Hot Topic: A Survey of CFPB's UDAAP Actions

By Adam Maarec

January 14, 2014

A hallmark creation of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act is the Consumer Financial Protection Bureau (CFPB). Chief among the new agency’s powers is its ability to prohibit “unfair, deceptive, and abusive” acts or practices (UDAAP) that occur in connection with consumer financial products or services. While the terms unfair, deceptive, and abusive each are specifically defined terms, in practice they are malleable concepts that come to life when applied to real world facts and circumstances.

The CFPB first used its authority to bring enforcement actions for UDAAP violations in July 2012 and has brought a total of 16 such actions in its short existence. A review of the actions taken by the agency using its UDAAP authority, and the particular facts and circumstances involved in each action leading to the specific UDAAP violations, is helpful in elucidating how the CFPB will apply the technical definitions of “unfair, deceptive, and abusive” in the future.

I  co-authored the article, A Survey of Activities Identified as Unfair, Deceptive, or Abusive by the CFPB, for the American Bar Association’s Consumer Financial Services Committee. The article provides background on the agency’s UDAAP powers and a survey of the CFPB’s UDAAP actions in 2012 and 2013. Below is a chart from the article that summarizes all of the activities that were considered UDAAP violations by the CFPB.

Consumer Financial Protection Bureau Hosts "Abusive" Symposium

On June 25, the CFPB held a symposium to discuss whether the definition of abusive, as that term is used in the Dodd-Frank Act, should be clarified by a rule or other guidance.

What Banks, Ins. Agencies Need to Know About CA’s New Privacy Law

The CCPA will mandate the most stringent consumer privacy protections in the country. And although the Act contains some exemptions for financial firms, it will undoubtedly affect their operations.

Appellate Courts Split on the Definition of an Autodialer

What exactly is an autodialer? This year, several appellate courts have tried to answer the question, but the most recent decision by the Ninth Circuit has left TCPA litigators and the telemarketing industry more confused than ever before.