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Regulatory: A peek into what a Cordray-led bureau might look like

Tea leaves reveal that UDAAP is a clear and present danger.

This column is part of a series of articles on the new Consumer Financial Protection Bureau and the upcoming wave of regulations affecting the consumer financial industry

Over the past two segments, we have taken a closer look at the provisions of Title X of the Dodd-Frank Act that give the new Consumer Financial Protection Bureau (CFPB) the power to prevent unfair, deceptive, or abusive acts or practices (UDAAP) in the consumer financial services industry. Along the way, we have learned a few important things:

Importantly, at the time these complaints were filed, there was nothing in any applicable state or federal banking or lending statute or regulation that addressed these issues in the mortgage servicing context. Nonetheless, Cordray said in a press release issued when the complaints were filed that, “[u]nfortunately, many servicers have ... repeatedly chosen to aggravate the [foreclosure] crisis through noncompliance and excuses. ... In Ohio, we have zero tolerance for any more excuses.”

“Noncompliance with what?,” you may be asking yourself. The answer is largely circular: noncompliance with UDAP. Later, as the cases progressed and some passed the motion to dismiss hurdle, Mr. Cordray said in a statement that “[f]or too long, servicers have stood idly by, talking the talk but failing to provide any solutions to the foreclosure crisis.”

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Martin Bishop

Martin J. Bishop is a partner, litigation department vice chairman and co-chair of the consumer financial services litigation practice at Foley & Lardner LLP. He...

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