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 announced significant revisions to its Unfair, Deceptive, or Abusive Acts or Practices (“UDAAP”) exam manual, 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
Online lender asks Supreme Court to review ALJ ruling
A Delaware-based online payday lender and its founder and CEO (collectively, “petitioners”) recently submitted a petition for a writ of certiorari challenging the U.S. Court of Appeals for the Tenth Circuit’s affirmation of a CFPB administrative ruling related to alleged violations of the Consumer...
InfoBytesCFPB report looks at junk fees; official says they remain agency focus
On March 8, the CFPB released a special edition of its Supervisory Highlights focusing on junk fees uncovered in deposit accounts and the auto, mortgage, student, and payday loan servicing markets. The findings in the report cover examinations completed between July 1, 2022 and February 1, 2023...
InfoBytesCFPB orders nonbank title lender to pay $15 million for numerous violations
On February 23, the CFPB entered a consent order against a Georgia-based nonbank auto title lender (respondent) for alleged violations of the Military Lending Act (MLA), the Truth in Lending Act, and the Consumer Financial Protection Act. According to the Bureau, the respondent allegedly charged...
InfoBytesJeffrey P. Naimon quoted in S&P Global article, “Banks scrutinizing their lending practices as DOJ cracks down on redlining”
The S&P Global article, “Banks scrutinizing their lending practices as DOJ cracks down on redlining,” examined the Department of Justice’s increased efforts to combat lending discrimination and redlining as well as lenders’ responses. The agency is not only focused on lending operations, but...
In The News9th Circuit orders district court to reassess $7.9 million civil penalty against payments company
On January 27, the U.S. Court of Appeals for the Ninth Circuit ordered a district court to reassess its decision “under the changed legal landscape since its initial order and opinion” in an action concerning alleged misrepresentations made by a bi-weekly payments company. The Bureau filed a...
InfoBytesCFPB seeks feedback on credit cards
On January 24, the CFPB issued a notice and request for information (RFI) seeking public feedback on several aspects of the consumer credit card market in accordance with Section 502(b) of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). The CARD Act was enacted...
InfoBytesSenators ask FTC, CFPB to investigate deceptive listing agreements
In December, Senate Banking Committee Chairman Sherrod Brown (D-OH), along with Senators Tina Smith (D-MN) and Ron Wyden (D-OR) sent a letter to the FTC and the CFPB requesting a review of a Florida-based real estate brokerage firm’s use of exclusive 40-year listing agreements marketed as a “loan...
InfoBytesCFPB and New York say auto lender misled consumers
On January 4, the CFPB and New York attorney general filed a complaint against a Michigan-based auto finance company accused of allegedly misrepresenting the cost of credit and deceiving low-income consumers into taking out high-interest loans on used vehicles. (See also AG’s press release here .)...
InfoBytesChopra testifies at congressional hearings
On December 14, CFPB Director Rohit Chopra testified at a hearing titled Consumers First: Semi-Annual Report of the Consumer Financial Protection Bureau held by the House Financial Services Committee on the CFPB’s most recent semi-annual report to Congress (covered by InfoBytes here ). Chopra’s...
InfoBytesCFPB proposes registry of nonbank repeat offenders
On December 12, the CFPB announced a proposed rule seeking to identify repeat financial law offenders by establishing a database of enforcement actions taken against certain nonbank covered entities. Specifically, the Bureau proposes to enhance market monitoring and risk-based supervision efforts...
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
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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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March 10, 2023
Online lender asks Supreme Court to review ALJ ruling
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March 9, 2023
CFPB report looks at junk fees; official says they remain agency focus
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February 24, 2023
CFPB orders nonbank title lender to pay $15 million for numerous violations
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February 2, 2023
9th Circuit orders district court to reassess $7.9 million civil penalty against payments company
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January 27, 2023
CFPB seeks feedback on credit cards