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Friday, June 7, 2013

CFPB Uses its Power to Prohibit Abusive Acts or Practices for the First Time

By: ABIA Outside Counsel Chrys Lemon and Adam Maarec, McIntyre & Lemon, PLLC

For the first time, the Consumer Financial Protection Bureau (CFPB) recently used its powers to attempt to prohibit an “abusive” act or practice by a debt settlement service provider. The term “abusive,” which was added to the long-understood “unfair and deceptive” standard by the Dodd-Frank Act, has concerned many in the industry and the Congress because it has not been thoroughly interpreted through case law. As critics expected, the CFPB is providing a deeper understanding of the standard through enforcement actions rather than rulemakings, which are subject to notice and comment.

To learn what actions the CFPB believes constituted an “abusive” act or practice, what other laws were alleged violated, and what penalties the debt settlement company now faces, read our compliance brief prepared just for bank-owned agencies that are members of ABIA. If you are having trouble logging on or you are with an ABIA member that is not a bank, please contact us and we will email you a copy.

ABIA offers a FREE one-hour consultation with its outside counsel, McIntyre and Lemon, as a member benefit. Members can submit a question via email or schedule a call to discuss any concerns. Contact Deanne Marino for more information.