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ARTICLE · 07 APRIL 2021

"Might" v. "Likely" – Pleading Deception

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In January, we wrote about the CFPB's latest lawsuit predicating an alleged federal UDAAP violation on the violation of a state law.

United StatesFinance and Banking
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In January, we wrote about the CFPB's latest lawsuit predicating an alleged federal UDAAP violation on the violation of a state law. The case involves claims against a mortgage lender who allegedly employed individuals working as loan originators, but who were not licensed as loan originators as required by state law. We noted that the CFPB claimed this conduct not only violated Regulation Z-which requires loan originators to be licensed in accordance with state law-but was also deceptive. The deception claim only alleged that the misrepresentation that the loan originators were licensed "might have" impacted consumer decisionmaking. As we previously noted, however, "a representation is only material if it is 'likely' to affect a consumer's behavior-that a consumer 'might have acted differently' is not enough."

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