Dhara Shah is a Senior Consultant with Treliant. Her broad experience in regulatory compliance includes strengthening Community Reinvestment Act (CRA) programs and performing risk assessments in areas related to the Home Mortgage Disclosure Act (HMDA) and mortgage servicing. In addition, she has held data analyst and project management roles in…
- Source: files.consumerfinance.gov
Treliant knows fair lending and consumer protection. If your institution needs assistance with enhancing your fair lending compliance management system (CMS) or assessing your compliance with this interpretation, we can help.
The Consumer Financial Protection Bureau (CFPB) has rescinded the Statement of Policy Regarding Prohibition on Abusive Acts or Practices (“2020 Policy Statement”) which was initially released on January 24, 2020. Under the 2020 Policy Statement, the CFPB would generally not “dual charge” the same acts as both abusive and unfair or deceptive or seek monetary penalties beyond consumer remediation unless the covered institution had not made a good faith effort to comply with the law.
In rescinding the 2020 Policy Statement, the CFPB noted that the agency “deters abusive practices and compensates certain harmed consumers using penalties, so the 2020 Policy Statement undermined deterrence and was contrary to the CFPB’s mission of protecting consumers.” The decision to rescind better aligns with the original standards defined by Congress, as the 2020 Policy Statement had components that could lead to ambiguity and misinterpretation due to conflicting principles. The 2020 Policy Statement’s principles of making “good-faith efforts” has hampered the Bureau’s ability to effectively and promptly clarify abusive standards set forth by claims.
The rescission provides the Bureau with further clarity and consistency moving forward in governing abusive acts or practices towards consumers and companies.