Unfair, Deceptive, or Abusive Acts or Practices
Practice Overview
The Consumer Financial Protection Bureau, the Federal Trade Commission, state attorneys general, and prudential bank regulators continue to be aggressive in their approaches to monitoring unfair, deceptive, or abusive acts or practices under federal and state consumer protection laws.
Buckley has extensive experience defending against unfair, deceptive, and abusive claims on behalf of the financial services industry. Our experience includes defending against enforcement actions and lawsuits brought by the CFPB and prudential bank regulators, FTC investigations and lawsuits, state attorneys general matters, and class action litigation. We represent clients on a wide range of matters, including fair and responsible lending and servicing, sales and marketing practices, overdraft protection, deposit reconciliation, payment processing, credit reporting, debt collection, and privacy and data security issues.
Our lawyers advise clients on all consumer financial products and services, including mortgage origination and servicing, short-term consumer loans, automobile and other installment loans, credit, debit and stored value cards, student loan origination and servicing, and retail banking products. We are well-versed in a full array of ancillary products like payday lending and tax refund advances.
Buckley also assists clients on UDAAP matters outside the enforcement context by helping financial services companies develop compliance programs and policies, conduct risk assessments, evaluate marketing, develop new products, review disclosures, perform mock CFPB examinations, prepare legal analyses of potential violations, and provide training to boards of directors, senior management, and other key personnel.
Representative work in this area includes:
- Represented Flagstar Bank in the first CFPB enforcement action of its mortgage servicing rules that was based, in part, on allegations of unfair acts and practices and resulted in an administrative consent order settlement for $37.5 million relating to default servicing loss-mitigation practices
- Represented Verizon Wireless in a multistate, multiagency investigation and settlement alleging that it permitted “cramming” by allowing third parties to place unauthorized charges on consumers’ wireless phone bills
- Represented a credit card issuer in the second CFPB enforcement action, issued jointly with the Federal Deposit Insurance Corporation, in which the agencies alleged deceptive marketing and sales practices related to add-on products
- Performed regulatory and transactional due diligences of lenders to advise potential investors and purchasers on the lenders’ compliance with federal and state UDAAP prohibitions
- Represented First National Bank of Omaha in a CFPB enforcement action alleging UDAAP violations relating to credit card add-on products
- Represented Customers Bank in an enforcement action before the Federal Reserve Board (FRB) concerning UDAAP allegations related to financial aid disbursement services for students offered in conjunction with a third party
- Represented bank clients in responding to FDIC inquiries related to UDAAP risk posed by marketplace lender/bank partnership arrangements
- Represented a credit reporting bureau in a CFPB enforcement action alleging UDAAP violations relating to the marketing of credit scores to consumers
- Represented a regional bank in the first CFPB enforcement action that cited both UDAAP and Regulation DD violations in connection with the bank’s marketing of a free checking product
- Defended financial institutions in class actions alleging violations of state unfair and deceptive practices laws
Articles
"CFPB revises UDAAP manual to include discriminatory practices" by Sasha Leonhardt, Jeffrey P. Naimon, and John R. Coleman (The Banking Law Journal)
The Consumer Financial Protection Bureau (“CFPB”) has announced1 significant revisions to its Unfair, Deceptive, or Abusive Acts or Practices (“UDAAP”) exam manual,2 in particular highlighting the CFPB’s view that its broad authority under UDAAP allows it to address discriminatory conduct in the...
ArticlesSpecial Alert: DOJ settles claims of algorithmic bias
On June 21, the United States Department of Justice announced that it had secured a “groundbreaking” settlement resolving claims brought against a large social media platform for allegedly engaging in discriminatory advertising in violation of the Fair Housing Act. The settlement is one of the...
Special Alerts"TCPA relief for Covid-19 communications could extend to financial institutions" by Ali M. Abugheida and Geoffrey L. Warner (Bloomberg Law)
Financial institutions face unprecedented and rapidly evolving challenges in the wake of the Covid-19 pandemic, including the need to communicate quickly and efficiently with customers in the face of government-issued stay-at-home orders. But the Telephone Consumer Protection Act, with its steep...
Articles"Alternative data and fair lending face off: The relationship is complicated" by Caroline M. Stapleton (Mortgage Compliance Magazine)
Thinking of getting into a relationship with alternative data? You're not alone. Use of "alternate data," a term broadly used to describe consumer information gathered from non-conventional sources, is becoming increasingly attractive to mortgage lenders, their service providers, and even consumers...
Articles"Neither forgiven nor forgotten: Taxation and UDAAP concerns with collecting charged off debt" by Sasha Leonhardt (Bloomberg BNA)
When debtors are unable to pay their debts, creditors are left with a choice: (i) allow the consumer to pay a lesser amount, if possible, to settle the obligation and recover some funds; or (ii) charge off the debt and cease all collection efforts. Regardless of the path chosen, each has potential...
Articles"The role of State AGs in solving student loan crisis" by Sasha Leonhardt (Law360)
State attorneys general are the chief legal officers of their state; state attorneys general are the chief law enforcement officers of their state; and state attorneys general must protect their citizens and vigorously enforce their state’s consumer protection statutes. As broad as these powers and...
ArticlesMarshall T. Bell and Megan E. Whitehill Authored a Law360 Article, "Ability-To-Repay Enforcement Comes To Auto Finance"
In recent years, regulators and enforcement agencies have eagerly exercised their authority to prosecute what they perceive as unfair or deceptive acts and practices (UDAPs). Unfortunately for the auto finance industry, these regulators and agencies show no sign of tapping the brakes on such...
ArticlesWhat's Driving Regulation of Auto Ancillary Products
Federal and state regulatory scrutiny of the automobile finance industry has accelerated over the last several months. The Consumer Financial Protection Bureau (CFPB or the Bureau) and the Department of Justice (DOJ) recently announced the fourth public resolution with an indirect auto finance...
ArticlesLost in Translation: Financial Services for Consumers with Limited English Proficiency
Susanna Khalil and Jessica Pollet authored "Lost in Translation: Financial Services for Consumers with Limited English Proficiency," which was published May 18, 2015 in the WestLaw Journal Bank & Lender Liability. They discuss the emerging area of access to credit for people with limited...
ArticlesNew Day For RESPA: The UDAAPification Of Section 8
The Real Estate Settlement Procedures Act has gone the "UDAAPified" way of debt collection — this time, through enforcement rather than guidance. In July 2013, Consumer Financial Protection Bureau Bulletin 2013-07 announced that the principles underlying the Fair Debt Collection Practices Act...
ArticlesCaveat Emptor or Caveat Vendor? The Evolution of Unfairness in Federal Consumer Protection Law
Under the Federal Trade Commission’s original interpretation of unfair or deceptive acts or practices law, financial institutions could feel some sense of security that, if they provided a consumer with a clear understanding of a proposed transaction, the burden was on the consumer to determine...
ArticlesSpecial Alert: CFPB Takes Enforcement Action Against "Buy-Here, Pay-Here" Auto Dealer for Alleged Unfair Collection and Credit Reporting Tactics
On November 19, the CFPB announced an enforcement action against a ‘buy-here, pay-here’ auto dealer alleging unfair debt collection practices and the furnishing of inaccurate information about customers to credit reporting agencies. ‘Buy-here, pay-here’ auto dealers typically do not assign their...
ArticlesThe CFPB's 'UDAAPification' of Consumer Protection Law
Questions about the scope of the Consumer Financial Protection Bureau's jurisdiction abound for financial institutions and other entities that work with them. What are the boundaries of the CFPB’s authority? How might these parameters expand in the future? Are there other ways the CFPB may take...
ArticlesSpecial Alert: CFPB Bulletin Re-Emphasizes Focus on Mortgage Servicing Transfers
On August 19, 2014, the CFPB issued Bulletin 2014-01 to address “potential risks to consumers that may arise in connection with transfers of residential mortgage servicing rights.” The bulletin, which is the latest in a series of CFPB regulations, statements, and guidance on this subject, replaces...
ArticlesPom v. Coke Will Impact Financial Services Too
Legal and compliance departments, take note: the U.S. Supreme Court’s recent decision in Pom Wonderful LLC v.Coca-Cola Co. confirms that even if an institution’s conduct meets the specific requirements established by the federal agency responsible for implementing one federal consumer protection...
ArticlesA Broader Application of Fair Debt Collection Principles
On July 10, the Consumer Financial Protection Bureau issued new debt collection guidance and announced broad application of the Fair Debt Collection Practices Act under Sections 1031 and 1036 of the Dodd-Frank Act. The guidance suggests that the CFPB views the acts and practices made illegal by the...
Articles
News & Blogs
CFPB releases spring 2022 semi-annual report
On December 6, the CFPB issued its semi-annual report to Congress covering the Bureau’s work for the period beginning October 1, 2021 and ending March 31, 2022. The report, which is required by Dodd-Frank, addresses several issues, including complaints received from consumers about consumer...
InfoBytesDistrict Court issues judgment against company for marketing fake high-yield CDs
On December 1, the U.S. District Court for the Southern District of New York entered a stipulated final judgment and order against a Delaware financial-services company operating in Florida and New York along with its owner (collectively, “defendants”) for engaging in deceptive acts under the...
InfoBytesStates say student loan trusts are subject to the CFPA’s prohibition on unfair debt collection practices
On November 15, a bipartisan coalition of 23 state attorneys general led by the Illinois AG announced the filing of an amicus brief supporting the CFPB’s efforts to combat allegedly illegal debt collection practices in the student loan industry. As previously covered by InfoBytes , in February, the...
InfoBytesDistrict Court: Defendants cannot use CFPB funding argument to dismiss deceptive marketing lawsuit
On November 18, the U.S. District Court for the Northern District of Illinois ruled that the CFPB can proceed in its lawsuit against a credit reporting agency, two of its subsidiaries (collectively, “corporate defendants”), and a former senior executive accused of allegedly violating a 2017...
InfoBytesCFPB aims to protect consumers at the local level
On November 18, the CFPB released a blog describing how CFPB complaint data can help cities and counties protect the public. According to the Bureau, one of the major ways it regulates consumer financial products and services and protects consumers from unfair, deceptive, or abusive acts or...
InfoBytesCFPB issues fall supervisory highlights
On November 15, the CFPB released its fall 2022 Supervisory Highlights , which summarizes its supervisory and enforcement actions between January and June 2022 in the areas of auto servicing, consumer reporting, credit card account management, debt collection, deposits, mortgage origination,...
InfoBytesDistrict Court approves payday settlement
On November 10, the U.S. District Court for the Southern District of Mississippi issued a final settlement order resolving allegations that a Mississippi-based payday lender violated the CFPA in connection with check cashing services and small dollar loans. As previously covered by InfoBytes , the...
InfoBytesCFPB finalizes nonbank supervisory rule
On November 10, the CFPB announced a final rule finalizing changes to a nonbank supervision procedural rule issued in April. As previously covered by InfoBytes , the Bureau announced earlier this year that it was invoking a “dormant authority” under the Dodd-Frank Act to conduct supervisory...
InfoBytesCFPB sues payment processor over junk fees and dark patterns
On October 18, the CFPB filed a complaint against a Texas-based payment processing service platform (primarily related to collecting and processing event fees) for allegedly violating the Consumer Financial Protection Act (CFPA) and the EFTA by engaging in deceptive and abusive acts and practices...
InfoBytesTrade groups object to CFPB’s revised UDAAP exam manual
On September 28, seven banking industry groups sued the CFPB and Director Rohit Chopra claiming the agency exceeded its statutory authority when it released significant revisions to the UDAAP exam manual in March, which included making clear its view that any type of discrimination in connection...
InfoBytes
Press Releases & Announcements
BuckleySandler Hosts Eighth Annual Fair Lending Today Conference
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...
Press ReleasesBuckley Sandler Hosts Annual Fair Lending Today Conference
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...
Press Releases
Our Unfair, Deceptive, or Abusive Acts or Practices Team
Partners
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FYI
"TCPA relief for Covid-19 communications could extend to financial institutions" by Ali M. Abugheida and Geoffrey L. Warner (Bloomberg Law)
Recent Blog Posts
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December 9, 2022
CFPB releases spring 2022 semi-annual report
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December 7, 2022
District Court issues judgment against company for marketing fake high-yield CDs
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December 2, 2022
States say student loan trusts are subject to the CFPA’s prohibition on unfair debt collection practices
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December 1, 2022
District Court: Defendants cannot use CFPB funding argument to dismiss deceptive marketing lawsuit
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December 1, 2022
CFPB aims to protect consumers at the local level