Why CFPB Payday Revamp is an Even Bigger Deal Than You Think
By softening its view toward payday lenders, some experts say the CFPB is also clarifying what constitutes UDAAP, or, "unfair, deceptive or abusive acts or practices." This is a move that has long been sought by the consumer financial services industry, “a deeper and more rigorous analysis of the unfairness and abusive standards is a refreshing change,” said Jenny.
As Jenny noted, a key impact of this decision is how it will affect consumer choice. "The elephant in the room in UDAAP cases is whether the likelihood of harm can be reasonably avoided for the consumer," she said. "This new approach in the new proposal opens a door to challenge the policy assumption that consumers that choose these products are not allowed to make that choice."
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