Venable of counsel Jonathan Pompan was quoted in a July 6, 2012 Law360 article on the Consumer Financial Protection Bureau’s authority to bring investigations and enforcement actions for alleged “abusive” practices in violation of the Consumer Financial Protection Act. The CFPB, however, has not defined the conduct that constitutes an “abusive” act or practice for financial products and services, including those advertised or provided by nonbanks.
“Right now, the director and the bureau haven't said much about their view of what abusive means other than a couple of statements to the press and in their examination manual,” said Pompan on the murky nature of how the CFPB will interpret the prohibition. “Without any precedent from the CFPB, the perception is they may be looking to play a game of gotcha given how broadly the staff can interpret their authority to prohibit abusive practices.” Pompan added, “And while in the short run that may serve their interest, it doesn't do anything to help the overall marketplace and help promote the availability of products for consumers.”