I 

118TH CONGRESS 

1ST SESSION H. R. 6789 

To amend the Consumer Financial Protection Act of 2010 to clarify standards 

for UDAAP enforcement actions brought by the Bureau of Consumer 

Financial Protection, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 14, 2023 

Mr. BARR (for himself, Mr. LUETKEMEYER, Mr. POSEY, Mr. MEUSER, Mr. 

STEIL, Mr. SESSIONS, Ms. DE LA CRUZ, Mr. FITZGERALD, Mr. 

TIMMONS, Mr. ROSE, Mr. MOONEY, Mr. LOUDERMILK, Mr. NORMAN, 

Mrs. KIM of California, and Mr. WILLIAMS of Texas) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Consumer Financial Protection Act of 2010 

to clarify standards for UDAAP enforcement actions 

brought by the Bureau of Consumer Financial Protection, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rectifying Undefined 

5 Descriptions of Abusive Acts and Practices Act’’ or the 

6 ‘‘Rectifying UDAAP Act’’. 

2 

•HR 6789 IH

1 SEC. 2. MITIGATING FACTORS IN ASSESSING CIVIL PEN2 ALTIES. 

3 Section 1055(c) of the Consumer Financial Protec4 tion Act of 2010 (12 U.S.C. 5565(c)) is amended by add5 ing at the end the following: 

6 ‘‘(6) RULEMAKING.—The Bureau shall, not 

7 later than 180 days after the date of the enactment 

8 of this paragraph, issue a rule that establishes poli9 cies and procedures relating to the imposition of civil 

10 monetary penalties sought under this subsection, in11 cluding the application of the mitigating factors de12 scribed in paragraph (3).’’. 

13 SEC. 3. RULEMAKING RELATING TO UNFAIR, DECEPTIVE 

14 OR ABUSIVE ACTS OR PRACTICES. 

15 (a) IN GENERAL.—Section 1031(b) of the Consumer 

16 Financial Protection Act of 2010 (12 U.S.C. 5531) is 

17 amended by striking subsection (b) and inserting the fol18 lowing: 

19 (b) RULEMAKING.— 

20 ‘‘(1) IN GENERAL.—The Bureau may prescribe 

21 rules applicable to a covered person or service pro22 vider identifying as unlawful unfair, deceptive, or 

23 abusive acts or practices in connection with any 

24 transaction with a consumer for a consumer 

25 finanical product or service, or the offering of a con26 sumer financial product or service. Rules under this 

3 

•HR 6789 IH

1 section may include requirements for the purpose of 

2 preventing such acts or practices. 

3 ‘‘(2) COST BENEFIT ANALYSIS REQUIRED.— 

4 Any final rule issued by the Bureau relating to abu5 sive, unfair, or deceptive acts or practices shall in6 clude a cost-benefit analysis. 

7 ‘‘(3) DEFINITION OF ABUSIVE ACT OR PRAC8 TICE.—The Bureau shall, not later than 180 days 

9 after the date of the enactment of this subsection, 

10 issue a rule that defines the term ‘abusive act or 

11 practice’ for the purposes of this section.’’. 

12 (b) OPPORTUNITY FOR COMMENT.—The Bureau of 

13 Consumer Financial Protection shall, not later than 180 

14 days after the date of the enactment of this subsection, 

15 allow the public to submit comments with respect to any 

16 confusion about how the Bureau of Consumer Financial 

17 Protection uses its authority with respect to unfair, decep18 tive, or abusive acts or practices. 

19 SEC. 4. AUTHORITY TO DECLARE AN ACT UNLAWFUL 

20 BASED ON DISCRIMINATION. 

21 The Bureau of Consumer Financial Protection may 

22 not interpret the authority of the Bureau of Consumer Fi23 nancial Protection relating to unfair, deceptive, or abusive 

24 acts and practices, as such term is used in section 1031 

4 

•HR 6789 IH

1 of the Consumer Financial Protection Act of 2010, to in2 clude discriminatory practices. 

3 SEC. 5. CLARIFYING THE ABUSIVE STANDARD FOR THE BU4 REAU OF CONSUMER FINANCIAL PROTEC5 TION. 

6 Section 1031 of the Consumer Financial Protection 

7 Act of 2010 (12 U.S.C. 5531) is amended by striking sub8 section (d) and inserting the following: 

9 ‘‘(d) ABUSIVE.— 

10 ‘‘(1) IN GENERAL.—The Bureau shall have no 

11 authority to declare an act or practice of a covered 

12 person abusive in connection with the provision of a 

13 consumer financial product or service, unless the act 

14 or practice— 

15 ‘‘(A) intentionally and materially interferes 

16 with the ability of a consumer to understand a 

17 term or condition of a consumer financial prod18 uct or service; or 

19 ‘‘(B) takes unreasonable advantage of— 

20 ‘‘(i) a lack of understanding by the 

21 consumer with respect to the possible im22 pact, material risks, costs, or conditions of 

23 the product or service, or the likelihood of 

24 the risks, costs, or conditions of the prodVerDate Sep 11 2014 19:24 Jan 09, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6789.IH H6789
5 

•HR 6789 IH

1 uct or service negatively affecting the con2 sumer; and 

3 ‘‘(ii) the reasonable reliance the con4 sumer places on an affirmative action or 

5 representation of such covered person to 

6 induce such consumer to rely on such ac7 tion or representation. 

8 ‘‘(2) ABUSIVE ACTIONS.—Conduct of a covered 

9 person shall be considered abusive if— 

10 ‘‘(A) the act or practice causes or is likely 

11 to cause substantial injury to consumers which 

12 is not reasonably avoidable by consumers; 

13 ‘‘(B) such substantial injury is not out14 weighed by countervailing benefits to consumers 

15 or to competition; or 

16 ‘‘(C) the conduct is otherwise prohibited by 

17 Federal consumer financial law. 

18 ‘‘(e) GOOD-FAITH EFFORT TO COMPLY.— 

19 ‘‘(1) IN GENERAL.—The Bureau may not seek 

20 monetary relief from a covered person under this 

21 section unless the covered person has not established 

22 by a preponderance of the evidence that they made 

23 a good-faith effort to comply. 

24 ‘‘(2) AUTHORITY TO SEEK LEGAL OR EQUI25 TABLE REMEDIES.—The limitation described in subVerDate Sep 11 2014 19:24 Jan 09, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6789.IH H6789
6 

•HR 6789 IH

1 paragraph (A) shall not restrict the authority of the 

2 Bureau to seek legal or equitable remedies, such as 

3 damages and restitution, to redress an identifiable 

4 consumer injury caused by the abusive acts or prac5 tices of such covered person.’’. 

6 SEC. 6. NOTICE AND OPPORTUNITY TO CURE. 

7 Section 1031 of the Consumer Financial Protection 

8 Act of 2010 (12 U.S.C. 5531) is amended by adding at 

9 the end the following: 

10 ‘‘(g) NOTICE AND OPPORTUNITY TO CURE.— 

11 ‘‘(1) IN GENERAL.—If a covered person self12 identifies a potential unfair, deceptive, or abusive act 

13 or practice carried out by such covered person, the 

14 Bureau shall, not later than 90 days after such self15 identification, provide a written notice in the form of 

16 a potential action and request for response letter or 

17 a notice and opportunity to respond and advise let18 ter of the potential unfair, deceptive, or abusive act 

19 or practice to such covered person and inform the 

20 covered person that such person has 180 days after 

21 the date the covered person receives such notice to 

22 cure such potential unfair, deceptive, or abusive act 

23 before the Bureau may pursue other legal action. 

24 ‘‘(2) TOLLING OF STATUTE OF LIMITATIONS.— 

25 Any applicable statute of limitations that applies to 

7 

•HR 6789 IH

1 conduct under which the Bureau has given notice 

2 and an opportunity to cure shall not toll until— 

3 ‘‘(A) the covered person cures the potential 

4 abusive, unfair, or deceptive act or practice and 

5 notifies the Bureau that such act or practice 

6 has been cured; 

7 ‘‘(B) the covered person notifies the Bu8 reau that such covered person will not cure the 

9 act or practice; or 

10 ‘‘(C) the 180-day period to cure ends.’’. 

11 SEC. 7. ABUSIVE, UNFAIR, OR DECEPTIVE ACTS OR PRAC12 TICES ENFORCEMENT ACTIONS. 

13 (a) IN GENERAL.—Subtitle E of title X of the Con14 sumer Financial Protection Act of 2010 (12 U.S.C. 5561 

15 et seq.) is amended by adding at the end the following 

16 new section: 

17 ‘‘SEC. 1059. UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR 

18 PRACTICES ENFORCEMENT ACTIONS. 

19 ‘‘Enforcement actions brought by the Bureau under 

20 section 1031 under this title shall be brought in— 

21 ‘‘(1) the United States district court located 

22 where the covered person has its headquarters loca23 tion; or 

24 ‘‘(2) the United States District Court for the 

25 District of Columbia.’’. 

8 

•HR 6789 IH

1 (b) ACTIONS UNDER SECTION 1031.—Section 1031 

2 of the Consumer Financial Protection Act of 2010 is 

3 amended by adding at the end the following: 

4 ‘‘(g) ENFORCEMENT ACTIONS.— 

5 ‘‘(1) IN GENERAL.—If the Bureau brings an 

6 enforcement action under this section, the Bureau 

7 shall state with particularity the circumstances that 

8 the Bureau alleges constitute violation of this sec9 tion. 

10 ‘‘(2) ALTERNATIVE CLAIMS.—If the Bureau 

11 brings an enforcement action under this section— 

12 ‘‘(A) claiming that an activity is unfair or 

13 deceptive, the Bureau may not claim in the al14 ternative that the activity is abusive; and 

15 ‘‘(B) claiming that an activity is abusive, 

16 the Bureau may not claim in the alternative 

17 that the activity is unfair or deceptive.’’. 

18 SEC. 8. LOOK-BACK PROVISIONS FOR THE CONSUMER FI19 NANCIAL PROTECTION BUREAU. 

20 Subtitle B of title X of the Consumer Financial Pro21 tection Act of 2010 (12 U.S.C. 5511 et seq.) is amended 

22 by adding at the end the following new section: 

23 ‘‘SEC. 1029B EXAMINATION PERIOD LIMITATIONS. 

24 ‘‘(a) IN GENERAL.—When enforcing Federal con25 sumer financial laws, the Bureau may not seek a civil 

9 

•HR 6789 IH

1 money penalty for any violating conduct that occurred 

2 prior to the most recent assignment of a consumer compli3 ance rating. 

4 ‘‘(b) RULE OF CONSTRUCTION.—This limitation de5 scribed in subsection (a) may not be construed to restrict 

6 the ability of the Bureau to seek other forms of legal or 

7 equitable relief available under subparagraphs (A) through 

8 (G) of section 1055(a)(2) for any violating conduct that 

9 occurred prior to the most recent assignment of a con10 sumer compliance rating.’’. 

Æ