The CFPB rescinded its January 24, 2020 policy statement, “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.”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.”