UDAAP

The Dodd-Frank Act added provisions allowing the Consumer Financial Protection Bureau (CFPB) to restrict “abusive” acts under their UDAAP authority. This is in addition to the Unfair and Deceptive Acts or Practices (UDAP) authority that existed under the FTC Act. These provisions under the Dodd-Frank Act could have the most impact on the operations of our member banks, both with regard to possible enforcement actions and upcoming rulemaking that would interpret these provisions. Examination guidelines issued by the CFPB also address UDAAP practices.
  • September 8, 2016
    On Thursday, September 8, 2016, Wells Fargo entered into a consent order with the CFPB to settle allegations it illegally opened consumer deposit and credit card accounts, and enrolled consumers in online bank services in violation of Dodd-Frank’s ban on Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). The bank also entered into a consent order with the OCC to settle allegations it...
  • August 31, 2016
    On Wednesday, August 31, 2016, the U.S. District Court for the Central District of California granted partial summary judgment to the CFPB in a 2013 lawsuit against CashCall, Inc., an online loan servicer, turning a violation of state usury law into a federal violation of unfair, deceptive and abusive acts and practices (UDAAP). The Court ruled CashCall engaged in UDAAP by using a "tribal model"...
  • June 21, 2016
    Many organizations now view compliance as an investment and not simply as a cost. These organizations realize that business and operational value can be derived by integrating compliance across the business and positioning it to contribute to business decisions and adapt to the changing business and regulatory environment. They are moving toward a transformation of compliance that allows the...
  • May 6, 2016
    On April 28, 2016, Rep. Blaine Luetkemeyer (R-MO) introduced H.R. 5112 , the Unfair or Deceptive Acts or Practices (UDAP) Uniformity Act. The bill would eliminate the vaguely defined “abusive” standard created by Section 1031 of the Dodd-Frank Act. Since the passage of the Dodd-Frank Act, the CFPB has not issued any guidance to define abusive practices, thereby making compliance with the standard...
  • April 15, 2016
    On Wednesday, April 13, 2016, the Office of the Comptroller of the Currency (OCC) assessed a $35 million penalty against HSBC Bank USA, N.A. and ordered the bank to identify and make restitution to the allegedly harmed customers. The OCC claims the bank’s billing practices violated Section 5 of the Federal Trade Commission (FTC) Act, which prohibits unfair and deceptive acts or practices...
  • February 26, 2016
    CBA LIVE 2016 – Customize Your Experience Via the App We have a record number of bankers registered, a record number of regulators, and, if we continue our current pace, 2016 will be our sixth straight year of record attendance . With essentially one week to go, we hope you are as excited as we are for CBA LIVE 2016! This week, we launched the CBA LIVE 2016: Leadership Unplugged mobile app. Be...
  • February 23, 2016
    On Tuesday, February 23, 2016, the CFPB issued two consent orders against Citibank, settling allegations the bank engaged in illegal debt collection and debt sales practices. In the first action , the Bureau alleges Citibank violated Dodd-Frank’s ban on unfair, deceptive or abusive acts or practices when it sold consumer credit card debt to debt buyers with “inflated interest rates” and failed to...
  • February 2, 2016
    On Tuesday, February 2, 2016, the CFPB announced a settlement , in conjunction with a Department of Justice (DOJ) action , with Toyota Motor Credit Corporation to resolve discriminatory outcomes in auto lending. Under the agreement, Toyota Credit will pay $21.9 million in restitution to African American and Asian or Pacific Islander consumers for pricing disparities from non-Hispanic white...
  • January 29, 2016
    On Friday, January 29, 2016, the CFPB announced the settlement administrator distributed checks to consumers for restitution under the Ally Bank indirect auto settlement. As a reminder, the Ally enforcement action was filed in December of 2013 and ordered Ally to pay $80 million in consumer restitution and $18 million to the CFPB in civil money penalties.
  • January 21, 2016
    On Thursday, January 21, 2016, the CFPB took action against Herbies Auto Sales, a buy-here pay-here used car dealer, for allegedly using abusive financing schemes, hiding auto finance charges and misleading consumers. Under the consent order, Herbies is required to pay $700,000 in redress to consumers, with a suspended civil penalty of $100,000. The company also must stop deceiving consumers...

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