Unfair, Deceptive, or Abusive Acts or Practices
Practice Overview
The Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), state attorneys general, and prudential bank regulators continue to be aggressive in their approaches to monitoring unfair, deceptive, or abusive acts or practices (UDAAP), as defined by 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 the defense of CFPB and prudential bank regulator enforcement actions and lawsuits, 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. We 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, and retail banking products. In addition, we are well-versed in the full array of ancillary products, and have particular strength in payday lending and tax refund advances.
Buckley also assists clients on UDAAP compliance matters outside the enforcement context. The firm helps financial services companies develop UDAAP compliance programs and policies, conducts risk assessments, evaluates marketing and product development materials, reviews disclosures, performs mock CFPB examinations, prepares legal analyses of potential UDAAP violations, and provides UDAAP 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 regarding the CFPB’s mortgage servicing rules that resulted in an administrative consent order settlement for $37.5 million relating to default servicing loss mitigation practices
- Represented Verizon Wireless in a multistate, multi-agency investigation and settlement alleging that Verizon Wireless 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 FDIC, in which the agencies alleged deceptive marketing and sales practices related to its “add-on” products
- 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, which were offered in conjunction with a third party
- 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
- Represented the first national bank to be sued by the CFPB in connection with the bank’s policies and practices for opting in customers to overdraft protection
Articles
"Finding the purpose in bureau civil investigative demands" by Aaron C. Mahler and Daniel Cheriyan (Bloomberg BNA)
“Why me?” It’s a common refrain whenever something bad happens. It’s also one of the first questions companies ask when finding themselves on the receiving end of a civil investigative demand from the Consumer Financial Protection Bureau. The logical place to look should be the notification of...
Articles"Neither forgiven nor forgotten: Taxation and UDAAP concerns with collecting charged off debt" by John C. Redding, Sasha Leonhardt, and Jessica M. Shannon (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 Douglas F. Gansler, Sasha Leonhardt, and Dana Walsh Kumar (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...
ArticlesJohn C. Redding, Marshall 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...
ArticlesAll Student Loan Players Great and Small
From presidential town halls to the local college dining hall, issues related to student lending have become the talk of the nation. According to recent estimates, over 41 million Americans owe more than $1.2 trillion in student loan debt, second only to mortgage loan debt. A quarter of these...
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...
Articles
News & Blogs
CFPB announces settlement with payday lending operation
On February 6, the CFPB announced a settlement with an Indiana-based payday retail lender and affiliates (companies) in seven states to resolve alleged violations of the Consumer Financial Protection Act (CFPA), Truth in Lending Act (TILA), and Gramm-Leach-Bliley Act (GLBA) privacy protections. The...
InfoBytesJohn C. Redding quoted in an Auto Finance News article, “Attorneys seek CFPB definition of abusive practices”
John C. Redding was quoted on November 5, 2018 in an Auto Finance News article, “Attorneys seek CFPB definition of abusive practices,” which discussed the announcement from the CFPB to define the term “abusive” in the Dodd-Frank Act. The article stated, “The Consumer Financial Protection Bureau has...
In The NewsCourt denies attorney’s move for summary judgment against CFPB as premature
On June 4, the U.S. District Court for the District of Maryland issued a Memorandum to Counsel denying defendants’ dispositive motions in a UDAAP action brought by the CFPB alleging the defendants employed abusive practices when purchasing structured settlements from consumers in exchange for lump-...
InfoBytesJonice Gray Tucker interviewed by Dodd Frank Update in “What states can, cannot do to supervise financial marketplace”
Jonice Gray Tucker was interviewed on June 4, 2016 in a Dodd Frank Update article “What states can, cannot do to supervise financial marketplace,” which examined the many questions the financial industry may have regarding the states’ role in supervising the financial marketplace, a task which,...
In The NewsMaryland expands scope of unfair and deceptive practices under the Maryland Consumer Protection Act, increases maximum civil penalties
On May 15, the Maryland governor signed HB1634 , the Financial Consumer Protection Act of 2018, which expands the definition of “unfair and deceptive trade practices” under the Maryland Consumer Protection Act (MPCA) to include “abusive” practices, and violations of the federal Military Lending Act...
InfoBytesDistrict Court denies payment company’s request to set aside judgment
On March 12, the U.S. District Court for the Northern District of California denied a company’s post-trial motions to set aside September 2017 judgments in a lawsuit brought by the CFPB for alleged violations of the Consumer Financial Protection Act (CFPA). Specifically, the bi-weekly payments...
InfoBytesFDIC fines Delaware-based bank for unfair and deceptive practices
On March 7, the FDIC announced that a Delaware-based bank agreed to settle allegations of unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act for assessing transaction fees in excess of what the bank previously had disclosed. The FDIC also found that the...
InfoBytesDistrict judge enters final judgment against company posing as a direct lender; rules in favor of CFPB
On January 30, a federal judge for the U.S. District Court for the Southern District of New York ordered a New Jersey-based company along with two associated individuals (defendants) to pay civil money penalties totaling $75,000 for allegedly offering loans to consumers who were awaiting payouts...
InfoBytesCFPB succession update: CFPB requests zero funding; seeks public comment regarding Bureau’s activities; & more
On January 17, in a letter to Federal Reserve Chair Janet Yellen, acting CFPB Director Mick Mulvaney requested zero dollars for the Bureau’s quarterly operating funds. Each fiscal quarter, as required by law, the CFPB formally requests that the Federal Reserve transfer a specified amount of money...
InfoBytesCFPB Fines Large Bank for Alleged Student Loan Servicing Issues
On November 21, the CFPB announced it had entered into a consent order with a large national bank over allegations that the bank engaged in unfair and deceptive practices in violation of the Consumer Financial Protection Act of 2010 (CFPA) related to its student loan servicing activities. The order...
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
Counsel
FYI
"Neither forgiven nor forgotten: Taxation and UDAAP concerns with collecting charged off debt" by John C. Redding, Sasha Leonhardt, and Jessica M. Shannon (Bloomberg BNA)
Recent Blog Posts
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February 7, 2019
CFPB announces settlement with payday lending operation
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June 8, 2018
Court denies attorney’s move for summary judgment against CFPB as premature
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May 18, 2018
Maryland expands scope of unfair and deceptive practices under the Maryland Consumer Protection Act, increases maximum civil penalties
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March 15, 2018
District Court denies payment company’s request to set aside judgment
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March 9, 2018
FDIC fines Delaware-based bank for unfair and deceptive practices