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10.15 Prohibition against Unfair, Deceptive or Abusive Acts or Practices

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10.15 Prohibition against Unfair, Deceptive or Abusive Acts or Practices

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10.15.   Prohibition against Unfair, Deceptive or Abusive Acts or Practices.  The Bureau may take action to prevent a Covered Person or a service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with a consumer financial product.

The Bureau may issues rules identifying as unlawful, unfair, deceptive, or abusive acts or practices in connection with a consumer financial product.  These rules may include requirements for the purpose of preventing such acts or practices.

            The Bureau will issue these rules in consultation with other Federal agencies.[§1031]

                        10.15.1.            Criteria.  The Bureau may not declare a practice unfair unless the practice is likely to cause substantial injury to consumers not reasonably avoidable by consumers, and the injury to consumers is not outweighed by countervailing benefits to consumers or to competition.  The Bureau is directed to consider established public policies, but such policy considerations may not serve as a primary basis for its determination.

            The Bureau may not declare a practice abusive unless the practice materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product, or takes unreasonable advantage of: (i) a lack of understanding by a consumer of the material risks, costs, or conditions of the product; (ii) the inability of the consumer to protect their interests in selecting or using a consumer financial product; or (iii) the reasonable reliance by the consumer on a Covered Person to act in the interests of the consumer.  In issuing rules regarding unfair, deceptive or abusive practices, the Bureau shall provide that creditors may consider the seasonality and irregularity of the documented income of a borrower in the underwriting of, and scheduling of payments for, an extension of credit secured by residential real estate.[§ 1031]