The Consumer Financial Protection Bureau today issued a policy statement outlining how it intends to cite and challenge “abusive” conduct in supervision or enforcement actions. The statement provides some long-awaited guidance on how the bureau views abusive conduct versus conduct which is unfair or deceptive. The policy statement is effective immediately.
When determining whether conduct meets the “abusive” standard in its supervision and enforcement activities, the CFPB said it will consider whether the harm to consumers outweighs the benefit to consumers. The bureau will also generally avoid “dual pleading” both abusiveness and unfairness or deception violations that stem from the same or nearly all of the same facts. Finally, the CFPB said it generally does not intend to seek monetary relief for abusive violations in instances where there is good-faith effort to comply with the abusiveness standard, except to address consumer injuries caused by the conduct.
“We’ve developed a policy that provides a solid framework to prevent consumer harm while promoting the clarity needed to foster consumer beneficial products as well as compliance in the marketplace, now and in the future,” said CFPB Director Kathy Kraninger. The CFPB did not rule out a future rulemaking to further define the abusiveness standard.