House bill introduced to amend CFPB UDAAP authority

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The Dodd-Frank Act gave the CFPB authority to regulate “unfair, deceptive, or abusive” acts or practices.  Republican Congressman Blaine Luetkemeyer has introduced the “Unfair or Deceptive Acts or Practices Uniformity Act,” (H.R. 5112), which would remove the CFPB’s authority to regulate abusive acts or practices.

The bill would also prohibit the CFPB from taking any enforcement action to prevent covered persons or service providers from engaging in an unfair or deceptive act or practice (UDAP) unless the CFPB “first consults the covered person or service provider’s primary financial regulatory agency, if any.”  In addition, the bill would require the CFPB, when engaging in UDAP rulemaking, to comply with FTC Act UDAP rulemaking requirements applicable to the FTC.  Those requirements include publishing two notices of proposed rulemaking, meeting a restrictive standard for justifying a new rule, and providing an opportunity for informal hearings.

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