Bill to Drop the “Abusive” in UDAAP Introduced in House

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 difficult.  The Luetkemeyer bill also seeks to align the CFPB’s interpretation of unfair and deceptive practices with the long-standing precedent created by the Federal Trade Commission and other federal regulators.  Specifically, the bill would subject the Bureau to the rulemaking process outlined in Section 18 of the Federal Trade Commission Act and require it to consult with a covered person’s or service provider’s primary financial regulator before taking any UDAP-related action.  The bill has been referred to the House Financial Services Committee for consideration.