CFPB Getting Ready to Set Rules by UDAAP Enforcement Actions

Ballard Spahr law firm has published an article today that indicates the Consumer Financial Protection Bureau is most likely in the midst of conducting active enforcement actions.

Their website ( is reporting:

While the CFPB’s choice of initial enforcement targets will undoubtedly be significant regardless of the kinds of violations the CFPB’s alleges, they will take on even more significance if the CFPB alleges that the target has engaged in “abusive” acts or practices. Most observers, ourselves included, expect the CFPB to use its enforcement authority, rather than its rulemaking authority, to set the standards for what is an “abusive” act or practice for purposes of the CFPB’s authority to prohibit acts or practices that are “unfair, deceptive or abusive.” In fact, it appears Director Cordray himself has confirmed that this will be the CFPB’s approach. An article appearing in today’s American Banker reporting on an interview with Mr. Cordray indicates that Mr. Cordray stated that he did not “anticipate [the CFPB] writing a rule around UDAAP.” Asked in a follow up question whether his statement meant that “people will mostly have to look at your actions as the model for how this new term in defined,” Mr. Cordray is reported to have responded “I think that’s probably right.”


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3 thoughts on “CFPB Getting Ready to Set Rules by UDAAP Enforcement Actions”

  1. I posted earlier, but it didn’t stick for some reason. Anyway, thanks, Steve for this posting. In preparation for these potential “examinations”, we are hosting a CFPB UDAAP Compliance Training Class tomorrow and Friday. Michael Thurman, a litigator and partner with Loeb and Loeb, will be presenting on the UDAAP Compliance as well during the Thursday class. This is an issue that cannot be ignored. The UDAAP Examination you will be subjected to in the event you are investigated has clearly laid requirements. You not only need to know what they are, but what you need in to have in place to meet or exceed their expectations. You will need specific systems, documents and protocols in place in order to survive the examination and not be found as a “potential UDAAP risk”.

    You can register for the class here:

    Call me if you have any questions.
    Matthew Hearn- MSTARS Elite training Academy
    Office: 952-388-0668
    Direct: 952-451-6288
    [email protected]

  2. Thanks for publishing this, Steve. We are conducting a UDAAP Compliance Training Class tomorrow and Friday to help the industry prepare for possible UDAAP Examinations. We will cover all the elements that need to be in place to ensure compliance with the standards set forth. It is a perfect time to get your ducks in a row and put the systems in place that are necessary to demonstrate a consumer focused, compliant environment. I will also say that if you think you are already in compliance and think you have it all figured out, you move forward at your own risk. I was actually surprised by some of the processes that you need to have in place to meet or exceed their measurement standards. It isn’t terribly difficult, but will certainly be time consuming and require effort and change to get in compliance with the UDAAP guidelines. On a personal note, the more we work through the guidelines, the more I realize how well thought out they are. Having these systems and protocols in place will create a much more focused environment and will draw attention to practices within the organization that could be problematic. Michael Thurman will be presenting on the requirements as well, Thursday morning at the class. I truly hope everyone will heed this warning and get prepared for the “new sheriff in town”.

    To get registered, go to


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