CFPB Aims to Clarify “Abusive” Standard in UDAAP

The Consumer Financial Protection Bureau (CFPB) announced yesterday that it will hold its first symposium on June 25 in Washington, D.C. where discussion will focus on abusive acts or practices under the unfair, deceptive, or abusive acts or practices (UDAAP) standard.

UDAAP has its origins in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that created the CFPB. Prior to Dodd-Frank, financial institutions were subject to laws regulating unfair or deceptive acts or practices, or simply UDAP. Over decades, the terms unfair and deceptive have become fairly well established.

In Dodd-Frank, Congress added the word “abusive” to UDAP, yet failed to fully define or clarify its meaning. Since its creation in 2010, the CFPB has failed to issue any agency guidance to supplement the brief descriptions of “abusive” in Dodd-Frank. “One of the biggest challenges is identifying what conduct is abusive that is not already deceptive or unfair,” former CFPB Deputy Enforcement Director Ori Lev said in 2015.

The upcoming symposium is the first attempt by the CFPB to provide some clarification around the “abusive” standard. The event will have two panels of UDAAP experts. The first panel will focus on “various policy issues relating to the abusive standard under Dodd-Frank,”  and will include the following participants:

• Patricia McCoy, Professor of Law, Boston College Law School
• Todd Zywicki, Professor of Law, George Mason University, Antonin Scalia Law School
• Howard Beales, George Washington University
• Adam Levitin, Professor of Law, Georgetown Law School

The second panel will focus on how the abusive standard has been used in practice, featuring the following participants:

• William MacLeod, Partner at Kelley Drye
• Eric Mogilnicki, Partner at Covington & Burling
• Lucy Morris, Partner Hudson Cook
• Nicholas Smyth, Assistant Director of the Pennsylvania Office of Attorney General’s Bureau of Consumer Protection

The event is open to the public, and those interested can RSVP here.