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ARTICLE · 25 APRIL 2023

CFPB Issues Policy Statement On CFPA's Prohibition On ‘Abusive' Conduct

Cooley LLP
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On April 3, 2023, the Consumer Financial Protection Bureau released a policy statement articulating a new framework for analyzing conduct that it considers "abusive" in violation of federal law.

United StatesFinance and Banking
Michelle Rogers
Michelle Rogers
Katherine Brockway Katz
Katherine Brockway Katz
H. Joshua Kotin
H. Joshua Kotin
David McGee
David McGee
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On April 3, 2023, the Consumer Financial Protection Bureau released a policy statement articulating a new framework for analyzing conduct that it considers "abusive" in violation of federal law. The CFPB until now has provided limited formal guidance on what constitutes "abusive" conduct under the Consumer Financial Protection Act (CFPA).

Consistent with the CFPB's recent statements, the new policy statement touches on concepts of fair dealing and proper market functions when explaining the CFPB's rationale. This includes references to prior concerns about competition where an entity has outsized market share or concentration, or when it otherwise participates in a market structure that disadvantages consumers. The CFPB also heavily focuses on congressional intent and commentary from the CFPA's enactment. It cites legislative history and House Committee on Financial Services testimony to show the necessity of prohibiting abusive conduct and why the

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