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Kathleen L. Kraninger's Speech at the Abusive Acts or Practices Symposium

Good morning.  Thank you to all of you for coming today.  I am delighted to kick off the Bureau’s new symposia series with an important topic: abusive acts or practices under Section 1031 of the Dodd-Frank Act.  

The Bureau’s symposia series is aimed at stimulating a robust, proactive, and transparent dialogue with experts reflecting diverse viewpoints across a range of subject matter areas.  

Through that dialogue, we hope to glean commonsense ideas to help in solving a number of challenging issues the Bureau is facing.  In turn, those ideas will help inform the Bureau’s policy development process.

The symposia series will include topics ranging from the general meaning of abusive acts or practices to behavioral law and economics, small business loan data collection, disparate impact and the Equal Credit Opportunity Act, cost-benefit analysis, and consumer authorized financial data sharing.

We are building on the approach the Bureau took last year when it convened experts on access-to-credit issues and credit invisibles.  And we are also building on the Bureau’s recent Call for Evidence, which sought feedback on the Bureau’s actions and policies.

These types of proactive efforts are precisely how the Bureau intends to proceed as it fulfills its important mission of consumer protection—with a commitment to transparent, productive public discourse and with an open mind on how to approach difficult issues.  

For today’s discussion, we are fortunate to welcome two panels of accomplished UDAAP experts representing a variety of perspectives.  

And I’d like to extend a warm “welcome back” to the former Bureau officials on our panels.  

And to all of our panelists:  I am so glad that you have volunteered your time to share your thoughts today.  Thank you for your participation. Your perspectives are extremely valuable.  I look forward to a robust and productive dialogue.  

Thank you also to the CFPB Symposia working group which led the development of this program, including Hilary Gibson, Delicia Hand, Tim Sheehan, and Christopher Mufarrige.  I appreciate your dedication and effort. 

Before we hear from our panelists, I’d like to say just a few words about today’s topic: abusive acts or practices under the Dodd-Frank Act.  This topic is one of many important and challenging issues facing the Bureau.

With the Dodd-Frank Act, Congress gave the Bureau the authority to protect consumers from unfair, deceptive, or abusive acts or practices, or “UDAAP” – a fundamental and critical responsibility.  But whereas unfairness and deception have been substantially developed, abusiveness does not have the same record.  Indeed, for more than 80 years, the Federal Trade Commission has used its authority under the FTC Act to address unfair and deceptive acts and practices that harm consumers.  Statutory language, regulations, agency policy statements, and a substantial body of case law have clarified the metes and bounds of these concepts.  Over time, this has provided reasonably clear standards for market participants to use in assessing whether their own conduct comports with laws prohibiting unfair and deceptive acts and practices.  

Abusiveness is somewhat different.  Although Congress provided a definition of what constitutes an abusive act or practice in the Dodd-Frank Act, abusiveness  does not have the long and rich history of unfairness or deception.  We have heard from some stakeholders that there is uncertainty about abusiveness’s parameters, which makes it harder for businesses that want to comply with the law to do so. And this uncertainty creates impediments to innovation and other salutary developments in the marketplace.  

The Bureau first announced in the Fall 2018 Unified Regulatory Agenda that it was “considering whether rulemaking or other activities may be helpful to further clarify the meaning of abusive acts or practices” under the Dodd-Frank Act.  Today’s symposium will help inform the Bureau’s thinking as to whether the Bureau should use its rulemaking or other tools to provide clarity about the general meaning of abusiveness—and, if so, which principles should be applied to determine the scope of abusiveness. 

Following this symposium, a transcript will be placed on the Bureau’s website.   

Thank you again for joining the Bureau in this discussion.