Removing Barriers Blog

CFPB Issues Policy Statement on “Abusive” Acts or Practices
Posted January 24, 2020 by CUNA Advocacy

The CFPB issued a policy statement outlining its approach to the “abusiveness” standard in supervision and enforcement matters. 

CUNA has long recommended the CFPB act to clarify the scope and meaning of “abusiveness.” While we continue to evaluate the policy statement to determine its impact, the Bureau’s action today is a step towards ending an “I know it when I see it” approach to its UDAAP authority.

Effective immediately, the Bureau’s policy statement identifies several key principles:

  • Citing or challenging conduct as abusive in supervision and enforcement matters only when the harm to consumers outweighs the benefit;
  • Generally avoiding “dual pleading” of abusiveness and unfairness or deception violations arising from all or nearly all the same facts, and alleging “stand alone” abusiveness violations that demonstrate clearly the nexus between cited facts and the Bureau’s legal analysis; and
  • Seeking monetary relief for abusiveness only when there has been a lack of a good-faith effort to comply with the law, except the Bureau will continue to seek restitution for injured consumers regardless of whether a company acted in good faith or bad faith

The policy statement also leaves open the possibility of the Bureau conducting a future rulemaking to further define the abusiveness standard.