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UDAAP: A HUGE Compliance Influence is Coming

Recorded on September 28, 2011

How to Prepare and Know What's Coming

"UDAAP" could become the most significant term ever to affect bank compliance. That sounds pretty extreme, but is it? The Consumer Financial Protection Bureau has been given an almost-unlimited mandate under Dodd-Frank to "take any action…to prevent a covered person or service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service." "Any actions" include prescribing rules and regulations that identify practices as "unlawful" and can include requirements "for the purpose of preventing such acts or practices."

We've known about unfair and deceptive for years under the FTC Act (UDAP), but "abusive" is brand new. And although Dodd-Frank has some language around it, it's still pretty vague, and leaves it up to the Bureau to determine what will be acceptable and what will not. We've already had some clues about what might be coming down the road here, but this will be broader than identifying and stopping certain specific practices. It's a shift in focus of the regulatory thought process.

In this webinar, we'll talk about the big picture as well as specifics. We'll discuss what this type of blanket mandate will likely do to your products and services, and how to prepare - meaning with your senior management and Board. But we'll also talk about specific products and services likely to be in the UDAAP crosshairs sooner rather than later.

Topics we'll discuss:

  • UDAP vs. UDAAP: what does the introduction of "abusive" really do?
  • Definition of "abusive" and how it's likely to be interpreted and implemented
  • How might it be interpreted by courts in the future, and will that impact banks?
  • Products and services that could be labeled as UDAAP - stop now or wait?
  • Regulatory focus: what if your bank is not subject to the CFPB's supervisory authority?
  • Emphasis on marketing and product management
  • Is this part of a new "paternalistic" focus by the regulators?

Plus much more.

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