CBA Comment Letter on CFPB Abusiveness Policy Statement

To Whom it May Concern:

The Consumer Bankers Association (“CBA”)1 appreciates the opportunity to submit comments2 to the Consumer Financial Protection Bureau (the “Bureau”) in response to the policy statement regarding the prohibition on abusive acts or practices (the “Policy Statement”).3 

We would like to thank Director Rohit Chopra for recognizing CBA as a leading voice of the financial services industry in his recent testimony to Congress4 when he repeatedly cited CBA’s response to the Bureau’s 2020 proposed procedural rule on the Advisory Opinion Program.5 As articulated in CBA’s Advisory Opinion Program comment letter, we “greatly appreciates the Bureau taking this further step to try to alleviate regulatory uncertainty across the various laws under its purview,” by issuing this Policy Statement on “abusiveness.” However, CBA is concerned generally that the Bureau has utilized guidance as a substitute for formal rulemakings, to the extent that this Policy Statement and other recent Bureau guidance have attempted to communicate new legal standards and binding requirements on industry. We appreciate that the Bureau has taken CBA’s suggestion (as articulated in in CBA’s Advisory Opinion Program comment letter) 6 to open the Policy Statement to formal notice and comment in the Federal Register. CBA urges the Bureau to take this approach in all of its policy guidance (including Advisory Opinions) and we welcome the opportunity to provide feedback on this Policy Statement. 

The Policy Statement as currently drafted does not clarify the abusiveness standard in a way that would allow regulated entities to understand what may be “abusive” in the Bureau’s future judgment. As a result, the Policy Statement as currently drafted is of little value to industry—or the Bureau—because there is no specificity that market participants can use to comply or that the Bureau can easily enforce. However, CBA has confidence that with appropriate revisions, the Bureau’s goal of providing “an analytical framework for identifying abusive acts or practices”7 can be achieved. Below CBA has identified some specific aspects of the Policy Statement that could be revised to make it a useful tool for both industry and the Bureau to utilize going forward. 

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To read the full letter, please click HERE.