Recent Enforcement Actions May Provide Guidance on CFPB Positions

Tomio Narita

The Dodd-Frank Act gave the Consumer Financial Protection Bureau (CFPB) sweeping authority to prohibit the use of “unfair, deceptive or abusive” acts or practices (UDAAPs) in connection with the collection of consumer debts.  These terms are broadly defined to provide the CFPB with maximum flexibility when carrying out its consumer protection mission.  But how can a collector know exactly what the CFPB will consider to be an “unfair” or “deceptive” or “abusive” collection practice?

The CFPB has provided some guidance on UDAAPs in the bulletin it released in July 2013 and in the Examination Manual that it published in 2012.  Beyond this, debt buyers and other collectors can read the UDAAP tea leaves by examining the recent enforcement activity of the CFPB and other regulators.