On January 21, 2020 the Consumer Financial Protection Bureau (CFPB) approved a policy statement that is intended to convey and foster greater certainty about the meaning of abusiveness. The statement provides a framework for the Bureau’s exercise of its supervisory and enforcement authority to address abusive acts or practices. providing a common-sense framework on how it intends to apply the “abusiveness” standard in supervision and enforcement matters.
With the revised statement the CFPB:

  • Intends to focus on citing conduct as abusive in supervision or challenging conduct as abusive in enforcement if it concludes that the harms to consumers from the conduct outweigh its benefits to consumers.
  • Will generally avoid challenging conduct as abusive that relies on all or nearly all of the same facts that it alleges are unfair or deceptive. Where the CFPB nevertheless decides to include an alleged abusiveness violation, it intends to plead such claims in a manner designed to clearly demonstrate the nexus between the cited facts and the CFPB’s legal analysis of the claim. In its supervision activity, the CFPB similarly intends to provide more clarity as to the specific factual basis for determining that a covered person has violated the abusiveness standard.
  • Generally does not intend to seek certain types of monetary relief for abusiveness violations where the covered person was making a good-faith effort to comply with the abusiveness standard.

The CFPB’s press release is available here.
The Policy Statement was effective on January 24, 2020.