Congressional debate over the regulatory authority of the Federal Trade Commission reopened yesterday when the nation's mobile home industry launched a stinging attack on an FTC program designed to monitor consumer complaints about its warranties.
The industry effort was enthusiastically supported by Sen. Birch Bayh (D-Ind.), who suggested that the FTC's mobile home regulations might not be cost effective and could instead drive smaller companies out of business.
"I have serious doubts as to whether there is a need for any further regulation, and -- if there is -- whether the FTC is the appropriate agency to be involved in the regulation of the mobile home industry," Bayh told the subcommittee and its chairman, Sen. Wendall Ford (D-Ky).
But the rule was vigorously defended by Albert Kramer, director of the FTC's Bureau of Consumer Protection, who told the subcommittee the FTC staff probes consistently concluded that "inadquate warranty service is a major problem in the industry."
The hearing was the first of a series of oversight hearings by Ford into FTC issues that were left unresolved in last spring's bitter fight over the agency's mandate. Ford said little about his view of the FTC mobile home regulations, but rigorously questioned Kramer during the hearing.
At one point, however, Kramer accidentally referred to Ford as "commissioner" and Ford, with a chuckle, had a ready response. "If I were your commisioner, you'd be in trouble," Ford said.
At issue in Bayh's testimony and statements provided by industry officials is whether the industry is adequately regulated and the 10 million mobile home owners are adequately protected under the Department of Housing and Urban Development's mobile home program. The HUD effort provides safety and durability standards, adopted in 1976, and inspections for the mobile home industry.
HUD Undersecretary Victor Marrero said his department could carry out the warranty if HUD's powers and resources were expanded to handle the problem. "There are many cases where a consumer may have a legitimate complaint covered by warranty in which the department can do little to help," Marrero said.
Leading the criticism of the FTC proposal, Walter Benning, president of the Manufactured Housing Institute, said the FTC rule is unnecessary in light of the HUD program.
"Aside from the fact that there is no need for the proposed rule, the implementation of this rule will adversely affect the ability of low- and moderate-income families to purchase affordable housing," said Benning. The FTC says the rule could add about $272 to the cost of a mobile home, a figure that association says could double.
The rule, which has been cut back during five years of study, would, if adopted by the FTC, require written a greements between manufacturers and mobile home dealers detailing consumer service requirements. The manufacturers would be forced to surpervise the repair performed by the dealer. m
Edward Kramer, director of the Mobile Home Advocacy Project, told the hearing his group, as a result of hundrends of complaints about mobile homes, believes the rule covers a gap in existing law and should therefore be adopted. b
"It has been my experience that consumers forced to make repairs because of ineffective warranty performance systems spend at least several hundred dollars out of their own pockets for services to their mobile homes," he said. "This sum, not foreseen by consumers, many of whom are on fixed incomes, can have a devastating impact."