In a recent development that will come as a relief to many corporations, the Consumer Financial Protection Bureau’s (CFPB) interpretation of its Unfair Deceptive and Abusive Acts and Practice (UDAAP) authority, announced in the March 2022 update to its Supervision and Examination Manual, has been found lacking by a district court.
The CFPB’s expanded interpretation of its UDAAP authority has been vacated by a district court on September 8, as seen in the case of Chamber of Commerce v. CFPB, Case 6:22-cv-00381, slip op. (E.D. Tex. Sept. 8, 2023). Under Director Rohit Chopra, the CFPB updated the UDAAP section of its Manual for the purposes of expanding its authority and ultimately strengthening consumer protection.
The ruling effectively means that organizations will no longer need to allocate funds for compliance with the CFPB’s wide-ranging interpretation of its UDAAP authority in numerous instances. Experts are of the opinion that businesses will see considerable savings as a result of the court’s decision, providing them with more leeway to invest in their services and products instead of allocating budget for compliance with the perceived broad regulatory interpretation.
The original piece can be read at JD Supra. More updates on this case, along with analysis and commentary by legal scholars, can be expected in the coming weeks as businesses, law firms, and regulatory bodies continue to comprehend and react to the impact of this decision.