SEC. 2. MITIGATING FACTORS IN ASSESSING CIVIL PEN-
ALTIES. 
Section 1055(c) of the Consumer Financial Protec-
tion Act of 2010 (12 U.S.C. 5565(c)) is amended by add-
ing at the end the following: 
‘‘(6) RULEMAKING.—The Bureau shall, not 
later than 180 days after the date of the enactment 
of this paragraph, issue a rule that establishes poli-
cies and procedures relating to the imposition of civil 
monetary penalties sought under this subsection, in-
cluding the application of the mitigating factors de-
scribed in paragraph (3).’’. 
SEC. 3. RULEMAKING RELATING TO UNFAIR, DECEPTIVE 
OR ABUSIVE ACTS OR PRACTICES. 
(a) IN GENERAL.—Section 1031 of the Consumer Fi-
nancial Protection Act of 2010 (12 U.S.C. 5531) is 
amended by striking subsection (b) and inserting the fol-
lowing: 
(b) RULEMAKING.— 
‘‘(1) IN GENERAL.—The Bureau may prescribe 
rules applicable to a covered person or service pro-
vider identifying as unlawful unfair, deceptive, or 
abusive acts or practices in connection with any 
transaction with a consumer for a consumer finan-
cial product or service, or the offering of a consumer 
financial product or service. Rules under this section 
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may include requirements for the purpose of pre-
venting such acts or practices. 
‘‘(2) COST
BENEFIT
ANALYSIS
REQUIRED.— 
Any final rule issued by the Bureau relating to abu-
sive, unfair, or deceptive acts or practices shall in-
clude a cost-benefit analysis. 
‘‘(3) DEFINITION OF ABUSIVE ACT OR PRAC-
TICE.—The Bureau shall, not later than 180 days 
after the date of the enactment of this subsection, 
issue a rule that defines the term ‘abusive act or 
practice’ for the purposes of this section.’’. 
(b) OPPORTUNITY FOR COMMENT.—The Bureau of 
Consumer Financial Protection shall, not later than 180 
days after the date of the enactment of this subsection, 
allow the public to submit comments with respect to any 
confusion about how the Bureau of Consumer Financial 
Protection uses its authority with respect to unfair, decep-
tive, or abusive acts or practices. 
SEC. 4. AUTHORITY TO DECLARE AN ACT UNLAWFUL 
BASED ON DISCRIMINATION. 
The Bureau of Consumer Financial Protection may 
not interpret the authority of the Bureau of Consumer Fi-
nancial Protection relating to unfair, deceptive, or abusive 
acts and practices, as such term is used in section 1031 
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of the Consumer Financial Protection Act of 2010, to in-
clude discriminatory practices. 
SEC. 5. CLARIFYING THE ABUSIVE STANDARD FOR THE BU-
REAU OF CONSUMER FINANCIAL PROTEC-
TION. 
Section 1031 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5531) is amended by striking sub-
section (d) and inserting the following: 
‘‘(d) ABUSIVE.— 
‘‘(1) IN GENERAL.—The Bureau shall have no 
authority to declare an act or practice of a covered 
person abusive in connection with the provision of a 
consumer financial product or service, unless the act 
or practice— 
‘‘(A) intentionally and materially interferes 
with the ability of a consumer to understand a 
term or condition of a consumer financial prod-
uct or service; or 
‘‘(B) takes unreasonable advantage of— 
‘‘(i) a lack of understanding by the 
consumer with respect to the possible im-
pact, material risks, costs, or conditions of 
the product or service, or the likelihood of 
the risks, costs, or conditions of the prod-
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uct or service negatively affecting the con-
sumer; and 
‘‘(ii) the reasonable reliance the con-
sumer places on an affirmative action or 
representation of such covered person to 
induce such consumer to rely on such ac-
tion or representation. 
‘‘(2) ABUSIVE ACTIONS.—Conduct of a covered 
person shall be considered abusive if— 
‘‘(A) the act or practice causes or is likely 
to cause substantial injury to consumers which 
is not reasonably avoidable by consumers, pro-
vided, however, that if the act or practice was 
timely, clearly and conspicuously disclosed to 
consumers, the injury is presumed to be reason-
ably avoidable; or 
‘‘(B) such substantial injury is not out-
weighed by countervailing benefits to consumers 
or to competition. 
‘‘(e) GOOD-FAITH EFFORT TO COMPLY.— 
‘‘(1) IN GENERAL.—The Bureau may not seek 
monetary relief from a covered person under this 
section unless the covered person has not established 
by a preponderance of the evidence that they made 
a good-faith effort to comply. 
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‘‘(2) AUTHORITY
TO
SEEK
LEGAL
OR
EQUI-
TABLE REMEDIES.—The limitation described in sub-
paragraph (A) shall not restrict the authority of the 
Bureau to seek legal or equitable remedies, such as 
damages and restitution, to redress an identifiable 
consumer injury caused by the abusive acts or prac-
tices of such covered person.’’. 
SEC. 6. NOTICE AND OPPORTUNITY TO CURE. 
Section 1031 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5531) is amended by adding at 
the end the following: 
‘‘(g) NOTICE AND OPPORTUNITY TO CURE.— 
‘‘(1) IN GENERAL.—If a covered person self- 
identifies a potential unfair, deceptive, or abusive act 
or practice carried out by such covered person, the 
Bureau shall, not later than 90 days after such self- 
identification, provide a written notice in the form of 
a potential action and request for response letter or 
a notice and opportunity to respond and advise let-
ter of the potential unfair, deceptive, or abusive act 
or practice to such covered person and inform the 
covered person that such person has 180 days after 
the date the covered person receives such notice to 
cure such potential unfair, deceptive, or abusive act 
before the Bureau may pursue other legal action. 
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