CFPB’s Kraninger Signals Next Steps on Clarifying ‘Abusive’ Standard in UDAAP

The Consumer Financial Protection Bureau will take the next step in its effort to clarify the meaning of “abusive acts or practices” under Section 1031 of the Dodd-Frank Act, CFPB Director Kathy Kraninger said today in her first public remarks. Plans to provide clarity—long sought by ABA and other industry participants—have been signaled for months; Kraninger said the bureau would hold a public symposium in the coming months to solicit stakeholder feedback on the abusive standard, which is much less defined and understood than the unfair or deceptive acts or practices standard.

Kraninger broadly outlined her vision for the bureau under her leadership, emphasizing that “supervision is the heart of this agency.” Kraninger noted that she intends to focus the bureau’s work on the prevention of harm and ensuring the consistent applications of the CFPB’s supervisory tools.

With regard to the bureau’s rulemaking authority, Kraninger emphasized the need for transparency throughout the rulemaking process and added that she is also giving thought to the cost of regulation. “I take seriously our responsibility under the law to reduce unwarranted regulatory burden and to consider the impact of rulemaking on regulated entities and consumers,” she said. “The CFPB must acknowledge that the cost imposed on regulated entities absolutely affect access to and the availability of credit to consumers.”

Kraninger also previewed the bureau’s upcoming proposal on the Fair Debt Collection Practices Act, which is expected to be released in the coming weeks. She noted that the proposal will provide clarity on how frequently collectors may call consumers, how they may communicate using newer technologies like email or text messages and what disclosures collectors should make at the beginning of collection.