Regulatory attention on the topic of Unfair or Deceptive Acts and Practices has been rising for several years. The Dodd-Frank Act expanded the topic to include Unfair, Deceptive or Abusive Acts or Practices (UDAAP).
UDAAP applies to:
- Every product or service offered by any financial institution.
- Every aspect of any transaction, including:
- Marketing any product or service;
- Opening a deposit account or an open-end line of credit;
- Originating a consumer, mortgage, commercial or any other type of loan;
- Administration of existing deposit or loan accounts;
- Terminating or closing accounts; and
- Much more.
UDAAP appears on every “bad news” list, including frequent violations, significant penalties, enforcement actions, to name a few. With increasing frequency examiners are requiring bank employees to explain the terms contained in account and service documentation, policies and procedures, and advertisements. If you can’t explain the terms to your examiner, how can you explain them to your customers?
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For additional resources on the topic of UDAAP visit the following pages: