Attys Urge CFPB to Clarify 'Abusive' Standard with Guidance

Eric Mogilnicki’s comments from a recent financial services conference are mentioned in Law360. At the conference, panelist lawyers said the Consumer Financial Protection Bureau should not wait to provide a definition of what counts as an "abusive" act or practice under the Dodd-Frank Act.

Mr. Mogilnicki says, “It would not be a bad start for the Bureau to issue some guidance that explains exactly when they’ll enforce, for example, the prohibition on abusive conduct. Think of that as a first draft that we can discuss further in forums like this, experience, and have ripen into a rule after we’re a little further along.” He argued that while such a rulemaking would be the “gold standard” and a goal to work up toward, it could take years to craft a more precise definition for a concept as complex as this one and put it through the paces of notice and comment. “You could start with a middle ground. There are a lot of other tools at the Bureau’s disposal, like statements of policy, bulletins and guidance. Other agencies use these very effectively.”