UC Irvine Law Review

Government enforcers have long contended with corporate misconduct, from the abuses of corporate power and monopolization of the late 19th and early 20th centuries to the set up to fail products and digital dark patterns of the 21st century. This Article explains the Consumer Financial Protection Bureau’s (CFPB) Policy Statement on Abusive Acts or Practices, which is appended to this article, and its importance in protecting people from business excesses. The statutory prohibition on illegal abusive conduct was a response to the predatory mortgage lending practices that drove the 2007-2008 financial crisis and sought to reach conduct that might not be considered “unfair” or “deceptive.” However, it is rooted in early 20th century attempts to regulate fair dealing. As government enforcers confront new challenges, they can look to a framework of consumer protection that is ingrained in the American tradition – one based on Congress’ understanding of right and wrong and market reality, rather than theoretical economic models.

This Article places the prohibition on abusive conduct as part of a history dating back to the common law standards of fair dealing. Congress has long tailored federal prohibitions in response to changes to business practices and given government enforcers new tools to meet new challenges. The Article also discusses the key objectives of the statement, including providing a straight-forward and analytical framework to help enforcers evaluate wrongdoing and promote a visceral understanding of the prohibition. Finally, the Article closes by outlining some key aspects of the policy statement and the public policy concerns motivating them, including condemning conduct that tricks people or exploits unequal bargaining power.