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
"Alternative data and fair lending face off: The relationship is complicated" by Jonice Gray Tucker and 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"FTC has big agenda for 2019. How should companies prepare?" by Michelle L. Rogers and Katherine L. Halliday (Bloomberg Law)
Federal Trade Commission Chairman Joseph Simons recently previewed an aggressive and expansive consumer protection agenda for 2019, invoking the commission’s broad powers to pursue unfair or deceptive acts or practices, and adding “fraudulent” to the types of conduct he expects to police. Among the...
Articles"Finding the purpose in bureau civil investigative demands" by Aaron C. Mahler (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 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...
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 issues NAL on housing counselors
On January 10, the CFPB issued its second no-action letter (NAL) under the agency’s revised NAL Policy that was issued last September. The new NAL Policy’s goal is to streamline the review process to “focus[ ] on the consumer benefits and risks of the product or service in question.” As previously...
InfoBytesNew York proposes state-level increase in consumer finance oversight
On January 8, the New York governor released a proposal that would, among other things, expand the entities subject to NYDFS’ enforcement authority and harmonize state regulator authority to bring actions against entities engaging in unfair, deceptive, or abusive acts or practices with federal...
InfoBytesDistrict Court stays proceedings in structured settlement case pending outcome of Seila Law
On December 23, the U.S. District Court for the District of Maryland granted a motion to stay in an action between the CFPB and parties of a structured-settlement company, pending the U.S. Supreme Court’s decision in CFPB v. Seila Law . According to the court, a decision in Seila Law that the CFPB’...
InfoBytesFTC obtains $191 million from for-profit school for deceptive ads
On December 10, the FTC announced a settlement with a for-profit school and its parent company to resolve allegations that they employed deceptive advertisements in violation of the FTC Act that gave the impression that the school had relationships and job opportunities with various technology...
InfoBytesConnecticut Supreme Court reverses in favor of consumer in unfair trade practices appeal
On November 26, the Connecticut Supreme Court reversed a trial court’s ruling on a mortgage servicer’s motion to dismiss a Connecticut Unfair Trade Practices Act (CUTPA) action brought by a consumer. The trial court had ruled in favor of the servicer, stating, among other things, that ruling in the...
InfoBytesCFPB argues private class action settlement interferes with its CFPA enforcement authority
On November 6, the CFPB filed an amicus brief with the Court of Appeals of Maryland in a case challenging a private class action settlement against a structured settlement company, which purports to “release the Bureau’s claims in a pending federal action, to enjoin class members from receiving...
InfoBytesMichigan AG sues online tribal lender
On October 31, the Michigan attorney general announced it filed a lawsuit against an online lender alleging the lender violated the CFPA and Michigan law by allegedly offering usurious loans in an “unfair, deceptive, and abusive manner” with interest rates between 388 percent and 1,505 percent. The...
InfoBytesRegulators tackle company offering relief from student loans
On October 30, the CFPB, along with the Minnesota and North Carolina attorneys general, and the Los Angeles City Attorney (together, the “states”), announced an action against a student loan debt relief operation for allegedly deceiving thousands of student-loan borrowers and charging more than $71...
InfoBytesKraninger discusses semi-annual report at House and Senate hearings
On October 17, CFPB Director Kathy Kraninger testified at a hearing held by the Senate Banking Committee on the CFPB’s Semi-Annual Report to Congress. (Previous InfoBytes coverage here .) Pursuant to the Dodd-Frank Act, the hearing covered the semi-annual report to Congress on the Bureau’s work...
InfoBytesCFPB files deceptive and abusive allegations against foreclosure relief services company and principals
On September 6, the CFPB announced a complaint filed in the U.S. District Court for the Central District of California against a foreclosure relief services company, along with the company’s president/CEO (defendants), for allegedly engaging in deceptive and abusive acts and practices 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
Counsel
FYI
"Alternative data and fair lending face off: The relationship is complicated" by Jonice Gray Tucker and Caroline M. Stapleton (Mortgage Compliance Magazine)
"What to expect from increased FTC-state AG collaboration" by Michelle L. Rogers and Katherine L. Halliday (Law360)
"FTC has big agenda for 2019. How should companies prepare?" by Michelle L. Rogers and Katherine L. Halliday (Bloomberg Law)
Recent Blog Posts
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January 14, 2020
CFPB issues NAL on housing counselors
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January 10, 2020
New York proposes state-level increase in consumer finance oversight
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January 9, 2020
District Court stays proceedings in structured settlement case pending outcome of Seila Law
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December 13, 2019
FTC obtains $191 million from for-profit school for deceptive ads
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December 13, 2019
Connecticut Supreme Court reverses in favor of consumer in unfair trade practices appeal