The Consumer Financial Protection Bureau issued a policy statement regarding how it intends to apply the “abusiveness” standard in supervision and enforcement matters.
To read the policy statement please click here: https://files.consumerfinance.gov/f/documents/cfpb_abusiveness-enforcement-policy_statement.pdf.
Through this policy statement, the Bureau is clarifying how it intends to apply abusiveness in order to promote compliance and certainty. Effective immediately, the Bureau intends to apply the following principles during supervision and enforcement work by:
- Focusing on citing or challenging conduct as abusive in supervision and enforcement matters only when the harm to consumers outweighs the benefit;
- Avoiding “dual pleading” of abusiveness and unfairness or deception violations arising from all or nearly all the same facts, and alleging “stand alone” abusiveness violations that demonstrate clearly the nexus between cited facts and the Bureau’s legal analysis; and
- Seeking monetary relief for abusiveness only when there has been a lack of a good-faith effort to comply with the law, except the Bureau will continue to seek restitution for injured consumers regardless of whether a company acted in good faith or bad faith.
In the policy statement, the Bureau left open the possibility of engaging in a future rulemaking to further define the abusiveness standard.
Last year, the Bureau held a Symposium on Abusive Acts or Practices with academics and practitioners that offered perspectives on the need and benefits in developing a clearer understanding of the abusiveness standard; most agreed that the Bureau should seek to resolve the uncertainty. The symposium archive webcast can be found here: https://www.consumerfinance.gov/about-us/events/archive-past-events/cfpb-symposium-abusive-acts-or-practices/