The Consumer Financial Protection Bureau will likely issue a rule to define what kinds of practices it considers “abusive” under the Dodd-Frank Act, providing greater clarity to the controversial UDAAP standard created by the statute, Acting Director Mick Mulvaney said today.
“I think we’re going to announce some rulemaking on what that term means,” he said at an industry event in Washington. “I think ‘unfair’ is fairly well-established in the law, ‘deceptive’ is very well-established in the law and to my knowledge, I don’t think ‘abusive’ is nearly as established in the law.”
The Dodd-Frank expanded the long-established UDAP standard to include “abusive” acts and practices, but UDAAP enforcement actions pursued by the bureau prior to Mulvaney’s arrival without a clear understanding of what constituted an abusive practice created regulatory uncertainty and litigation risk.
