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U.S. consumer protection law: a federalist patchwork.

UNLIKE MANY foreign jurisdictions, the United States lacks a singular, comprehensive consumer protection code. Consumer protection law in the United States is instead a patchwork of federal and state laws. This patchwork is primarily a product of U.S. federalism, which allocates sovereign powers to both the federal and state governments. But it is also a function of the federal and state governments' piecemeal approach to consumer protection legislation. Accordingly, consumer protection law in the United States is not so much a cohesive body of law as it is a jumble of discrete (yet often interrelated and overlapping) federal and state laws.

Federal Consumer protection law reflects piecemeal Congressional efforts to protect consumers. Rather than enact comprehensive or overarching consumer protection legislation, Congress has passed a series of separate laws targeting specific business practices, industries, and consumer products. The most significant of these laws address unfair or deceptive business practices (e.g., the Federal Trade Commission Act), food and drugs (e.g., the Food, Drug, and Cosmetic Act), household goods (e.g., the Consumer Product Safety Act), and consumer financial products and services (e.g., the recent Dodd-Frank Wall Street Reform and Consumer Protection Act). Many of these laws also created new federal agencies charged with carrying out their provisions, most notably the Federal Trade Commission, Food and Drug Administration, Consumer Product Safety Commission, and newly formed Bureau of Consumer Financial Protection. In other words, federal consumer protection law is scattered throughout the federal statutes and enforced by a variety of federal agencies.

State consumer protection law is no less complex. While every state has enacted laws prohibiting unfair or deceptive business practices, the scope, evolution, and enforcement of those laws vary considerably from state to state. In addition, state "common" law--i.e., the non-statutory decisional law of torts and contracts--may offer aggrieved consumers an extra layer of protection. The contours of state common law vary considerably from state to state. Further complicating state consumer protection law is its sometimes uneasy coexistence with federal law. Because the U.S. Constitution requires that federal law supersede or "preempt" conflicting state law, the constitutional viability of state consumer protection laws is often called into question.

Finally, no survey of U.S. consumer protection law would be complete without briefly mentioning consumer class action lawsuits. Consumer class actions have been a prominent feature of U.S. consumer protection law since the 1960s, and some might argue they represent the chief enforcement mechanism for certain consumer protection laws. (1) While a few other countries permit class actions or a close facsimile, consumer class actions in the United States are unique in their prevalence, scale, and economic impact.

Consumer protection law in the United States is idiosyncratic, both in its federalist complexity and reliance on class actions. While this paper does not purport to catalog every federal and state consumer protection law, it does attempt to summarize the most significant laws. While this article is directed primarily towards international practitioners, the discussion of the Dodd-Frank Wall Street Reform and Consumer Protection Act in Section I.C may also prove useful to domestic practitioners.

I. Federal Consumer Protection Law

The U.S. Constitution does not address the authority of the federal government to protect consumers. Instead, federal consumer protection law derives from Congress's constitutional power to regulate domestic commerce] Accordingly, federal consumer protection law is generally scattered among the various topical commercial laws (e.g., laws addressing trade, food, drugs, and banking) rather than codified in one federal law or statute. The result is a labyrinth of often overlapping consumer protection laws and regulations.

Despite their proliferation, federal consumer protection laws are of relatively recent vintage. Prior to 1900, the federal government rarely legislated in the area of consumer protection. Protecting consumers was instead the province of state and even municipal governments. Around the turn of the twentieth century, several factors led to Congressional intervention in the field of consumer protection. Rapid industrialization created an ever expanding national market for manufactured or processed consumer goods. Because states had no jurisdiction to regulate conduct outside their borders, state law became increasingly ineffective at regulating consumer products and services that were distributed nationwide by out-of-state companies. (3) The emergence of the "progressive" reform movement focused public attention on the negative consequences of an unregulated national marketplace on public health and welfare. (4) In addition, there were several highly publicized incidents involving tainted food, hazardous (and even fatal) medicines, and unscrupulous or fraudulent business practices. (5) The U.S. Supreme Court, which once closely scrutinized Congressional efforts to expand its legislative powers over domestic commerce, began to adopt an expansive view of Congressional legislative power under the "Commerce Clause" of the U.S. Constitution. (6)

Against this backdrop, Congress began passing legislation targeting specific categories of consumer products and unfair or deceptive business practices. It has since strengthened those laws and enacted additional significant consumer protection laws in the areas of product safety and consumer finance.

A. General Consumer Protection: the Federal Trade Commission Act

To the extent there is a general consumer protection law it is the Federal Trade Commission Act ("FTCA"). The FTCA prohibits unfair or deceptive business practices that "affect commerce." (7) These broad prohibitions apply to all individuals and businesses except those regulated by a different provision of federal law, such as banks and certain common carriers. (8) The FTCA has evolved into the primary federal consumer protection statute and is most often used to prohibit false or misleading advertisements, fraudulent marketing practices, identity theft, data piracy, and other consumer scares or frauds. (9) The FTCA is perhaps best known for the federal agency charged with enforcing it--the Federal Trade Commission ("FTC").

1. FTC Structure

In 1914, the FTCA created the FTC and tasked the agency with prohibiting anti-competitive business practices and arrangements. (10) Despite its origins as an antitrust agency, Congress later broadened the FTC's mission to include consumer protection. Given these broad mandates and the FTC's commensurately broad regulatory authority--including the authority to enforce numerous other consumer protection laws--the FTC is arguably the primary federal consumer protection agency. (11) The FTC is headed by five commissioners who are appointed by the President and subject to Senate confirmation. No more than three commissioners may be from the same political party. (12)

2. FTC Powers

The FTCA endowed the FTC with broad regulatory authority to prevent "unfair or deceptive" business practices. (13) "Unfair" practices are those that, at a minimum, "cause[] or [are] likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition." (14) "Deceptive" practices are typically those that tend to materially deceive a reasonable consumer. These definitions carry added weight because many other federal and state consumer protection laws borrow them or defer to the FTC's interpretations thereof. (15)

(a) Rulemaking

Under the FTCA, the FTC may issue regulations or rules that define or prevent unfair or deceptive business practices. (16) Invoking this power, the FTC has issued regulations addressing a wide range of business practices such as advertising, marketing, labeling, and the use of a consumer's private information. The FTC has also issued a number of business-specific regulations addressing businesses as varied as funeral homes, used car dealerships, and ophthalmologists. In addition to the FTCA, other federal consumer protection laws vest the FTC with rulemaking power over specific industries or practices. Examples of such statutes are the Fair Packaging and Labeling Act, Magnuson-Moss Warranty Act (addressing consumer product warranties), and Telemarketing and Consumer Fraud and Abuse Prevention Act. (17)

(b) Investigation

The FTC has several investigative and fact-finding tools at its disposal. The Bureau of Consumer Protection may issue subpoenas known as "civil investigative demands" ("CIDs") to investigate potential unfair or deceptive practices. (18) The CID may require the recipient to produce documents, give oral testimony, or file written reports or answers to questions. (19) In addition to CIDs, the FTC can also require a person or entity to submit a report or answer specific questions about the recipient's business, conduct, practices, management, or relationship to other entities. (20) The FTC frequently uses this fact-finding authority to conduct wide-ranging economic studies that may not have a specific law enforcement purpose.

(c) Enforcement

The FTC is responsible for enforcing both the FTCA, which outlaws unfair or deceptive practices, and the regulations promulgated thereunder. (21) Congress has also charged the FTC with enforcing numerous other federal consumer protection laws, including the Truth in Lending Act, Fair Debt Collection Practices Act, Electronic Fund Transfer Act, and Cigarette Labeling and Advertising Act. (22) The FTC may enforce the aforementioned laws through either administrative proceedings or civil litigation, although civil litigation is more common.

3. Proscribed Conduct and Remedies

Persons or entities that violate FTC cease-and-desist orders or knowingly violate FTC rules are subject to a civil penalty of up to $11,000 per violation. (23) In addition, in a civil action for violation of an FTC regulation or cease-and-desist order, the defendant may be subject to the following legal and equitable remedies: rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and public notification respecting the rule violation or the unfair or deceptive act or practice. (24)

The FTCA does not authorize private lawsuits to enforce the FTCA or FTC regulations. The FTC is authorized to seek certain forms of relief on behalf of consumers, such as refunds, the payment of damages, or the return of property, but private consumers have no standing under the FTCA to seek such relief themselves.

B. Consumer Products

While the FTCA regulates the manner in which consumer products and services are sold, other federal statutes regulate consumer products themselves. The two most notable examples are the Food, Drug, and Cosmetic Act and the Consumer Product Safety Act. (25)

1. Food, Drug, and Cosmetic Act

One of the most pervasive U.S. consumer protection laws is the Food, Drug, and Cosmetic Act ("FDCA"), which regulates more than $1 trillion in consumer goods or roughly one quarter of every consumer dollar spent in the United States. (26) The FDCA is perhaps best known for the Food and Drug Administration ("FDA"), the massive federal agency (i.e., more than 11,000 full-time employees in 2009) (27) charged with its implementation and enforcement.

(a) FDA Purpose and Structure

Created by the Pure Food and Drug Act of 1906 and strengthened by the FDCA, the FDA is the oldest federal consumer protection agency. Under the FDCA and amendments thereto, the FDA is charged with overseeing the safety and marketing of food and food additives, drugs (both prescription and over-the-counter), tobacco, cosmetics, and medical devices. (28) To carry out its mission, the FDA is endowed with broad regulatory powers, most notably the power to approve the sale of new prescription drugs. (29) Those powers also include general rulemaking, investigative, and enforcement functions. (30)

The FDA is part of the U.S. Department of Health and Human Services ("HHS'). (31) It is headed by the Commissioner of Food and Drugs, who is appointed by the President and subject to Senate confirmation. (32) The FDA is divided into offices that primarily specialize in food or drugs, such as the Center for Food Safety and Applied Nutrition and the Center for Drug Evaluation and Research, respectively.

(b) FDA Jurisdiction

The FDA's regulatory authority extends to virtually all food and food additives except non-game meat and poultry, which are regulated by the U.S. Department of Agriculture. (33) The FDA's jurisdiction over drugs is similarly broad, as the FDCA defines a "drug" to include any substance or component thereof intended for use in the "diagnosis, cure, mitigation, treatment or prevention" of any disease in humans or animals, as well as any substance "intended to affect the structure or any function of the body of man or other animals." (34) The FDA also exercises primary regulatory jurisdiction over medical devices and cosmetics and shares jurisdiction with the FTC over certain tobacco products.

(c) FDA Powers

Rulemaking-Food. The FDA regulates food and food additives primarily through the issuance of regulations and standards relating to food packaging, processing, labeling, quality, transport, sanitation, and additives. (35) The FDA also tightly regulates the sale of specific foods and additives such as infant formula, bottled drinking water, and dietary supplements. (36)

Rulemaking-Drugs. Under the FDCA, the FDA is responsible for ensuring that human and animal drugs are "safe and effective." (37) That responsibility encompasses not only the evaluation of "new drugs," the distribution of which may not proceed without FDA approval, (38) but also the issuance of rules concerning the safety, efficacy, and advertising of all drugs and devices. (39) To that effect, the FDA has issued scores of regulations addressing common over-the-counter drugs such as antacids, nighttime sleep-aids, and cold medication, as well as an approved list of ingredients from which over-the-counter drugs may be comprised. (40) The FDA also tightly regulates the advertisement and marketing of prescription drugs. (41) In addition, under the Public Health Service Act, the FDA has assumed regulatory authority over so-called "biologics" such as vaccines, blood, and tissue products. (42)

Rulemaking-Tobacco. In 2009, the passage of the Family Smoking Prevention and Tobacco Control Act gave the FDA broad regulatory authority over tobacco products. (43) That authority is concurrent with the FTC's and authorizes the FDA to regulate the content and marketing of tobacco products. (44) Investigation. The FDA has wide latitude to investigate and ensure compliance with safety standards. The FDA is permitted to conduct "examinations and investigations" for any purpose under the FDCA and frequently inspects food and drug manufacturing or processing facilities. (45) The FDA is also authorized to inspect and collect samples from any food, drug, medical device, cosmetic, or tobacco facility. (46)

Enforcement. The FDA also has a wide range of enforcement mechanisms at its disposal. The FDA may seize or detain goods that violate FDCA regulations and may disseminate information about food, drugs, or other articles it deems grossly deceptive or an imminent danger to public healthy The FDA can also order product recalls in limited circumstances, such as in the case of hazardous medical devices, (48) tobacco products, (49) or infant formula, (50) although it generally lacks authority to compel a recall of most food and drugs. The FDA may request recalls, however, and companies selling FDA-regulated products often voluntarily recall potentially unsafe or defective products in cooperation with the FDA. (51) Through administrative proceedings, the FDA may also assess civil monetary penalties for a number of FDCA violations.

In addition to administrative enforcement mechanisms, the FDCA authorizes civil or criminal enforcement proceedings in federal court, including civil suits for injunctive relief. (52) Additionally, after giving notice to the FDA, individual states may initiate civil litigation to enforce or enjoin the violation of certain FDCA provisions. (53)

(d) Proscribed Conduct and Remedies

The FDCA makes it unlawful to engage in a range of activities that violate the FDCA or FDA regulations, including the sale of adulterated or misbranded food or drugs, the obstruction of an FDA inspection or investigation, the failure to register as a drug producer or supplier, or the sale of new drugs without FDA approval. (54) Persons or entities that engage in these proscribed activities are subject to both civil and criminal liability. (55) The FDCA does not grant a private right of action to consumers injured by FDCA violations. Under state tort law, however, violations of certain FDCA standards or regulations may be the subject of individual or class negligence actions seeking damages under state law.

2. Consumer Product Safety Act

Consumer products that are neither food nor drugs are typically governed by the Consumer Product Safety Act ("CPSA"), which Congress passed in 1972. The impetus for the CPSA came from both consumer advocates and product manufacturers. (56) Since its passage, the CPSA has been used to ban products containing unsafe substances (e.g., lead paint), recall dangerous or defective products, and establish stringent safety standards for children's toys and products, among other things. The CPSA is administered and enforced by the Consumer Product Safety Commission ("CPSC").

(a) CPSC Purpose and Structure

The CPSA created the CPSC as an independent federal regulatory agency. (57) The CPSC is charged with protecting against unreasonable risks of injury or death associated with consumer products. (58) The CPSC is generally headed by three commissioners, each serving staggered seven-year terms and each appointed by the President subject to Senate confirmation. (59)

(b) CPSC Jurisdiction

The CPSC has jurisdiction over "consumer products," a term that encompasses any household, recreational, or educational product sold to consumers or intended for the personal use, consumption, or enjoyment of consumers. (60) Examples of the over 15,000 specific consumer products subject to CPSC jurisdiction include children's toys, furniture, textiles, and paint. (61) Specifically excluded from the definition of "consumer products," however, are (i) food, (ii) drugs, devices, and cosmetics (these products, together with food, are regulated by the FDCA), (iii) motor vehicles, (iv) tobacco, (v) aircraft, and (vi) pesticides. (62)

(c) CPSC Powers

The CPSC has broad authority to issue product safety standards, ban dangerous consumer products, issue recalls, compel manufacturers to report potentially unsafe products, investigate potential product hazards, and educate consumers about product safety.

Safety Standards'. Since its inception, the CPSC has issued numerous safety standards for products as varied as bicycles, children's toys, matchbooks, swimming pools, garage door openers, portable generators, and all-terrain vehicles. (63) The CPSC also has authority under other federal statutes to issue safety standards for flammable fabrics, refrigerators, hazardous substances, and certain poisonous substances. (64)

Recalls. When the CPSC has reason to believe a currently available consumer product fails to meet safety standards or is otherwise potentially dangerous to consumers, the CPSC has the power to order a product recall. Despite such authority, the CPSC frequently works with manufacturers to conduct voluntary recalls.

Bans. Where safety standards or recalls are ineffective, the CPSC may act to ban "hazardous" products, that is, products for which the CPSC determines there exists no "consumer product safety standard under [the CPSA] that would adequately protect the public from the unreasonable risk of injury associated." (65) The CPSC has invoked this authority to ban many consumer products, including products containing lead paint, certain fireworks, and certain flammable materials. (66) The CPSA also expressly prohibits the sale of consumer products containing certain nitrites and phthalates. (67)

Investigation and Enforcement. In addition to its legislative powers, the CPSC also possesses significant investigative authority. Manufacturers, retailers, and other entities are obligated to submit reports to the CPSC whenever a product they sell poses a risk to consumer safety. (68) The CPSC may also conduct hearings, subpoena documents and testimony, and require written reports and answers to questions the CPSC may prescribe. (69) The CPSC is also authorized to seek an injunction or civil penalty in federal district court. (70) In addition to the CPSC, state attorneys general may sue for injunctive relief under the CPSA. (71)

(d) Proscribed Conduct and Remedies

The CPSA makes it unlawful to sell, distribute, or import any consumer product that violates the CPSA or any CPSC regulation. (72) CSPA violations create civil and sometimes criminal liability. Importantly, the CPSA makes clear that compliance with CPSC regulations shall not be a defense to liability under state statutory or common law. (73) The CPSA expressly authorizes private suits for damages against any person who engages in a "knowing (including willful) violation of a consumer product safety rule, or any other rule or order issued by the [CPSC]." (74) Such suits are brought in federal court, and the damages available are compensatory in nature, including reasonable attorneys' fees. (75)

C. Banking, Finance, and Credit

Many recent consumer protection laws have addressed financial products and services. Two of the most persuasive explanations for recent Congressional forays into consumer financial protection are (i) the increasing number, variety, and complexity of consumer financial transactions in the last four decades, and (ii) the nexus between recent economic downturns in the United States and the perceived abuses or excesses in the consumer credit markets--most notably the market for consumer home mortgages.

Until recently, Congressional efforts to address consumer financial protection were emblematic of its piecemeal approach to consumer protection. In the past four decades, Congress has passed a litany of separate enactments targeting specific and often hyper-specific consumer financial issues. For example, since 1970 Congress has passed specific acts or amendments governing credit card disclosures, lending disclosures, debt collection practices, mortgages, electronic fund transfers, financial data privacy, student loans, credit reporting, discrimination in consumer credit markets, bankruptcy, and so-called "credit repair" services, among others. Moreover, enforcement of these acts is often delegated to different federal agencies.

With the passage of the landmark Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act" or the "Act") earlier this year, however, Congress eschewed the piecemeal approach in the context of consumer financial protection. Not only does the Dodd-Frank Act endeavor to consolidate financial consumer protection under one legislative framework, it also creates a new enforcement agency with authority over most federal financial consumer protection laws. (76)

1. Recent Developments: the Dodd-Frank Wall Street Reform and Consumer Protection Act

The Dodd-Frank Act was signed into law in July 2010 as a response to the U.S. financial crisis of the late 2000s. The Act's stated purpose is to "promote the financial stability of the United States by improving accountability and transparency in the financial system, to end 'too big to fail', to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes." (77) To effectuate its purpose, the Act--which spans over 800 pages--significantly increases and reorganizes the regulation of the U.S. financial services industry. Whereas previous federal consumer financial laws reflected a disclosure-based regulatory framework, the Act ushered in a more stringent rules-based regime for consumer credit transactions.

The creation of the BCFP is the Act's central and perhaps most significant consumer protection component. Because the BCFP will not be fully operational until 2011, (78) it is too early to tell how the BCFP will exercise its broad regulatory powers, which, along with the Act's other consumer protection provisions, are summarized below.

(a) BCFP

Propose and Structure. The BCFP's purpose is 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." (79) To carry out this broad mission, the Act endowed the BCFP with primary regulatory authority over federal consumer financial laws, including existing laws currently administered by a multitude of federal agencies such as the FTC, Federal Deposit Insurance Corporation, Comptroller of the Currency, and the Board of Governors of the Federal Reserve System. (80) In short, the Act essentially consolidates the regulation of consumer financial protection into one agency. (81)

Title X of the Act created the BCFP as an independent federal agency within the Federal Reserve System. (82) The BCFP is headed by a director appointed by the President for a five-year term and subject to Senate confirmation. (83)

Jurisdiction. The BCFP has authority over the provision of "consumer financial products or services" by covered persons and entities. (84) "Consumer financial products or services" are those primarily used for personal, family, and household purposes, including loans, stored value instruments, consumer report services, financial advisory services, check cashing services, traditional banking and depository activities, real estate settlement services, and any other product or service the BCFP determines is likely to have a material impact on consumers. (85) Covered persons and institutions are those engaging in the provision of--as well as those that provide a material service to the provision of "consumer financial products or services." (86) Such persons and entities include (i) banks, (ii) mortgage brokers, originators, lenders, servicers, modifiers, and foreclosure relief services, (iii) private education lenders, and (iv) so-called "payday" loan providers. (87) Excluded from BCFP jurisdiction, however, are merchants, retailers, real estate agents, tax preparers, attorneys, insurance entities, ERISA plans, auto dealers, charities, and persons regulated by the Securities and Exchange Commission, Commodity Futures Trading Commission, Farm Credit Administration, or a state securities commission. (88)

The BCFP will also assume jurisdiction over existing "enumerated consumer laws." (89) Jurisdiction over those enumerated laws currently resides in a host of federal banking regulators and consumer protection agencies. The BCFP will assume the consumer protection functions of those regulators on the "Transfer Date," which will likely take place in July 2011. (90)

Regulatory Powers. The BCFP has broad rulemaking, supervisory, and enforcement authority with respect to other federal consumer financial laws, e.g., the Truth in Lending Act, Fair Debt Collection Practices Act, and Equal Credit Opportunity Act. (91) In addition, the BCFP has broad authority to prohibit "unfair, deceptive, or abusive" acts or practices in the provision of consumer financial products and services. (92) Banks will also fall under the BCFP's authority, as the BCFP will assume primary supervisory, examination, and enforcement authority over large banks. (93) The BCFP has similar authority over "non-depository" entities, such as entities that broker, originate, or service mortgages, as well as any other "larger participant" in the market for consumer financial products or services. (94)

In addition to its general regulatory powers, the BCFP is also explicitly authorized to take specific actions that could significantly impact the provision of consumer financial products and services. These actions include (i) requiring additional disclosures to consumers, (ii) restricting mandatory predispute arbitration in consumer credit contracts, (iii) issuing final regulations under the Electronic Fund Transfer Act relating to many aspects of credit or debit card transactions, and (iv) within one year of enactment, developing a model disclosure for consumer mortgage transactions. (95)

In discharging its enforcement authority over consumer financial laws, the BCFP has broad investigative, adjudicatory, and prosecutorial powers. The BCFP may subpoena documents, tangible evidence, written answers to questions, and oral testimony. (96) The BCFP may also hold hearings and adjudicatory proceedings, including cease-and-desist proceedings. (97) BCFP cease-and-desist orders may be appealed to the federal appellate courts. (98) The BCFP is also empowered to initiate civil enforcement proceedings in federal or state court. In either litigation or administrative adjudications, the BCFP may seek civil penalties, injunctive relief, rescission or reformation of contracts, refunds, restitution, disgorgement, and the return of real property. (99)

(b) Proscribed Conduct and Private Remedies

As it relates to consumer financial protection, the Act creates general civil liability for violations of federal consumer financial laws by covered persons and entities. (100) The Act also creates civil liability for any covered person or entity that engages in unfair, deceptive, or abusive practices, or that fails to comply with any BCFP rule or order. (101) Persons that knowingly and recklessly provide "substantial assistance" to any such violation are also subject to liability. (102) The Act does not expressly create a private right of action for injured consumers of financial products or services. The Act does not, however, displace or otherwise preclude private rights of action such consumers might have under other federal or state law. (103)

(c) Relationship with State Law

Congress intended the Act's consumer protection provisions to supplement rather than supplant state law. (104) As such, the Act both preserves and expands the ability of states to regulate consumer financial protection. To that effect, the Act's most significant state law provisions address preemption (i.e., the extent to which the Act or other federal law supplants a related state law) and states' enforcement authority.

(d) New Mortgage and Predatory Lending Regulations

While the creation of the BCFP is arguably the Act's most significant consumer protection component, Title XIV of the Act--also known as the Mortgage Reform and Anti-Predatory Lending Act--represents a response to the perceived problems and abuses in the mortgage lending and servicing industries. Through various amendments to the Truth in Lending Act, Title XIV creates a set of national mortgage underwriting standards and prohibits a wide range of previously common (and oft-criticized) practices in the mortgage industry. The two main consumer protection provisions of Title XIV are summarized below.

Ability-to-Repay Provisions. Title XIV amends the Truth in Lending Act to require that mortgage lenders verify a borrower's ability to repay before extending credit. (105) That verification must be based on the borrower's current income (which must be verified through examination of tax returns, payroll receipts, and other reliable third-party information), credit history, current debt, debt-to-income ratio, employment status, and other factors. (106) Title XIV tasks the BCFP with issuing regulations prohibiting mortgage lenders from extending credit without making a reasonable good faith determination that, at the time the loan is consummated, the borrower is reasonably able to repay the loan and all applicable taxes, insurance, and assessments. (107)

Anti-Steering Provisions. Title XIV also closely regulates the relationship between mortgage originators and brokers, a relationship that was subject to considerable scrutiny and criticism during the financial crisis of the late 2000s. (108) More specifically, Title XIV seeks to prevent lenders and brokers from "steering" borrowers into loans that provide the lender or broker with higher compensation but which may not be in the borrower's best interests. (109) Title XIV also directs the BCFP to issue "anti-steering" regulations that, among other things, prohibit lenders from referring a borrower to any loan that has predatory characteristics (i.e., unconscionable terms or so-called "equity stripping"), promotes racial or gender disparities in access to credit, or for which a borrower cannot reasonably repay. (110)

2. Consumer Credit Protection Act

Until the passage of the Dodd-Frank Act, the most significant federal consumer financial protection law was the Consumer Credit Protection Act ("CCPA"), which Congress passed in 1968 and has since amended multiple times. (111) Confusingly, the CCPA itself is divided into several acts, the most notable being the Truth in Lending Act (Title I of the CCPA), which was part of the original CCPA but has been amended several times; (112) the Fair Credit Reporting Act (Title VI), (113) enacted in 1970; the Equal Credit Opportunity Act (Title VII), (114) enacted in 1976; the Fair Debt Collection Practices Act (Title VIII), (115) enacted in 1977; and the Electronic Fund Transfer Act (Title IX), (116) enacted in 1978.

(a) Truth in Lending Act and Amendments

Background and Purpose. The Truth in Lending Act ("TILA") was originally passed by Congress in 1968 as part of the CCPA. It was intended to promote the informed use of consumer credit by requiring disclosures about the terms and costs of such credit to consumers. (117) Prior to TILA, there were no standard or required disclosures or definitions of loan terms, meaning consumers could not effectively compare the interest rates and overall loan costs of competing loan products. Scams and frauds were pervasive. TILA was a response to this problem and was designed to prevent abuses in consumer credit cost disclosures, as well as to create uniform methods for calculating and disclosing borrowing costs. (118)

Conduct Proscribed by TILA Generally. The specific TILA provisions are implemented by the Federal Reserve Board's Regulation Z. (119) Regulation Z sets forth who and what is covered by TILA and establishes the specific disclosures and other requirements. TILA regulates both "open-end" and "closed-end" credit transactions. (120) With the exception of certain high-cost mortgage loans, TILA does not regulate what charges may be imposed for consumer credit. Instead it requires standardized disclosure of the costs and charges imposed. TILA's disclosure requirements generally apply to any person or institution that regularly extends credit used primarily for personal, family, or household purposes, provided that such credit is either subject to a finance charge or payable in more than four installments. (121)

The Fair Credit Billing Act. The Fair Credit Billing Act ("FCBA") is a TILA amendment that seeks to "protect the consumer against inaccurate and unfair credit billing and credit card practices." (122) To that effect, the FCBA provides a means for fair and timely resolutions of credit billing disputes, protects against unfair billing practices, and sets out procedures for addressing billing errors in open-end credit transactions (e.g., credit card transactions). (123)

Bankruptcy Abuse Prevention and Consumer Protection Act. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") is a comprehensive act addressing many areas of bankruptcy practice and substantially altering U.S. bankruptcy law. (124) BAPCPA's main focus is arguably abuse prevention rather than consumer protection. As its name suggests, however, BAPCPA does contain consumer protection provisions that operate as amendments to TILA. Most significantly, BAPCPA requires creditors to disclose clearly on the front of their billing statements a minimum monthly payment warning, as well as a toll-free number consumers can contact to seek information on the time required to repay specific credit balances. (125)

TILA Amendments. TILA also contains several amendments relating to credit cards. The Unsolicited Credit Card Act, enacted in 1970, prohibits the issuance of a credit card unless in response to an oral or written application or as a card renewal. (126) The Fair Credit and Charge Card Disclosure Act requires new disclosures on credit and charge cards. (127) The Credit Card Accountability Responsibility and Disclosure Act (known as the Credit CARD Act), which took effect in February 2010, requires card issuers to provide advanced notice of any increase in the APR and notice of the consumer's right to cancel the account before the effective date of the increase. (128) The Credit CARD Act also defines terms commonly used in promotions or credit solicitations in an attempt to prevent creditors from using credit terms in misleading or deceptive ways. In addition to credit cards, the rental and ownership of residential property are also regulated by TILA amendments. The Consumer Leasing Act regulates personal property leases in excess of four months that are made to consumers for personal, family, or household purposes. (129) The Home Equity Loan Consumer Protection Act, enacted in 1988, requires lenders to disclose terms, rates, and conditions for home equity lines of credit in their applications. (130) Additionally, the Home Ownership and Equity Protection Act of 1994 requires certain disclosures and mandates certain restrictions on high-cost loans. (131) As explained above in Section I.C.I, Title XIV of the Dodd-Frank Act significantly amended TILA with respect to consumer mortgage lending.

Enforcement and Penalties. At least nine separate federal agencies are responsible for enforcing various provisions of TILA. (132) While the FTC has general enforcement authority under TILA, the FTC will share enforcement power with (and will cede other powers to) the BCFP under the Dodd-Frank Act in 2011. The FTC and the BCFP's enforcement powers, as well as some of TILA's specific penalty provisions, are set forth above. TILA provides for a private right of action, including class actions, for violations of disclosure requirement provisions. Actions must be brought within one year from the date on which the violation occurred. (133) In addition to any actual damage sustained by consumers, TILA provides for statutory damages. (134) For class actions, the maximum recovery is the lesser of $500,000 or 1% of the creditor's net worth. (135)

(b) Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act ("FDCPA") was passed in 1977 to "eliminate abusive debt collection practices by debt collectors." (136) The FDCPA regulates the manner in which debt collectors may attempt to collect consumer debts. It was passed in response to a systemic pattern of abusive, deceptive, and unfair debt collection practices, which Congress blamed for contributing to "the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy." (137)

The FDCPA applies to the collection of consumer debts on behalf of a third-party lender; it does not apply to so-called "original creditors," that is, creditors to whom the debt is directly owed. (138) The debt must also be consumer debt (i.e., for personal, family, or household purposes) and not for business purposes. (139) The FDCPA prohibits debt collectors from engaging in any conduct "the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." (140) The FDCPA also prohibits a debt collector from using any false, deceptive, or misleading representation or means in connection with any debt. (141)

Enforcement. The FTC has general enforcement responsibilities over the FDCPA. (142) In 2011, however, this and other FTC authority under the FDCPA will be transferred to the BCFP pursuant to the Dodd-Frank Act. The FTC will retain its FDCPA enforcement authority, which it will share with the BCFP. (143) The FDCPA also provides for a private right of action, including class actions. (144) Prevailing consumers may recover their actual damages plus statutory damages. (145) The FDCPA essentially imposes strict liability because the burden is on the debt collector to show that the violation was both unintentional and the result of a bona fide error for which the defendant had avoidance procedures in place. (146)

(c) Electronic Fund Transfer Act

The Electronic Fund Transfer Act ("EFTA") was passed by Congress in 1978 to "provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund and remittance transfer systems," with a strong emphasis on individual consumer rights. (147) The EFTA was a response to new fund transfer technologies that Congress feared could lead to unauthorized fund transfers. (148) The EFTA applies to electronic fund transfers involving asset accounts.

"Electronic fund transfer" refers to a transfer of money from one account to another (within the same financial institution or across multiple institutions) by a computer-based system. (149) This includes the use of automatic teller machines or ATMs, telephone transfer systems, online bill payments, direct deposits, and automatic preauthorized payments to third parties. (150) The EFTA protects consumers by limiting their liability for unauthorized transfers, such as credit or debit card transactions that occur after a card is lost or stolen.

Enforcement. The EFTA is enforced by the FTC in conjunction with other federal banking agencies, and the FTC may use all the enforcement tools available to it under the FTCA. (151) Under the Dodd-Frank Act, the BCFP will assume authority over the EFTA in 2011, although the FTC will retain its enforcement authority. (152) In addition to any civil penalties the FTC may obtain under the FTCA, the EFTA provides for criminal penalties where appropriate.

The EFTA allows for private suits, including class actions. Like the FDCPA, prevailing consumers under the EFTA may recover their actual damages plus statutory damages. (153) Also similar to the FDCPA, the EFTA essentially imposes strict liability because the burden is on the bank or card issuer to show that the violation was both unintentional and as a result of a bona fide error, despite having procedures in place designed to avoid this error. (154) The EFTA also creates a safe harbor for transfer errors that resulted from good faith compliance with any transfer rules or regulations. (155)

(d) Equal Credit Opportunity Act

The Equal Credit Opportunity Act ("ECOA") is an anti-discrimination law passed in 1974 to prevent creditors from discriminating against credit applicants on the basis of sex, race, color, national origin, age, marital status, religion, or because the applicant's income comes from a public assistance source, retirement benefits, or alimony/child support. (156) It also prohibits creditors from denying credit because the applicant, in good faith, exercised any of their rights under the CCPA. (157)

Enforcement. As with the FDCPA and EFTA, the FTC has general enforcement authority under the ECOA, while numerous other federal agencies have specific enforcement jurisdiction. (158) In 2011, the BCFP will have rulemaking and joint enforcement powers under the ECOA. The ECOA permits both individual and class actions for actual damages. (159) Importantly, the ECOA is one of the few federal consumer laws that explicitly allows punitive damages, although in effect such damages are more akin to statutory damages because they are capped at $10,000 in individual actions and the lesser of $500,000 or 1% of the defendant's net worth in class actions (plus reasonable attorneys' fees). (160) As with the FDCPA and EFTA, the ECOA creates a safe harbor for conduct that was undertaken in good faith compliance with an applicable rule or regulation. (161)

(e) Fair Credit Reporting Act

The Fair Credit Reporting Act ("FCRA") was enacted to "insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." (162) Congress passed the FCRA in recognition of the importance of and reliance on credit reporting in the banking sector and the need for procedural safeguards to ensure the impartiality and accuracy of these credit reports. (163) The FCRA regulates the compilation, distribution, and use of consumer credit information, as well as all documents that affect a consumer's credit worthiness.

The FCRA regulates both consumer credit reporting agencies and entities that rely on the credit reports generated by these agencies. (164) Each agency must provide consumers with all information in their files for that individual, as well as investigate any such information that is disputed by the consumer. (165) Companies that provide information to consumer reporting agencies are also subject to the FCRA. These are typically credit card companies, loan finance companies, and mortgage holders, and the FCRA regulates when and what they may report to the agencies. The FCRA refers to these companies as "information furnishers" (166) and imposes upon them a duty to provide accurate reports, investigate disputed information, correct errors, and inform consumers about negative information that has been or will be furnished to the credit reporting agency. (167) Entities that use the information in credit reports also have obligations under the FCRA. They must notify consumers when they rely on the credit report to take an adverse action (e.g., deny a loan). (168) They must also tell consumers which company supplied them the credit report upon which they relied. (169) The FCRA also sets forth the categories of information that may affect credit reports (such as late payments, bankruptcies, etc.) and prescribes time limits for negative information to remain on a consumer's credit report. (170)

Enforcement and Penalties. As with the FDCPA, EFTA, and ECOA, the FCRA is generally enforced by the FTC and by other federal agencies in specific circumstances. (171) The FCRA also permits state attorneys general to initiate civil enforcement proceedings, including actions for damages on behalf of state consumers. (172) Under the Dodd-Frank Act, the BCFP will be vested with enforcement authority under the FCRA in 2011, although the FTC will retain its general enforcement authority. The FCRA also authorizes a private right of action for negligent and willful FCRA violations. (173) For negligent violations, consumers are entitled to actual damages plus reasonable attorneys' fees. (174) Willful violations entitle the consumer to either actual damages or statutory damages, punitive damages where appropriate, and reasonable attorneys' fees and costs. (175)

3. Gramm-Leach-Bliley Act

Background and Purpose. The Gramm-Leach-Bliley Act ("GLBA"), also known as the Financial Services Modernization Act of 1999, repealed portions of the Glass-Steagall Act of 1933 and the Bank Holding Company Act, which prohibited any one institution from acting as any combination of investment bank, commercial bank, or insurance company. (176)

The GLBA's key consumer protection provisions include the Financial Privacy Rule, the Safeguards Rule, and the Pretexting provisions. The Financial Privacy Rule governs the compilation and disclosure of customers' personal financial information by financial institutions and by companies who might receive personal financial information. (177) The Safeguards Rule requires all financial institutions to design, implement, and maintain safeguards to protect customer information. (178) The Pretexting provisions are designed to protect consumers from individuals and companies that obtain their personal financial information under false pretenses. (179)

Enforcement and Penalties. The Pretexting provisions are generally enforced by the FTC. As with most of the aforementioned consumer financial protection laws, the BCFP will assume concurrent GLBA enforcement power with the FTC in 2011. A violation of the Pretexting provisions is a criminal offense. Whoever knowingly and intentionally violates or attempts to violate the Pretexting provisions may be fined or imprisoned for up to five years, or both. (180) In aggravated cases, the maximum fine and term of imprisonment are doubled. (181) The GLBA does not authorize any private right of action.

4. Real Estate Settlement Procedures Act

The Real Estate Settlement Procedures Act ("RESPA") was passed in 1974 to provide uniform rules for the residential real estate industry, clarify settlement costs to the consumer, and to avoid kickbacks and referral fees that unnecessarily increased the cost of real estate transactions. (182)

RESPA's most prominent requirement is the use of a uniform settlement statement to be used in all real estate transactions involving federally related mortgage loans. (183) Under the Dodd-Frank Act, the BCFP is charged with issuing a new model settlement statement that incorporates the disclosure requirements of both RESPA and TILA. (184)

RESPA also prohibits several practices that increase the cost of closing services. First, there are strict prohibitions on a person giving or accepting anything of value for referrals of closing services or for accepting any part of a charge for a service that was not performed. (185) Second, RESPA prohibits home sellers from requiring buyers to purchase title insurance from a particular company. (186) Third, RESPA limits the amount that a lender may require a borrower to put into an escrow account for purposes of paying taxes, insurance premiums, and other charges related to the property. (187)

Enforcement and Penalties. RESPA is chiefly enforced by the Secretary of the Department of Housing and Urban Development ("HUD"). (188) It also gives HUD rulemaking and investigatory powers. (189) The BCFP will assume primary regulatory and enforcement power over RESPA in 2011, but HUD will still retain secondary enforcement authority. (190) Additionally, state attorneys generals and insurance commissioners are authorized to sue in federal or state court to enjoin RESPA violations. (191)

Individual and class actions are permitted under RESPA for violations involving kickbacks or unearned fees, steering consumers to certain title insurance companies, or violations of RESPA mortgage servicing provisions. (192) For mortgage servicing violations, prevailing consumers may recover their actual damages, statutory damages for a pattern of non-compliance, and reasonable attorneys' fees. (193) For steering and kickback violations, consumers can recover up to three times the unlawful charges. (194)

II. State Consumer Protection Law

State consumer protection laws bear some resemblance to their federal counterparts. All states have enacted general statutes that, like the FTCA, prohibit unfair and deceptive trade practices. Almost all states have enacted specific statutes regulating certain professions, industries, or business practices. Unlike federal consumer protection law, however, state consumer protection law is also shaped by the "common" law, that is, the judge-made state law of contracts and torts. Moreover, class actions figure more prominently under state consumer protection law--both common and statutory--than federal law. Further generalizations about state consumer protection law are belied by the great variability in each state's statutes, common law, and class action rules.

A. State Consumer Protection Statutes

In the 1960s, public pressure mounted on state governments to intervene in the area of consumer protection. This pressure was a function of many factors, most notably the increasing complexity and impersonal nature of consumer transactions, the then-widespread criticism of the FTC as weak and ineffective, and the perception that protections afforded by state tort law were too limited. (195) Against this backdrop, states in the late 1960s and early 1970s began to adopt all or part of "model" consumer protection statutes drafted by non-governmental committees and often modeled on the FTCA. (196)

By 1981, every state had enacted some form of consumer protection act that addressed deceptive (and often unfair) trade practices. (197) Most states have since amended their consumer protection acts many times, resulting in great variation from state to state, even among states that initially adopted the same "model" statute. (198) States have also enacted additional consumer protection statutes targeting specific industries, products, or practices.

1. Unfair and Deceptive Trade Practices Acts

(a) Overview

Each state's general consumer protection act is typically entitled the "Unfair Trade Practices Act" or "Deceptive Trade Practices Act" (collectively, "UDTPAs"). (199) Because many UDTPAs are modeled on the FTCA, they are often colloquially referred to as "little FTC Acts." (200) Most UDTPAs prohibit false, unfair, or deceptive trade practices and vest the state attorney general (or in some cases a state consumer protection agency) with broad enforcement and rulemaking powers. (201) To avoid preemption and other potential conflicts with federal law, many UDTPAs expressly state that enforcement and rulemaking is to be undertaken in a manner consistent with the FTCA and federal court interpretations thereof. (202) Indeed, the FTC and state enforcement officials often coordinate their efforts in the areas of consumer education, identity theft, telemarketing, and other national consumer protection issues.

Despite their similarities to the FTCA, however, UDTPAs differ in several key respects. First, almost every UDTPA authorizes a private right of action and in many cases class actions. (203) Second, consumers who prevail in a UDTPA private action may obtain injunctive relief, actual damages, statutory damages, and in some cases treble or even punitive damages. (204) Because no such rights exist under the FTCA and because most UDTPAs proscribe the same conduct as the FTCA, UDTPAs effectively transfer enforcement powers from the FTC and other agencies to consumers themselves. This is especially true for class actions under UDTPAs, because the class action mechanism significantly increases the likelihood of lawsuits from consumers whose injuries may be too minor to warrant an individual lawsuit.

(b) Variation Among States

Prohibiting deceptive or unfair trade practices lies at the core of every UDTPA, but their substance, structure, and enforcement vary considerably from state to state. For example, some states only impose liability for fraudulent or willful deceptions, while most others impose liability irrespective of the wrongdoer's state of mind. (205) Moreover, some states, such as California and Rhode Island, permit the recovery of punitive damages without an express limitation, (206) while others, such as Florida and Michigan, do not provide for punitive damages. (207) Between these extremes lie a large number of states that allow the more common UDTPA remedy of enhancing or trebling damages for particularly severe violations. (208) Not surprisingly, private UDTPA actions are more prevalent (and the case law accordingly more developed) in states with the broadest liability and damages standards.

(c) Investigation and Enforcement

Aside from private consumer lawsuits, state attorneys general (and in some cases state consumer protection agencies) are the primary public UDTPA enforcers. Like the FTC, state attorneys general possess broad investigative and subpoena powers under UDTPAs. (209) State attorneys general often work closely with the FTC to investigate specific practices or industries. They also work with each other through the National Association of Attorneys General to coordinate state investigations or enforcement at the regional or national level. In the area of enforcement, state attorneys general or consumer protection agencies may generally initiate administrative, civil, and in some cases criminal enforcement proceedings.

2. Other State Laws

Most states have also enacted other consumer protection provisions regulating specific professions, industries, or business practices. Many states have established a 'Department of Consumer Affairs' or similar agency charged with licensing and regulating certain businesses and professions. For example, the California Department of Consumer Affairs issues licenses in more than 100 business and 200 professional categories, including doctors, dentists, contractors, cosmetologists, and auto repair shops. (210) To protect consumers, the Department establishes minimum qualifications and levels of competency for licensure. (211)

Many states also closely regulate large industries like utilities (e.g., electricity, natural gas, water, and telecommunications), agriculture, insurance, health care, and consumer credit. (212) These industry-specific regulatory regimes often contain consumer protection provisions that are enforced by a state commission or department charged with regulating a specific industry. (213) Other state laws and regulations target specific business practices as varied as funeral service contracts, telemarketing, promotions or giveaways, and thermostat settings for rental buildings. (214) In addition, at least nine states have adopted the Uniform Consumer Credit Code ("UCCC"), which was drafted by the National Conference of Commissioners on Uniform State Laws in 1968 and modeled upon the federal CCPA (and more specifically TILA). (215) A few other states have enacted statutes similar to the UCCC, and most others have enacted selected UCCC provisions. (216)

B. State Common Law

Aside from federal and state statutory law, state common law (i.e., the decisional law of torts and contracts) often serves consumer protection functions. State common law predates statutory consumer laws and may therefore be considered the oldest form of consumer protection law in the United States. Under state common law, injured or defrauded consumers may sue on the basis of the defendant's negligence, breach of contract, fraud, or breach of warranty, among other things. Indeed, prior to the enactment of federal and state consumer protection statutes, state common law was the lone avenue of legal redress for aggrieved consumers. Of course, it was also the perceived shortcomings of common law suits e.g., tough evidentiary burdens for consumers, limited remedies, and often arcane pleading requirements--that prompted the passage of UDTPAs and other consumer protection statutes. (217)

Today, common law consumer suits coexist with state and federal consumer protection statutes, although their interrelationship is complex. In some instances, the statutory law seemingly complements the common law. Conversely, compliance with a consumer protection standard or regulation is often a viable defense to common law suits. In other instances, statutory law expressly preserves a consumer's rights under state common law. In still other instances, statutory law bars or preempts common law actions based on the same conduct. (218)

If injured consumers are permitted to maintain a common law suit, they may seek the full range of legal and equitable relief permitted under state law, including compensatory damages, restitution, and injunctive relief. While punitive or exemplary damages are generally not recoverable in suits for breach of contract, the availability of punitive damages in tort cases varies considerably from state to state. Generally, punitive damages are only available in cases of intentional or grossly reckless conduct by the defendant.

III. Class Actions

One unique aspect of consumer protection law in the United States is the prevalence of consumer class actions. Class actions are a special type of civil proceeding in which one or more individual consumers can sue on behalf of a class of consumers who suffered the same or similar injury. (219) Their purpose is to promote judicial efficiency and consistency by adjudicating numerous similar claims in a streamlined master proceeding. (220) Class actions may be maintained in federal or state court, and attorneys for the class often initiate class actions in courts--typically state courts--where the judges or jury pool are perceived as sympathetic to their claims. (221) In passing the Class Action Fairness Act of 2005 ("CAFA"), Congress sought to curtail this practice by expanding the jurisdiction of federal courts over class actions premised upon violations of state law. (222)

Despite CAFA and other reform efforts, consumer class actions are still commonplace, particularly where the injury to each consumer is relatively small but where the pool of injured consumers number in the hundreds, thousands, or even millions. (223) Indeed, one of the justifications for class actions is that they provide efficient private enforcement of consumer protection laws by deterring businesses from inflicting even the smallest injury on individual consumers. (224) Conversely, a common criticism of consumer class actions is that the significant leverage it affords consumers--and especially the attorneys representing them--creates an incentive for baseless or frivolous suits, the sole purpose of which is the extraction of a "nuisance" settlement. (225) While the political debate over class actions rages on, consumer class actions remain one of the most unique and influential components of U.S. consumer protection law.

IV. Conclusion

There is no singular or overarching 'law' of consumer protection in the United States. Consumer protection is instead the province of scores of separate federal and state statutes, as well as state common law. This multitude of laws also yields a diversity of enforcement mechanisms, ranging from federal criminal prosecutions to private individual or class actions. On one hand, this complex patchwork offers consumers layers--albeit sometimes redundant--of legal protection. On the other hand, it presents an ongoing challenge to businesses and individuals seeking to ensure or monitor their compliance with applicable federal and state law. Above all, however, U.S. consumer protection law is a reflection of the United States' allocation of power among the federal and state governments truly a federalist patchwork.

(1) Consumer class actions are frequently brought under state law, although many federal consumer protection statutes also permit class actions.

(2) See U.S. CONST. ART. 1 [section] 8.

(3) See, e.g., LAWRENCE M. FRIEDMAN, A HISTORY OF AMERICAN LAW 329-349 (Touchstone Press 2005).

(4) See generally MICHAEL MCGERR, A FIERCE DISCONTENT: THE RISE AND FALL OF THE PROGRESSIVE MOVEMENT IN AMERICA, 18701920 (Free Press, 2003); see also A HISTORICAL GUIDE TO THE U.S. GOVERNMENT 248-251 (George T. Kurian, ed., Oxford Univ. Press, 1998).

(5) U.S. Food and Drug Administration, FDA History Part I, http://www.fda.gov/ AboutFDA/WhatWeDo/History/Origin/ucm05 4819.htm (last visited May 10, 2011).

(6) See, e.g., RONALD D. ROTUNDA AND JOHN E. NOWAK, TREATISE ON CONSTITUTIONAL LAW: SUBSTANCE AND PROCEDURE [section] 4.5 (4th ed. 2007).

(7) 15 U.S.C. [section] 45(a).

(8) Id.

(9) See, e.g., Federal Trade Commission, About the Bureau of Consumer Protection, http://www.ftc.gov/bcp/about.shtm (last visited May 10, 2011).

(10) 15 U.S.C. [section][section]41 et seq.

(11) The FTC, along with the Antitrust Division of the U.S. Department of Justice, has also retained its role as the primary federal antitrust agency, but the FTC's antitrust regulatory authority is outside the scope of this paper.

(12) 15 U.S.C. [section] 41.

(13) See id. at [section][section] 41-58, as amended.

(14) Id. at [section] 45(n).

(15) See, e.g., 15 U.S.C. [section] 16921(a) (the Fair Debt Collection Practices Act); 815 Ill. Comp. Stats. 505/2 (the Illinois Consumer Fraud and Deceptive Business Practices Act).

(16) 15 U.S.C. [section] 57a(b)(3).

(17) See Federal Trade Commission, Statutes Relating to Consumer Protection Mission, http://www.ftc.gov/ogc/stat3.shtm (last visited May 10,2011).

(18) 15 U.S.C. [section] 57b-1.

(19) Id.

(20) Id. at [section] 46(b).

(21) Id. at [section] 45(a)(2).

(22) See, e.g., id. at [section] 1691.

(23) Id. at [section] 45(m) (recently amended from $10,000 to $11,000).

(24) Id. at [section] 57b(b).

(25) Other significant federal consumer protection laws addressing food and consumer products are enforced by the U.S. Department of Agriculture, which regulates the sale of meat and poultry products to consumers, and the National Highway Traffic Safety Administration, which establishes motor vehicle and highway safety standards.

(26) Gardiner Harris, The Safety Gap, N.Y. TIMES, Nov. 2, 2008, at 46.

(27) Food and Drug Admin., FY 2011 Food and Drug Administration Congressional Justification (2010), http://www.fda.gov/ downloads/AboutFDA/ReportsManualsForms/ Reports/BudgetReports/UCM205781.pdf (last visited May 10, 2011).

(28) 21 U.S.C. [section][section] 301 et seq.

(29) Id. at [section] 355.

(30) Id. at [section][section] 335b(b), 371-76.

(31) Id. at [section] 393.

(32) Id.

(33) Id. at [section] 392(a). Pursuant to a memorandum of understanding between the FDA and the Alcohol and Tobacco Tax and Trade Bureau ("TTB"), which split off from the Bureau of Alcohol, Tobacco, and Firearms ("ATF") in 2003, the TTB exercises primary regulatory authority over alcoholic beverages while the FDA advises, consults, and shares information with the TTB.

(34) 21 U.S.C. [section] 321(g).

(35) Id. . at [section][section] 341-350f.

(36) Id. at [section][section] 349-350b, 467f.

(37) Id. at [section] 393(b).

(38) Id. at [section] 355. The FDCA generally defines "new drugs" as those drugs "not generally recognized" by qualified scientific experts as safe or effective for a given use. 21 U.S.C. [section] 321 (p). "New drugs" are considered prescription drugs by default. The scope and details of the FDA "new drug" approval process are beyond the scope of this paper, but the pertinent regulations may be found at secs. 310.3-314.650 of Title 21 of the Code of Federal Regulations, 21 C.F.R. [section][section] 310.3-314.650.

(39) 21 U.S.C. [section][section] 351-352.

(40) 21 C.F.R. [section][section] 314.1 et seq.

(41) Id. at [section][section] 202.1-203.70.

(42) 21 C.F.R. [section][section] 600.2-680.3.

(43) 21 U.S.C. [section][section] 387-387u.

(44) Id. at [section] 387a.

(45) Id. at [section] 372.

(46) Id. at [section] 374.

(47) 21 U.S.C. [section][section] 334, 375. Note that seizure proceedings in federal courts are generally brought by the Attorney General in the name of the United States rather than the FDA, which has only limited powers to litigate in its own name in federal court. 21 U.S.C. [section] 337.

(48) 21 U.S.C. [section] 360h(e).

(49) Id. at [section] 387h(c).

(50) The FDA does have some authority to direct recalls of infant formula. 2l U.S.C. [section] 350a(f).

(51) Indeed, companies that fail to cooperate with FDA recall requests or proactively recall potentially hazardous or defective products also risk the negative publicity associated with FDA press releases informing the public of the potential dangers.

(52) 21 U.S.C. [section][section] 335, 337.

(53) Id. at [section] 337(b).

(54) Id. at [section] 331.

(55) Id. at [section] 333.

(56) See, e.g., A HISTORICAL GUIDE TO THE U.S. GOVERNMENT 138-139 (George T. Kurian, ed., Oxford Univ. Press, 1998).

(57) 15 U.S.C. [section] 2053.

(58) Id. at [section] 2051.

(59) Id. at [section] 2053. Although the CPSC is usually three appointed Commissioners, there are currently five appointed Commissioners.

(60) Id. at [section] 2052(a)(5).

(61) ABA SEC. OF ANTITRUST LAW, CONSUMER PROTECTION LAW DEVELOPMENTS 739 (August T. Horvath & John E. Villafranco eds., 2009).

(62) 15 U.S.C. [section] 2052(a)(5). As noted, supra, pursuant to a memorandum of understanding between the FDA and the TTB/ATF, the TTB retains primary regulatory authority over alcoholic beverages while the FDA advises, consults, and shares information with the TTB. The CPSC does not have regulatory jurisdiction over alcoholic beverages.

(63) See, e.g., 16 C.F.R. [section][section] 1201 et seq.

(64) See, e.g., id. at [section][section] 1500-1750.

(65) 15 U.S.C. [section] 2057.

(66) 16 C.F.R. [section][section] 1500.17-1500.18.

(67) 15 U.S.C. [section][section] 2057a-2057c.

(68) Id. at [section] 2064(b).

(69) Id. at [section] 2076.

(70) Id. at [section][section] 2069, 2071.

(71) Id. at [section] 2073.

(72) Id. at [section] 2068.

(73) Id. at [section] 2074.

(74) Id. at [section] 2072.

(75) Id.

(76) See David Cho, et al., Lawmakers Guide Dodd-Frank Bill for Wall Street Reform into

Homestretch, THE WASH. POST, June 26, 2010, at A01.

(77) Dodd-Frank Wall Street Reform and Consumer Protection Act (hereinafter the "Dodd-Frank Act" or the "Act"), preamble, Pub. L. No. 111-203, 124 Stat. 1376, 1376 (2010).

(78) See id. at [section] 1062(c).

(79) Id. at [section] 1021(a). As defined in the Act, "Federal consumer financial law" encompasses not only any rules and regulations issued by the BCFP, it also includes other enumerated federal consumer laws. Note that the FTCA is excluded from this definition, although the BCFP is authorized to regulate consumer financial products or services that may also fall under the FTCA.

(80) Id. at [section][section] 1002, 1022, 1061.

(81) Note, however, that the FTC will both retain and share with the BCFP its enforcement authority under certain consumer financial laws.

(82) Dodd-Frank Act [section] 1011.

(83) Id.

(84) Id. at [section][section] 1002(6), 1011.

(85) Id. at [section] 1002(5).

(86) Id. at [section] 1002(6).

(87) Id. at [section][section] 1024-1026.

(88) Id. at [section] 1027.

(89) The enumerated consumer laws are: the Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. [section][section] 3801 et seq.); the Consumer Leasing Act of 1976 (15 U.S.C. [section][section] 1667 et seq.); the Electronic Fund Transfer Act (15 U.S.C. [section][section] 1693 et seq.), except with respect to section 920 of that Act; the Equal Credit Opportunity Act (15 U.S.C. [section][section] 1691 et seq.); the Fair Credit Billing Act (15 U.S.C. [section][section] 1666 et seq.); the Fair Credit Reporting Act (15 U.S.C. [section][section] 1681 et seq.), except with respect to sections 615(e) and 628 of that Act, (15 U.S.C. [section][section] 168Ira(e), 168lw); the Home Owners Protection Act of 1998 (12 U.S.C. [section][section] 4901 et seq.); the Fair Debt Collection Practices Act (15 U.S.C. [section][section] 1692 et seq.); subsections (b) through (f) of section 43 of the Federal Deposit Insurance Act (12 U.S.C. [section][section] 1831t(c)-(f)); sections 502 through 509 of the Gramm-Leach-Bliley Act (15 U.S.C. [section][section] 6802 6809) except for section 505 as it applies to section 501(b); the Home Mortgage Disclosure Act of 1975 (12 U.S.C. [section][section] 2801 et seq.); the Home Ownership and Equity Protection Act of 1994 (15 U.S.C. [section][section] 1601 et seq.); the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. [section][section] 2601 et seq.); the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. [section][section] 5101 et seq.); the Truth in Lending Act (15 U.S.C. [section][section] 1601 et seq.); the Truth in Savings Act (12 U.S.C. [section][section] 4301 et seq.); section 626 of the Omnibus Appropriations Act, 2009 (Pub. L. 111-8); and the Interstate Land Sales Full Disclosure Act (15 U.S.C. [section] 1701). Dodd-Frank Act [section] 1002(12).

(90) Dodd-Frank Act [section] 1061(b)(5); Designated Transfer Date for the Bureau of Consumer Financial Protection, 75 Fed. Reg. 57,252 (Sept. 20, 2010).

(91) Dodd-Frank Act [section][section] 1002, 1021-1022.

(92) Id. at [section][section] 1021(b), 1031(a).

(93) Id. at [section][section] 1024-1026, 1042.

(94) Id. at [section][section] 1024-1026, 1042.

(95) Id. at [section][section] 1028, 1032, 1075.

(96) Id. at [section] 1052.

(97) Id. at [section] 1053.

(98) Id.

(99) Id. at [section][section] 1054-1055.

(100) Id. at [section] 1036.

(101) Id.

(102) Id. at [section] 1036(a)(3).

(103) Id. at [section][section] 1041-1046.

(104) See, e.g., id. at [section][section] 1041(a).

(105) Id. at [section] 1411.

(106) Id.

(107) Id. at [section][section] 1401-1422.

(108) Id. at [section] 1403.

(109) Id.

(110) Id.

(111) 15 U.S.C. [section][section] 1601 et seq.

(112) Id.

(113) Id.

(114) Id. at [section][section] 1691 et seq.

(115) Id. at [section][section] 1692 et seq.

(116) id. at [section][section] 1693 et seq.

(117) Id. at [section] 1601.

(118) Id.

(119) 12 C.F.R. [section] 226.1 et seq. (further clarified by the Federal Reserve Board's Official Staff Commentary to Regulation Z, 63 Fed. Reg. 16,669 (Apr. 6, 1998)).

(120) Open-end credit transactions, or plans under which creditors reasonably contemplate repeated transactions, cover credit card and charge card plans in which consumers are authorized to purchase items on credit up to a certain limit and then required to pay interest on any outstanding balance each month. Closed-end credit transactions involve a onetime borrowing of a specific amount of money that the consumer repays over a period of time, such as a car loan.

(121) 12 C.F.R. [section] 226.1(c).

(122) 15 U.S.C [section] 1601.

(123) Id. at [section] 1666.

(124) See 11 U.S.C. [section][section] 101 et seq.

(125) 15 U.S.C. [section][section] 1601-1606.

(126) 12 C.F.R. [section] 226.12.

(127) 15 U.S.C. [section] 1637(c)-(g).

(128) Id. at [section] 1603.

(129) Id. at [section][section] 1667-1667f.

(130) Id. at [section][section] 1637, 1647.

(131) 12 C.F.R. [section] 226.32.

(132) 15 U.S.C. [section] 1607.

(133) This limitation period does not apply if TILA violations are being asserted as a defense or counterclaim, except as otherwise provided by state law. Id. at [section] 1640.

(134) Id.

(135) Id.

(136) 15 U.S.C. [section] 1692.

(137) Id.

(138) However, some state debt collection laws do apply to original creditors.

(139) 15 U.S.C. [section] 1692a.

(140) Id. at [section] 1692d.

(141) Id. at [section] 1692e.

(142) Under 15 U.S.C. [section] 16921(a), a violation of the FDCPA is also deemed a violation of the FTCA, which allows the FTC to use its arsenal of FDCA enforcement tools to enforce the FDCPA.

(143) See 15 U.S.C. [section] 16921.

(144) Id. at [section] 1692k.

(145) Id. at [section] 1692k(a).

(146) Id. at [section] 1692k(c).

(147) Id. at [section] 1693.

(148) Id.

(149) Id. at [section] 1693a.

(150) Id.

(151) Id. at [section] 16930.

(152) Id. at [section] 16930; Dodd-Frank Act [section] 1084(5).

(153) Id. at [section] 1693m(a).

(154) Id. at [section] 1693m(c).

(155) Id. at [section] 1693m(d).

(156) Id. at [section][section] 1691 & 1691a.

(157) Id.

(158) Id. at [section] 1691c.

(159) Id. at [section] 1691e(a).

(160) Id. at [section] 1691e(b).

(161) Id. at [section] 1691e(e).

(162) Id. at [section] 1681.

(163) Id.

(164) The FCRA defines a consumer reporting agency as "any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information ... for the purposes of preparing or furnishing consumer reports." Id. at [section] 1681a.

(165) Id. at [section] 1681i.

(166) Id. at [section] 1681s.

(167) Id.

(168) Id. at [section] 1681m.

(169) Id.

(170) Id. at [section] 1681c.

(171) The FCRA lists the other government agencies and defines their enforcement powers. Id. at [section] 1681s.

(172) Id. at [section] 168Is(c).

(173) Id. at [section] 1681n.

(174) Id. at [section] 1681o(a).

(175) Id. at [section] 1681n.

(176) 12 U.S.C. [section] 1841. See also Lissa Lamkin Broome and Jerry W. Markham, The Gramm-Leach-Bliley Act. An Overview (2001), available at http://www.symtrex.com/ pdfdocs/glb_paper.pdf.

(177) 15 U.S.C. at [section][section] 6801-6809.

(178) Id.

(179) Id. at [section][section] 6821-6827.

(180) Id. at [section] 6823.

(181) Aggravated cases triggering enhanced penalties include violating this provision while violating another law, or as part of a pattern of illegal activity involving more than $100,000. Id. at [section] 6823.

(182) 12 U.S.C. [section] 2601.

(183) Id. at [section] 2603.

(184) Dodd-Frank Act, at [section] 1098(2).

(185) 12 U.S.C. [section] 2607.

(186) Id. at [section] 2608.

(187) Id. at [section] 2609.

(188) Id. at [section] 2617.

(189) Id.

(190) Dodd-Frank Act, at [section] 1098(6).

(191) 12 U.S.C. [section] 2614.

(192) Id. at [section] 2607.

(193) Id. at [section][section] 2607, 2608, 2609.

(194) Id. at [section][section] 2607, 2608.

(195) See State Consumer Protection Acts. An Empirical Investigation of Private Litigation, at 5 (Northwestern University School of Law, Searle Center on Law, Regulation, and Economic Growth preliminary report, 2009), available at http://www.law.northwesternedu/searlecenter/ uploads/CPA_Proof_113009_final.pdf.

(196) Id. at 6-7.

(197) MARY DEE PRIDGEN, CONSUMER PROTECTION AND THE LAW [section] 2:10 (2008).

(198) Id.

(199) ABA SEC. OF ANTITRUST LAW, CONSUMER PROTECTION LAW DEVELOPMENTS 384-598. In some states, the UDTPAs also contain "Consumer Fraud" in the title.

(200) Id. at 375.

(201) Id. at 375-384.

(202) Id. at 375-384.

(203) Id. at 383.

(204) Id. at 381-382.

(205) See. e.g., ARK. CODEANN. [section] 4-88-107(a).

(206) See CAL. CIV. CODE [section] 1780(a)(4); R.I. GEN. LAWS [section] 6-13.1-5.2(a).

(207) See FLA. STAT. [section] 501.211(2); MICH. COMP. LAWS [section] 445.911(2).

(208) See MASS. GEN. LAWS ch. 93A, [section] 9(3); N.Y. GEN. BUS. LAW [section] 349(h). Note that some in states, such as Ohio and New Mexico, the enhanced damages remedy is generally not available in UDTPA class actions. N.M. STAT. 57-12-10.B; OHIO REV. CODE [section] 1234.09(B).

(209) ABA SEC. OF ANTITRUST LAW, CONSUMER PROTECTION LAW DEVELOPMENTS 380-382.

(210) California Department of Consumer Affairs, About DCA, http://www.dca.ca. gov/about_dca/morabout.shtml (last visited May 11, 201l).

(211) Id.

(212) See ABA SEC. ON ANTITRUST LAW, CONSUMER PROTECTION LAW DEVELOPMENTS 376 & n.5.

(213) See id. at 376.

(214) See, e.g., CONN. GEN. STAT. [section][section] 42-206 & 42-300: WIS. STAT. [section][section] 424.202 et seq. & 134.81.

(215) See Peter V. Letsou, The Political Economy of Consumer Credit Regulation, 44 EMORY L.J. 589, 608 n.62 (1995) (noting that Colorado, Idaho, Indiana, Iowa, Kansas, Maine, Oklahoma, Utah, and Wyoming have adopted all or part of the UCCC).

(216) See id. at 608 n.62.

(217) See Joshua D. Wright, State Consumer Protection Acts. An Empirical Investigation of Private Litigation, at 5-6 (Northwestern University School of Law, Searle Center on Law, Regulation, and Economic Growth preliminary report 2009), available at http://www.law.northwestern.edu/searlecenter/ uploads/CPA_Proof_113009_final.pdf.

(218) See, e.g., ALA. CODE [section] 8-19-15(a).

(219) See, e.g., FED. R. CIV. P. 23(a); 735 ILL. COMP. STAT. 5/2-801 (a).

(220) See ALBA CONTE & HERBERT NEWBERG, NEWBERG ON CLASS ACTIONS [section] 1:6 (2002); see generally FED. R. CIV. P. 23(b).

(221) See, e.g., Edward F. Sherman, Decline & Fall; As the Golden Age of Consumer Class Actions Ends, the Question Now Is Whether They Have Any Future, 93 A.B.A.J. 51 (2007).

(222) 28 U.S.C. [section] 1332(d).

(223) See Edward F. Sherman, Decline & Fall; As the Golden Age of Consumer Class Actions Ends, the Question Now Is Whether They Have Any Future, 93 A.B.A.J. 51 (2007).

(224) See, e.g., id.

(225) See, e.g., id.

IADC Member Edward M. Crane is a partner with Skadden, Arps, Slate, Meagher & Flom LLP and heads up the litigation practice in the firm's Chicago office. He has represented clients in complex litigation for more than 25 years and regularly represents clients in trial and appellate courts throughout the United States in federal and state multidistrict and class action litigation. Mr. Crane is a Fellow of the Litigation Counsel of America and has been selected repeatedly for inclusion in The Best Lawyers in America.

Nicholas J. Eichenseer and Emma S. Glazer are associates in the litigation practice of Skadden, Arps, Slate, Meagher & Flom's Chicago office.
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Author:Crane, Edward M.; Eichenseer, Nicholas J.; Glazer, Emma S.
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