UDAAP

The CFPB's recent guidance on so-called "unfair" bank fees has created legal turmoil for banks and financial firms after the White House claimed the bureau's actions were settled law.

The trade groups, including the American Bankers Association, allege the Consumer Financial Protection Bureau exceeded its authority by claiming discrimination in any financial product violates the federal prohibition on "unfair, deceptive or abusive acts or practices."

The FDIC said Financial Pacific Leasing, a subsidiary of the Oregon bank, charged undisclosed fees to borrowers, made excessive collection calls and disclosed information about customer debts to third parties.

The company agreed to pay a $750,000 to address claims it steered consumers into high-cost loans from affiliated lenders. It will also reimburse consumers $646,000 in fees.

The Consumer Financial Protection Bureau's revocation of a Trump-era policy on abusive practices could mean higher fines and penalties for violators. But it still isn't clear what makes a practice abusive.

A recent statement by acting Director Dave Uejio is the clearest signal that the agency plans to revive strong underwriting standards that the Trump administration eliminated.

The agency's new leadership, which has already unwound numerous actions from the prior administration, said the January 2020 guidance implementing criteria for punishing firms that mistreat customers was “inconsistent with the bureau’s duty to enforce Congress’s standard.”

The bank has agreed to pay $97 million in customer restitution and a $25 million fine to settle allegations by the Consumer Financial Protection Bureau that it deceptively charged overdraft fees for certain ATM and debit card transactions.

A proposal to expand consumer protections in the state was added to a budget bill after being dropped in June. Financial institutions say the measure conflicts with federal law and are working behind the scenes to stop it.

A proposal to expand consumer protections in the state was added to a budget bill after being dropped in June. Financial institutions say the measure conflicts with federal law and are working behind the scenes to stop it.