On March 11, 2021, the Consumer Financial Protection Bureau (“CFPB”) announced it would rescind its January 24, 2020 Policy Statement related to prohibition on abusive acts or practices. In the January 2020 Policy Statement, the CFPB, with a goal of resolving uncertainty in the abusiveness standard, provided that it intended to apply the following principles during its supervision and enforcement work with a covered person:
- Focus on citing conduct as abusive in supervision or challenging conduct as abusive in enforcement if it concluded that harm outweighed the benefit to consumers.
- Avoid challenging conduct as abusive when it relied on the same facts in labelling conduct as unfair or deceptive.
- Monetary relief will not be sought for abusiveness violations where the covered person was making a good-faith effort to comply with the standard.
Since issuing this Policy Statement last year, the CFPB concluded that the principles outlined in the policy do not actually deliver the clarity sought. Ultimately, the CFPB, determining that their January 2020 Policy Statement was counterproductive to its intended purpose, has rescinded its prior Policy Statement.
January 24, 2020 Policy Statement
March 11, 2021 Rescission Statement