New “Cop on the Beat” and the Fairness Standard
Banking & Financial Services Alert
As part of its mandate under the Dodd-Frank Wall Street Reform Consumer Protection Act (“Dodd-Frank”), the Consumer Financial Protection Bureau (“CFPB”) is charged with examination and enforcement of federal prohibitions against unfair, deceptive and
abusive trade practices (“UDAAP”) in connection with consumer financial products and services.
On their website (www.cfpb.gov), the CFPB describes their role: “Like a neighborhood cop on the beat, the CFPB supervises banks, credit unions, and other financial companies, and we will enforce Federal consumer financial laws.”
Under the CFPB, the focus shifts from the prudential banking regulators’ examination of risk to the bank to the new cop’s examination of risk to the consumer. UDAAP is an important part of that function.
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