Newsroom
Lawsuit against CFPB challenges UDAAP policy, funding structure
Wednesday, a complaint led by the U.S. Chamber of Commerce was filed against the CFPB and Director Rohit Chopra challenging the bureau’s March 2022 update to the Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) section of its examination manual. The complaint alleges that the CFPB’s attempt to regulate discriminatory conduct under UDAAP violates the Administrative Procedures Act (APA), exceeds the CFPB’s statutory authority, and is arbitrary.
The complaint further alleges that the CFPB has misinterpreted its UDAAP authority to include discrimination, causing significant compliance costs because examiners will require their supervised companies to show their processes for examining risks and discriminatory outcomes.
Of note, the CFPB’s updated manual stated that “discrimination may meet the criteria for ‘unfairness’ by causing substantial harm to consumers that they cannot reasonably avoid, where that harm is not outweighed by countervailing benefits to consumers or competition.”
The plaintiffs, which include several trade associations, also allege that the manual is a legislative rule that should be subject to the APA’s notice and comment requirement, which the CFPB did not follow. In addition, the plaintiffs allege that the manual was issued with funds that were not properly appropriated in accordance with the constitutional appropriations clause.
Following the release of the bureau’s updated examination manual, NAFCU released an updated version of its UDAAP issue brief. In addition, the association has a new issue brief that highlights the significant impacts the CFPB’s regulations have on the credit union industry, noting that many – including UDAAP – are ripe for reform.
The association will continue to work closely with the CFPB and other stakeholders to share credit union feedback and provide insights into the regulatory and legislative landscape. In addition, NAFCU continues to advocate for clear guidance under UDAAP, particularly under the definition of “abusive" acts or practices.
Share This
Related Resources
Add to Calendar 2024-05-03 14:00:00 2024-05-03 14:00:00 Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing About the Webinar In January 2024, Pentegra conducted a survey of retirement plan sponsors and their perspectives on retirement plan management and fiduciary outsourcing. The survey measured how sponsors are using fiduciary outsourcing to help better manage their retirement plans. It also captured their perspectives on what outsourcing does to help them better position their plans and drive improved retirement plan outcomes. Key Takeaways: What is the full scope of your responsibilities as a plan sponsor? What is fiduciary outsourcing and how does it work? How does fiduciary outsourcing help reduce workloads and minimize risk? How can a credit union best position its plan to drive improved outcomes? Register Here Web NAFCU digital@nafcu.org America/New_York public
Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing
preferred partner
Pentegra
Webinar
Ensuring Safety and Soundness with AI
Management, Consumer Lending, FinTech
preferred partner
Upstart
Blog Post
Turning Lemons into Lemonade: Capitalizing in a Post-Banking Crisis Era
Strategy
preferred partner
Allied Solutions
Blog Post
Add to Calendar 2024-05-02 14:00:00 2024-05-02 14:00:00 Mastering Resilience in Incident Response Plans About the Webinar An Incident Response (IR) plan is crucial for guiding credit unions through major incidents efficiently and effectively. However, many IR plans lack resilience, making them less adaptable to the evolving threat landscape. Join us for our webinar Mastering Resilience in Incident Response Plans where DefenseStorm cyber experts Elizabeth Houser and James Bruhl will delve into the importance of resiliency within cybersecurity IR plans. Don’t miss out on the opportunity to learn how to: Ensure IR plan accessibility so that all team members with assigned roles are prepared for effective incident response. Conduct efficient and regular reviews to ensure roles and responsibilities are current, tools are relevant, and compliance requirements are met. Implement and utilize tabletops to regularly test the effectiveness of your IR plan. Enhance preparedness, efficiency, and confidence among responders. View On-Demand Web NAFCU digital@nafcu.org America/New_York public
Mastering Resilience in Incident Response Plans
preferred partner
DefenseStorm
Webinar
Get daily updates.
Subscribe to NAFCU today.