HB1652, titled the “Rectifying UDAAP Act,” would substantially revise how the Consumer Financial Protection Bureau (CFPB) may define and enforce unfair, deceptive, or abusive acts or practices (UDAAP) under the Consumer Financial Protection Act of 2010. The bill requires the CFPB to issue rules on civil penalty policies and mitigating factors, to define “abusive act or practice” by rule, and to include cost-benefit analysis in any final rule on abusive, unfair, or deceptive practices. It also directs the Bureau to solicit public comment on confusion surrounding its UDAAP authority.
The bill narrows the CFPB’s authority in several ways. It bars the Bureau from treating discriminatory practices as UDAAP, sets detailed statutory limits on what can count as “abusive,” requires a showing of good-faith compliance before monetary relief may be sought in some cases, and creates a notice-and-opportunity-to-cure process for covered persons who self-identify potential violations. It also limits where enforcement actions may be filed, requires particularized pleadings, prohibits alternative pleading between unfair/deceptive and abusive theories, and restricts civil money penalties for conduct occurring before the most recent consumer compliance rating, while preserving other remedies.
The bill’s impact would be to amend multiple provisions of the Consumer Financial Protection Act of 2010 and significantly constrain CFPB enforcement discretion, especially in UDAAP matters. It would add new procedural requirements, new rulemaking mandates, and new venue and pleading rules, while also limiting the Bureau’s ability to seek civil penalties for older conduct and to characterize discriminatory conduct as abusive, unfair, or deceptive under that authority. Covered persons and service providers in the consumer finance industry would be the primary regulated parties affected.
Because the bill was only referred to the House Committee on Financial Services and no votes or committee transcripts are available, there is no recorded legislative debate or vote history in the provided materials. Based on the text, the bill appears designed to respond to concerns about CFPB enforcement overreach and uncertainty in UDAAP standards, suggesting support from those favoring clearer limits and more predictable enforcement. At the same time, it would likely draw opposition from those who view the changes as weakening consumer protection and narrowing the CFPB’s ability to address harmful or discriminatory financial practices.
Notable points of contention include whether the CFPB should be required to define “abusive” by rule, whether cost-benefit analysis should be mandatory for UDAAP rules, whether discrimination should be excluded from UDAAP enforcement, and whether the notice-and-cure and venue restrictions would unduly hamper enforcement. The bill also raises questions about the balance between regulatory certainty for financial firms and the Bureau’s flexibility to respond to evolving consumer harm.
HB1652 would amend the Consumer Financial Protection Act of 2010 to impose new substantive and procedural limits on CFPB UDAAP authority. It would require rulemaking on civil penalties and the definition of “abusive,” add cost-benefit analysis requirements, restrict the Bureau’s ability to treat discrimination as UDAAP, create a notice-and-cure framework, limit enforcement venue and pleading options, and bar civil money penalties for conduct predating the most recent consumer compliance rating while preserving other remedies.
No committee transcript or vote record is provided, so there is no direct evidence of legislative sentiment from debate or roll call. The bill’s structure suggests a deregulatory or enforcement-limiting approach favored by proponents of clearer standards and more predictable CFPB action, while likely facing criticism from consumer advocates and others who would see it as weakening the Bureau’s enforcement tools and consumer protections.
The main points of contention are the bill’s restrictions on CFPB discretion. Supporters are likely to favor clearer definitions, cost-benefit analysis, notice-and-cure protections, venue limits, and limits on retroactive penalties; opponents are likely to argue these changes would make it harder for the CFPB to stop unfair, deceptive, abusive, or discriminatory conduct and would reduce deterrence. The exclusion of discrimination from UDAAP authority and the narrowing of the abusive standard are especially likely to be disputed.