As we previously posted on June 23, the Federal Trade Commission (FTC or Commission) released a proposed Motor Vehicle Dealers Trade Regulation Rule. This new rule could allow the FTC to regulate dealers exempt from the Consumer Financial Protection Bureau’s (CFPB) jurisdiction under Section 1029(a) of the Dodd-Frank Act and would impose significant limits on how dealers advertise, impose up-front price disclosure requirements, require new paperwork for any optional “add-on” products, and prohibit a laundry list of specific kinds of misrepresentations in the sales process. With the deadline for comments initially set to expire on September 12, the FTC announced
that it declined multiple requests for a deadline extension.
The FTC explained: “[T]he Commission voted to authorize the publication of its [Notice of Proposed Rulemaking (NPRM)] on June 23, 2022, at which time it was announced and made publicly available on the Commission’s website. The NPRM was subsequently published in the Federal Register twenty days later, on July 13, 2022, with a sixty-day comment period that ends on September 12, 2022. The public will thus have had eighty days between the proposal’s announcement and the close of the comment period. This period affords the public a meaningful opportunity to provide the Commission with comments regarding its rulemaking proposal.”
Some in the auto industry opposed the proposed rule, including the National Automobile Dealers Association, which called the new requirements “unwarranted, redundant, and ineffectual” in a statement.
Troutman Pepper will continue to monitor important developments involving the FTC and the proposed rules regarding motor vehicle dealers and will provide further updates as they become available.