The updated exam manual for UDAAPs focuses on supervisory operations related to discrimination in financial markets.
03/28/2022 2:30 P.M.
1.5 minute read
The Consumer Financial Protection Bureau has published an updated exam manual for evaluating Unfair, Deceptive and Abusive Acts or Practices (UDAAPs).
These examination procedures provide general guidance, according to the CFPB, on:
- The principles of unfairness, deception, and abuse in the context of offering and providing consumer financial products and services.
- Assessing the risk that an institution’s practices may be unfair, deceptive, or abusive.
- Identifying unfair, deceptive or abusive acts or practices (including by providing examples of potentially unfair or deceptive acts and practices).
- Understanding the interplay between unfair, deceptive, or abusive acts or practices and other consumer protection and antidiscrimination statutes.
The changes in the exam manual focus on supervisory operations to better protect families and communities from illegal discrimination, including in situations where fair lending laws may not apply, according to the CFPB.
The CFPB will examine these operations for discrimination in all consumer finance markets, including credit, servicing, collections, consumer reporting, payments, remittances, and deposits. CFPB examiners will require supervised companies to show their processes for assessing risks and discriminatory outcomes, including documentation of customer demographics and the impact of products and fees on different demographic groups. The CFPB will look at how companies test and monitor their decision-making processes for unfair discrimination, as well as discrimination under Equal Credit Opportunity Act.
The CFPB also recently updated its debt collection examination procedures to reflect requirements for regulated entities under Regulation F, ACA International previously reported. These procedures include guidance for examination of all aspects of debt collection.
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