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Then Consumer Financial Protection Bureau is rescinding its Jan. 24, 2020 policy statement, "Statement of Policy Regarding Prohibition on Abusive Acts or Practices." The CFPB plans to exercise supervisory and enforcement authority with the full scope of its statutory authority under the Dodd-Frank Act, as established by Congress, according to a press release.
The bureau made these changes in order to better protect consumers and the marketplace from abusive acts or practices. The CFPB is also looking to enforce the law as it was written by Congress. According to the CFPB, the Dodd-Frank Act prohibits companies from materially interfering with someone's ability to under a product or service, taking unreasonable advantage of someone's lack of understanding, taking unreasonable advantage of someone who cannot protect themself and taking unreasonable advantage of someone who reasonably relies on a company to act in their interests.
"The 2020 Policy Statement was inconsistent with the Bureau’s duty to enforce Congress’s standard and rescinding it will better serve the CFPB’s objective to protect consumers from abusive practices," according to the release.
The 2020 Policy Statement stated that the CFPB would decline to seek civil money penalties and disgorgement for certain abusive acts or practices. The CFPB deters abusive practices and compensates certain harmed consumers using penalties, so the Policy Statement undermined deterrence and was contrary to the CFPB’s mission of protecting consumers.
Click here to read more about the CFPB's plans moving forward.