UDAP (Unfair and Deceptive Acts or Practices)
By David Dickinson
This is the second installment about things I learned while at the ABA's Regulatory Compliance Conference. Here's another short piece on what I learned in a session on UDAP - something we don't talk about much, but is very ugly if the regulators believe your institution is involved in a deceptive act. These are my notes and not necessarily complete sentences.
- There is a bill in Congress to allow FTC to be more involved in the regulation of banks (directly).
- What's deceptive? You'd better be able to substantiate it BEFORE you make the claim.
- Every State has a "UDAP like" law
- New Proposal will expand Reg AA
- Was limited (Credit Practices Rule). The proposed rules have more "teeth" and coverage
- Congress is getting involved.
- Credit card & ODP targeted.
- Exposure beyond Marketing
- Fulfillment has to match promises
- Even if years later and there has been system changes
- "Combined Balance" = my account + ODP/HELOC/OD LOC will get you a UDAP violation and FTC referral. No question.
- Bottom line: The "net impression" is what matters.
