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CFPB Outlines UDAAPs for Debt Collectors

July 12, 2013

By THE GLOBAL BANKING & PAYMENT SYSTEMS PRACTICE

On July 10, 2013, the Consumer Financial Protection Bureau (“CFPB”) issued two bulletins detailing examples of particular conduct by collectors of consumer debt that may constitute either: (i) an unfair, deceptive or abusive act or practice (“UDAAP”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DFA”) or (ii) a deceptive act or practice under the Fair Debt Collection Practices Act (“FDCPA”). CFPB Bulletin 2013-07 provides examples of conduct that may constitute a UDAAP under the DFA, while CFPB Bulletin 2013-08 describes CFPB observations of representations regarding the impact of debt payments on credit reports and scores that the CFPB believes may be either UDAAPs or deceptive acts or practices under the FDCPA. Based on these issuances, creditors, debt buyers, and third-party debt collectors subject to supervision and examination by the CFPB, as well as institutions that rely on the services of such entities, should review and update their policies, procedures, communications materials, scripts and training manuals (and, as applicable, third party vendor oversight) to ensure they comply with the guidance.