CFPB Rescinds Supervision And Enforcement Policy On Prohibited Abusive Acts

The CFPB ("Bureau") rescinded its "January 2020 Statement of Policy Regarding Prohibition on Abusive Acts or Practices" in supervision and enforcement.

The policy provided "a framework for the Bureau's exercise of its supervisory and enforcement authority to address abusive acts or practices." (See related coverage.) The Bureau determined that the policy fails to provide clarity to regulated entities and is "counterproductive."

The Bureau gave the following reasons, among others, for rescinding the policy:

• declining to seek civil money penalties and disgorgement runs contrary to the CFPB's current priority of achieving deterrence through penalties;
• the statement's principle of "making a good-faith effort to comply with the abusiveness standard" affords the CFPB "considerable discretion" and adds uncertainty to market participants; and