Today, the CFPB announced the issuance of its Statement of Policy Regarding Prohibition on Abusive Acts or Practices. Through the policy statement,
“the Bureau is providing clarification on how it intends to apply abusiveness in order to promote compliance and certainty. Commencing 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.
- “Generally 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.
- “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.”
The Bureau also “leaves 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. These experts provided a variety of 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, along with other feedback from stakeholders, was an important part of the process leading to the Bureau’s decision to issue the policy statement.