Since UDAAP seems to be the catch all now, I'm wondering what some of the seasoned veterans think about Credit Builder products and UDAAP. We promote the product as a way to build or rebuild credit but the more I think abut it, the more I wonder if that's deceptive. There is little to no data on whether or not these products do that and as I'm trying to sift through customer data to see if the product worked as intended, I'm finding the customers finish the term and move on. Therefore, we don't know if they have built a good score or raised their score. Does anyone have any thoughts/data about these products? Should I be considering UDAAP and maybe soften the marketing verbiage a little or am I making an issue out of nothing?

I think a lot of it depends upon how you market it and what you charge for it. Three banks ago (and some decades ago now!) we had a product that we offered where we loaned on cash in an account. We weren't sending out flyers advertising it or anything. For kids with no tradelines, it offered the chance to get one. We also offered a small balance, secured credit card for the same purpose....getting you a tradeline. And that's how we sold it...as a way to add a tradeline in case you only have one or none. In both cases, the account earned interest and the bank got almost nothing in return. Minimal interest and no fees. Our return was a happy parent or two.

I think some banks that promote these products as a way to fix bad credit may have some issues. I'd want some evidence if my bank marketed a product that way. In other words, I think there is a difference between adding a tradeline to an empty CBR and trying to fix a destroyed CBR. And if there's a high interest rate and fees on that loan...

And, no, I don't think you are making a big issue out of nothing. Looking at every ad through the UDAAP lens is very smart, I think.

We don't offer credit building products, but support nonprofits that do.

We focus on outcomes, not outputs. The nonprofits have extensive information that measure outcomes, those things in life that count. Such as a better credit score, paying down debt, opening or increasing savings - those kinds of things.

Focus on outcomes, not outputs. Simply adding a tradeline is an output. Measure the outcomes and the regulators will call you blessed.