WASHINGTON—NAFCU said it has updated its unfair, deceptive, or abusive acts or practices (UDAAP) issue brief to reflect the CFPB’s recently revised examination procedure guide for UDAAP.
The revision specifies that the agency will now target discrimination as an “unfair” practice in connection with all financial products and services and not just credit products, NAFCU explained.
Of note, the updated brief notes that while the Bureau has yet to explicitly discuss what types of discrimination are covered under the CFPB’s new stance, it appears that the Bureau may begin engaging in disparate impact enforcements, NAFCU said.
“Credit unions may wish to begin looking at their policies, practices, and procedures for noncredit financial products and services to assess their UDAAP risk under this recent guidance,” NAFCU said. “The CFPB was granted broad and unprecedented rulemaking and enforcement authority regarding unfair, deceptive, and abusive acts or practices and prohibits depository institutions and nonbanks from engaging in those practices. Therefore, all entities that fall under the CFPB’s purview, including credit unions, need to closely monitor the Bureau’s use of its UDAAP authority.”