March 11, 2021 – The Consumer Financial Protection Bureau (CFPB) announced in a press release Thursday that it is rescinding its January 24, 2020 policy statement, “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.”
New Director Dave Uejio, says that the Policy was “inconsistent with the bureau’s duty to enforce Congress’s standard” against abusive acts and practices, which “harms both the consumers who were taken advantage of and the honest companies that have to compete against those that violate the law.”
Going forward, the CFPB intends to exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under the Dodd-Frank Act as established by Congress.
In plain words, this means that companies who violate the prohibition against abusive acts and practices can expect to face monetary penalties, as the CFPB enforces the standards laid out by Congress in section 1031(d) of the Dodd-Frank Act.
Paraphrasing Congress, the standard prohibits companies from:
As stated in the CFPB’s Supervision and Examination Manual, “unfair, deceptive, or abusive acts and practices (UDAAPs) can cause significant financial injury to consumers, erode consumer confidence, and undermine the financial marketplace.”
That means dishonest practices don’t just hurt customers – they hurt businesses too.
The wrong approach can have significant costs, including:
With consumer confidence eroded, it can be difficult to regain the trust needed to recover your funds and grow your business. That’s why it’s so important to take the right approach from the start.
For 30 years, we’ve been helping clients achieve better payment outcomes by building trust with their customers. We know that when customers are treated with dignity and respect, they’re much more likely to resolve their debts – and remain your customers for years to come.
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