Newsroom

April 29, 2016

NAFCU-backed bill amends UDAAP

Rep. Blaine Luetkemeyer, R-Mo., introduced a NAFCU-backed bill yesterday that would change the definition of UDAAP and require CFPB to first consult primary regulators before taking enforcement actions.

The bill, H.R. 5112, the "Unfair or Deceptive Acts or Practices Uniformity Act," would amend the definition of "unfair, deceptive or abusive acts and practices" (UDAAP) under the Consumer Protection Act to remove the word "abusive." By taking out that term, the bill would align CFPB's definition with that used by the Federal Trade Commission, which regulates "unfair or deceptive acts or practices" (UDAP).

Luetkemeyer's bill would also add a provision to the law prohibiting CFPB from taking UDAP action without first consulting the covered person's or service provider's primary financial regulatory agency.

Under existing law, both the CFPB and NCUA are authorized to take enforcement actions addressing unfair, deceptive or abusive acts or practices, or UDAAP. In NAFCU's list of 2016 priorities, the association called for more transparent guidance on UDAAP issues. NAFCU has also raised concerns that the bureau is addressing UDAAP through enforcement rather than rulemaking or guidance.

In January, the Wall Street Journal reported that CFPB "roughly doubled" its number of enforcement cases in 2015.