• Ad Age, Wednesday, April 30, 2008 10 AM

One top official of the Federal Trade Commission says the agency will ramp up oversight of the marketing of sub-prime mortgages as the agency comes under fire for not doing enough to stop misleading ads. "For the past several months, we have been questioning ourselves on whether we could have done more," says Lydia Parnes, the FTC's director of the Bureau of Consumer Protection, under grilling by the Senate Commerce Committee.

She adds that staff is now being shifted to help the FTC devote more of its time to policing financial ads. While it does not regulate federally chartered banks that make mortgage loans, it does regulate advertising and marketing by mortgage brokers and companies. Sen. Byron Dorgan, D-N.D., has put forward legislation that would expand the FTC's authority to banking and telecommunications areas while giving it new power to issue fines.

He notes that many of the-sub prime woes stem from regulatory failure. "Something is dreadfully wrong, and nobody is here to fix it," Dorgan says. Parnes says her agency would welcome more power but claims it has already heightened scrutiny of the financial services industry and "deceptive mortgage advertising is an area where we are actively pursuing enforcement."

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