Never tell me the odds: UDAAP strikes back
by: Suzie Higbee
We know that a blog post about Unfair, Deceptive, or Abusive Acts or Practices may not be everybody’s idea of good time. But that doesn’t diminish the importance of keeping up to speed on the prohibited practices that could land your institution in hot water. With the recent excitement about the upcoming reboot of the Star Wars franchise, we thought a few familiar film references might help make an overview of the basics of UDAAP go down just a little bit easier.
Not so long ago, in a galaxy that is actually pretty close, attention to UDAAP heated up like a summer blockbuster. The prohibition against unfair, deceptive, or abusive acts or practices is considered by many to be an overly broad and impressively vague area of compliance. That can make preparing for UDAAP a challenge, but never fear (because, as you may know, fear is the path to the dark side). And your regulator may find your lack of faith disturbing. Don’t worry; there is a new hope.
First of all, it’s critical to remember that the ban against UDAAP doesn’t only apply to financial products and services, but to every activity at your institution. So set your deflector shields to maximum. UDAAP impacts advertising, initial and subsequent disclosures, servicing, collections, credit card disclosures and bills, third-party vendors, employee interactions with consumers, and more. Not to mention that the CFPB is openly soliciting for complaints. Furthermore, UDAAP is increasingly being cited in conjunction with other regulations to “boost” their impact.
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