The Consumer Financial Protection Bureau on Friday issued a new policy on how it will go after companies for “abusive” practices against consumers, imposing new restrictions on when the agency will bring those types of enforcement actions under federal consumer protection law.
— The new policy outlines how the CFPB will enforce the Dodd-Frank Act’s prohibition on companies engaging in “abusive” practices, providing a clarification that business groups have long sought. POLITICO’s Katy O’Donnell has more on the new policy.
— Among the changes: The CFPB will focus on going after “abusive” conduct if it concludes that the harm to consumers outweighs the benefits. The CFPB will no longer pursue claims of abusiveness against a company in tandem with claims of unfairness or deception when they all stem from the same conduct. And the agency said it generally won’t seek monetary damages against a company for “abusive” practices if the company has made a “good-faith effort” to comply with the law.
— Why it matters: Some of the CFPB’s major cases against for-profit colleges and student loan companies have involved the “abusive” standard. That includes the bureau’s enforcement action against ITT Tech and its ongoing lawsuit against Navient.