Fed Proposes to Repeal Rule Regarding Unfair or Deceptive Acts or Practices

The Federal Reserve Board has requested comment on a proposal to repeal its Regulation AA regarding unfair or deceptive acts or practices.

The Dodd-Frank Wall Street Reform and Consumer Protection Act repealed the Board’s authority to write rules that address unfair or deceptive acts or practices, which are contained in Regulation AA.  Regulation AA includes the Board’s “credit practices rule,” which prohibits banks from using certain remedies to enforce consumer credit obligations and from including these remedies in their consumer credit contracts.

In connection with the Fed proposal, the Federal Reserve Board, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency issued guidance clarifying that the repeal of the credit practices rules applicable to banks, savings associations, and federal credit unions is not a determination that the prohibited practices contained in those rules are permissible.  The regulators believe the practices described in the former credit practices rules could potentially violate the prohibition against unfair or deceptive practices under the Federal Trade Commission Act and Dodd-Frank Act, even in the absence of a specific regulation governing the conduct.

Topics:  Dodd-Frank, Federal Reserve, Regulation AA, Repeal, Unfair or Deceptive Trade Practices

Published In: Antitrust & Trade Regulation Updates, Consumer Protection Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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