CFPB finalizes policy statement regarding “Abusive” Practices under UDAAP
Last Friday, CFPB issued a policy statement clarifying what constitutes “abusive” conduct for purposes of supervision and enforcement under Unfair Deceptive or Abusive Acts or Practices as compared to conduct that is unfair or deceptive. The policy is effective immediately. In determining whether an act or practice is “abusive” under UDAAP, the CFPB will consider whether the harm outweighs the benefits to consumers. In addition, the CFPB will generally avoid alleging that an act or practice that meets the unfairness or deceptive standard would also trigger a violation of the “abusive” standard under the same set of facts in a supervisory or enforcement action. Further, the CFPB noted that it will not generally seek monetary relief for violations of the “abusive” standard when there is a good-faith effort by the bank to comply with the standard, except in instances where the consumer suffers injuries caused by the act or practice.
Click here to read the CFPB’s policy statement.