Rectifying UDAAP Act Rectifying Undefined Descriptions of Abusive Acts and Practices Act
Impact
If enacted, HB6789 is expected to significantly affect the regulatory landscape for consumer financial products and services. By redefining what constitutes 'abusive' conduct, it could limit the Bureau's capacity to act against certain practices, which some proponents argue would provide financial entities with more leeway in their operations. However, critics fear that these changes may undermine consumer protections by making it harder to prosecute predatory business practices, thereby putting consumers at greater risk of exploitation.
Summary
House Bill 6789, known as the Rectifying Undefined Descriptions of Abusive Acts and Practices Act, aims to amend the Consumer Financial Protection Act of 2010 by clarifying the standards and procedures for enforcing actions against unfair, deceptive, or abusive acts or practices (UDAAP). The bill particularly focuses on the authority and responsibilities of the Bureau of Consumer Financial Protection in identifying and penalizing such practices. The proposed legislation seeks to establish clearer definitions and mitigating factors that would govern enforcement actions and the imposition of civil penalties against financial service providers.
Contention
One of the notable points of contention surrounding HB6789 is the balancing act between protecting consumers and providing flexibility to financial institutions. Supporters of the bill argue that the existing vague definitions can hamper the ability of businesses to operate efficiently, as they fear robust regulatory scrutiny and penalties for actions that could be interpreted in various ways. Conversely, consumer advocacy groups express concern that tightening the standards for what constitutes abusive practices will serve to sanction potentially harmful actions by financial institutions, reducing safeguards for consumers in an already challenging economic environment.
To expand and enhance consumer, student, servicemember, and small business protections with respect to debt collection practices, and for other purposes.
Enacts the "fostering affordability and integrity through reasonable (FAIR) business practices act", to expand the attorney general's ability to protect New Yorkers from unfair, deceptive and abusive business practices.
Enacts the "fostering affordability and integrity through reasonable (FAIR) business practices act", to expand the attorney general's ability to protect New Yorkers from unfair, deceptive and abusive business practices.