The Consumer Financial Protection Bureau is installing new policies that will limit its power to pursue actions of abusive conduct from financial companies against their consumers.
The Dodd-Frank Act of 2010 established the CFPB the unique authority to go after companies for abusive practices against consumers, alongside the established standards for pursuing unfair or deceptive acts and practices (UDAP). Under this 2010 Act, no guidelines were established for what constituted as abusive conduct towards consumers, which became a large area of complaint for financial institutions.
Under the new policy, the CFPB said it will no longer bring abusiveness claims against companies unless it can provide legal rationale for the abusive conduct charge. Under the previous policy, abusive claims and unfair practice/deception claims were filed jointly against financial institutions, with no individual cause.
The new policy now defines abusive conduct through a two-pronged system, one of specific legal definition. The first prong is defined as: Materially interfering with a customer’s ability to understand a term or condition attached to a financial product. Taking an “unreasonable advantage” of a customer’s inability to understand any risks or costs of a product or a consumer’s inability to make a choice in their service provider is the second prong outlined in the new policy.
Have you been a victim of abuse from a company? We may be able to help! Contact our office at 816-524-4949 or visit our website: www.hoorfarlaw.com