The statement outlines the prohibition of “abusive conduct” in consumer financial markets and a framework for federal and state regulators to detect such conduct.
05/04/2023 3:55 p.m
2 minutes read
The Consumer Financial Protection Bureau’s latest policy statement “explains the law prohibiting abusive conduct in consumer financial markets and summarizes precedents from over a decade” under the Consumer Financial Protection Act, according to a press release.
The bureau reports that the policy statement “will assist consumer financial protection enforcement agencies in identifying wrongdoing and help businesses avoid abusive acts or practices.”
It should be noted that while policy statements provide background information on the laws enforced by the CFPB and how they are enforced, they do not add any new legal requirements for regulated entities.
In this policy statement, the CFPB states that “abusive conduct” mainly “comprises concealing important characteristics of a product or service, or taking advantage of circumstances — including lack of understanding, unequal bargaining power, or consumer trust — to gain an improper advantage. In particular, the statement describes how abusive the use of dark patterns, setup-to-fail business models seen before the mortgage crisis, profiting from captive customers, and kickbacks and self-dealing can be.”
According to a summary of the policy statement by Barron & Newburger, an ACA International member firm, “The guide raises concerns about how businesses can use information at their disposal effectively in a world of poor consumer literacy.”
Read the CFPB’s full policy statement here. It will also be published in the Federal Register and will be available for public comment until July 3, 2023.
Related content from ACA International:
CFPB circular outlines enforcement of ‘dark patterns’
Remember to subscribe ACA daily and member notifications under your My ACA profile when you are logged in acainternational.org to receive updates on the ACA Huddle.
Comments are closed.