[No title available]

[Federal Register Volume 74, Number 233 (Monday, December 7, 2009)]

[Unknown Section]

[Pages 64363-64371]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: X09-281207]

[[Page 64363]]

FEDERAL TRADE COMMISSION (FTC)

Statement of Regulatory Priorities

I. REGULATORY PRIORITIES

Background

The Federal Trade Commission (FTC or Commission) is an independent

agency charged with protecting American consumers from ``unfair methods

of competition'' and ``unfair or deceptive acts or practices'' in the

marketplace. The Commission strives to ensure that consumers benefit

from a vigorously competitive marketplace. The Commission's work is

rooted in a belief that competition, based on truthful and non-

misleading information about products and services, brings the best

choice of products and services at the lowest prices for consumers.

The Commission pursues its goal of promoting competition in the

marketplace through two different, but complementary, approaches. Fraud

and deception injure both consumers and honest competitors alike and

undermine competitive markets. Through its consumer protection

activities, the Commission seeks to ensure that consumers receive

accurate, truthful, and non-misleading information in the marketplace.

At the same time, for consumers to have a choice of products and

services at competitive prices and quality, the marketplace must be

free from anticompetitive business practices. Thus, the second part of

the Commission's basic mission--antitrust enforcement--is to prohibit

anticompetitive mergers or other anticompetitive business practices

without unduly interfering with the legitimate activities of

businesses. These two complementary missions make the Commission unique

insofar as it is the Nation's only Federal agency to be given this

combination of statutory authority to protect consumers.

The Commission is, first and foremost, a law enforcement agency. It

pursues its mandate primarily through case-by-case enforcement of the

Federal Trade Commission Act and other statutes. In addition, the

Commission is also charged with the responsibility of issuing and

enforcing regulations under a number of statutes. Pursuant to the FTC

Act, for example, the Commission currently has in place sixteen trade

regulation rules. The Commission also has adopted a number of voluntary

industry guides. Most of the regulations and guides pertain to consumer

protection matters and are generally intended to ensure that consumers

receive the information necessary to evaluate competing products and

make informed purchasing decisions.

Industry Self-Regulation and Compliance Partnerships with Industry

The Commission vigorously protects consumers through a variety of tools

including both regulatory and non-regulatory approaches. To that end,

it has encouraged industry self-regulation, developed a corporate

leniency policy for certain rule violations, and established compliance

partnerships where appropriate. The Commission has held workshops and

issued reports that encourage industry self-regulation and compliance

partnerships in several areas. As detailed below, information privacy

and security, the evolving nature of technology, consumer credit and

finance, and health care issues continue to be at the forefront of the

Commission's consumer protection and competition programs. By subject

area, we discuss the major workshops and reports\1\ the FTC has issued

since the 2008 Regulatory Plan was published.

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\1\ The FTC also prepares a number of annual and periodic reports on

the statutes it administers. These are not discussed in this plan.

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(a) Protecting Personal Information. The Commission convened a number

of workshops in interrelated areas associated with protecting personal

information, consumer privacy, and identity theft. They include:

On November 13, 2008, the FTC and the Southern Methodist

University Dedman School of Law co-hosted a workshop on how

businesses can secure personal information and protect the

privacy of consumers and employees. The workshop was

presented in partnership with the International Association

of Privacy Professionals which provides guidance to

businesses on data security, privacy, and responses to data

breaches.

On March 16-17, 2009, the FTC, along with the Asia-Pacific

Economic Cooperation forum and the Organization for

Economic Cooperation and Development, co-hosted an

international conference on how companies can manage

personal data security issues in a global information

environment where data can be stored and accessed from

multiple jurisdictions.

On April 29, 2009, the FTC held a workshop to help businesses

implement data security practices to deter identity thieves

and recognize telltale signs - or red flags - that thieves

are trying to use personal information they have obtained.

Beginning December 7, 2009, the Commission will hold three

roundtables to explore the privacy challenges posed by 21st

century technology and business practices that collect and

use company data. The goal of the roundtables is to

determine how best to protect consumers while supporting

beneficial uses of the information and technological

innovation.

As an outgrowth of an April 2007 federal government strategic plan

which contained 31 recommendations to address identity theft, the

President's Identity Task Force (co-chaired by the Attorney General and

the FTC's Chairman) released an October 2008 report on the progress

made in implementing the recommendations.\2\ The report discusses the

FTC's workshops, training seminars, and extensive outreach with public,

private, and non-government organizations on preventing identity theft.

Related to this, and following a December 2007 workshop on the use of

Social Security numbers, the Commission issued a December 2008 report

``Security in Numbers: Social Security and Identity Theft: A Federal

Trade Commission Report Providing Recommendations on Social Security

Number Use in the Private Sector.''\3\

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\2\ See ``The President's Identity Theft Task Force Report'' at http://

www.ftc.gov/os/2008/10/081021taskforcereport.pdf.

\3\ The complete report is at http://www.ftc.gov/os/2008/12/

P075414ssnreport.pdf.

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As a result of a November 2007 town hall on issues related to online

behavioral advertising - the practice of tracking an individual's

online activities in order to deliver advertising tailored to his or

her interests - and how best to protect consumer privacy, the FTC staff

put out for comment a set of four principles in December 2007. The

principles were transparency and consumer control, reasonable security

for consumer collected data, express consumer consent to material

changes in privacy policy, express consumer consent to use of sensitive

data. After considering the comments, the Commission issued a report in

February 2009, ``Self-Regulatory Principles for Online Behavioral

Advertising,'' which revised and retained the principles governing

self-regulation by advertisers.\4\

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\4\ This can be found at http://www.ftc.gov/os/2009/02/

P085400behavadreport.pdf.

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[[Page 64364]]

(b) Mobile Marketplace. In May 2008, the Commission held a town hall

meeting to assess the evolving mobile commerce marketplace and its

implications for consumer protection policies. As a result of that

meeting and based on further review, the FTC staff issued an April 2009

report ``Beyond Voice: Mapping the Mobile Marketplace.''\5\ The report

found that cost disclosures about mobile services continue to generate

consumer complaints and that the increased use of smartphones to access

the mobile Web presented unique privacy concerns, especially regarding

children. The report also highlighted the need to monitor the impact of

unwanted mobile text messages, malware, and spyware and the substantial

cost to carriers (and potentially consumers) of blocking them.

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\5\ This is located at www.ftc.gov/reports/mobilemarketplace/

mobilemktgfinal.pdf.

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(c) Debt Collection. In October 2007, the Commission held a two-day

workshop to explore how collection industry changes have affected

consumers and businesses. In February 2009, in addition to its annual

report on the Fair Debt Collection Practices Act (FDCPA), the FTC

issued ``Collecting Consumer Debts: The Challenges of Change.''\6\ The

report found that major problems in the flow of information in the

collection chain and recommended that consumers be provided better

information on debts and their rights. The report also recommended that

debt collection laws should be modernized to reflect changes in

technology and that Congress authorize the FTC to issue rules under the

FDCPA.

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\6\ This is at http://www.ftc.gov/bcp/workshops/debtcollection/

dcwr.pdf.

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The report further notes that the FTC lacked sufficient information on

debt collection proceedings. On August 5-6, September 29-30, and

December 4, 2009, the Commission has held or will hold roundtables

examining consumer protection issues involving debt collections, both

in litigation and arbitration proceedings.

(d) Health Care. On November 21, 2008, the Commission held roundtables

on two distinct health care issues involving competition and consumer

protection issues: competition between health care providers based on

quality information, and competition which may be provided by an

abbreviated regulatory approval for follow-on biologics (FOBs).

In June 2009, the Commission issued two reports on health care issues.

The first, ``Follow-On Biologic Drug Competition,''\7\ was a result of

the November workshop. After discussing the differences between FOB

drugs and branded-generic drugs and noting that competition by FOBs is

unlikely to be similar to brand-generic competition (substantial FOB

costs, limited competition, lack of automatic substitution, FOB

difficulty gaining market share), the report concludes that patent

protection and market-based pricing will promote competition by FOBs

and recommends legislation to put in place an abbreviated FDA approval

process for FOBs. The second report, ``Authorized Generics: An Interim

Report,''\8\ analyzes price reductions when authorized generic (AG)

drugs compete with first-to-file generics during 180-day exclusivity

and the impact of brand-generic patent litigation settlements that

contain provisions on launching an AG drug. The FTC's report was

prepared in response to requests from Congress and is relevant to

health care reform initiatives.

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\7\ The link is http://www.ftc.gov/os/2009/06/

P083901biologicsreport.pdf.

\8\ The link is www.ftc.gov/os/2009/06/

P062105authorizedgenericsreport.pdf.

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(e) Competition. On February 17-19 and May 20-21, 2009, the Commission

hosted public workshops on resale price maintenance under the Sherman

Act and the FTC Act, focusing on how best to distinguish resale price

maintenance that benefits consumers from that which does not. The

workshops discussed theories of economic benefits and harms, featured

panel presentations, and allowed for audience questions. On October 17,

2008, the FTC held a workshop on the scope of ``unfair methods of

competition'' in section 5 of the FTC Act. The Commission considered

the history of the provision, FTC and court interpretations,

contemporary business conduct, and issues concerning standard-setting

organizations.

In addition, beginning December 3, 2009, and ending January 26, 2010,

the Commission and the Department of Justice will hold a series of five

joint public workshops to explore updating the guidelines used to

evaluate the potential competitive effects of mergers and acquisitions.

The purpose of the review is to consider guideline revisions to more

accurately reflect agency practice and result in a more efficient

review process. The agencies have requested comments on twenty

questions related to competitive effects; market definition, share, and

concentration; and the price and non-price effects of mergers.

(f) Intellectual Property. The Commission held a series of five

hearings on the ``Evolving Intellectual Property (IP) Marketplace.''

The hearings generally focused on examining changes in intellectual

property law, patent-related business models, and new information

regarding the operation of the IP marketplace since the issuance of the

FTC's October 2003 report, ``To Promote Innovation: The Proper Balance

of Competition and Patent Law and Policy.''

Overview Hearing. On December 5, 2008, three panels provided

an overview of developing business models, recent and

proposed changes in IP remedies law, and changes in legal

doctrines affecting the value and licensing of patents.

Remedies. On February 11-12, 2009, the Commission held

hearings on damages in patent cases and recent changes in

permanent injunction and willful infringement standards in

the wake of recent court decisions.

Operation of IP Markets. The hearings on March 18-19, 2009

explored how different industries use patents, the economic

and legal perspectives on IP and technology markets, and

the notice role of patents.

Markets for Intellectual Property. This April 17, 2009 hearing

addressed new business models in the IP market; strategies

for buying, selling, and licensing patents; and the role of

secondary markets.

Industry Focus. On May 4-5, 2009, in conjunction with the

Berkeley Center for Law and Technology and the Berkeley

Center for Competition Policy, the Commission considered

how markets for patents and technology operate in different

industries and how patent policy might be adjusted to

respond to problems and better promote innovation and

competition.

In addition to these five IP hearings, the Commission and the

Technology Law and Public Policy Clinic at the University of Washington

School of Law hosted a ``Digital Rights Management'' (DRM) conference

on March 25, 2009. The conference addressed the use of DRM

technologies, practices which are expected to become more prevalent in

U.S. markets.

[[Page 64365]]

(g) Journalism and the Internet. On December 1-2, 2009, the FTC will

host a two-day workshop titled ``From Town Criers to Bloggers: How Will

Journalism Survive the Internet Age?'' 74 FR 51605 (Oct. 7, 2009). The

workshop will broadly consider the economics of journalism; the wide

variety of new business and non-profit models for journalism; the

financial, technological, and other challenges facing the news

industry; and a variety of government policies, including antitrust,

copyright, and tax policy, bearing on journalism. Witnesses will

include journalists and representatives of news organizations, new

media representatives, direct marketers, academics, and consumer

advocates.

(h) Other Workshops. The FTC hosted a ``Fraud Forum'' on February 25-

26, 2009. The first day was open to the public and addressed the many

aspects of fraud today. The second day was open only to domestic and

international law enforcement officials and focused on improving

interagency coordination in consumer fraud cases. On March 12, 2009,

the FTC staff conducted a forum to gather information for an upcoming

education campaign involving advertising and marketing to children.

Then-Chairman William E. Kovacic also issued a report that considered

basic questions and future directions as the Commission approaches its

100-year anniversary in 2014.\9\ The report was based on seven months

of agency self-assessment and numerous consultations with officials in

the public and private sector, and concluded, ``The progress of the

Federal Trade Commission in its modern era has built heavily upon the

willingness of its people to assess their work critically and explore

possibilities for improvement. Critical self-study and external

consultations not only have helped identify paths to achieving

greatness, but also have renewed the institution's commitment to

fulfill the destiny that Congress in 1914 wished it to achieve.'' The

report, the latest element of that tradition, seeks to ingrain in the

agency a habit of periodic self-assessment to illuminate the way to

future improvements.

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\9\ See Chairman William E. Kovacic, ``The Federal Trade Commission at

100: Into Our 2nd Century - The Continuing Pursuit of Better Practices,

A Report by Federal Trade Commission'' (January 2009), available at

http://www.ftc.gov/os/2009/01/ftc100rpt.pdf.

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In other areas, like the entertainment industry, the Commission has

encouraged industry groups to improve their self-regulatory programs to

discourage the marketing to children of movies, games, and music that

the industries' rating or labeling systems say are inappropriate for

children or warrant parental caution due to their violent content. The

motion picture, electronic game and music industries have each

established self-regulatory systems that rate or label products in an

effort to help parents seeking to limit their children's exposure to

violent materials. Since 1999, the Commission has issued six reports on

these three industries, examining the industries' compliance with their

own voluntary marketing guidelines.\10\

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\10\ For the most recent report, see ``Federal Trade Commission,

Marketing Violent Entertainment to Children: A Fifth Follow-Up Review

of Industry Practices in the Motion Picture, Music Recording &

Electronic Game Industries A Report to Congress'' (April 2007),

available at www.ftc.gov/reports/violence/

070412MarketingViolentEChildren.pdf.

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Staff is currently working on the development of a mall intercept study

of parental awareness and use of rating information on movie DVDs and

on a telephone survey on parental awareness and attitudes toward the

marketing and sale of Unrated ``Director's Cut'' DVDs. The results of

this research will be reported in the Commission's seventh media

violence report, with an anticipated release in the Fall of 2009.

Regarding advertising for alcoholic products, the Commission plans to

issue each year orders requiring two to four suppliers to provide

information about advertising and marketing practices and compliance

with self-regulatory guidelines. In June 2009, the Commission issued

orders pursuant to FTC Act Section 6(b) to three alcohol companies,

asking for information about advertising and marketing practices. In

the coming year, FTC will review the companies' responses to the orders

in light of the provisions of the alcohol industry self-regulatory

codes. The FTC will continue to monitor advertising and marketing

efforts by other industry members. It will also continue to promote the

``We Don't Serve Teens'' consumer education program, supporting the

legal drinking age.\11\

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\11\ More information can be found at http://www.dontserveteens.gov/.

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The Commission will continue to examine issues related to food

marketing to youth. In July 2008, the Commission published a report to

Congress on this topic\12\ based on the responses of 44 members of the

food and beverage industry to Special Orders issued by the Commission

in 2007 under Section 6(b) of the FTC Act. The Commission's report

found that, in 2006, the surveyed companies spent more than $1.6

billion in youth-directed marketing, often employing a variety of

integrated techniques such as traditional media, digital- and Internet-

based platforms, packaging and in-store marketing, and cross-promotions

with media and entertainment companies including the use of licensed

characters. Among the report recommendations were that food companies

adopt meaningful nutrition-based standards for marketing products to

children and that companies define ``marketing to children'' to

encompass the full spectrum of advertising and promotional techniques.

After receipt of 2009 data from the companies during 2010, the

Commission intends to conduct a follow-up study to assess the extent to

which recommendations from the 2008 report have been implemented and

whether additional measures are needed.

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\12\ See ``Marketing Food to Children and Adolescents: A Review of

Industry Expenditures, Activities, and Self-Regulation'' (July 2008),

available at http://www.ftc.gov/os/2008/07/P064504foodmktingreport.pdf.

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The Commission is also spearheading an Interagency Working Group on

Food Marketed to Children, made up of members of the FTC, the Food and

Drug Administration, the Centers for Disease Control and Prevention,

and the Department of Agriculture. The working group was established in

response to a provision in the FY 2009 Omnibus Appropriations Act (H.R.

1105) and is charged with conducting a study and developing

recommendations for nutritional standards for foods marketed to

children ages 17 and under. Findings and recommendations will be

submitted in a report to Congress by July 2010.

Additionally, in the industry self-regulation area, the Commission

continues to apply the Textile Corporate Leniency Policy Statement for

minor and inadvertent violations of the Textile or Wool Rules that are

self-reported by the company. 67 FR 71566 (Dec. 2, 2002). Generally,

the purpose of the Textile Corporate Leniency Policy is to help

increase overall compliance with the rules while also minimizing the

burden on business of correcting (through relabeling) inadvertent

labeling errors that are not likely to cause injury to consumers. Since

the Textile Corporate Leniency Program was announced, 160 companies

have been granted ``leniency'' for self-reported minor violations of

FTC textile regulations.

Finally, the Commission also has engaged industry in compliance

partnerships in at least two areas

[[Page 64366]]

involving the funeral and franchise industries. Specifically, the

Commission's Funeral Rule Offender Program, conducted in partnership

with the National Funeral Directors Association, is designed to educate

funeral home operators found in violation of the requirements of the

Funeral Rule, 16 CFR 453, so that they can meet the rule's disclosure

requirements. Nearly 300 funeral homes have participated in the program

since its inception in 1996. In addition, the Commission established

the Franchise Rule Alternative Law Enforcement Program in partnership

with the International Franchise Association (IFA), a nonprofit

organization that represents both franchisors and franchisees. This

program is designed to assist franchisors found to have a minor or

technical violation of the Franchise Rule, 16 CFR 436, in complying

with the rule. Violations involving fraud or other section 5 violations

are not candidates for referral to the program. The IFA teaches the

franchisor how to comply with the rule and monitors its business for a

period of years. Where appropriate, the program offers franchisees the

opportunity to mediate claims arising from the law violations. Since

December 1998, twenty-one companies have agreed to participate in the

program.

Rulemakings that Have International Effects

The OMB has requested that agencies discuss the international effects

of their rulemakings in the regulatory plan narrative per the

recommendation of the OMB Secretariat General of the European

Commission joint report to the U.S.-European Union (EU) High Level

Regulatory Cooperation Forum

And Transatlantic Economic Council (TEC).\13\ The Commission has

statutory authority and implementing regulatory authority to prevent

unfair or deceptive acts or practices in commerce among the states or

with foreign nations. The Commission's Rules apply to foreign-based

corporations doing business in the United States. As explained below,

to the extent that foreign companies do business in the United States

or their conduct from outside causes or is likely to cause reasonably

foreseeable injury within the United States, these foreign entities are

required to comply with the applicable statutes and rules.

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\13\ See ``Review of the Application of EU and US Regulatory Impact

Assessment Guidelines on the Analysis of Impacts on International Trade

and Investment'' (May 2008), available at http://www.whitehouse.gov/

omb/assets/regulatory_matters_pdf/sg_omb_final.pdf.

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The Commission enforces Section 5(a) of the FTC Act, which provides

that ``unfair or deceptive acts or practices in or affecting commerce

... are ... declared unlawful.'' Recently, the ``Undertaking Spam,

Spyware, And Fraud Enforcement With Enforcers beyond Borders Act of

2006'' (or the ``U.S. SAFE WEB Act of 2006'' or ``SAFE WEB'') (Pub. L.

No. 109-455, codified to the FTC Act, 15 U.S.C. Sec. 41 et seq.)

amended Sec. 5(a)'s ``unfair or deceptive acts or practices'' to

include such acts or practices involving foreign commerce that cause or

are likely to cause reasonably foreseeable injury within the United

States or involve material conduct occurring within the United States.

This amendment expressly confirmed the FTC's authority to redress harm

in the United States caused by foreign actors and harm abroad caused by

U.S. actors. This also clarified the factors for Commission

consideration in establishing Trade Regulation Rules to remedy unfair

or deceptive acts or practices that occur on an industry-wide basis.

Under Section 18 of the FTC Act, the Commission is authorized to

prescribe ``rules which define with specificity acts or practices which

are unfair or deceptive acts or practices in or affecting commerce''

within the meaning of Section 5(a)(1) of the Act.

Turning to specific rules and rulemakings and their international

effects or of potential international interest, the Premerger

Notification Rules, 16 CFR 801-803, for example, apply to mergers or

acquisitions reaching a certain size threshold and where one or both

parties are of a certain size. In addition, the Energy Independence and

Security Act of 2007 provided the Commission with authority to

promulgate a rule addressing manipulation of wholesale prices for

petroleum products and authorizes rule provisions prohibiting persons

from supplying misleading or deceptive information or data to certain

entities. As discussed within Final Actions below, the Commission

announced a final rule on August 6, 2009.

For the Commission's consumer protection mission, some of the rules

currently being reviewed may have effects on international companies

doing business in the United States or on U.S. businesses regarding

their dealings with foreigners. These include, among other things, the

provisions of the recently promulgated Health Breach Notification Rule,

16 CFR 318, which applies to foreign vendors of personal health records

and related entities. Other rules that are pending or under review and

that may have an effect on international commerce include: the

Regulations under the Comprehensive Smokeless Tobacco Health Education

Act of 1986, 16 CFR 307; Trade Regulation Rules adopted pursuant to the

Telephone Disclosure and Dispute Resolution Act of 1992 (900 Number

Rule), 16 CFR 308; Telemarketing Sales Act, which prohibit calls to

persons listed on the Do-Not-Call list, 16 CFR 310; the rulemakings on

Mortgage Acts and Practices and Mortgage Assistance Relief Services, to

be codified at 16 CFR 321, 322; Power Output Claims for Amplifiers Used

in Home Entertainment Systems, 16 CFR 432; and the Trade Regulation

Rule on Mail or Telephone Order Merchandise, which covers purchases on

the Internet, 16 CFR 435.

In addition, many of the FTC Guides also apply to foreign entities

doing business in the United States or are of interest to such foreign

entities. These include among others: Guides for the Jewelry, Precious

Metals, and Pewter Industries, 16 CFR 23; the Guides Concerning the Use

of Endorsements and Testimonials in Advertising, 16 C.F.R. 255; Guides

Concerning Fuel Economy Advertising for New Automobiles, 16 CFR 259;

and the Guides for the Use of Environmental Marketing Claims, 16 CFR

260. The FTC also issued and applies an Enforcement Statement on the

use of Made in USA and other U.S. origin claims in advertising and

labeling.\14\ The principles set forth in this enforcement policy

statement apply to U.S. origin claims included in labeling,

advertising, other promotional materials, and all other forms of

marketing, including marketing through digital or electronic means such

as the Internet or electronic mail.\15\

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\14\ See http://www.ftc.gov/os/statutes/usajump.shtm.

\15\ The Made in USA Enforcement Statement does not cover products

specifically subject to the country-of-origin labeling requirements of

the Textile Fiber Products Identification Act, the Wool Products

Labeling Act, the Fur Products Labeling Act, or the American Automobile

Labeling Act.

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Rulemakings and Studies Required by Statute

The Congress has enacted laws requiring the Commission to undertake

rulemakings and studies. They include at least 15 new rulemakings and

eight studies required by the Fair and Accurate Credit Transactions Act

of 2003, Pub. L. No. 108-159 (FACTA or the FACT Act) and the related

Credit

[[Page 64367]]

Card Accountability Responsibility and Disclosure Act of 2009, Pub. L.

No. 111-24 (CARD Act); the rulemaking pursuant to the Federal Deposit

Insurance Corporation Improvements Act of 1991, Pub. L. No. 102-242

(FDICIA); model privacy notices under the Gramm-Leach-Bliley Act; the

rulemakings concerning gasoline price manipulation and energy labeling

for lamps required or authorized by the Energy Security and

Independence Act of 2007, Pub. L. No. 110-140; temporary breach

notification requirements for vendors of personal health records under

the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5; and

a rulemaking on mortgage loans pursuant to the Omnibus Appropriations

Act of 2009, Pub. L. No. 111-8. The Final Actions section below

describes actions taken on the required rulemakings and studies since

the 2008 Regulatory Plan was published.

FACTA Rules. The Commission has already issued nearly all of the rules

required by FACTA. These rules are codified in several parts of 16 CFR

600 et seq. The remaining active FACTA rulemakings are:

1. Credit Bureau Charge for Credit Scores-The Commission was required

to determine a fair and reasonable fee to be charged by a

consumer reporting agency for providing the credit score

information required under FACTA. On November 8, 2004, the

Commission issued an NPRM on reasonable fees for credit

scores. 69 FR 64698. The comment period ended on January 5,

2005. Staff reviewed the comments and is monitoring the

credit score market, where prices have continued to remain

reasonable and competitive.

2. Risk Based Pricing Rule-The Commission jointly with the Federal

Reserve published a risk-based pricing proposal for comment

on May 19, 2008. 73 FR 28966. The comment period ended on

August 18, 2008. Risk-based pricing refers to the practice

of setting or adjusting the price and other terms of credit

offered or extended to a particular consumer to reflect the

risk of nonpayment by that consumer. This statutorily-

required rulemaking would address the form, content, time,

manner, definitions, exceptions, and model of a risk-based

pricing notice. The agencies anticipate issuing a final

rule in December 2009.

3. Furnisher Rules-On July 1, 2009, the Agencies issued furnisher

accuracy and dispute rules which are discussed under

Completed Actions below. On the same date, the Agencies

also issued an advance notice of proposed rulemaking

(``ANPRM'') that seeks to obtain information that would

assist in determining whether it would be appropriate to

propose an addition to one of the guidelines that would

delineate the circumstances under which a furnisher would

be expected to provide an account opening date, or any

other types of information, to a consumer reporting agency

to promote the integrity of the information. 74 FR 31529.

The comment period closed on August 31, 2009.

4. Advertising Disclosure Rule for Free Credit Reports-Section 205 of

the CARD Act requires the Commission to issue a rule to

prevent deceptive marketing of ``free credit reports.'' On

October 7, 2009, the Commission issued an NPRM to amend the

Free Credit Reports Rule to require prominent disclosures

in advertising for ``free credit reports'' and to address

practices which interfere with consumers' ability to obtain

file disclosures from consumer reporting agencies. 74 FR

52915 (Oct. 15, 2009). Comments on the NPRM are due on

November 30, 2009.

FACTA Study on Insurance Scores. On March 27, 2009, the Commission

issued Amended Orders to File a Special Report amending the compulsory

process resolution dated May 16, 2008 titled ``Resolution Directing Use

of Compulsory Process to Study the Effects of Credit Scores and Credit-

Based Insurance Scores Under Section 215 of the FACT Act.'' This

Amended Order requires certain insurance companies to produce

information for a study on the use and effect of credit-based insurance

scores on consumers of homeowner's insurance. The Amended Orders were

served on nine of the largest private providers of homeowners insurance

on or about April 6, 2009; it is anticipated the insurers will have

fully complied with the Amended Orders by the middle of September,

2009. Staff has begun reviewing the data produced by the insurers and

is working to identify a sample set of data to be used for the study.

FACTA Study on Credit Reports. Pending approval from the Office of

Management and Budget, the FTC plans to conduct a national study of the

accuracy of consumer reports in connection with Section 319 of the FACT

Act. This study is a follow-up to the Commission's two previous pilot

studies that were undertaken to evaluate a potential design for a

national study. Section 319 required the FTC to study the accuracy and

completeness of information in consumers' credit reports and to

consider methods for improving the accuracy and completeness of such

information. Section 319 also required the Commission to issue a series

of biennial reports to Congress over a period of eleven years from the

date of enactment (2003).

FDICIA Rule. The FDICIA assigns to the Commission responsibilities for

certain non-federally insured depository institutions (``DIs'') and

private deposit insurers of such DIs. The FTC is required to prescribe

by regulation or order, the manner and content of certain disclosures

required of DIs that lack federal deposit insurance. From 1993-2003,

the Commission was statutorily barred on an annual basis from

appropriating funds for purposes of complying with FDICIA. The

Consolidated Appropriations Act of 2004 and subsequent yearly

appropriations have not imposed the same funding prohibition and the

Commission issued an NPRM on March 16, 2005, 70 FR 12823, and a revised

NPRM on March 14, 2009. 74 FR 10843. Staff is reviewing the comments on

the revised NPRM and expects to forward a recommendation to the

Commission by the end of 2009.

Gramm-Leach-Bliley (GLB) Rule. Please see Final Actions for information

about a final GLB Rule.

Energy Security and Independence Act Rules. Several sections of the

Energy Security and Independence Act of 2007 (ESIA), require or

authorize, among other things, that the Commission promulgate rules

concerning gas price manipulation and labeling requirements for various

categories of biodiesel fuels, as well as energy labeling requirements

for certain appliances including light bulbs.\16\ The active

rulemakings under ESIA are discussed below and, for the Market

Manipulation Rulemaking, in the Final Actions section.\17\

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\16\ The rulemaking concerning labeling for biofuels was completed in

2008.

\17\ In addition, this act provides the Commission with authority to

promulgate energy labeling rules for consumer electronics; and the

Commission issued an ANPRM in May 2009. See Ongoing Reviews below.

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Section 321 of the ESIA requires the Commission to conduct a rulemaking

to consider the effectiveness of current energy labeling for lamps

(commonly referred to as ``light bulbs'') and to consider alternative

labeling approaches. In response to that

[[Page 64368]]

directive, the Commission issued an ANPRM on July 17, 2008, seeking

comments on the effectiveness of current labeling requirements for lamp

packages and possible alternatives to those requirements. 73 FR 40988.

As part of this effort, the Commission held a public roundtable meeting

on September 15, 2008; and the comment period ended on September 29,

2008. The Commission announced an NPRM on October 27, 2009, seeking

comments about proposed labeling requirements for light bulbs. 74 FR

57950 (Nov. 10, 2009). Comments are due by December 28, 2009. The

Commission will take final action before June 2010.

Mortgage Loans Rule. Section 626 of the Omnibus Appropriations Act of

2009 directed the Commission to initiate a rulemaking proceeding with

respect to mortgage loans and prescribed that any violation of the rule

shall be treated as a violation of a rule under section 18 of the

Federal Trade Commission Act regarding unfair or deceptive acts or

practices. On June 1, 2009, the Commission published an ANPRM in two

parts: (1) Mortgage Acts and Practices through the life cycle of the

mortgage loan (i.e., loan advertising, marketing, origination,

appraisals, and servicing), 74 FR 26118, and (2) Mortgage Assistance

Relief Services (practices of entities providing assistance to

consumers in modifying mortgage loans or avoiding foreclosure), 74 FR

26130. The comment periods for the ANPRMs have closed. Staff is

reviewing the comments and expects to send a recommendation to the

Commission by fall 2009 relating to further proposed actions.

Please see Final Actions below for information about the statutorily

required Temporary Breach Notification Rule.

Ten-Year Review Program

In 1992, the Commission implemented a program to review its rules and

guides regularly. The Commission's review program is patterned after

provisions in the Regulatory Flexibility Act, 5 USC 601-612. Under the

Commission's program, rules have been reviewed on a ten-year schedule

as resources permit. For many rules, this has resulted in more frequent

reviews than is generally required by section 610 of the Regulatory

Flexibility Act. This program is also broader than the review

contemplated under the Regulatory Flexibility Act, in that it provides

the Commission with an ongoing systematic approach for seeking

information about the costs and benefits of its rules and guides and

whether there are changes that could minimize any adverse economic

effects, not just a ``significant economic impact upon a substantial

number of small entities.'' 5 USC 610. The program's goal is to ensure

that all of the Commission's rules and guides remain in the public

interest. It complies with the Small Business Regulatory Enforcement

Act of 1996, Pub. L. No. 104-121. This program is consistent with the

Administration's ``smart'' regulation agenda to streamline regulations

and reporting requirements and section 5(a) of Executive Order 12866,

58 FR 51735 (Sept. 30, 1993).

As part of its continuing ten-year review plan, the Commission examines

the effect of rules and guides on small businesses and on the

marketplace in general. These reviews may lead to the revision or

rescission of rules and guides to ensure that the Commission's consumer

protection and competition goals are achieved efficiently and at the

least cost to business. In a number of instances, the Commission has

determined that existing rules and guides were no longer necessary nor

in the public interest.

Calendar Year 2008-09 Reviews

Most of the matters currently under review pertain to consumer

protection and are intended to ensure that consumers receive the

information necessary to evaluate competing products and make informed

purchasing decisions. On February 5, 2009, the Commission published its

modified ten-year schedule of review and announced that it would

initiate the review of two rules and one guide during 2009: (1) the

Automotive Fuel Ratings, Certification, and Posting Rule (Fuel Ratings

Rule), 16 CFR 306, (2) the Rule Concerning Prenotification Negative

Option Plans (Negative Option Rule), 16 CFR 425, and (3) the Guides for

Private Vocational and Distance Education Schools (Vocational School

Guides), 16 CFR 254. 74 FR 6129 (Feb. 5, 2009). Discussion of these

three reviews follows.

Fuel Ratings Rule. The Fuel Ratings Rule sets out a uniform method for

determining the octane rating of gasoline from the refiner through the

chain of distribution to the point of retail sale. The rule enables

consumers to buy gasoline with an appropriate octane rating for their

vehicle and establishes standard procedures for determining,

certifying, and posting octane ratings. On March 3, 2009, the

Commission published an ANPRM and requested comments on the rule as

part of its systematic periodic review of current rules and guides. 74

FR 9054. Staff anticipates that the Commission will issue an NPRM

during December 2009.

Negative Option Rule. The Negative Option Rule governs the operation of

prenotification subscription plans. Under these plans, sellers ship

merchandise automatically to their subscribers and bill them for the

merchandise within a prescribed time. The rule protects consumers by

requiring the disclosure of the terms of membership clearly and

conspicuously and establishes procedures for administering the

subscription plans. An ANPRM was published on May 14, 2009, 74 FR

22720, and the comment period ended on July 27, 2009. Several states, a

county government agency, and an industry trade association filed

requests seeking to extend the comment period but the requests were so

close to the end of the comment period we could not extend the period.

On August 7, 2009, the Commission granted the requests to reopen and

extended the comment period until October 13, 2009.

Vocational Schools Guides. The Commission is seeking public comments on

its Private Vocational and Distance Education Schools Guides, commonly

known as the Vocational Schools Guides. 74 FR 37973 (July 30, 2009).

Issued in 1972 and most recently amended in 1998 to add a provision

addressing misrepresentations related to post-graduation employment,

the guides advise businesses offering vocational training courses -

either on the school's premises or through distance education, such as

correspondence courses or the Internet - how to avoid unfair and

deceptive practices in the advertising, marketing, or sale of their

courses. The comment period closed on October 16, 2009.

Ongoing Reviews

Since the publication of the 2008 Regulatory Plan, the Commission has

initiated two rulemaking proceedings and is continuing review of a

number of rules and guides. The two new rulemaking proceedings are

discussed first under (a) Rules, followed by the other rule reviews and

then (b) Guides.

(a) Rules

Consumer Electronics Rule. The Commission has authority under section

325 of the ESIA to promulgate energy labeling rules for consumer

electronics (Consumer Electronics Rule). On March 16, 2009, the

Commission published an ANPRM seeking comments on whether it should

require labels for consumer

[[Page 64369]]

electronics, including televisions, computers, video recorder boxes,

and certain other equipment; the disclosures, need, and format of

labels; and appropriate test procedures. 74 FR 11045. The comment

period ended on May 14, 2009. Staff is currently reviewing the comments

and anticipates sending a recommendation to the Commission by the end

of 2009.

Debt Relief Services TSR Rule. On July 30, 2009, the Commission

approved an NPRM seeking comments on a proposal to amend the

Telemarketing Sales Rule (TSR) to address the sale of debt relief

services, including: for-profit credit counselors; debt settlement

companies that promise to obtain substantially reduced, lump sum

settlements of consumers' debts; and debt negotiators that offer to

obtain interest rate reductions or other concessions to lower

consumers' monthly payments (Debt Relief Services TSR Rule) 74 FR 41988

(Aug. 19, 2009). The proposed amendments would define ``debt relief

services,'' to ensure that telemarketing transactions involving these

services would be subject to the TSR, mandate certain disclosures, and

prohibit misrepresentations and the request or receipt of payment for

these services until services have been performed and documented. The

comment period was initially set to close on October 9, 2009, but was

extended to October 26, 2009. Staff held a public forum on November 4,

2009, which afforded Commission staff and interested parties an

opportunity to discuss the proposed amendments as well as any issues

raised in comments in response thereto.

Mail Order Rule. The Mail or Telephone Order Merchandise Rule (or the

Mail Order Rule), 16 CFR 435, requires that, when sellers advertise

merchandise, they must have a reasonable basis for stating or implying

that they can ship within a certain time. The Commission sought

comments about non-substantive changes to the rule to bring it into

conformity with changing conditions; including consumers' usage of

means other than the telephone to access the Internet when ordering,

consumers paying for merchandise by demand draft or debit card, and

merchants using alternative methods to make prompt rule-required

refunds. 72 FR 51728 (Sept. 11, 2007). Staff has reviewed the comments

and anticipates sending a recommendation to the Commission by early

2010.

Business Opportunity Rule. The proposed Business Opportunity Rule stems

from the recently concluded review of the Franchise Rule, where staff

recommended that the rule be split into two parts; one part addressing

franchise issues and another part addressing business opportunity

issues. After reviewing the comments from an NPRM, 71 FR 19054 (Apr.

12, 2006), the Commission issued a revised NPRM on March 26, 2008, that

would require business opportunity sellers to furnish prospective

purchasers with specific information that is material to the consumer's

decision as to whether to purchase a business opportunity and which

should help the purchaser identify fraudulent offerings. 73 FR 16110.

The revised NPRM comment period ended on May 27, 2008, and the rebuttal

comment period ended on June 16, 2008. A public workshop was held on

June 1, 2009, to explore changes to the proposed rule and a related

comment period closed on June 30, 2009. The Commission plans to issue a

staff report on the Business Opportunity Rule in early 2010 and seek

comment on the report.

Hart-Scott-Rodino Rules. For the Hart-Scott-Rodino Premerger

Notification Rules (HSR Rules), 16 CFR 801-803, Bureau of Competition

staff is continuing to review various HSR Rule provisions. Staff is

also reviewing the HSR Form and anticipates sending a recommendation to

the Commission in January 2010.

Used Car Rule. The Used Motor Vehicle Trade Regulation Rule (Used Car

Rule), 16 CFR 455, sets out the general duties of a used vehicle

dealer, requires that a completed Buyers Guide be posted at all times

on the side window of each used car a dealer offers for sale, and

mandates disclosure of whether the vehicle is covered by a warranty,

and if so, the type and duration of the warranty coverage, or whether

the vehicle is being sold ``as is - no warranty.'' The Commission

published a notice seeking public comments on the effectiveness and

impact of the rule. 73 FR 42285 (July 21, 2008). The notice seeks

comments on a range of issues including, among others, whether a

bilingual Buyers Guide would be useful or practicable, as well as what

form such a Buyers Guide should take. Second, the notice seeks comments

on possible changes to the Buyers Guide that reflect new warranty

products such as certified used car warranties, that have become

increasingly popular since the rule was last reviewed. Finally, the

notice seeks comments on other issues including the continuing need for

the rule and its economic impact, the effect of the rule on deception

in the used car market, and the rule's interaction with other

regulations. The comment period ended on September 19, 2008, and staff

anticipates sending its recommendation to the Commission during fall

2009.

Amplifier Rule. The Amplifier Rule, 16 CFR 432, assists consumers in

purchasing by standardizing the measurement and disclosure of various

performance attributes of power amplification equipment for home

entertainment purposes. The rule makes it an unfair or deceptive act or

practice for manufacturers and sellers of sound power amplification

equipment for home entertainment purposes to fail to disclose certain

performance information in connection with direct or indirect

representations of power output, power band, frequency or distortion

characteristics. The rule also sets out standard test conditions for

performing the measurements that support the required performance

disclosures. On February 27, 2008, the Commission published a request

for comments including a number of specific issues related to changes

in technology and products. 73 FR 10403. The comment period ended on

May 12, 2008, and staff anticipates sending a recommendation to the

Commission by fall 2009.

Cooling-Off Rule. The Cooling-Off Rule requires that a consumer be

given a three-day right to cancel certain sales greater than $25.00

that occur at a place other than a seller's place of business. The rule

also requires a seller to notify buyers orally of the right to cancel;

to provide buyers with a dated receipt or copy of the contract

containing the name and address of the seller and notice of

cancellation rights; and to provide buyers with forms which buyers may

use to cancel the contract. An ANPRM seeking comment was published on

April 21, 2009. 74 FR 18170. The comment period was supposed to close

on June 22, 2009, but was extended to September 25, 2009. 74 FR 36972

(July 27, 2009). Staff is reviewing the comments and expects to prepare

a recommendation for the Commission during the early part of 2010.

Smokeless Tobacco Regulations. The Commission's review of the

Regulations Under the Comprehensive Smokeless Tobacco Health Education

Act of 1986 (Smokeless Tobacco Regulations), 16 CFR 307, is ongoing.

The Smokeless Tobacco Regulations govern the format and display of

statutorily-mandated health warnings on all packages and advertisements

for smokeless tobacco. Staff anticipates Commission action

[[Page 64370]]

regarding review of this rule by early 2010.

Pay-Per-Call Rule. The Commission's review of the Pay-Per-Call Rule, 16

CFR 308, is continuing. The Commission has held workshops to discuss

proposed amendments to this rule, including provisions to combat

telephone bill ``cramming'' - inserting unauthorized charges on

consumers' phone bills - and other abuses in the sale of products and

services that are billed to the telephone including voicemail, 900-

number services, and other telephone based information and

entertainment services. The most recent workshop focused on the use of

800 and other toll-free numbers to offer pay-per-call services, the

scope of the rule, the dispute resolution process, the requirements for

a pre-subscription agreement, and the need for obtaining express

authorization from consumers before placing charges on their telephone

bills. The review record has remained open to encourage additional

comments on expansion of the rule's coverage. Staff anticipates

forwarding its recommendation to the Commission by December 2010.

(b) Guides

Fuel Economy Guide. The Fuel Economy Guide for new automobiles, 16 CFR

259, was adopted in 1975 to prevent deceptive fuel economy advertising

and to facilitate the use of fuel economy information in advertising.

As part of its regular review of all rules and guides, the Commission

issued a request for comments on May 9, 2007, on whether to retain or

amend the guide. 72 FR 72328. The Commission sought comments on, among

other things, whether there is a continuing need for the guide and, if

so, what changes should be made to it, if any, in light of

Environmental Protection Agency amendments to fuel economy labeling

requirements for automobiles. On April 28, 2009, the Commission

published proposed amendments to the Guide. The deadline for comments

was June 16, 2009. Staff is reviewing the comments and expects to make

a recommendation by the end of 2009.

Jewelry, Precious Metals and Pewter Guides. After issuing a staff

advisory opinion indicating that the Commission's current Guides for

Jewelry, Precious Metals and Pewter Industries, 16 CFR 23, did not

address descriptions of new platinum alloy products, the Commission

issued a Request for Public Comments on whether the platinum section of

the Guides for Jewelry, Precious Metals and Pewter Industries, should

be amended to provide guidance on how to non-deceptively mark or

describe products containing between 500 and 850 parts per thousand

(ppt) pure platinum and no other platinum group metals. 70 FR 38834

(July 6, 2005). After reviewing the comments, the Commission issued a

notice seeking comment on proposals to amend the platinum section of

the Guides to address the new platinum alloys. 73 FR 10190 (Feb. 26,

2008). The extended comment period ended August 25, 2008. Staff expects

that the Commission will amend the Guides during late 2009 to provide

that marketers may non-deceptively mark and describe an alloy of

platinum and non-precious metals consisting of at least 500 parts per

thousand (ppt), but less than 850 ppt, pure platinum and less than 950

ppt total platinum group metals (PGM) as ``platinum,'' provided they

make certain disclosures.

Green Guides. The Commission previously announced that it would review

the Green Guides, 16 CFR 260. 73 FR 66091 (Nov. 27, 2007). The Green

Guides outline general principles that apply to all environmental

marketing claims and provide guidance regarding specific environmental

claims. The Commission sought comment on the need for the guides and

their economic impact, the effect of the guides on the accuracy of

various environmental claims, and the interaction of the guides with

other environmental marketing regulations. As part of its review,

during 2008, the Commission held workshops and received comments in

three specific areas: 1) carbon offsets and renewable energy

certificates (Jan. 8, 2008); 2) environmental packaging claims and

green packaging (April 30, 2008); and 3) developments in green building

and textiles claims and consumer perception of such claims (July 15,

2008). Staff is reviewing the comments the Commission has received and

is conducting consumer research.

FCRA Commentary. Finally, the Commission anticipates issuing a notice

requesting comments on the Statement of General Policy or

Interpretations under the Fair Credit Reporting Act (also known as FCRA

Commentary) by the middle of 2010.

Final Actions

Since the publication of the 2008 Regulatory Plan, the Commission has

issued the following final rules:

Call Abandonment TSR Amendments. The Commission issued a final rule

implementing proposed Call Abandonment amendments to the TSR. 73 FR

51164 (Aug. 29, 2008). The amendments expressly prohibited

telemarketing sales calls that deliver prerecorded messages, whether

answered in person by a consumer or by an answering machine or

voicemail service, unless the seller has previously obtained the

recipient's signed, written agreement to receive such calls. The

amendments also changed the method for measuring the maximum allowable

call abandonment rate in the call abandonment safe harbor provision

from ``3 percent per day per calling campaign'' to ``3 percent per 30-

day period per calling campaign.'' The Commission also ended its

temporary policy during the rulemaking of forbearing from bringing

enforcement actions against sellers and telemarketers who placed

prerecorded calls that meet certain specified conditions that would be

inconsistent with the new requirements. There was a phase-in of various

effective dates, with the last one being the provision requiring

permission from consumers to receive such calls, which became effective

September 1, 2009.

Market Manipulation Rule. Section 811 of the ESIA prohibits any

manipulative or deceptive device or contrivance in connection with the

wholesale purchase, or sale of crude oil, gasoline, or other petroleum

distillate in contravention of rules or regulations the Commission may

prescribe (Market Manipulation Rule). Section 813 specifies the methods

of enforcing such a rule. The Commission announced an ANPRM requesting

comments on the manner in which it should carry out its

responsibilities to promulgate regulations under these sections. 73 FR

25614 (May 7, 2008). After considering the comments, the Commission

issued an NPRM on August 19, 2008, 73 FR 53393, and held a workshop on

November 6, 2008. The Commission issued a revised NPRM on April 22,

2009, 74 FR 18304; and the comment period on the revised NPRM ended on

May 20, 2009. On August 6, 2009, the Commission announced a final rule

that prohibits fraud or deceit in wholesale markets for petroleum

products, and intentional omissions of material information that are

likely to distort market conditions for any such product. 74 FR 40686

(Aug. 12, 2009). The rule was effective on November 4, 2009. On

November 13, 2009, the FTC issued its Compliance Guide for these

Petroleum Market Manipulation Regulations. The Guide answers commonly

asked questions and examines various scenarios to help those trading in

wholesale petroleum markets comply

[[Page 64371]]

with the regulations. The Guide is available on the FTC's Web site at:

www.ftc.gov/ftc/oilgas/rules.htm.

Health Breach Notification Rule. Section 13407 of the American Recovery

and Reinvestment Act of 2009 required the Commission to issue rules

requiring vendors of personal health records and third parties that

offer products or services through the web sites of vendors to notify

individuals when the security of their individually identifiable health

information is breached. The Commission published an NPRM on April 20,

2009 (74 FR 17914), seeking comments. The Commission announced the

final rule on August 17, 2009. 74 FR 42962 (Aug. 25, 2009).

FACTA Furnisher Rule. The Commission also published one final rule

mandated by FACTA, the Furnisher Rule. The Commission is required, in

coordination with the banking agencies and National Credit Union

Administration, to issue guidelines and rules concerning the accuracy

of information furnished to consumer reporting agencies, and rules

relating to the ability of consumers to dispute information directly

with furnishers of information. The Commission and the other agencies

published final rules on July 1, 2009. 74 FR 31484.

Endorsements and Testimonials in Advertising Guides. On January 16,

2007, the Commission requested public comments on the overall costs,

benefits, and regulatory and economic impact of its Guides Concerning

the Use of Endorsements and Testimonials in Advertising, 16 CFR 255.

The Commission also released consumer research it commissioned

regarding the messages conveyed by consumer endorsements, and sought

comment both on this research and upon several other specific

endorsement-related issues. 72 FR 2214 (Jan. 18, 2007). After reviewing

the comments, the Commission proposed changes to the guides and

requested public comments. 73 FR 72374 (Nov. 28, 2008). The proposed

revisions address consumer endorsements, expert endorsements,

endorsement by organizations, and disclosure of material connections

between advertisers and endorsers. On the issue of consumer

endorsements, the proposed revisions explain that when ads using

consumer testimonials convey that the endorser's experience is

representative of what consumers will generally achieve and the

advertiser does not possess adequate substantiation for this

representation, the advertiser should clearly and conspicuously

disclose the results consumers actually can expect to achieve. The

initial comment period ended on January 30, 2009, but was subsequently

extended to March 2, 2009. 74 FR 5810 (Feb. 2, 2009). On October 5,

2009, the Commission announced it would retain a revised version of the

guides, effective on December 1, 2009. 74 FR 53124 (Oct. 15, 2009).

Gramm-Leach-Bliley Rule. Pursuant to Section 728 of the Financial

Services Relief Act of 2006, P. L. No.109-351, which added section

503(e) to the Gramm-Leach-Bliley Act (or GLB Act), the Commission

together with seven other federal agencies\18\ is directed to propose a

model form that may be used at the option of financial institutions for

the privacy notices required under GLB. The 2006 amendment provided

that the agencies must propose the model form within 280 days after

enactment, or by April 11, 2007. On March 29, 2007, the GLB agencies

issued an NPRM proposing as the model form the prototype privacy notice

developed during the consumer testing research project undertaken by

first six, and then seven, of these agencies. 72 FR 14940. On November

17, 2009, the Agencies announced a model privacy form that financial

institutions may rely on as a safe harbor to provide disclosures under

the privacy rules. In addition, the Agencies other than the SEC are

eliminating the safe harbor permitted for notices based on the Sample

Clauses currently contained in the privacy rules if the notice is

provided after December 31, 2010.

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\18\ The agencies are the Board of Governors of the Federal Reserve

System, the Federal Deposit Insurance Corporation, the Office of the

Comptroller of the Currency, the Office of Thrift Supervision, the

National Credit Union Administration, the Securities and Exchange

Commission, and the Commodity Futures Trading Corporation.

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Summary

In both content and process, the FTC's ongoing and proposed regulatory

actions are consistent with the President's priorities. The actions

under consideration inform and protect consumers and reduce the

regulatory burdens on businesses. The Commission will continue working

toward these goals. The Commission's ten-year review program is

patterned after provisions in the Regulatory Flexibility Act and

complies with the Small Business Regulatory Enforcement Fairness Act of

1996. The Commission's ten-year program also is consistent with section

5(a) of E.O. 12866, which directs executive branch agencies to develop

a plan to reevaluate periodically all of their significant existing

regulations. 58 FR 51735 (Sept. 30, 1993). In addition, the final rules

issued by the Commission continue to be consistent with the President's

Statement of Regulatory Philosophy and Principles, Executive Order

12866, section 1(a), which directs agencies to promulgate only such

regulations as are, inter alia, required by law or are made necessary

by compelling public need, such as material failures of private markets

to protect or improve the health and safety of the public.

The Commission continues to identify and weigh the costs and benefits

of proposed actions and possible alternative actions, and to receive

the broadest practicable array of comment from affected consumers,

businesses, and the public at large. In sum, the Commission's

regulatory actions are aimed at efficiently and fairly promoting the

ability of ``private markets to protect or improve the health and

safety of the public, the environment, or the well-being of the

American people.'' E.O. 12866, section 1.

II. REGULATORY ACTIONS

The Commission has one proposed rule that would be a ``significant

regulatory action'' under the definition in Executive Order 12866.\19\

This is the FACTA Risk Based Pricing Final Rule, which staff

anticipates being approved by the Commission during early 2010. There

is further information about this under the prior heading of

Rulemakings and Studies Required by Statute.

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\19\ Section 3(f) of the Executive Order defines a regulatory action to

be ``significant'' if it is likely to result in a rule that may: (1)

Have an annual effect on the economy of $100 million or more or

adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities; (2) Create a serious inconsistency or otherwise interfere

with an action taken or planned by another agency; (3) Materially alter

the budgetary impact of entitlements, grants, user fees, or loan

programs or the rights and obligations of recipients thereof; or (4)

Raise novel legal or policy issues arising out of legal mandates, the

President's priorities, or the principles set forth in this Executive

Order.

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BILLING CODE 6750-01-S