Venable LLP's Randy Shaheen and Amy Mudge might just be prime candidates for guest posts on Bank Lawyer's Blog. A recent "All About Advertising Law" post launched a snark attack that made this blogger proud. The victim was every banker's bête noire, the CFPB, and the cause for the caustic comments was the CFPB's apparent hypocrisy.
According to the American Banker, an outspoken critic of indirect auto lenders, Harry Douglas Lane, was in the audience at a recent CFPB forum and was called upon to speak as an audience participant. However, no one in attendance or the press covering the event was informed that the CFPB had paid for Lane’s flight to the forum as well as his hotel.
The lawyers point out that if a private advertiser had engaged in this sort of egregious omission, the FTC would likely have found that it acted inappropriately.
A company holds a press event to tout the success of its newly introduced product. Someone in the audience asks a question, which the Company subsequently uses in its advertising for the product. However, the Company fails to disclose that it actually paid for the audience member to fly into the press event. Is this a problem under the FTC’s Endorsement Guides? Most likely yes, since the payment of travel expenses would probably be a material connection between the consumer and the company.
As noted above, if advertisers had engaged in this sort of behavior, they almost certainly would have violated the Endorsement Guides, and the CFPB’s purported justification for its failure to disclose, that the critic had only a “limited” role in the Forum, would likely be met with deafening silence by the FTC staff and Bureau Director. Even if the CFPB and other government agencies aren’t literally covered by Section 5, isn’t the practice of disclosing material connections still common sense? After all, government agencies, like advertisers, are often pitching a product or ideas to consumers. Doesn’t the public (and the press) have the right to know that people who speak out in support of these ideas have a “material connection” to the agency advocating the policy?
The answer is "Yes." But, don't hold your breath. It took a "60 Minutes" expose to uncover the practice of Senators and Congress persons benefiting from insider trading, and get them to ban the practice. Even then, Congress, in the dead of night, rolled back part of that ban. Bloggers don't carry the same heft as CBS News and neither does the banking trade press. In addition, while the average voter is already chapped on general principles about the fact that members of Congress have access to oxygen, and, as a result, he or she will sit up and take notice at scandalous behavior by those clowns, he or she doesn't give a flying fig in a rolling donut that the CFPB might be paying witnesses without disclosing it in order to set up auto lenders for a fall. They're just banks, aren't they? Aren't they all a bunch of fat cats who are responsible for the economy collapsing, global warming, baldness, and Miley Cyrus? Set 'em up and take 'em down by whatever means necessary!
Still, the few of us who will follow this latest instance of rolling over a log to view the maggots crawling out appreciate the authors' closing observations.
Perhaps it’s time that what’s good for the goose is good for the gander.
Perhaps it is. Nevertheless, when the gander's the one cooking the goose, expect that the goose to be the only one who's roasted.