The CFPB rescinded
its January 24, 2020 policy statement, “Statement of Policy Regarding
Prohibition on Abusive Acts or Practices.”
Congress
defined abusive acts or practices in section 1031(d) of the Dodd-Frank Act.
Under the statute, companies are prohibited from:
- Materially
interfering with someone’s ability to understand a product or service;
- Taking
unreasonable advantage of someone’s lack of understanding;
- Taking
unreasonable advantage of someone who cannot protect themselves; and
- Taking
unreasonable advantage of someone who reasonably relies on a company to
act in their interests.
The
Bureau’s announcement rescinding the abusiveness guidance stated “the 2020
Policy Statement was inconsistent with the Bureau’s duty to enforce Congress’s
standard and rescinding it will better serve the CFPB’s objective to protect
consumers from abusive practices. Going forward, the CFPB intends to consider
good faith, company size, and all other factors it typically considers as it
uses its prosecutorial discretion.”