Page 30 - CARS Standard Program

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank Act)
Unfair, Deceptive, and Abusive Practices (UDAAPS); 12 USC 5531
Commentary
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), signed into federal law July 21st, 2010, all covered persons or service providers (including collateral recovery agents) are legally required to refrain from committing Unfair, Deceptive, or Abusive Acts or Practices (UDAAPs). Although there are similarities between the language in the FDCPA and the Dodd-Frank Act as it applies to self-help repossession activity we will point out, in detail, what constitutes a UDAAP violation under the Dodd-Frank Act with regards to the self-help repossession process.
It is important to know that, while enforcement of the FDCPA is through the Federal Trade Commission, UDAAPs are enforced through the Consumer Financial Protection Bureau (CFPB).
Unfair, Deceptive, or Abusive Acts and Practices, (UDAAPs) can cause significant financial injury, erode consumer confidence, and undermine fair competition in the financial marketplace. Under the Dodd-Frank Act, it is unlawful for any provider of consumer financial products or services or a service provider (this would include self-help repossession service providers) to engage in any unfair, deceptive, or abusive act or practice. The Act also provides the CFPB with rule-making authority and with respect to entities within its jurisdiction, enforcement authority to prevent unfair, deceptive, or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service or the offering of a consumer financial product or service. In addition, the CFPB has supervisory authority for detecting and assessing risks to consumers and to markets for consumer financial products and services. All parties covered by the FDCPA must comply with any obligations they have under the FDCPA, in addition to any obligations to refrain from committing UDAAPs in violation of the Dodd-Frank Act.
The CFPB’s mission is to monitor and enforce compliance issues and violations directly with financial institutions which means that those financial institutions must ensure that the collateral recovery agents they hire also meet CFPB compliance mandates. Here, we will address those potential UDAAP violations that result from the actions of recovery agents. Potential violations include, but are not limited to the following examples:
1. Unfair Acts or Practices:
A. Charging fees to the debtor in excess of the amount agreed upon in a contract between the lender and the recovery agent.
B. Convincing the debtor to give up possession of collateral that is included in bankruptcy.
C. Repossessing collateral over the verbal objections of the debtor. 17