Clarifying the abusive standard for the Bureau of Consumer Financial Protection

Section 1031 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5531) is amended by striking subsection (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 product or service; or (B) takes unreasonable advantage of— (i) a lack of understanding by the consumer with respect to the possible impact, material risks, costs, or conditions of the product or service, or the likelihood of the risks, costs, or conditions of the product or service negatively affecting the consumer; and (ii) the reasonable reliance the consumer places on an affirmative action or representation of such covered person to induce such consumer to rely on such action 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, provided, however, that if the act or practice was timely, clearly and conspicuously disclosed to consumers, the injury is presumed to be reasonably avoidable; or (B) such substantial injury is not outweighed 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. (2) Authority to seek legal or equitable remedies The limitation described in subparagraph (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 practices of such covered person..