UDAAP

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The U.S. Chamber of Commerce, joined by six other trade groups, filed a lawsuit yesterday in a Texas federal district court against the CFPB challenging the CFPB’s recent update to the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) section of its examination manual to include discrimination.  The other plaintiffs are American Bankers Association, Consumer Bankers Association, Independent Bankers Association of Texas, Longview Chamber of Commerce, Texas Association of Business, and Texas Bankers Association. … Continue Reading

In a blog post published on July 30 on Consumer Law and Policy Blog, Professor Jeff Sovern discusses comments from CFPB officials that the Bureau will not use the disparate effects or impact test to determine if discrimination has occurred when using its UDAAP authority.  In those comments, Director Rohit Chopra and Assistant Director Eric Halperin indicated that “unfair” for purposes of the CFPB’s UDAAP authority has its own test and that the Bureau will use that test rather than the disparate effects test when using its UDAAP authority to determine if a discriminatory practice is unfair.… Continue Reading

We first review the views expressed by Director Chopra and CFPB actions taken under his leadership that led the Chamber to launch its campaign.  We then discuss the campaign’s specific components, which consist of digital ads, Freedom of Information Act requests, and letters to Director Chopra.  Our discussion includes an in-depth look at the basis for the Chamber’s view that the CFPB has acted unlawfully in connection with changes to its UDAAP examination procedures, revisions to its rules for administrative proceedings, rule change to make public a decision establishing risk-based supervision of a company, and its interpretive rule on enforcement of federal consumer financial protection laws by state attorney generals. … Continue Reading

We recently blogged about the request made by four leading trade groups for the CFPB to rescind the recent updates to the UDAAP section of its Supervision and Examination Manual that instruct examiners to consider discrimination in connection with non-credit products and services as an unfair act or practice. 

The trade groups made their request in a letter to Director Chopra, which was accompanied by a white paper setting forth the legal basis for their position.… Continue Reading

Four leading trade groups are calling on the CFPB to rescind the recent updates to the UDAAP section of its Supervision and Examination Manual that instruct examiners to consider discrimination in connection with non-credit products and services as an unfair act or practice.  The four groups are the American Bankers Association, the Consumer Bankers, the Independent Community Bankers of America, and the U.S.… Continue Reading

The CFPB has issued a new interpretive rule regarding the authority of state attorneys general and state regulators (State Officials) to enforce the Consumer Financial Protection Act (CFPA). 

CFPA Section 1042(a) (12 U.S.C. Section 5552) authorizes “the attorney general (or the equivalent thereof) of any State” to bring “a civil action…to enforce the provisions of [the CFPA] or regulations issued under [the CFPA] and to secure remedies under provisions of [the CFPA] or remedies otherwise provided under other law.” … Continue Reading

In a new blog post published on the Consumer Law & Policy Blog, Professor Jeff Sovern advocates very strongly in support of interpreting the “unfairness” prong of UDAAP to encompass discrimination in connection with credit and non-credit consumer financial products and services offered by banks and other persons covered by the Consumer Financial Protection Act (CFPA).  … Continue Reading

The CFPB recently announced that it is updating its exam manual to direct its examiners to consider discriminatory conduct an “unfair” act or practice represents a significant expansion of its UDAAP authority.  We discuss: the CFPB’s legal theory; types of products/services/bases for discrimination the CFPB could reach using unfairness and role of disparate impact analysis; what manual updates tell examiners to ask about and look at; implications for entities the CFPB does not supervise or have jurisdiction over; likely legal challenges to the Bureau’s theory; and how companies can prepare.… Continue Reading

Consistent with expectations that the CFPB under Director Chopra’s leadership would take an expansive view of its statutory authorities, the CFPB has announced its intention to use its authority to prohibit unfair, deceptive, or abusive acts or practices (UDAAPs) to target discriminatory conduct, even where fair lending laws may not apply.… Continue Reading

The California Department of Financial Protection and Innovation (DFPI) has issued an invitation for comments from interested parties on draft rules to implement certain provisions of the California Consumer Financial Protection Law (CCFPL) which became effective on January 1, 2021.  The CCFPL provisions that the draft rules would implement deal with (1) procedures for a covered person or service provider to respond to consumer complaints and inquiries, and (2) the definition of unfair, deceptive, or abusive acts and practices in connection with the offering or providing of commercial financing or other financial products and services to small business recipients, nonprofits, and family farms. … Continue Reading