Regulatory Compliance
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REGamania Runs Wild On You!

When I was a kid, I was a huge Hulkamaniac! I watched WWF wrestling every Saturday and Sunday. Whether it was Saturday Night’s Main Event or WWF Superstars of Wrestling, I was in front of the TV rooting for the Hulkster. His music would crank up, he would run out of the tunnel, and I remember cheering wildly in our family room for the man who was the WWF Heavyweight Champion. Each week seeing Hogan take on a new foe, whether it was against the “Macho Man” Randy Savage, King Kong Bundy, or Andre the Giant, Hulk usually always stood tall at the end of the match with the championship belt still around his waist. I can still remember in his interviews he would say “eat your vitamins and say your prayers.” Well, I can tell you that I made sure to follow those words. Every morning I took my Flintstones’ chewable vitamins and every night I said my prayers.

Nowadays I still heed Hulk Hogan’s advice, I take my multi-vitamins every morning and I pray that we can see some regulatory relief. Unfortunately, I am not sure there will be relief anytime soon. Like Hogan’s opponents who kept coming after him each week, the Consumer Financial Protection Bureau (CPFB) continues to push out new rules and look for issues with current rules.

The one rule that seems to have a Brutus the Barber Beefcake type of “sleeper hold” on the CFPB’s attention is the Unfair, Deceptive, Abusive Acts, and Practices (UDAAP). Based on the new Supervisory Highlights, Summer 2017 released by the CFPB, there were a number of UDAAP findings. Like a Jake “The Snake” Roberts DDT, the amount of UDAAP findings in this release might knock you out.

As Gorilla Monsoon or Bobby “The Brain” Heenan always took us to the highlights on those WWF shows, let me take you to UDAAP highlights from the CFPB:

  • Deceptive misrepresentations to consumers regarding costs and availability of pay-by-phone options
  • Deceptive misrepresentations to consumers concerning benefits and terms of credit card add-on products
  • Deceptively implying that authorized users are responsible for a debt
  • False representations regarding the effect on a consumer’s credit report of paying a debt in full rather than settling the debt in full
  • Freezing of deposit accounts
  • Misrepresentations about monthly service fees
  • Deceptive statements about overdraft protection products
  • Failure to reimburse unused portions of a required service deposit where certain disclosure language was used constituted an unfair practice
  • Deceptive practice involving an arbitration notice on certain residential mortgage loan documents
  • Broad waivers in short sale and cash-for-keys agreements
  • Workplace collection calls
  • Repeated collection calls to third parties
  • Misrepresentations in collections
  • Marketing misrepresentations about small dollar loan products
  • Misrepresentations regarding use of references provided by borrowers in small dollar loan applications
  • Small dollar lending unauthorized debits and overpayments

Like the airplane maneuver in wrestling, reading that list may make you dizzy, I know my head was kind of spinning. It is important to know that UDAAP violations can make you look like the biggest heel or bad guy in the ring. You can be written up in an exam or audit, levied with fines, and worst of all take a hit on your reputation. Unless you are like Ric Flair in the ring (WOOOOOOOOOO! Sorry had to do it) and like the negative attention, I think all of us would admit that we would not like to take that reputational chance.

I wanted to share with you some advice like the advice Hulk Hogan gave me so many years ago: Besides taking your vitamins and saying your prayers, make sure you also look at your own products, services, processes, and procedures to ensure they do not violate UDAAP.

Otherwise, like the Hulkster used to say, “you got to ask yourself one thing Mean Gene, ‘What you gonna do if UDAAP and the CFPB runs wild on you, brother!’”

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