It has been reported that Director Cordray, in a briefing on March 22, stated that CFPB enforcement actions are “in process” but was unwilling to specify when the first cases might be filed. This is consistent with the CFPB’s statement in its first annual report  to Congress on federal enforcement of the Fair Debt Collection Practices Act filed on March 20 that the CFPB “currently is conducting non-public investigations of debt collection practices to determine whether they violate the FDCPA or the Dodd-Frank Act.”

While the CFPB’s choice of initial enforcement targets will undoubtedly be significant regardless of the kinds of violations the CFPB’s alleges, they will take on even more significance if the CFPB alleges that the target has engaged in “abusive” acts or practices. Most observers, ourselves included, expect the CFPB to use its enforcement authority, rather than its rulemaking authority, to set the standards for what is an “abusive” act or practice for purposes of the CFPB’s authority to prohibit acts or practices that are “unfair, deceptive or abusive.” In fact, it appears Director Cordray himself has confirmed that this will be the CFPB’s approach.  An article appearing in today’s American Banker reporting on an interview with Mr. Cordray indicates that Mr. Cordray stated that he did not “anticipate [the CFPB] writing a rule around UDAAP.” Asked in a follow up question whether his statement meant that “people will mostly have to look at your actions as the model for how this new term in defined,” Mr. Cordray is reported to have responded “I think that’s probably right.”