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NAFCU's alert to members on the recent enforcement actions by CFPB for "unfair, deceptive or abusive acts or practices" was cited by Credit Union Times as prescient warning about the potential consequences of the bureau's interpretation of the law.

CFPB uses a three-part test to determine if an act or practice is unfair, beginning with whether or not an act or practice has caused or is likely to cause "substantial injury." This month, CFPB fined Citibank $700 million and Discover Bank $18.5 million for UDAAP violations based on credit card activities and student loan servicing, respectively.

"NAFCU rightly points out the key phrase here is substantial injury," CU Times writes. "Normally, substantial injury means monetary harm. However, according to the CFPB, substantial injury can occur without monetary harm. For example, emotional harm could qualify as substantial injury and could be determined by such subjective measures as excessive collection calls."

The article continues, "In other words, according to NAFCU's bulletin, if information has been hidden, omitted, withheld or presented inaccurately, it could hinder the consumer's decision-making process. However, the CFPB refuses to define exactly what information needs to be provided."

NAFCU has more coverage of unfair acts or practices in the June Compliance Monitor, and members are encouraged to reach out to the association with concerns or questions about UDAAP compliance.