The Consumer Financial Protection Bureau (CFPB) has issued a policy statement
designed to define the standards for “abusiveness” in supervision and enforcement matters.
In announcing the policy, the agency stated the Dodd-Frank Act’s effort to prohibit “abusive” acts or practices in connection with the provision of consumer financial products or services, includong mortgages, was too broad and created uncertainty. The CFPB said it would apply the concept of abusiveness in supervision and enforcement matters only when the harm to consumers outweighs the benefit, adding that it would seek to avoid “dual pleading” of abusiveness and unfairness or deception violations arising from all or nearly all the same facts.
The CFPB also stated it would seek monetary relief for abusiveness “only when there has been a lack of a good-faith effort to comply with the law.” However, it added that it would still work to obtain “restitution for injured consumers,” regardless of whether a company acted in good faith or bad faith.
“I am committed to ensuring we have clear rules of the road and fostering a culture of compliance–a key element in preventing consumer harm,” said CFPB Director Kathleen Kraninger. “We’ve developed a policy that provides a solid framework to prevent consumer harm while promoting the clarity needed to foster consumer beneficial products as well as compliance in the marketplace, now and in the future.”