Interagency guidance on deceptive credit practices

Aug. 25, 2014 – Several government agencies including NCUA and CFPB put out an interagency guidance about the repeal of Regulation AA, which requires credit unions and other financial institutions to institute procedures for handling consumer complaints involving unfair or deceptive acts or practices (UDAAPs).
The guidance explains that Regulation AA is being repealed as a consequence of the Dodd-Frank Act.  While the Federal Trade Commission’s Credit Practices Rule, governing UDAAPs, will remain in effect for creditors under the FTC’s purview, the guidance notes there will be no specific regulation governing this conduct for financial institutions, including credit unions, until CFPB exercises its statutory authority under Dodd-Frank to promulgate a rulemaking. 
In the meantime, however, the guidance cautions that: “The Agencies believe that, depending on the facts and circumstances, if banks, savings associations, and Federal credit unions engage in the unfair or deceptive practices described in these former credit practices rules, such conduct may violate the prohibition against unfair or deceptive practices in Section 5 of the FTC Act and Sections 1031 and 1036 of the Dodd-Frank Act. The Agencies may determine that statutory violations exist even in the absence of a specific regulation governing the conduct.”
The other agencies issuing the guidance are the Federal Reserve Board of Governors, the FDIC, and the Office of the Comptroller of the Currency.

 

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