This article is the second in a series of six articles concerning UDAAP. Read part one here.
According to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau (CFPB) can declare “unfair,” and thus unlawful, any act or practice in connection with a transaction for a consumer financial product or service, or the offering of a consumer financial product or service, so long as the CFPB has a reasonable basis to conclude that:
So, is unfairness objective or subjective? Well, it is arguably a bit of both, although one can quite readily take the position that it’s completely, inherently subjective. Below are a series of questions related to UDAAP’s “unfairness” standard, with answers derived from information the CFPB provided in version 2.0 of its Supervision and Examination Manual.
Q: What constitutes a “substantial injury”?