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Washington Report
May 1999
Nonprofit Cemeteries Exempt
from FTC Rulemaking
by Robert M. Fells, Esq., General Counsel
In a recent meeting with Federal Trade Commission (FTC) staff, the ICFA received confirmation of its long-held position that all not-for-profit cemeteries would be exempt from the Funeral Rule should the Rule ever be extended to cover cemeteries. According to FTC staff, the Commission has no legal jurisdiction over nonprofit organizations including nonprofit cemeteries, thus confirming the ICFA's view that the Funeral Rule is an inappropriate regulatory vehicle to apply to cemeteries. While specific information on the total number of cemeteries in the U.S. is difficult to ascertain, it is generally recognized that the majority of cemeteries are nonprofit.
The ICFA was represented by Executive Vice President Linda E. Christenson and General Counsel Robert M. Fells, who requested the meeting with FTC staff members assigned to the Funeral Rule review proceedings. Among the other issues discussed, FTC staff stressed that the upcoming review of the Rule would be conducted "by the book" and that FTC procedures for amending its trade regulations were complicated. Staff also pointed out that the Commission had recently repealed a number of trade rules and guides; therefore, it was within the realm of possibility that the Commission may ultimately decide to repeal the Funeral Rule.
There was a general discussion of consumer complaints against cemeteries, especially fees for services rendered at the time of need that were not disclosed on preneed contracts. FTC staff volunteered that effective solutions to these concerns would not necessarily require federal regulation. The FTC is planning to solicit public comments on expanding the types of goods and services required to be listed on the General Price List and on the existing prohibition of charging casket handling fees, in addition to the issue of expanding coverage of the Rule to cemeteries and other sellers. (At press time, the announcement of the initiation of the Funeral Rule review has not been published by the FTC).
According to staff, following a comment period, hearings will be held using a "public workshop conference" format whereby organizations selected by the FTC will participate in roundtable discussions. Selected organizations will make presentations to the group, then be questioned by other participants, thus providing a spontaneity to the proceedings. The conference discussions will be transcribed and posted on the Internet.
The timetable for the various stages of the review is still being developed but the workshop conference is not expected to be held until this fall at the earliest. After that point, the subsequent stages would be determined including the need for any additional conferences. FTC staff stressed the need for submitting statistical data in supporting views and opinions on the Rule. The ICFA staff were given the impression that "slogans" and conclusory statements to amend the Rule would have little weight.
Finally, FTC staff emphasized that they were taking "a fresh look" at the Funeral Rule and that this review marked the first time the same individuals who enforced the Rule were included in the review process. ICFA members will be kept informed of all important developments as they occur.
Copyright ICFA 1999.
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