WASHINGTON (CN) – The newly created Consumer Financial Protection Bureau and the Federal Trade Commission agreed to coordinate their efforts to avoid redundant regulation.
The CFPB was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act to police consumer financial services, such as credit cards and mortgages offered by banks, credit unions and other financial companies.
The CFPB is charged to do this through consumer education, regulatory enforcement and publishing reports on practices in the consumer financial services market.
In a joint statement, Richard Cordray, Director of the CFPB and Jon Leibowitz, Chairman of the FTC said that a memorandum of understanding between the two agencies would ensure efficiency and limit duplication of effort.
“Entering this agreement with the FTC is important to making sure markets for consumer financial products are getting efficient and effective federal government oversight,” Cordray said.
“The FTC has always been committed to protecting consumers and legitimate companies from bad actors in the financial marketplace,” said Leibowitz, “Now we have another cop on the beat, and this agreement ensures that businesses will not be double-teamed by the two agencies.”
The agencies agreed to share training resources, conduct joint consumer education efforts and notify each other of proposed regulations at least 30 days in advance.
They also agreed to notify each other before they begin investigations or take legal actions against suspects, and they will not go after the same suspects for the same underlying activity.
Controversy remains as to whether any actions taken by the CFPB will stand up in court. President Barack Obama used a recess appointment to make Cordray the director of the agency, bypassing confirmation by the Senate.
Republicans in Congress say this violates Dodd-Frank which says the CFPB can not begin operations until its head is approved by the Senate.
Critics also argue that the recess appointment is unconstitutional because the Senate never officially recessed.
Instead, over the winter break, a single Senator came to the floor of the Senate every business day and tapped the gavel, bringing the otherwise empty chamber to order.