MBA Releases UDAAP Enforcement Actions Matrix

MBA NewsLink Staff

June 05, 2018

The Mortgage Bankers Association has updated its Unfair, Deceptive or Abusive Acts or Practices Matrix as a member benefit.

The Dodd-Frank Act gives the Bureau of Consumer Financial Protection (formerly the Consumer Financial Protection Bureau) jurisdiction over all covered persons or service providers to enforce the legal prohibition on UDAAPs. Beginning in 2012, the Bureau began periodically publishing Supervisory Highlights to share key examination findings. This includes instances that raised issues related to violations of the prohibition on UDAAPs.

The UDAAP Matrix ( Enforcement Actions Matrix.pdf) provides a list of instances where UDAAPs have been addressed by the BCFP in its Supervisory Highlights. The matrix is organized by category, sub-category (if applicable) and UDAAP. The Supervisory Highlight issue, section and page number is also listed for reference. It should be noted, however, that in addition to the statutory definition provided by Dodd‐Frank, the BCFP has yet to formally address by regulation or otherwise what constitutes an abusive act or practice.

MBA noted while the acts or practices under UDAAP vary among the entities regulated by the BCFP, it identified several common themes found in UDAAPs in the mortgage industry. MBA said the BCFP have consistently brought supervision or enforcement actions related to substantial delays that have resulted in allegedly unfair negative consequences for consumers. This includes delays in trial periods and transfers of mortgages. Another common theme is the waiver of rights. Provisions in agreements that require a broad waiver of rights of consumers generally invite action from the BCFP. Much of this has occurred in agreements that are developed during the loss mitigation process or when engaging in non-retention options. Computer programming errors, and the failure to honor trial modifications following transfer, are also a few common areas.

The UDAAP Matrix is an exclusive MBA member benefit.

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