July 8, 2022

Partner Jean Noonan comments for Automotive News on FTC's sweeping new regulations

The FTC recently announced a new rule that affects how auto dealers will sell cars and voluntary protection products, which the FTC calls "add-on" products. In April 2021, a unanimous Supreme Court held in AMG Capital Management v. FTC that the FTC could not request monetary relief alongside an injunction request in federal court. The court said the agency needed to follow administrative procedures and then seek the civil penalty. The FTC says that its new proposed rule would allow it to pursue civil penalties and consumer redress.

Automotive News asked Hudson Cook partner Jean Noonan what she is telling clients who ask whether the new prohibited misrepresentations were already illegal. The Supreme Court's ruling "was a tremendous blow to the FTC's enforcement program," said Jean. Without a trade regulation rule, the FTC could only order a company to quit a particular practice. It could not get more aggressive until the company committed a second violation, rendering the first instance effectively "free," Jean added. The format adopted here lets the FTC get a new rule up and running in less time than the average of five years for other FTC rulemakings.

Jean is a partner in Hudson Cook's Washington, DC office and a former executive with the FTC, where she directed the agency's enforcement of consumer financial services laws. Jean advises clients on consumer financial services, fair lending, marketing, financial privacy, and consumer protection matters. She counsels financial institutions and others in complying with laws related to consumer credit, privacy, telemarketing, and unfair trade practices. Jean represents clients in government investigations, examinations, and enforcement actions before federal agencies, including the CFPB, FTC, and federal prudential regulators, and in other ancillary matters.

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