Washington, D.C. — The Consumer Financial Protection Bureau (CFPB) today released a new policy statement to define abusive conduct in consumer financial markets and summarize supporting precedents. In response, the American Economic Liberties Project released the following statement.

“This policy statement is crystal clear: just as Dodd-Frank intended, the CFPB will use the full extent of its existing authority to hold powerful corporate actors accountable when they cheat, defraud, or exploit American consumers,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “This will protect American consumers across the country and serve as a wake-up call to corporations all-too willing to break the law to pad profits.”

The Dodd-Frank Act bans abusive acts or practices in connection with the provision of consumer financial products or services. Today’s policy statement — which does not establish new legal requirements — clarifies that  “abusive” conduct includes concealing important elements of a product or service through manipulative user interfaces, using outsized market power to capture consumers, and taking unreasonable advantage of consumers through gaps in financial literacy, low-income status, or consumer trust that financial institutions will act in their best interest. This statement will empower the agency to better combat dominant corporations’ abusive behavior across consumer financial markets and make it easier for businesses large and small to comply with the law.

Since the passage of Dodd-Frank, the CFPB has brought more than 40 cases alleging abusive conduct by corporate actors, “ranging from predatory student lending practices to charging surprise overdraft fees,” according to the agency.  The CFPB’s policy statement follows a previous CFPB policy statement in 2020, which laid out a common-sense framework for applying the abusiveness standard in supervision and enforcement.

Learn more about Economic Liberties here.

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