Q: Has the Bureau of Consumer Financial Protection Issued a Policy Statement on Abusive Acts or Practices?
Dodd-Frank provides the Bureau of Consumer Financial Protection (CFPB) with authority to prevent unfair, deceptive, or abusive acts or practices. CFPB recently issued a policy statement clarifying the abusive standard pursuant to that authority. While the policy statement is not law, and does not modify the existing statute or definition of abusive, it is designed to provide additional clarity as to how CFPB intends to use the abusive standard. The policy statement describes three aspects of how CFPB intends to approach the abusive standard going forward. To that extent, CFPB:
- Intends to focus on citing conduct as abusive if it determines that the harm to consumers outweigh its benefits.
- Will generally avoid investigating conduct as abusive based upon the same facts that makes conduct unfair or deceptive.
- Does not intend to seek monetary relief for abusive violations when a good-faith effort was made to comply with the abusive standard.
In its policy statement CFPB elaborates on how it intends to implement these approaches. The full policy statement may be found here: https://files.consumerfinance.gov/f/documents/cfpb_abusiveness-enforcement-policy_statement.pdf.
Birrenkott is WBA assistant director – legal. For legal questions, please email email@example.com.
Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.
By, Amber Seitz