I
119THCONGRESS
1
STSESSION H. R. 1652
To amend the Consumer Financial Protection Act of 2010 to clarify standards
for UDAAP enforcement actions brought by the Bureau of Consumer
Financial Protection, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY27, 2025
Mr. B
ARRintroduced the following bill; which was referred to the Committee
on Financial Services
A BILL
To amend the Consumer Financial Protection Act of 2010
to clarify standards for UDAAP enforcement actions
brought by the Bureau of Consumer Financial Protec-
tion, and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Rectifying Undefined 4
Descriptions of Abusive Acts and Practices Act’’ or the 5
‘‘Rectifying UDAAP Act’’. 6
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SEC. 2. MITIGATING FACTORS IN ASSESSING CIVIL PEN-1
ALTIES. 2
Section 1055(c) of the Consumer Financial Protec-3
tion Act of 2010 (12 U.S.C. 5565(c)) is amended by add-4
ing at the end the following: 5
‘‘(6) R
ULEMAKING.—The Bureau shall, not 6
later than 180 days after the date of the enactment 7
of this paragraph, issue a rule that establishes poli-8
cies and procedures relating to the imposition of civil 9
monetary penalties sought under this subsection, in-10
cluding the application of the mitigating factors de-11
scribed in paragraph (3).’’. 12
SEC. 3. RULEMAKING RELATING TO UNFAIR, DECEPTIVE 13
OR ABUSIVE ACTS OR PRACTICES. 14
(a) I
NGENERAL.—Section 1031 of the Consumer Fi-15
nancial Protection Act of 2010 (12 U.S.C. 5531) is 16
amended by striking subsection (b) and inserting the fol-17
lowing: 18
(b) R
ULEMAKING.— 19
‘‘(1) I
N GENERAL.—The Bureau may prescribe 20
rules applicable to a covered person or service pro-21
vider identifying as unlawful unfair, deceptive, or 22
abusive acts or practices in connection with any 23
transaction with a consumer for a consumer finan-24
cial product or service, or the offering of a consumer 25
financial product or service. Rules under this section 26
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may include requirements for the purpose of pre-1
venting such acts or practices. 2
‘‘(2) C
OST BENEFIT ANALYSIS REQUIRED .— 3
Any final rule issued by the Bureau relating to abu-4
sive, unfair, or deceptive acts or practices shall in-5
clude a cost-benefit analysis. 6
‘‘(3) D
EFINITION OF ABUSIVE ACT OR PRAC -7
TICE.—The Bureau shall, not later than 180 days 8
after the date of the enactment of this subsection, 9
issue a rule that defines the term ‘abusive act or 10
practice’ for the purposes of this section.’’. 11
(b) O
PPORTUNITY FOR COMMENT.—The Bureau of 12
Consumer Financial Protection shall, not later than 180 13
days after the date of the enactment of this subsection, 14
allow the public to submit comments with respect to any 15
confusion about how the Bureau of Consumer Financial 16
Protection uses its authority with respect to unfair, decep-17
tive, or abusive acts or practices. 18
SEC. 4. AUTHORITY TO DECLARE AN ACT UNLAWFUL 19
BASED ON DISCRIMINATION. 20
The Bureau of Consumer Financial Protection may 21
not interpret the authority of the Bureau of Consumer Fi-22
nancial Protection relating to unfair, deceptive, or abusive 23
acts and practices, as such term is used in section 1031 24
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of the Consumer Financial Protection Act of 2010, to in-1
clude discriminatory practices. 2
SEC. 5. CLARIFYING THE ABUSIVE STANDARD FOR THE BU-3
REAU OF CONSUMER FINANCIAL PROTEC-4
TION. 5
Section 1031 of the Consumer Financial Protection 6
Act of 2010 (12 U.S.C. 5531) is amended by striking sub-7
section (d) and inserting the following: 8
‘‘(d) A
BUSIVE.— 9
‘‘(1) I
N GENERAL.—The Bureau shall have no 10
authority to declare an act or practice of a covered 11
person abusive in connection with the provision of a 12
consumer financial product or service, unless the act 13
or practice— 14
‘‘(A) intentionally and materially interferes 15
with the ability of a consumer to understand a 16
term or condition of a consumer financial prod-17
uct or service; or 18
‘‘(B) takes unreasonable advantage of— 19
‘‘(i) a lack of understanding by the 20
consumer with respect to the possible im-21
pact, material risks, costs, or conditions of 22
the product or service, or the likelihood of 23
the risks, costs, or conditions of the prod-24
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uct or service negatively affecting the con-1
sumer; and 2
‘‘(ii) the reasonable reliance the con-3
sumer places on an affirmative action or 4
representation of such covered person to 5
induce such consumer to rely on such ac-6
tion or representation. 7
‘‘(2) A
BUSIVE ACTIONS.—Conduct of a covered 8
person shall be considered abusive if— 9
‘‘(A) the act or practice causes or is likely 10
to cause substantial injury to consumers which 11
is not reasonably avoidable by consumers, pro-12
vided, however, that if the act or practice was 13
timely, clearly and conspicuously disclosed to 14
consumers, the injury is presumed to be reason-15
ably avoidable; or 16
‘‘(B) such substantial injury is not out-17
weighed by countervailing benefits to consumers 18
or to competition. 19
‘‘(e) G
OOD-FAITHEFFORTTOCOMPLY.— 20
‘‘(1) I
N GENERAL.—The Bureau may not seek 21
monetary relief from a covered person under this 22
section unless the covered person has not established 23
by a preponderance of the evidence that they made 24
a good-faith effort to comply. 25
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‘‘(2) AUTHORITY TO SEEK LEGAL OR EQUI -1
TABLE REMEDIES.—The limitation described in sub-2
paragraph (A) shall not restrict the authority of the 3
Bureau to seek legal or equitable remedies, such as 4
damages and restitution, to redress an identifiable 5
consumer injury caused by the abusive acts or prac-6
tices of such covered person.’’. 7
SEC. 6. NOTICE AND OPPORTUNITY TO CURE. 8
Section 1031 of the Consumer Financial Protection 9
Act of 2010 (12 U.S.C. 5531) is amended by adding at 10
the end the following: 11
‘‘(g) N
OTICE ANDOPPORTUNITYTOCURE.— 12
‘‘(1) I
N GENERAL.—If a covered person self- 13
identifies a potential unfair, deceptive, or abusive act 14
or practice carried out by such covered person, the 15
Bureau shall, not later than 90 days after such self- 16
identification, provide a written notice in the form of 17
a potential action and request for response letter or 18
a notice and opportunity to respond and advise let-19
ter of the potential unfair, deceptive, or abusive act 20
or practice to such covered person and inform the 21
covered person that such person has 180 days after 22
the date the covered person receives such notice to 23
cure such potential unfair, deceptive, or abusive act 24
before the Bureau may pursue other legal action. 25
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‘‘(2) TOLLING OF STATUTE OF LIMITATIONS .— 1
Any applicable statute of limitations that applies to 2
conduct under which the Bureau has given notice 3
and an opportunity to cure shall not toll until— 4
‘‘(A) the covered person cures the potential 5
abusive, unfair, or deceptive act or practice and 6
notifies the Bureau that such act or practice 7
has been cured; 8
‘‘(B) the covered person notifies the Bu-9
reau that such covered person will not cure the 10
act or practice; or 11
‘‘(C) the 180-day period to cure ends.’’. 12
SEC. 7. ABUSIVE, UNFAIR, OR DECEPTIVE ACTS OR PRAC-13
TICES ENFORCEMENT ACTIONS. 14
(a) I
NGENERAL.—Subtitle E of title X of the Con-15
sumer Financial Protection Act of 2010 (12 U.S.C. 5561 16
et seq.) is amended by adding at the end the following 17
new section: 18
‘‘SEC. 1059. UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR 19
PRACTICES ENFORCEMENT ACTIONS. 20
‘‘Enforcement actions brought by the Bureau under 21
section 1031 under this title shall be brought in— 22
‘‘(1) the United States district court located 23
where the covered person has its headquarters loca-24
tion; or 25
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‘‘(2) the United States District Court for the 1
District of Columbia.’’. 2
(b) A
CTIONSUNDERSECTION1031.—Section 1031 3
of the Consumer Financial Protection Act of 2010 is 4
amended by adding at the end the following: 5
‘‘(g) E
NFORCEMENTACTIONS.— 6
‘‘(1) I
N GENERAL.—If the Bureau brings an 7
enforcement action under this section, the Bureau 8
shall state with particularity the circumstances that 9
the Bureau alleges constitute violation of this sec-10
tion. 11
‘‘(2) A
LTERNATIVE CLAIMS .—If the Bureau 12
brings an enforcement action under this section— 13
‘‘(A) claiming that an activity is unfair or 14
deceptive, the Bureau may not claim in the al-15
ternative that the activity is abusive; and 16
‘‘(B) claiming that an activity is abusive, 17
the Bureau may not claim in the alternative 18
that the activity is unfair or deceptive.’’. 19
SEC. 8. LOOK-BACK PROVISIONS FOR THE CONSUMER FI-20
NANCIAL PROTECTION BUREAU. 21
Subtitle B of title X of the Consumer Financial Pro-22
tection Act of 2010 (12 U.S.C. 5511 et seq.) is amended 23
by adding at the end the following new section: 24
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‘‘SEC. 1029B EXAMINATION PERIOD LIMITATIONS. 1
‘‘(a) I
NGENERAL.—When enforcing Federal con-2
sumer financial laws, the Bureau may not seek a civil 3
money penalty for any violating conduct that occurred 4
prior to the most recent assignment of a consumer compli-5
ance rating. 6
‘‘(b) R
ULE OFCONSTRUCTION.—This limitation de-7
scribed in subsection (a) may not be construed to restrict 8
the ability of the Bureau to seek other forms of legal or 9
equitable relief available under subparagraphs (A) through 10
(G) of section 1055(a)(2) for any violating conduct that 11
occurred prior to the most recent assignment of a con-12
sumer compliance rating.’’. 13
Æ
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