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.
As promised, on Oct. 13, 2011, the Consumer Financial Protection Bureau released version 1.0 of its Supervision and Examination Manual. In the short term, the manual will guide the Bureau’s supervision and examination of “large” banks, thrifts and credit unions (i.e., those with total assets greater than $10 billion), and all their affiliates.
Another thing worth mentioning is the Bureau effectively dodged the most feared and least understood word in all of Title X of the Dodd-Frank Act: “abusive.” Recall that Title X gives the Bureau the power to prevent unfair, deceptive, or abusive acts or practices (UDAAP). The Dodd-Frank Act defines unfair and abusive, but left deceptive undefined. Borrowing heavily from prior statements by the Federal Trade Commission, the Federal Deposit Insurance Corp. and other federal regulators, the manual goes to some effort to lay out the standards for these two terms and even provides some examples. But what does the manual say about the term “abusive”?
Nothing, really. The manual quotes the definition of “abusive” from Title X, that an abusive act or practice is one that: