The Office of the Comptroller of the Currency (OCC) has issued an updated version of its guidance on unfair or deceptive acts or practices (UDAP) and unfair, deceptive, or abusive acts or practices (UDAAP), titled the “Unfair or Deceptive Acts or Practices and Unfair, Deceptive, or Abusive Acts or Practices” booklet of the Comptroller’s Handbook. Version 1.1 of the booklet brings several important updates for banks under OCC supervision, but these changes also carry implications for entities beyond traditional OCC-regulated institutions, such as debt collection agencies and fintech firms.
The updated booklet outlines the OCC’s expectations regarding the oversight of UDAP and UDAAP risks, providing guidance for OCC examiners in evaluating a bank’s practices related to Section 5 of the Federal Trade Commission Act (FTC Act) and Sections 1031 and 1036 of the Dodd-Frank Act. Both of these sections aim to protect consumers from unfair, deceptive, or abusive practices.
Key Updates in Version 1.1
- Overdraft Services: The updated booklet now provides clearer guidance regarding sound risk management practices associated with overdraft services, a significant area of consumer protection concern. The inclusion of more detailed examination expectations emphasizes the importance of transparency in disclosing overdraft policies and fees.
- Data Protection and Information Security: Reflecting broader regulatory trends, the OCC has incorporated guidance from the Consumer Financial Protection Bureau (CFPB) regarding data protection and information security. This is especially relevant given the evolving landscape of data privacy laws and the rising expectations for safeguarding consumer data.
- Appendix B: UDAP and UDAAP Risk Indicators: The revised guidance also features an updated version of Appendix B, which includes UDAP and UDAAP risk indicators. This tool helps examiners identify potential red flags, assisting in the evaluation of risk management programs.
- Reflecting Regulatory Changes Since 2020: The booklet has been updated to incorporate OCC and interagency issuances that have been published or rescinded since the release of the previous version in June 2020. This ensures that the guidance remains relevant amidst ongoing regulatory shifts.
