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8000 - Miscellaneous Statutes and Regulations
SEC. 18. (a)(1) Except as provided in subsection (h),
the Commission may prescribe--
(A) interpretative rules and general statements of policy with
respect to unfair or deceptive acts or practices in or affecting
commerce (within the meaning of section
5(a)(1) of this Act), and
(B) rules which define with specificity acts or practices which
are unfair or deceptive acts or practices in or affecting commerce
(within the meaning of such section 5(a)(1)), except that the
Commission shall not develop or promulgate any trade rule
or
{{2-29-08 p.8554.02}}regulation with
regard to the regulation of the development and utilization of the
standards and certification activities pursuant to this section. Rules
under this subparagraph may include requirements prescribed for the
purpose of preventing such acts or practices.
(2) The Commission shall have no authority under this Act, other
than its authority under this section, to prescribe any rule with
respect to unfair or deceptive acts or practices in or affecting
commerce (within the meaning of section 5(a)(1)). The preceding
sentence shall not affect any authority of the Commission to prescribe
rules (including interpretive rules), and general statements of policy,
with respect to unfair methods of competition in or affecting commerce.
(b)(1) When prescribing a rule under subsection (a)(1)(B) of this
section, the Commission shall proceed in accordance with
section 553 of title 5, United
States Code (without regard to any reference in such section to
sections 556 and
557 of such title), and shall
also (A) publish a notice of proposed rulemaking stating with
particularity the text of the rule, including any alternatives, which
the Commission proposes to promulgate, and the reason for the proposed
rule; (B) allow interested persons to submit written data, views, and
arguments, and make all such submissions publicly available; (C)
provide an opportunity for an informal hearing in accordance with
subsection (c); and (D) promulgate, if appropriate, a final rule based
on the matter in the rulemaking record (as defined in subsection
(e)(1)(B)), together with a statement of basis and purpose.
(2)(A) Prior to the publication of any notice of proposed
rulemaking pursuant to paragraph (1)(A), the Commission shall publish
an advance notice of proposed rulemaking in the Federal Register. Such
advance notice shall--
(i) contain a brief description of the area of inquiry under
consideration, the objectives which the Commission seeks to achieve,
and possible regulatory alternatives under consideration by the
Commission; and
(ii) invite the response of interested parties with respect to
such proposed rulemaking, including any suggestions or alternative
methods for achieving such objectives.
(B) The Commission shall submit such advance notice of proposed
rulemaking to the Committee on Commerce, Science, and Transportation of
the Senate and to the Committee on Energy and Commerce of the House of
Representatives. The Commission may use such additional mechanisms as
the Commission considers useful to obtain suggestions regarding the
content of the area of inquiry before the publication of a general
notice of proposed rulemaking under paragraph (1)(A).
(C) The Commission shall, 30 days before the publication of a
notice of proposed rulemaking pursuant to paragraph (1)(A), submit such
notice to the Committee on Commerce, Science, and Transportation of the
Senate and to the Committee on Energy and Commerce of the House of
Representatives.
(3) The Commission shall issue a notice of proposed rulemaking
pursuant to paragraph (1)(A) only where it has reason to believe that
the unfair or deceptive acts or practices which are the subject of the
proposed rulemaking are prevalent. The Commission shall make a
determination that unfair or deceptive acts or practices are prevalent
under this paragraph only if--
(A) it has issued cease and desist orders regarding such acts or
practices, or
(B) any other information available to the Commission indicates a
widespread pattern of unfair or deceptive acts or practices.
(c) The Commission shall conduct any informal hearings required by
subsection (b)(1)(C) of this section in accordance with the following
procedure:
(1)(A) The Commission shall provide for the conduct of
proceedings under this subsection by hearing officers who shall perform
their functions in accordance with the requirements of this subsection.
(B) The officer who presides over the rulemaking proceedings
shall be responsible to a chief presiding officer who shall not be
responsible to any other officer or employee of the Commission. The
officer who presides over the rulemaking proceeding shall make a
recommended decision based upon the findings and conclusions of such
officer as to all relevant and material evidence, except that such
recommended decision may be made by another officer if the officer who
presided over the proceeding is no longer available to the
Commission.
{{2-29-08 p.8555}}
(C) Except as required for the disposition of ex parte matters as
authorized by law, no presiding officer shall consult any person or
party with respect to any fact in issue unless such officer gives
notice and opportunity for all parties to participate.
(2) Subject to paragraph (3) of this subsection, an interested
person is entitled--
(A) to present his position orally or by documentary submissions
(or both), and
(B) if the Commission determines that there are disputed issues
of material fact it is necessary to resolve, to present such rebuttal
submissions and to conduct (or have conducted under paragraph (3)(B))
such cross-examination of persons as the Commission determines (i) to
be appropriate, and (ii) to be required for a full and true disclosure
with respect to such issues.
(3) The Commission may prescribe such rules and make such rulings
concerning proceedings in such hearings as may tend to avoid
unnecessary costs or delay. Such rules or rulings may include (A)
imposition of reasonable time limits on each interested person's oral
presentations, and (B) requirements that any cross-examination to which
a person may be entitled under paragraph (2) be conducted by the
Commission on behalf of that person in such manner as the Commission
determines (i) to be appropriate, and (ii) to be required for a full
and true disclosure with respect to disputed issues of material fact.
(4)(A) Except as provided in subparagraph (B), if a group of
persons each of whom under paragraphs (2) and (3) would be entitled to
conduct (or have conducted) cross-examination and who are determined by
the Commission to have the same or similar interests in the proceeding
cannot agree upon a single representative of such interests for
purposes of cross-examination, the Commission may make rules and
rulings (i) limiting the representation of such interest, for such
purposes, and (ii) governing the manner in which such cross-examination
shall be limited.
(B) When any person who is a member of a group with respect to
which the Commission has made a determination under subparagraph (A) is
unable to agree upon group representation with the other members of the
group, then such person shall not be
[The page following this is 8567.]
{{8-31-87 p.8567}}denied under the
authority of subparagraph (A) the opportunity to conduct (or have
conducted) cross-examination as to issues affecting his particular
interests if (i) he satisfies the Commission that he has made a
reasonable and good faith effort to reach agreement upon group
representation with the other members of the group and (ii) the
Commission determines that there are substantial and relevant issues
which are not adequately presented by the group representative.
(5) A verbatim transcript shall be taken of any oral
presentation, and cross-examination, in an informal hearing to which
this subsection applies. Such transcript shall be available to the
public.
(d)(1) The Commission's statement of basis and purpose to accompany
a rule promulgated under subsection (a)(1)(B) shall include (A) a
statement as to the prevalence of the acts or practices treated by the
rule; (B) a statement as to the manner and context in which such acts
or practices are unfair or deceptive; and (C) a statement as to the
economic effect of the rule, taking into account the effect on small
business and consumers.
(2)(A) The term "Commission" as used in this subsection and
subsections (b) and (c) includes any person authorized to act in behalf
of the Commission in any part of the rulemaking proceeding.
(B) A substantive amendment to, or repeal of, a rule promulgated
under subsection (a)(1)(B) shall be prescribed, and subject to judicial
review, in the same manner as a rule prescribed under such subsection.
An exemption under subsection (g) shall not be treated as an amendment
or repeal of a rule.
(3) When any rule under subsection (a)(1)(B) takes effect a
subsequent violation thereof shall constitute an unfair or deceptive
act or practice in violation of section
5(a)(1) of this Act, unless the Commission otherwise expressly
provides in such rule.
(e)(1)(A) Not later than 60 days after a rule is promulgated under
subsection (a)(1)(B) by the Commission, any interested person
(including a consumer or consumer organization) may file a petition, in
the United States Court of Appeals for the District of Columbia circuit
or for the circuit in which such person resides or has his principal
place of business, for judicial review of such rule. Copies of the
petition shall be forthwith transmitted by the clerk of the court to
the Commission or other officer designated by it for that purpose. The
provisions of section 2112 of title 28, United States Code, shall apply
to the filing of the rulemaking record of proceedings on which the
Commission based its rule and to the transfer of proceedings in the
courts of appeals.
(B) For purposes of this section, the term "rulemaking
record" means the rule, its statement of basis and purpose, the
transcript required by subsection (c)(5), any written submissions, and
any other information which the Commission considers relevant to such
rule.
(2) If the petitioner or the Commission applies to the court for
leave to make additional oral submissions or written presentations and
shows to the satisfaction of the court that such submissions and
presentations would be material and that there were reasonable grounds
for the submissions and failure to make such submissions and
presentations in the proceeding before the Commission, the court may
order the Commission to provide additional opportunity to make such
submissions and presentations. The Commission may modify or set aside
its rule or make a new rule by reason of the additional submissions and
presentations and shall file such modified or new rule, and the rule's
statement of basis of purpose, with the return of such submissions and
presentations. The court shall thereafter review such new or modified
rule.
(3) Upon the filing of the petition under paragraph (1) of this
subsection, the court shall have jurisdiction to review the rule in
accordance with chapter 7 of title 5, United States Code, and to grant
appropriate relief, including interim relief, as provided in such
chapter. The court shall hold unlawful and set aside the rule on any
ground specified in subparagraphs (A), (B), (C), or (D) of
section 706(2) of title 5,
United States Code (taking due account of the rule of prejudicial
error), or if--
{{8-31-87 p.8568}}
(A) the court finds that the Commission's action is not supported
by substantial evidence in the rulemaking record (as defined in
paragraph (1)(B) of this subsection) taken as a whole, or
(B) the court finds that--
(i) a Commission determination under subsection (c) that the
petitioner is not entitled to conduct cross-examination or make
rebuttal submissions, or
(ii) a Commission rule or ruling under subsection (c) limiting
the petitioner's cross-examination or rebuttal submissions, has
precluded disclosure of disputed material facts which was necessary for
fair determination by the Commission of the rulemaking proceeding taken
as a whole.
The term "evidence", as used in this paragraph, means any
matter in the rulemaking record.
(4) The judgment of the court affirming or setting aside, in
whole or in part, any such rule shall be final, subject to review by
the Supreme Court of the United States upon certiorari or
certification, as provided in section 1254 of title 28, United States
Code.
(5)(A) Remedies under the preceding paragraphs of this subsection
are in addition to and not in lieu of any other remedies provided by
law.
(B) The United States Courts of Appeal shall have exclusive
jurisdiction of any action to obtain judicial review (other than in an
enforcement proceeding) of a rule prescribed under subsection
(a)(1)(B), if any district court of the United States would have had
jurisdiction of such action but for this subparagraph. Any such action
shall be brought in the United States Court of Appeals for the District
of Columbia circuit, or for any circuit which includes a judicial
district in which the action could have been brought but for this
subparagraph.
(C) A determination, rule, or ruling of the Commission
described in paragraph (3)(B) or (ii) may be reviewed only in a
proceeding under this subsection and only in accordance with paragraph
(3)(B). Section 706(2)(E) of
title 5, United States Code, shall not apply to any rule promulgated
under subsection (a)(1)(B). The contents and adequacy of any statement
required by subsection (b)(1)(D) shall not be subject to judicial
review in any respect.
(f)(1) In order to prevent unfair or deceptive acts or
practices in or affecting commerce (including acts or practices which
are unfair or deceptive to consumers) by banks or savings and loan
institutions described in paragraph (3), each agency specified in
paragraph (2) or (3) of this subsection shall establish a separate
division of consumer affairs which shall receive and take appropriate
action upon complaints with respect to such acts or practices by banks
or savings and loan institutions described in paragraph (3) subject to
its jurisdiction. The Board of Governors of the Federal Reserve System
(with respect to banks) and the Federal Home Loan Bank Board (with
respect to savings and loan institutions described in paragraph (3))
and the National Credit Union Administration Board (with respect
to Federal credit unions described in paragraph (4)) shall prescribe
regulations to carry out the purposes of this section, including
regulations defining with specificity such unfair or deceptive acts or
practices, and containing requirements prescribed for the purpose of
preventing such acts or practices. Whenever the Commission prescribes a
rule under subsection (a)(1)(B) of this section, then within 60 days
after such rule takes effect each such Board shall promulgate
substantially similar regulations prohibiting acts or practices of
banks or savings and loan institutions described in paragraph (3), or
Federal credit unions described in paragraph (4), as the case may be
which are substantially similar to those prohibited by rules of the
Commission and which impose substantially similar requirements, unless
(A), any such Board finds that such acts or practices of banks or
savings and loan institutions described in paragraph (3), or Federal
credit unions described in paragraph (4), as the case may be are not
unfair or deceptive, or (B) the Board of Governors of the Federal
Reserve System finds that implementation of similar regulations with
respect to banks, savings and loan institutions or Federal credit
unions would seriously conflict with essential monetary and payments
systems policies of such Board, and publishes any such finding, and the
reasons therefor, in the Federal Register.
{{12-29-06 p.8569}}
(2) ENFORCEMENT.--Compliance with regulations prescribed
under this subsection shall be enforced under
section 8 of the Federal
Deposit Insurance Act, in the case of--
(A) national banks, and Federal branches and Federal agencies of
foreign banks, by the division of consumer affairs established by the
Office of the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than
national banks), branches and agencies of foreign banks (other than
Federal branches, Federal agencies, and insured State branches of
foreign banks), commercial lending companies owned or controlled by
foreign banks, and organizations operating under section 25 or 25(a) of
the Federal Reserve Act, by the division of consumer affairs
established by the Board of Governors of the Federal Reserve System;
and
(C) banks insured by the Federal Deposit Insurance Corporation
(other banks referred to in subparagraph (A) or (B)) and insured State
branches of foreign banks, by the division of consumer affairs
established by the Board of Directors of the Federal Deposit Insurance
Corporation.
The terms used in this paragraph that are not defined in the Federal
Trade Commission Act or otherwise defined in section 3(s) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(s)) shall have the meaning given to them in section
1(b) of the International Banking Act of 1978
(12 U.S.C. 3101).
(3) Compliance with regulations prescribed under this subsection
shall be enforced under section 8 of the Federal Deposit Insurance Act
with respect to savings associations as defined in section 3 of the
Federal Deposit Insurance Act.
(4) Compliance with regulations prescribed under this subsection
shall be enforced with respect to Federal credit unions under sections
120 and 206 of the Federal Credit Union Act (12 U.S.C. 1766 and 1786).
(5) For the purpose of the exercise by any agency referred to in
paragraph (2) of its powers under any Act referred to in that
paragraph, a violation of any regulation prescribed under this
subsection shall be deemed to be a violation of a requirement imposed
under that Act. In addition to its powers under any provision of law
specifically referred to in paragraph (2), each of the agencies
referred to in that paragraph may exercise, for the purpose of
enforcing compliance with any regulation prescribed under this
subsection, any other authority conferred on it by law.
(6) The authority of the Board of Governors of the Federal
Reserve System to issue regulations under this subsection does not
impair the authority of any other agency designated in this subsection
to make rules respecting its own procedures in enforcing compliance
with regulations prescribed under this subsection.
(7) Each agency exercising authority under this subsection shall
transmit to the Congress each year a detailed report on its activities
under this paragraph during the preceding calendar year.
(g)(1) Any person to whom a rule under subsection (a)(1)(B) of this
section applies may petition the Commission for an exemption from such
rule.
(2) If, on its own motion or on the basis of a petition under
paragraph (1), the Commission finds that the application of a rule
prescribed under subsection (a)(1)(B) to any person or class
or 1
persons is not necessary to prevent the unfair or deceptive act or
practice to which the rule relates, the Commission may exempt such
person or class from all or part of such rule. Section 553 of title 5,
United States Code, shall apply to action under this paragraph.
(3) Neither the pendency of a proceeding under this subsection
respecting an exemption from a rule, nor the pendency of judicial
proceedings to review the Commission's action or failure to act under
this subsection, shall stay the applicability of such rule subsection
(a)(1)(B).
(h) The Commission shall not have any authority to promulgate any
rule in the children's advertising proceeding pending on the date of
the enactment of the Federal
{{12-29-06 p.8570}}Trade Commission
Improvements Act of 1980 or in any substantially similar proceeding on
the basis of a determination by the Commission that such advertising
constitutes an unfair act or practice in or affecting commerce.
(i)(1) For purposes of this subsection, the term "outside
party" means any person other than (A) a Commissioner; (B) an
officer or employee of the Commission; or (C) any person who has
entered into a contract or any other agreement or arrangement with the
Commission to provide any goods or services (including consulting
services) to the Commission.
(2) Not later than 60 days after the date of the enactment of the
Federal Trade Commission Improvements Act of 1980, the Commission shall
publish a proposed rule, and not later than 180 days after such date of
enactment the Commission shall promulgate a final rule, which shall
authorize the Commission or any Commissioner to meet with any outside
party concerning any rulemaking proceeding of the Commission. Such rule
shall provide that--
(A) notice of any such meeting shall be included in any weekly
calendar prepared by the Commission; and
(B) a verbatim record or a summary of any such meeting, or of any
communication relating to any such meeting, shall be kept, made
available to the public, and included in the rulemaking record.
(j) Not later than 60 days after the date of the enactment of the
Federal Trade Commission Improvements Act of 1980, the Commission shall
publish a proposed rule, and not later than 180 days after such date of
enactment the Commission shall promulgate a final rule, which shall
prohibit any officer, employee, or agent of the Commission with any
investigative responsibility or other responsibility relating to any
rulemaking proceeding within any operating bureau of the Commission,
from communicating or causing to be communicated to any Commissioner or
to the personal staff of any Commissioner any fact which is relevant to
the merits of such proceeding and which is not on the rulemaking record
of such proceeding, unless such communication is made available to the
public and is included in the rulemaking record. The provisions of this
subsection shall not apply to any communication to the extent such
communication is required for the disposition of ex parte matters as
authorized by law.
[Codified to 15 U.S.C. 57a]
[Source: Section 18 of the Act of September 26, 1914 (Pub. L. No.
203), as added by section 202(a) of title II of the Act of January 4,
1975 (Pub. L. No. 93--637; 88 Stat. 2193), effective January 4, 1975;
as amended by the Act of July 23, 1979 (Pub. L. No. 96--37; 93 Stat.
95), effective July 23, 1979; section 610 of the Act of March 31, 1980
(Pub. L. No. 96--221; 94 Stat. 174), effective April 1, 1982;
sections 7-12 of the Act of May 28, 1980 (Pub. L. No. 96--252; 94
Stat. 376--380), effective May 28, 1980; section 715(c) of title VII of
the Act of August 10, 1987 (Pub. L. No. 100--86; 101 Stat. 655),
effective August 10, 1987; section 744(t) of title VII of the Act of
August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 441), effective August
9, 1989; section 212(g)(2)(B) of title II of the Act of December 19,
1991 (Pub. L. No. 102--242; 105 Stat. 2302), effective December 19,
1991; section 1604(a)(9) of title XVI of the Act of October 28, 1992
(Pub. L. No. 102--550; 106 Stat. 4082), effective December 19, 1991;
sections 3(a), and 5 of the Act of August 26, 1994 (Pub. L. No.
103--312; 108 Stat. 1691, and 1692, respectively), effective August 26,
1994; section 5(a) of the Act of November 2, 1994 (Pub. L. No.
103--437; 108 Stat. 4582, effective November 2, 1994; section 725(g) of
title VII of the Act of October 13, 2006 (Pub. L. No. 109--351; 120
Stat. 2002), effective October 13, 2006, section 123(g) of title I of
the Act of October 16, 2006 (Pub. L. No. 109--356; 120 Stat. 2029),
effective October 16, 2006]
NOTE
Validity of rules. Section 202(c) of title II of
the Act of January 4, 1975 (Pub. L. No. 93--637; 88 Stat. 2198),
effective January 4, 1975; and section 202(d) of title II ofthe
Act of January 4, 1975 (Pub. L. No. 93--637; 88 Stat. 2198), effective
January 4, 1975, as amended by section 2 of the Act of May 29, 1976
(Pub. L. No. 94--299; 90 Stat.
{{8-31-05 p.8570.01}}588), effective May
29, 1976, provides as follows:
"(c)(1) The amendments made by subsections (a) [insertion of
section 18]... of this section shall not affect the
validity of any rule which was promulgated under section 6(g) of the
Federal Trade Commission Act prior to the date of enactment of this
section. Any proposed rule under section 6(g) of such Act with respect
to which presentation of data, views, and arguments was substantially
completed before such date may be promulgated in the same manner and
with the same validity as such rule could have been promulgated had
this section not been enacted.
"(2) If a rule described in paragraph (1) of this subsection
is valid and if section18 of the Federal Trade Commission Act
would have applied to such rule had such rule been promulgated after
the date of enactment of this Act, any substantive change in the rule
after it has been promulgated shall be made in accordance with such
section 18.
"(d) The Federal Trade Commission and the Administrative
Conference of the United States shall each conduct a study and
evaluation of the rulemaking procedures under section 18 of the Federal
Trade Commission Act and each shall submit a report of its study
(including any legislative recommendations) to the Congress not later
than July 5, 1978."
[The page following this is 8581.]
1 So in original. The word "or" should probably read
"of". Go Back to Text
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