetoric from my Democratic colleagues, you would believe this bill was narrowly targeted at fraudsters and scammers, but that is not the case.
Under this bill, the FTC could obtain billions in penalties without ever proving that the alleged company ever knew or intended to mislead at all.
The Supreme Court ruled 9-0, a unanimous decision, that the FTC never had the authority to grant monetary relief under 13(b). Even the liberal Justices of the Court, Mr. Speaker, said that 13(b) was only designed for injunctive relief. We all agree on that.
So, let's fix it for the benefit of our consumers and any future victims. Let's make sure that they get the restitution they deserve.
An important principle of the American justice system is that the harsher the penalty is, the more due process is needed. So while I do agree with my Democratic colleagues that 13(b) provides sufficient due process for injunctive relief, the new authorities this legislation bestows on section 13(b) does not, however, provide enough due process if the penalty is monetary relief.
Perhaps therein lies my colleagues' true intent. This legislation is not really to fix a problem or restore a power but instead aims to grant the FTC with brand-new and unchecked authorities, rivaling those of the 1970s, to seek financial penalties for what it alleges is fraud and anticompetitive acts through section 13(b) of the FTC Act.
To those listening today, do not be fooled by the title of this bill. I believe it is irresponsible that the Consumer Protection and Recovery Act grants these new authorities without any guardrails to ensure due process remains a foundational American principle or to protect American companies from egregious enforcements that are not intended to protect consumers or help them recover from the harm of bad actors.
We all want to go after the bad actors, Mr. Speaker, but there must be due process.
Now, if it is a clear-cut case of fraud, like Volkswagen, then I agree that we should be able to use 13(b) to seek monetary relief, and my amendment captures such acts. That is the exception to the legal standard.
But if the FTC has to look back 10 years--and that is what we do with this particular piece of legislation, if it passes--and not have to prove there was deceptive intent, as there was in Volkswagen, then we need to ensure due process before the FTC can take money from small businesses and entrepreneurs.
I feel that that is only fair. That is why I was proud to offer a compromise during our Energy and Commerce Committee markup, which was the only portion of the markup that received bipartisan support. My amendment was the only one that received bipartisan support, and I believe it is fair and reasonable.
My amendment struck the right balance between providing the FTC with the new authorities to go after bad actors but also placed much-needed guardrails to keep the FTC from short-circuiting due process and seeking disgorgement from small businesses unaware of any potential violation.
Our small businesses are struggling, and those that conduct bad acts should be punished, absolutely should be punished. There should be restitution for the victims. But our innocent small businesses are having a hard time as it is.
One of my Democratic colleagues even commented that to go from 5 years to 10 years will increase the cost of businesses' errors-and- omissions insurance policies. We must consider that as well.
Now, combine that with no standards attached to the behavior in question, and we will see even more inflation, ultimately hurting our small businesses and allowing the big guys to pass on the cost to constituents, which they most likely will do. They have the lawyers on their side, so they will pass the costs on to the constituents. We can't have that.
Without these guardrails, the FTC will create a ripple effect that will kill small businesses, unfortunately, innovation and ingenuity, while raising prices in our economy.
My amendment found the right balance, I believe, on the statute of limitations to ensure businesses are not blindsided by the assertion of claims long after the potential conduct, when evidence may no longer be available or is stale, and it is only right. Five years--I would even compromise and go a little higher, but the information must not be stale. I would say in most States, and also DOJ in some criminal cases, the statute is roughly 5 years. In most States, approximately 5 to maybe 7 years, at the most.
While shortening the statute, it also provides the FTC with a unique, equitable tolling period to allow the FTC the ability to seek monetary relief beyond the 5-year statute of limitations in the case of intentionally deceptive or fraudulent conduct. This addresses examples of the fraudulent behavior you will hear from my Democratic colleagues, when the FTC failed to act in a timely fashion. The tolling language is in my amendment.
Despite receiving bipartisan support, the majority rejected this amendment. One can only wonder if this is because it stands in the way of remaking our entire country into a managed economy and one that, again, strips due process rights from its citizens. I hope that is not the case.
Mr. Speaker, as I have said before, Republicans and Democrats both want to protect consumers. We were in Rules yesterday, and we both agreed on that; we want to protect our consumers, and we want to make sure that they get the restitution that they deserve.
I have stayed at the table to negotiate this and even offered an amendment that went a step further than the one I offered in committee. Unfortunately, it fell on deaf ears. The Rules Committee did not make my or any other Republican amendment in order today, ignoring our serious concerns.
We were concerned about pending cases, to make sure that the FTC had the time to look at all the pending cases, and that would make an exception to the statute of limitations, the 5 years. I think we thought of everything.
To my colleagues, let's work together and properly empower the FTC to protect constituents and pass a national privacy standard. This is our opportunity. As a matter of fact, the Senate is working on a bill that includes a privacy standard; a 13(b) fix, but also a privacy standard.
I urge a ``no'' vote on this particular piece of legislation. I want to get back to the table and get this right.
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Mr. BILIRAKIS. Michigan is the home of Tom Brady; at least he went to college there, a great American. Mr. Walberg is also a great American.
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Mr. BILIRAKIS. Mr. Speaker, I continue to reserve the balance of my time.
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Mr. BILIRAKIS. Mr. Speaker, I will continue to reserve the balance of my time.
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Mr. BILIRAKIS. Mr. Speaker, I will continue to reserve the balance of my time.
Mr. Speaker, we need due process in this particular bill. I believe that this bill is incomplete. We do have to protect the honest small businesses in this country. As a matter of fact, I heard just yesterday, from over 100 small businesses, and they have real serious concerns, legitimate concerns about this particular bill. This bill is not ready for prime time at this particular time. As I said, it is incomplete.
Mr. Speaker, we must go after the bad actors. There must be restitution for our victims--there is no question--but it has to be fair, with a fair and reasonable legal standard.
Mr. Speaker, on that particular note, with regard to the legal standard, former head of the FTC Consumer Protection Bureau and committee witness, Dr. Howard Beales stated that a reasonable person standard was an appropriate standard to include in any restitution or disgorgement legislation.
He testified that this will ensure that the FTC focuses its efforts on bad actors, not honest small business people, but bad actors when using its limited resources to bring these claims.
Mr. RODNEY DAVIS of Illinois. Mr. Speaker, I thank my good friend, Mr. Bilirakis, for yielding.
Mr. Speaker, H.R. 1, the Democrats' so-called For the People Act, would create a public money slush fund using corporate fines to fund political campaigns, including their own.
Based on numbers from the last election cycle, H.R. 1 would add up to an average of $7.2 million into each Congressional candidate's campaign.
My motion would ensure any fines collected by the Federal Trade Commission under this bill would go to the victims of fraud and not be used as a pathway to fund Congressional campaign coffers--victims, like the thousands of students that were cheated out of $62 million by a debt relief scam recently prosecuted by the FTC; or the patients with liver disease who spent thousands on a supplement that was deceptively marketed as a treatment; or those struggling with opioid abuse who were part of a scheme that overcharged them for medication to help minimize withdrawal symptoms.
The FTC has worked to ensure these victims are compensated. But if H.R. 1 were to become law, many of these fine structures would be weaponized to boost public funds given to candidates to pay for their campaign mailers, political consultants, and even attack ads. Our focus should be on assisting victims, not using public dollars to fund our own campaigns. Again, based on numbers from the 2020 cycle, that is up to $7.2 million per Congressional candidate.
H.R. 1 is often touted by my Democrat colleagues and the media as voting rights legislation. This is the furthest thing from the truth. How does weaponizing our victim compensation system to line the pockets of politicians help people vote, or really help people at all?
Mr. Speaker, if we adopt this motion to recommit, we will instruct the Committee on Energy and Commerce to consider my amendment to H.R. 2668 that would prevent any public funds collected because of this bill from going into the campaign coffers of Members of Congress or Congressional candidates, and instead, keep the fines' process focused on helping the victims of fraud.
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Mr. BILIRAKIS. Mr. Speaker, I urge a ``no'' vote on the underlying bill, and I yield back the balance of my time.
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