UDAAP Dodd-Frank Consumer Protection
United States
2010
Consumer Protection
Overview
The UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) standard was established under Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It grants the Consumer Financial Protection Bureau (CFPB) authority to prohibit financial service providers from engaging in harmful practices that violate consumer rights or distort market fairness.This regulation applies to banks, non-bank lenders, fintech companies, debt collectors, credit card issuers, payment processors, and other consumer-facing financial institutions. UDAAP focuses on transparency, fairness, and ethical treatment throughout the lifecycle of a financial product or service.
Key Obligations
- Avoid unfair practices that cause substantial consumer harm not outweighed by benefits
- Refrain from deceptive practices that mislead consumers through representations or omissions
- Prevent abusive acts that take unreasonable advantage of consumer understanding or circumstances
- Provide clear and accurate disclosures for products, pricing, terms, and risks
- Monitor and remediate consumer complaints and conduct root cause analysis
- Maintain robust compliance programs and employee training to prevent violations
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