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Chamber urges CFPB to define abusive
WASHINGTON (7/5/12)--The Consumer Financial Protection Bureau (CFPB) should clearly define what constitutes an "abusive" financial product or practice, and take stronger steps to verify consumer complaints before they are published in public forums, the U.S. Chamber of Commerce said in a recent letter to CFPB Director Richard Cordray.

In the letter, David Hirschmann, president/CEO of the Chamber of Commerce's Center for Capital Markets Competitiveness, said a CFPB policy statement defining "abusive" practices "will help to prevent divergent interpretations of the 'abusive' standard around the country, and provide much needed clarity to legitimate businesses trying their best to ensure that their actions comply with the law."

The CFPB director has previously indicated that the agency would not define the term "abusive."

Hirschmann in the letter argued that without a clear definition, state attorneys general and state regulators could institute enforcement actions depending on their individual interpretations of the term. It is the CFPB's responsibility to ensure the law is enforced consistently and does not create separate standards that result in excessive compliance burdens being placed on the credit market, he wrote.

The agency's practice of publishing company-specific consumer complaint information on its website could also create issues for market participants, the letter said.

The CFPB last month unveiled an online database of consumer credit card complaints.

The database details the issue that prompted a consumer complaint, the ZIP code of the consumer that made the complaint, and the company against which the complaint was made. Information on how the complaint was resolved, and whether it was resolved in a satisfactory fashion, is also included.

The letter suggested the CFPB could make a few fundamental changes to this database "to ensure the government is not disseminating misleading information." Publishing only company-specific figures related to complaint resolutions is one way the agency could guard against fraudulent or malicious manipulation of the database, the letter said.

"This will help to ensure the validity of the underlying complaint, and help to ensure the information is actually useful to consumers," the letter added.

The letter also encouraged the CFPB to stop including enforcement attorneys as part of the examination process, noting that this practice can turn the exam process into an adversarial proceeding.

Publishing more organizational information on its homepage, and regularly releasing a schedule of planned proposed and final rulemakings, would also help the agency and those it regulates, the letter added.

For the full letter, use the resource link.

The Credit Union National Association (CUNA) has recommended actions the CFPB could take to minimize regulatory burdens in recent meetings with the agency, including exempting credit unions from potential overdraft fee regulations. CUNA has also urged the CFPB to provide credit unions with relief from final remittance regulations.
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