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U.S. Code as of:
01/19/04
Section 57a. Unfair or deceptive acts or practices rulemaking proceedings
(a) Authority of Commission to prescribe rules and general
statements of policy
(1) Except as provided in subsection (h) of this section, the
Commission may prescribe -
(A) interpretive rules and general statements of policy with
respect to unfair or deceptive acts or practices in or affecting
commerce (within the meaning of section 45(a)(1) of this title),
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 section 45(a)(1) of this title),
except that the Commission shall not develop or promulgate any
trade rule or 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 subchapter,
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 45(a)(1) of this
title). 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) Procedures applicable
(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 (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) of this section; and (D) promulgate, if appropriate,
a final rule based on the matter in the rulemaking record (as
defined in subsection (e)(1)(B) of this section), 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) Informal hearing procedure
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.
(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
submission (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 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) Statement of basis and purpose accompanying rule; "Commission"
defined; judicial review of amendment or repeal of rule;
violation of rule
(1) The Commission's statement of basis and purpose to accompany
a rule promulgated under subsection (a)(1)(B) of this section 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) of this section 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) of this section shall be prescribed, and
subject to judicial review, in the same manner as a rule prescribed
under such subsection. An exemption under subsection (g) of this
section shall not be treated as an amendment or repeal of a rule.
(3) When any rule under subsection (a)(1)(B) of this section
takes effect a subsequent violation thereof shall constitute an
unfair or deceptive act or practice in violation of section
45(a)(1) of this title, unless the Commission otherwise expressly
provides in such rule.
(e) Judicial review; petition; jurisdiction and venue; rulemaking
record; additional submissions and presentations; scope of review
and relief; review by Supreme Court; additional remedies
(1)(A) Not later than 60 days after a rule is promulgated under
subsection (a)(1)(B) of this section 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 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) of this section, 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 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 (taking due account of the rule of prejudicial error),
or if -
(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) of this
section that the petitioner is not entitled to conduct
cross-examination or make rebuttal submissions, or
(ii) a Commission rule or ruling under subsection (c) of this
section 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.
(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) of this section, 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)(i) 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 shall not apply to any rule
promulgated under subsection (a)(1)(B) of this section. The
contents and adequacy of any statement required by subsection
(b)(1)(D) of this section shall not be subject to judicial review
in any respect.
(f) Unfair or deceptive acts or practices by banks, savings and
loan institutions, or Federal credit unions; promulgation of
regulations by Board of Governors of Federal Reserve System,
Federal Home Loan Bank Board, and National Credit Union
Administration Board; agency enforcement and compliance
proceedings; violations; power of other Federal agencies
unaffected; reporting requirements
(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.
(2) Enforcement. - Compliance with regulations prescribed under
this subsection shall be enforced under section 1818 of title 12,
in the case of -
(A) national banks, banks operating under the code of law for
the District of Columbia, 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 and banks operating under the code of law for the
District of Columbia), 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) (!1) of the Federal Reserve Act [12 U.S.C.
601 et seq., 611 et seq.], 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 (!2) 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.
(3) Compliance with regulations prescribed under this subsection
shall be enforced under section 1818 of title 12 with respect to
savings associations as defined in section 1813 of title 12.
(4) Compliance with regulations prescribed under this subsection
shall be enforced with respect to Federal credit unions under
sections 1766 and 1786 of title 12.
(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.
The terms used in this paragraph that are not defined in this
subchapter or otherwise defined in section 1813(s) of title 12
shall have the meaning given to them in section 3101 of title 12.
(g) Exemptions and stays from application of rules; procedures
(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) of this section to any person
or class or (!3) 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 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
under subsection (a)(1)(B) of this section.
(h) Restriction on rulemaking authority of Commission respecting
children's advertising proceedings pending on May 28, 1980
The Commission shall not have any authority to promulgate any
rule in the children's advertising proceeding pending on May 28,
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) Meetings with outside parties
(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 May 28, 1980, the Commission
shall publish a proposed rule, and not later than 180 days after
May 28, 1980, 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) Communications by investigative personnel with staff of
Commission concerning matters outside rulemaking record
prohibited
Not later than 60 days after May 28, 1980, the Commission shall
publish a proposed rule, and not later than 180 days after May 28,
1980, 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.
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