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Federal Register / Vol. 86, No. 52 / Friday, March 19, 2021 / Rules and Regulations
Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register.
Signed in Washington, DC, on March 15, 2021.
Treena V. Garrett, Federal Register Liaison Officer, U.S.
Department of Energy.
FR Doc. 202105585 Filed 31821; 8:45 am BILLING CODE 645001P

BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Chapter X
Statement of Policy Regarding Prohibition on Abusive Acts or Practices; Rescission Bureau of Consumer Financial Protection.
ACTION: Rescission of statement of policy.
AGENCY:

The Bureau of Consumer Financial Protection is rescinding the Statement of Policy Regarding Prohibition on Abusive Acts or Practices.
DATES: This rescission of the policy statement published at 85 FR 6733 on February 6, 2020, is applicable on March 19, 2021.
FOR FURTHER INFORMATION CONTACT:
Mehul Madia, Division of Supervision, Enforcement, and Fair Lending, at 202
4357104. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@
cfpb.gov.
SUPPLEMENTARY INFORMATION: Section 1031a of the Dodd-Frank Wall Street Reform and Consumer Protection Act Dodd-Frank Act provides that the Bureau of Consumer Financial Protection Bureau may use its authorities, among other things, to prevent a covered person or service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.1

jbell on DSKJLSW7X2PROD with RULES

SUMMARY:

1 Public
Law 111203, tit. X, sec. 1031a, 124
Stat. 1376, 2005 2010 codified at 12 U.S.C.
5531a; see also 12 U.S.C. 5536a1B making it unlawful for any covered person or service provider to engage in any abusive act or practice.

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Section 1031d of the Dodd-Frank Act sets forth standards for when the Bureau may declare that an act or practice is abusive for purposes of the Dodd-Frank Act.
On January 24, 2020, the Bureau announced a policy statement entitled Statement of Policy Regarding Prohibition on Abusive Acts or Practices Policy Statement, which provided a framework for the Bureaus exercise of its supervisory and enforcement authority to address abusive acts or practices.2 Specifically, the Policy Statement provided that the Bureau intended to apply the following three principles during its supervision and enforcement work. First, the Bureau stated that it intended to focus on citing conduct as abusive in supervision or challenging conduct as abusive in enforcement if the Bureau concluded that the harms to consumers from the conduct outweighed its benefits to consumers.3 Second, the Bureau stated that it would generally avoid challenging conduct as abusive that relied on all or nearly all of the same facts that the Bureau alleged are unfair or deceptive.4 The Bureau stated that where it nevertheless decided to include an alleged abusiveness violation, the Bureau intended to plead such claims in a manner designed to clearly demonstrate the nexus between the cited facts and the Bureaus legal analysis of the claim. The Bureau stated that, in its supervision activity, the Bureau similarly intended to provide more clarity as to the specific factual basis for determining that a covered person had violated the abusiveness standard.5 Third, the Bureau stated that it generally did not intend to seek certain types of monetary relief for abusiveness violations where the covered person was making a good-faith effort to comply with the abusiveness standard.6
The Bureau asserted that the Policy Statement was necessary to address the uncertainty of the abusiveness standard based on the Bureaus conclusions that such uncertainty was not beneficial, presented significant challenges to businesses, imposed substantial costs, including impeding innovation, and may cause consumers to lose the benefits of improved products or services and lower prices. 7 As the Policy Statement referenced, some panelists at the Bureaus June 2019
2 85
3 Id.

FR 6733 Feb. 6, 2020.
at 6736.

4 Id.
5 Id.
6 Id.
7 Id.

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at 673536.

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Symposium on Abusive Acts or Practices urged the Bureau to resolve the abusiveness standards uncertainty for these and other reasons,8 while others expressed the view that the statutory definition of abusiveness is sufficiently clear and that no evidence supported the claims that the uncertainty had affected business practices, including chilling innovation.9
Based on its review of, and experience in applying, the Policy Statement, however, the Bureau has concluded that the principles set forth in the Policy Statement do not actually deliver clarity to regulated entities. In fact, the Policy Statements intended principles, including making a good-faith effort to comply with the abusiveness standard, themselves afford the Bureau considerable discretion in its application and add uncertainty to market participants. Additionally, the Bureaus further consideration of and experience under the Policy Statement have led it to conclude that the intended principles have the effect of hampering certainty over time. Not asserting abusiveness claims solely because of their overlap with unfair or deceptive conduct or based on the other intended principles articulated in the Policy Statement has the effect of slowing the Bureaus ability to clarify the statutory abusiveness standard by articulating abusiveness claims as well as through the ensuing issuance of judicial and administrative decisions. It is thus counterproductive to the purpose of the original Policy Statement.
8 Id. at 6735 n.16 citing panelists from the Bureaus June 2019 Symposium on Abusive Acts or Practices.
9 See, e.g., Adam J. Levitin, Abusive Acts and Practices: Towards a Definition?, Written Submission Prepared for CFPB Symposium on Abusive at 67, 9, https
files.consumerfinance.gov/f/documents/cfpb_
levitin-written-statement_symposium-abusive.pdf arguing that the statutory language of the DoddFrank Act and the Bureaus enforcement actions to date provide a sense of the scope of abusive, that the Bureau would do better to allow the term to be better defined through the common law process, and that there is no evidence that uncertainty on the issue is affecting business practices at all; the claims of certain trade associations on the matter are completely unsubstantiated; Nicholas F.B. Smyth, presenting on behalf of Pennsylvania Attorney General Josh Shapiro, Statement submitted to the Bureau for the symposium on Abusive Acts or Practices at 1, 5
June 25, 2019, https files.consumerfinance.gov/f/
documents/cfpb_smyth-written-statement_
symposium-abusive.pdf asserting that the abusiveness standard does not stifle innovation any more than the prohibitions on unfairness or deception do, and that every time Congress creates a new standard, there is a period of time when some uncertainty may exist as to what conduct violates that standard and what does not.
This is perfectly normal, and the Courts are well equipped to interpret new standards..

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