Are all FDCPA violations by creditors and servicers potential UDAAPs: a difference of opinion

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Jeff Sovern has written an interesting blog post about the CFPB’s recent Bulletin 2013-07 that warns creditors and servicers who are not covered by the FDCPA that their collection practices are subject to the CFPB’s authority under Section 1031 of the Dodd-Frank Act which prohibits “unfair, deceptive, or abusive” acts or practices (UDAAPs). In particular, the bulletin provides, as examples of conduct that could constitute UDAAPs, various acts or practices that would likely be covered by the general FDCPA prohibitions on harassment or abuse, false or misleading representations, and unfair practices, as well as various acts or practices specifically identified in the FDCPA as conduct that violates those prohibitions.

In his post, Jeff correctly notes that there is no private right of action to enforce Section 1031. However, we take issue with Jeff’s suggestion that the CFPB would take the position that creditors and servicers who are not subject to the FDCPA must nevertheless comply with all of its provisions (perhaps other than disclosure requirements) or risk a UDAAP violation for which the CFPB will hold them responsible. If the CFPB’s view was that all FDCPA violations were potentially UDAAPs, it would have been quite easy for it to have said exactly that. It declined to do so.