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CFPB Clarifies Its Policy for Supervision and Enforcement of "Abusive" Acts and Practices

 

  • The Consumer Financial Protection Bureau (“CFPB”) issued a Statement of Policy Regarding Prohibition on Abusive Acts or Practices (“Policy”), clarifying how it intends to apply the “abusiveness” standard for conduct prohibited in the provision of consumer financial products or services under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
  • Under the Policy, the CFPB will primarily cite or challenge conduct as abusive only when the harm to consumers outweighs the benefit, will generally avoid pleading separate abusiveness and unfairness or deception violations arising from substantially similar facts, and will seek monetary relief for abusiveness only for violations where there has been a lack of good-faith efforts to comply with the law, among other things.
  • The Policy went into effect on January 24, 2020.