CFPB expands scope and enforcement of UDAAP

The Consumer Financial Protection Bureau has published revised examination guidance and a compliance bulletin that expand the scope of unfair, deceptive or abusive acts or practices. This expansion will result in greater scrutiny and increased enforcement actions for entities regulated by CFPB. The likelihood that other regulators will follow suit increases the compliance risk for credit unions.

The guidance, released on March 16, includes discrimination as an unfair practice, even when the claim does not involve a credit product or an underlying anti-discrimination law. Under it, the description regarding two of the three elements in the definition of “unfair” were amended to include discrimination as follows:

1. The act or practice must cause or be likely to cause substantial injury to consumers. Substantial injury, such as monetary and/or emotional harm, may be caused by discriminatory behavior.

 

continue reading »