Several regulatory agencies have jointly issued guidance to banks, saving associations, and Federal credit unions concerning the repeal of consumer protection regulations promulgated under the FTC Act. The Board of Governors of the Federal Reserve System (the Board), the Consumer Financial Protection Bureau (CFPB), the National Credit Union Administration (NCUA), and the Office of the Comptroller of Currency (the OCC) jointly issued guidance on August 22, 2014 to banks, savings associations, and Federal credit unions explaining that the repeal of certain regulations as a result of the Dodd-Frank Act should not be construed as a tacit approval of these prohibited practices addressed in the regulations, and that the CFPB may still enforce such rules in principal under its general mandate to prohibit deceptive practices.
The agencies collectively issued Interagency Guidance Regarding Unfair or Deceptive Credit Practices on August 22, 2014. The agencies explain that, as a consequence the enactment of the Dodd-Frank Act, the creation of the CFPB, and the removal of rulemaking authority previously held by the Board, NCUA and the Federal Home Loan Bank Board/Office of Thrift Supervision, the regulations applicable to banks, savings associations, and Federal credit unions issued under the FTC Act that were designed to emulate the FTC’s Fair Credit Practices Rule were being repealed. These regulations typically concerned issues such as misrepresentations surrounding cosigner liability, certain prohibited terms in consumer contracts, and the improper use of late fees.
Although these rules are being repealed, the agencies note that the CFPB intends to effectively operate as if these rules are still in place. Specifically, the agencies explain that:
The Agencies believe that, depending on the facts and circumstances, if banks, savings associations, and Federal credit unions engage in the unfair or deceptive practices described in these former credit practices rules, such conduct may violate the prohibition against unfair or deceptive practices in Section 5 of the FTC Act and Sections 1031 and 1036 of the Dodd-Frank Act. The Agencies may determine that statutory violations exist even in the absence of a specific regulation governing the conduct.
As such, banks, savings associations, and Federal credit unions have been advised that nothing has changed, and that all should continue to govern their actions as if these regulations were still in place.