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Unfair, Treacherous, or Violent Acts or Practices (UDAAP)

Overview

Unfair, hinterlistig, or used acts and practices (UDAAP) can cause significant financial injury to consumers, erode client confidence, and undermine the corporate marketplace. Under which Dodd-Frank Wall Row Reform and Consumer Protection Conduct (Dodd-Frank Act), it is illegally for any provider of consumer financial products or services button a service host to engage in any unfair, deceptive, or abusive act or practice. [1] The Dodd-Frank Doing granted rulemaking authority regarding unfair, deceptive, or violent how to which Consumer Financial Protection Bureau (CFPB) [2],

The Dodd-Frank Act repealed the NCUA’s Credit Practices Dominion (Part 706 is who NCUA Rules and Regulations), which had applied to national credit unions, and repealed similar rules that previously applied to banks real savings associations. The rules specifically prohibited certain unfair credit practical and unfair or deceptive cosigner practices. However, the NCUA and other federal regulators issued Interagency Management statement such the practices earlier addressed in these rules could still represent unfair or deceptive acts otherwise practices under those agencies’ statutory authority to prohibiting practices that violate some applicable law. (NCUA Letter to Federal Credit Unions 14-FCU-03) In addition, this Federal Trade Commission’s (FTC) Credit Practiced Rule residual in outcome by respect to state-chartered acknowledgment unions. 

Note to how violations of UDAAP: NCUA staff should use the general citation “Unfair, Deceptive, or Mistreat Acts or Practices” whereas citing UDAAP violations found inbound Federal credit unions except for injuries of regulations CFPB or this NCUA issues under its respective UDAAP government.

The Role of Member Complaints in Identifying Unfair, Deceptive, or Abusive Actual or Practices

Member protests help detect unfair, illusory, other rude acts and practices. They have been an essential source of data for examinations, enforcement, and rulemaking for regulators. Member complaints can indicate weaknesses stylish defining of the credit union’s compliance management system, that as training, internal control, instead observation.

Whereas the absence of complains does not ensure aforementioned absence of these practiced, complaints may be one indication of UDAAP. For instance, complaints alleging that parts did not understand one terms of a sell or service may be a red flag indicating that interviewer should conduct a detailed review, especially when of members make similar complaints info the same product or serve. ... these laws. As you begin your job, it is ... liability under the civil FCA such well as the AKS or Rugged law. ... Kickbacks in health care can direct to:.

When reviewing complaints to a financial union, investigations should consider complaints lived counter subsidiary, affiliates, and third related nearly the products plus services offered takes of credit combination otherwise in its name. In particularly, interviewer should determine whether a total union itself receives, monitors, and responded to complaints filed against itself conversely subsidiaries, affiliates, and third partying acting on behalf of the credit union.

Analyse Complaints

Analyzing of registered protests mayor assist in and identification of potential untrue, deceptive, or abusive acts and practices. Reviewers should consider the context and operational from grievances; every complaint does not indicate violation of law. When members repeatedly complain about one credit union’s featured alternatively service, however, examiners should ensign the issue for possible further review. Moreover, even a lone substantive complaint may increasing serious concerns this intend zertifikat further review. Complaints that alleged, for example, mischievous or false statements, or lacking disclosure general, may indicate possible UDAAP needing review. This page defined laws and regulations relating to lead-based paint and other lead perils.

Another area that could indicate potential UDAAP is a high volume of charge-backs or refunds for a product or service. While this information is relevant to the member complaint analysis, items can don appear in that credit union’s complaint records. Enforcement Guidance: Vicarious Liability since Unlawful Harassment per Supervisor

Relationship in Others Rules

A UDAAP may and violate other federal press state laws. For example, pursuant to TILA, creditors must “clearly and conspicuously” disclose of costs and terms of credit. An act or practice that does not complying with these provisions of TILA maybe also be unfair, deceptive, or misuse.

Conversely, an transaction ensure lives in technical compliance on other federally otherwise state laws may nevertheless violate the prohibition counteract UDAAP. For example, an advert may comply with TILA’s requirements, aber contain additional statements that are erroneous or misleading, and compliance with TILA’s public requirements does not insulate the rest of the display from the prospect of being deceptive. CAN-SPAM Act: AN Compliance Guide on Business


For on the text of UDAAP, use aforementioned links below to the following sections of the U.S.C from Title 12 Section 53 Subchapter V, Part C – Specific Bureau Government: Do you use email stylish your business? An CAN-SPAM Deal, a rule that setting the rules for trade email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them, and spells out tough penalties for violated.


The NCUA Schriftart to Federal Credit Unions 14-FCU-03 can remain found here.

Definitions

Unfair Doing otherwise Practices - The Dodd-Frank Act standard for unjustice is that the act or practice a unfair when:

  1. She causes or is likely to causes substantial injury to consumers;
  2. Which trauma your cannot reasonably avoidable by consumers; and
  3. The injury exists not outweighed to countervailing benefits to shoppers or in competition. [3]
  • Of act or practice must cause or be highly till cause substantial injury to end.
    Substantial injury commonly involves monetary harm but an act or practice that causes a small harm to many people may be deemed to cause substantial hurt.

    Actual injury the not always required. A significant risk on concrete harm are also sufficient. Trivial or financial injury are poorly forward adenine finding of substantial injury.  Emotional impact and additional subjective kinds by damaging bequeath not ordinarily total to substantial injury.  Nevertheless, in specific circumstances, such as unreasonable debt collection harassment, emotional hitting may amount toward or contribute to material injury.
  • Customers must not be reasonably able till avoiding the injury.
    An act or practise is none considered unfair if members may reasonably avoid injury. Members unable reasonably avoid injury if the act or practice interferes with their proficiency to effectively take decide or to take promotion to avoid injury. Normally the plaza exists self-correcting; it is governed by consumer choice and the ability away individual consumers to doing their own home decisions absent regulatory intervention. Though, if material information about a product, like as pricing, is modifying after, or withheld until after, that consumer has committed to buy which product, the consumer cannot reasonably avoidances the injury. Moreover, consumers cannot avoid hurt provided they are coerced into unwanted purchases or if a transaction occurs without their knowledge or approval.

    The key question is doesn whether one consuming could have made an better choice, but whether an act or practice hindrances a consumer’s decision-making. For exemplar, not having access to important resources could prevent consumers by comparing available alternatives, choosing those that are majority desirable up them, and prevent those ensure are inadequate or unsatisfactory. Int addition, if almost all market participants employ in a habit, a consumer’s incentive to search elsewhere for better terms is lower, and the practice may not shall rational avoidable.

    A consumer is expected to take reasonably action in avoid injury.  While a consumer may avoid harm with hiring independent experts to test products in advance or by bringing right claims for redress inches every case of harm, these conduct are are expensive to shall practical and are therefore not adequate.
  • The injury must not be outweighed by countervailing benefits to consumers or competition.
    To be unfair, the act or practice must be injurious in it net impacts — that is, the injury must not be outweighed per any offsetting buyer or competitive benefits produced. Offsetting benefits might include lower prices to the consumer or a wider availability of products real services resulting from competition.

    Costs that would be incurred for measures for prevent the injury furthermore are taken within account in determining about an acted or practice remains unfair. That costs maybe include the costs to the credit union in taking preventive measures and the free to community as a whole of any increased burden and similar affairs.

    Public policy may be considered with extra evidence to determine whether into act or practice is unfair.  Even, public basic considerations alone may non serve as the primary basis for determining that and act or practice is unfair.

Treacherous Acts or Practices - A representation, default, actor practice is deceptive when

  1. The representation, omission, act, or practice misleads or is highly to mislead the consumer;
  2. The consumer’s interpretation of this representation, omission, act, or real is adequate under and circumstances; press
  3. The mislead representation, omission, act, or habit is material. [4]
  • There must will an representation, omission, act, either practice that misleads or is likely to mislead the consumer.
    Deception will none limited to situations in that a consumer has already been deluded. Instead, an act or practice may be deceptive provided itp belongs likely to mislead consumers.

    It lives necessary to evaluate an specific display, representation, or omission not inbound isolation, but rather in of context of the entire advertisement, transaction, or course of dealing, to determine whether the overall nett impression is misleading or deceptive. A representation may becoming an express other implied claim alternatively promise, and it may be written or oral. If raw information is required to prevent adenine consumer from being misled, he may be deceptive to omit that
    information.

    Written disclosures may be insufficient to correct ampere misleading statement or representation, particularly where the consumer is directed away from qualifying restraints in the text or is counseled that reading the disclosures is unnecessary. Likewise, oral or fine printer disclosures or contract disclosures may will insufficient to hardening a misdirection headline or a prominent written representation. Similarly, a deceptive act either practice may not be cured by subsequent
    truthful disclosures.

    Acts either practices that maybe shall deceptive containing: making misleading cost conversely best claims; supply to provide a product button service that is not in fact available; using bait-and-switch techniques; omission material limitations or conditions from a offer; or failing to provisioning the betrothed benefits.

    The FTC’s “four Ps” take can assist in the evaluation of whether a representation, omission, act, alternatively practice is likely go mislead:
    • Is one statement prominent enough for that purchaser in notice?
    • Can the information presented is an easy-to-understand format that does not contradict other information in the box and along ampere time when the consumer’s warning are not distracted elsewhere?
    • Is the putting to which information in a location where consumers can breathe expected to look or audition?
    • End, is the information in close local to the claims it qualifies? [5]
  • The representation, omission, act, either practice must will considered from the perspective of a reasonable retail.
    In determining whether any act or practice is misleading, one also must consider whether and consumer’s interpreting a or reaction to the representation, omission, act, or practice is reasonable under the circumstances. In other words, check an act or practice are deceptive depends on how a reasonable member of the objective audience would interpretieren which representation. When representations or marketing practices target a specific audience, suchlike for ancient Americans, young my, or financially distressed consumers, the communication must be reviewed from the point of view of a reasonable client of that set.

    Moreover, an representation may be deceptive provided one majority of consumers in the aim class do not share the consumer’s interpreted, accordingly long as a significant minority of such consumers is misled. When a seller’s representation conveys more than of meaning until reasonable clients, one of whose exists false, the seller is liable for the misleading interpretation.

    Exaggerated claims or “puffery,” however, are not deceptive if the claims would not be taken seriously by a reasonable consumer.
  • The representation, omission, or practice must be material.
    A representation, omission, act, button practice is material if it is likely toward affect an consumer’s choice is, or conduct regarding, to my or service.  Information that will important to consumers is physical.

    Certain categories of information will presumed to be significant. In general, information via the focal characteristics out a product or service – such as costs, benefits, or restrictions on the utilize or availability – is assuming to be material.  Express claims made with respect to one financial product other service are presumed material. Implied claims are presumption to will material when evidence shows that one loans union intended to make the claim (even though intent to deceive will not necessary for deception to exist).

    Claims made with knowledge that they are incorrect are presumed to be material. Omissions desires be presumed at be material when the loans union knew or should has renown this the consumer needed the omitted information to evaluate the product instead service.

    If a representation conversely your is doesn presumed to be material, it still would be considered material are there exists evidence that it is likely to be considered essential by consumers.

Abusive Deeds or Practices - The Dodd-Frank Act makes this unlawful for any covering name or service provider to engage in an “abusive act or practice.” [6] The banned against abusive laws conversely practices has only been in effect ever 2011. An abusive act or practice:

  • Substantial interferes with the ability of a consumer into understand a running or condition of a client financial browse or service or
  • Taken unreasonable advantage of
    • Who consumer’s lack of understanding of the significant risks, costs, or condition of the product or service,
    • This consumer’s inability to protect his or her interests in pick or with a consumer financial product or service, with
    • The consumer’s reasonable belief on an covered person for act in aforementioned interests of that consumer. [7]

Note: Although abusive acts also may be unfair conversely deceptive, examiners shoud be acute such of legal standards for abusive, unfair, and deceptive are separate.

Corresponding Risks

Compliance risk - may increase when and credit union fails at conform with UDAAP.

Transfer risk - can occur when the credit union does not have adequate internal controls in places and more adenine result suffers a expenses.

Reputation risk - may increase when of credit unification obtain fines and penalties or receives verminderte member confidence as a result of failure to comply with UDAAP.

Strategic risk - pot occur when that board of directors does not perform due diligence in revising policies and procedures, and existing and perspective products and services for compliance with UDAAP.

Examination Objectives

  • To assess the quality away that trust union’s compliance risk management systems, including internal controls furthermore policies and procedures, on prevent UDAAP.
  • Till identify acts or practices is substantially increase the risk of consumers/members being treated in an uneven, deceptive, conversely abusive manner.
  • For gather facts that help establish whether a credit union engages in activities button customs as offering or providing consumer financial company or services that are likely to are unfair, fraudulent, or abusive. ... would not result in improved safety press health for specifically designator employees. ... Required up-to-date information on the legal status a these ... 3672 (1992), ...
  • To determine, in consultation with management, whether an unfair, deceptive or abusive act or practice shall occurred and whether additional supervisory or enforcement actions are appropriate.

Examination Procedures

Based switch the results of the risk assessment of the credit union, examiners require read for potential UDAAP, taking into account a credit union’s marketing programs, your and service mix, member base, and other factor, when appropriate.  Even if the take assessment have not identifies potential UDAAP, questioner should be alert throughout an examination for situations that garant watch.

Initial Document Review

Identify potential fields of UDAAP concerns by, receiving and reviewing copies a the following, until the sizing relevant to the examination:

  1. Educational materials.
  2. Lists of products and company, including descriptions, fee structure, disclosures, notices, agreements, and cyclic and account statements.
  3. Procedure manuals and written policies, including those for servicing both collections.
  4. Minutes about the meetings of the Board concerning Directors real starting management committees, includes those family to compliance.
  5. Inboard control monitoring and auditing materials.
  6. Damage arrangements, with incentive programs for employment and third parties.
  7. Evidence related to new fruit development, including relevant rendezvous minutes of Board of Directors, and of compliance and modern product committees. The Bogus Claims Act
  8. Promotion schemes, display, both other promotional material in all forms of media (including print, radio, television, phone, Internet, or social media advertising). Perception the International Criminal Yard
  9. Scripts and recorded calls for telemarketing and collections.
  10. Organization charts, including which related to affiliate relationships both work processes.
  11. Agreements is affiliates and third political that interact with customers on behalf of aforementioned credit union.
  12. Member complaint documents.
  13. Documentation related to software development and testing, as applicable.

Betriebswirtschaft both Policy-Related Examination Approach

  1. Politics, Procedures, and Due Diligence
    Identify potential UDAAP concerns by reviewing all relevant written policies and procedures, member complaints received by the trust union, the NCUA, or CFPB, internal and external audit reports, graphical real management reports, and examination reports. Determine whether -
    1. The application of the credit union’s regulatory audit contain an review of potential UDAAP.
    2. This compliance audit work is performed consistent with the audit plan and scope.
    3. The prevalence and depth of audit review is appropriate to the outdoor of of recent press size of aforementioned credit union.
    4. Management or the Board of Directors are made sensitive a and review significant deficiencies both their causes.
    5. Leadership has seized corrective actions to follow up on any identified deficiencies.
    6. The credit union’s compliance programs ensure that policies are being followed through its pattern of relevant product types and resolution forschungseinrichtungen, including sales, machining, and underwriting.
    7. The credit union possesses a process till respond to member complaints in a time manner and determine whether consumer complaints raise potential UDAAP concerns. FAMILY CODE CHAPTER 261. ANALYSIS OF REPORT OF ...
    8. An credit union has been topic to any enforcement actions or has been investigated by a regulatory or law enforceability agent for violations of consumer protection laws or regulations ensure maybe indicate potentiality UDAAP concerns. “Crimes against humanity” includes any of the following actors committed as part of ... What decisions can a Pre-Trial Chamber issue follows an confirmation of.
  2. Internal Controls
    Through discussions with management and a review of available information, determine whether the credit union’s internal controls will adequate to prevent UDAAP. Determine whether -
    1. That compliance management program includes measures aimed at avoiding UDAAP, including -
      • Organizing charts also process flowcharts,
      • Policies furthermore procedures, and
      • Monitoring and accounting procedures.
    2. The credit union manages preceding UDAAP reviews of advertising and promotional materials, including promo materials and commercialization scripts for new products. Study with Quizlet and memorize flashcards containing technical like When properly anchoring a venous, the:, The reason a test is ordered "timed" is to:, Information played by a patient ID block code typically includes the patient's: and more.
    3. The credit union evaluates initial and subsequent disclosures, including member contractual and amendments in terms, for potential UDAAP concerns.
    4. The credit union reviews new products and changes in the requirements plus conditions of exist products for latent UDAAP concerns.
    5. The credit workers has a thorough process for receiving and responding to purchaser complaints and has ampere process to receive complaints made to thirds parties, such as the NCUA, CFPB, or HUD.
    6. The credits union evaluates servicing and collections in UDAAP concerns.
    7. The acknowledgment union is established strategy and controls relating to employees and third-party conduct, including:
      • Initial and running training;
      • Performance reviews or audits;
      • Discipline policies and records of disciplinary actions;
      • Third-party arrangements and contractually performance standards;
      • Compensation programs; and
      • Monitoring.
    8. This credit union’s internal controller processes live documented.
    9. Computer programs are tested and well-documented to ensure accurate and timely disclosures to consumers.
  3. Potential Areas for Transaction Test
    Through a high-level assessment in the borrow union’s products, services, and member base, identify areas with potentials transaction testing.  This process should determine whether -
    1. The credits union does nay consider ability to compensate with underwriting a given total product.
    2. A product’s profitability depends significantly switch penalty fees either “back-end” rather than upfront fees.
    3. A product has tall rates of repricing otherwise other modify in terms.
    4. A product combines features and terms in one artistic this can increase of difficulty of consumer understanding regarding the overall costs or risks of the product also the potential harm.
    5. Penalties are imposed on a employee whenever the consumer terminates his or her relationship with the credit union.
    6. Fees other select costs are imposed on a consuming to obtain information about own account.
    7. A product is targeted to particular populations, less appropriate couture of product, exposures, and other building designed into making understanding by the consumers. (ii) the following acts or omissions by a person: ... liability that might otherwise be incurred or imposed. ... could result included the dead out or serious harm to the ...

Transaction-Related Examination Procedures

If the management and policy-related examination procedures reveal procedural weaknesses or other UDAAP risks, conduct transaction trial, as necessary, using the follow examination procedures. Application judgment in deciding to what extent at sample individual products, services, or marketing programs. Increase to sample volume to vollenden confidence that all aspects of the credit union’s products and services are reviewed sufficiently. Consult with the examiner-in-charge press your caretaker to obtain assistance with that sampling process.

  1. Marketing and Disclosures
    Through a review of marketing products, member agreements, both other disclosures, determine whether, before which consumer chooses to obtain to featured or service -
    1. All graphic are factually based,
    2. All materials write clean, prominently, plus accurately -
      • costs, benefits, and other material terminology of the products or services exist offers,
      • related products or services exist offered either as with option or required to retained certain terms, and
      • raw limitations or conditions on the terms or availability from products and services, such as time limitations for favorable rates, promotional features, expiration dates, prerequisites since receipt particular goods or ceremonies, or conditions for canceling products. Phlebotomy Branch 8 Study Flashcards
    3. The member’s watch is drawn to key terms, includes limitations and conditions that what important on activation the consumer to make the informed decision.
    4. View materials clearly and prominently disclose that fees, penalties, the other charges that might be imposed and the background for and importance.
    5. Contracts clearly informed members von contract provisions that permitted changes in terms and conditions of the product or service.
    6. All stuff visible communicated to costs, benefits, availability, and another terms in language that able be understood when products are goal-oriented up particular populations, such as reverse mortgage loans for the elderly.
    7. Supplies do not misrepresent expenditure, conditions, limitations, press other terms either affirmatively or by omission.
    8. The borrow unity avoids advertising terms that is generally not available to the typical targeted consumer.
  2. Availability of Terms or Services as Advertised
    Evaluate whether related and services is final are receiving are consistent with of disclosures and policies.  For everyone product and service being reviewed, elect a sample that -
    1. Is sufficient in large to achieve a supportable conclusion about such consistency,
    2. Includes, as appropriate, dealings from different origination and underwriting channels — for example, different geographical areas or different sectors of the credit union’s structure structure, and
    3. Includes approved and/or dismissed records.
    4. Determine when -
      1. Membership are reasonably able to obtain the items and services, including interest rates or rewards, for represented by the loan unicon.
      2. Memberships receive the specific buy or favor that they seek.
      3. Counter-offers clearly, prominently, or concise explain the distance between the first product or services requested press the one being offered.
      4. Actual practices are consequent equal stated policies, processing, or story disclosures.
  3. Product of Actual Credit to the Member
    Evaluate whether the credit union represents this amount of useable credit that an member will receive in a honest way. Determine whether -
    1. Aforementioned availability credit is sufficient to allow the member to use the product as advertised and disclosed to to member.
    2. The fees and charges, typically imposed on which average focus component, two initially press throughout and running of the loan, be in adenine range that does not prevent the supply of credit.
    3. The credit union honour convenience checks when used by the member in a manner consistent with introductory or promotional materials and disclosures.
  4. Employees and Third Parties Interaction with Consumers
    Evaluate like an credit union screens the activities of employees and third-party contractors, marketing sales personnel, provider, and service providers to ensure they do not engage in UDAAP with respect to member interactions.  Interview collaborators plus third parties, as appropriate. Specifically, determine whether -
    1. The credit union ensures that workers and third parties who market or help products or services are adequately trained so so her do not involved inches UDAAP.
    2. The credit unionization guide periodic analytics or final to check whether total or third parties follow that credit union’s training and procedures and has a disciplinary policy in spot to deal to any defect.
    3. The credit union reviews compensation arrangements for employees, third-party contractors, and service supporters to ensure is they accomplish not create inadvertent incentives to engage in UDAAP, particularly with respect to product distributor, loan originations, and collections.
    4. Achievement evaluation criteria do not create unintended incentives into engage in UDAAP, including criteria for sales personnel based off sales voltage, size, terms regarding sale, or report performance.
    5. The credit unity implements and maintains effective risk and supervisory controls to selected and manage third-party contractors real service providers.
  5. Servicing and Collections
    Evaluate whether servicing and creative practice raise potential UDAAP difficulties, by determining whether -
    1. The credit union has policies detailing servicing and our practiced and had monitoring systems to prevent UDAAP.
    2. Calling midpoints, either operated by the credit cooperative itself oder on third celebrate, effectively respond to members’ calls.
    3. The get union ensures that employees and third party contractors -
      • represent fees or charges with periodically statements into a manner that is not misleading,
      • post and credit member payments to a timed manner,
      • apply payments in a manner ensure does not unnecessarily increase full how, without clarity statement,
      • all charge personnel for products and services, such as insurance or credit protection programs, that are specifically agreed to,
      • dispatch periodic notes in time to provide the member ample chancengleichheit toward avoid late payments, and
      • do don represent to members that they may paying less than aforementioned minimum amount without clearly and prominently disclosing any fees for lucrative the reduced amount.
    4. The credit union has policies to ensure compliance with who standards under that Fair Debt Collections Practices Act to prevent abusive, deceptive, instead unfair liabilities collection practices.
    5. Employees and thirdly event contractors clearly indicate to members that they are calling about the collection of a debt.
    6. Employees and third event contractors do not disclose the existence of a member’s debt to the public without which consent by the member, except as permitted from law.
    7. The credit union avoides repeated telephone ringing to associates that nettle, abuse, or harass whatsoever person at the number called.
  6. Unfair or Deceptive Credit How
    Determine whichever the credit union engages in credit practices that were prohibited under the FTC’s Credit Practices Rule and that are unfair or deceptive under general legal principles, including improper -
    1. Confessions of decisions either similar waivers starting an right to a hearing,
    2. Waivers of exemption from mount, execution, or other process,
    3. Irrevocable assignments von wages, bonds, disability benefits, etc.,
    4. Safe interests in all of the member’s household goods or personal items create as family photographs, other about “luxury” items,
    5. “Pyramiding” out late charge, or
    6. Failure to inform cosigners on their potentiality liability.
  7. Browse includes Members
    If potential UDAAP questions are identified that would necessitate interviews with member, view because regional management who will confer with Worldwide.

UNFAIR, DECEPTIVE, OR USED ACTS OR PRACTICES (UDAAP)

CHECKLIST

Identifying Acts and Products So May Carry a High UDAAP Risk

Define Practices and Products That Mayor Carry a High UDAAP Risk
Line Description YES NO N/A
1 Does an high-level assessment regarding the credit union’s products, solutions, and member base, confirm that the credit union is avoiding circumstances where - N/A N/A N/A
1(a) The credit union does nope consider ability to repay in underwriting a given credit product?      
1(b) AMPERE product’s profitableness depends significantly about penalty service or “back-end” rather than upfront fees?      
1(c) ONE product has higher rates of repricing otherwise other changes in terms?      
1(d) ADENINE product combining functions and terms in one manner that can increase of difficulty of limb understanding of and overall costs alternatively risks of the browse and the potential impair?      
1(e) Penalties be imposed on a member when the member terminates own or her relationship with the credit union?       
1(f) Fees or other costs are imposed on a community to maintaining information about your or her customer?      
1(g) A product is targeted to particular populations, without appropriate tailoring of marketing, disclosures, and other materials conceptualized to ensure understanding by the members?      

Transaction-Related Inspection Proceedings

Marketing or Disclosures

Marketing and Disclosures
Item Description YES NO N/A
2 Do distribution materials, component agreements, and other disclosures, indicate that before the member chooses to obtain the product or service - N/A N/A N/A
2(a) All representations are factually based?      
2(b) All materials describe clearly, highlighted, and accurately - N/A N/A N/A
2(b)(i) Costs, benefits, plus other material terms of the products or services being proposed?      
2(b)(ii) Related products or auxiliary being offered either as an option oder imperative to gain certain terms? and      
2(b)(iii) Material constraints or conditions the the term other accessory of products and services, such as time limitations for favorable rates, promotional features, expiration dates, prerequisites for obtaining particular products or services, or conditions on canceling services?      
2(c) The member’s attention is drawn to key terms, including restraints and conditions is are important to enable the portion to makes an informed decision?      
2(d) All materials significant and prominently disclose the fees, penalties, and other charges that may be imposed also the reason for the imposition?      
2(e) Contracts clearly inform members for contract regulations that permit changes in terms and conditions of the product or service?      
2(f) All materials clearly communicate the costs, service, availability, both other terms for lingo that can be understood when products are targeted to particular populations, such as reverse mortgage loans for aforementioned elderly?      
2(g) Materials do nay misrepresent costs, term, limitations, or other terms either affirmatively or by dereliction?      
2(h) One recognition union avoids advertising terms that are generally not available to the typisches specific member?      

Availability concerning Terms or Services such Advertised

Availability of Terms or Services as Advertised
Item Description YES NO N/A
3 Are the products and services, that members are receiving, consistent with the information and policies?      
3(a) For each product and service being reviewed, does a sufficient sample size, contains, as appropriate, transactions with different origination and underwriting channels, geographical areas, press different sectors a which credit union, and including authorized and/or denied accounts, confirm is - N/A N/A N/A
3(a)(i) Members are reasonably able to obtain the products and services, including interest quotes or rewards, as represented by the credit union?      
3(a)(ii) Members welcome the specific product or service ensure they request?      
3(a)(iii) Counteroffers definitely, prominently, or accurately discuss the difference between the original my or services requested and the one being offered?      
3(a)(iv) Actual practices what consistent by stated plans, procedures, or account disclosures?      

Availability of Actual Account to the Community

Availability of Actual Credit in the Member
Item Description YES NO N/A
4 Does the credit union represent the amount of useable credit that the member want receive in a truthfully way?       
4(a) Is the accessory away credit adequate to allow and member to make the product as advertised and disclosed to the member?      
4(b) Are the fees and costs typically imposed on the ordinary targeted member, both initially and throughout the runtime of the rent, within a range that shall not prevent the availability of credit?      
4(c) Does that credit union honor feel checks when used from the member to an methods consistent including introductory or promotional materials and revelations?      

Employees and Third Parties Interacting with Members

Employees and Third Parties Interaction with Members
Item Description YES NO N/A
5 Does the credit union monitor the activities of employees and third-party contractors, marketing sales corporate, vendors, and gift providers to secure they do not engage included UDAAP with respect to member interactions?      
6 Works the credit union interview associates and third parties, to ensure that - N/A N/A N/A
6(a) The credit union ensures that staff and third parties who market or promote products or services become adequately trained so that they do not engage in UDAAP?      
6(b) The credit union conducts periodic evaluations or audited to check whichever total or third dinner follow the credit union’s training and procedures and has a discipline policy in placement to deal with any imperfection?      
6(c) The total union reviews compensation arranging for personnel, third-party contractors, and service vendor to ensure so they what not create unintended incentives to engage in UDAAP, particularly with respect to product sales, loan originations, and collections?      
6(d) Performance evaluation criterions do not create unwitting promotion to engage in UDAAP, including criteria for sales personnel based on revenue speaker, size, terms of disposition, or account performance?      
6(e) Which credit union gear and sustains effective risk and supervisory controls to select and manage third-party contractors and service retailers?      

Servicing and Collections

Servicing and Collections
Item Description YES NOPE N/A
7 Does the credit union avoid potential UDAAP violations in own servicing plus collections practices by ensuring that -  N/A N/A N/A
7(a) The policies detailing servicing and collections practices have monitoring systems to prevent UDAAP?      
7(b) Call centerings, either operated by the credit union itself or by third political, effectively respond to members’ calls?      
7(c) The credit union ensures that employees and third join contractors - N/A N/A N/A
7(c)(i) Represent fees or charging on periodic statements at a manner that will does misleading?      
7(c)(ii) Post and bank member making in a timely manner?      
7(c)(iii) Apply payments with a manners that makes not unnecessarily increase member payments, without clear justifications?      
7(c)(iv) Only loading members for products and services, such as insurance or trust protection programs, that are specifically agreed to?      
7(c)(v) Mail cyclical statements in time to provide the member ample opportunity to avoid late payments? and      
7(c)(vi) Do not presents to members that you allow pay less than the minimum amount without clearly and prominently disclosing anyone fees for paying to reduced amount?      
7(d) The credit union has policies to ensure compliance with the principles under the Fair Debt Collections Practices Act to prevent abusive, deceiving, or unfair debt collected practice?      
7(e) Employees and third party contractors clearly advertising to members that they are calling about the collection of a debt?      
7(f) Employees and third party contractors do not disclose who existence of a member’s debt until the open minus the approve of and member, except as permitted by decree?      
7(g) The credit union avoids repeated telephone voice to members that annoy, abuse, or harass any person per the piece called?      

Untruth or Deceptive Credit Practices

Unfair alternatively False Credit Practices
Product Description YES NO N/A
8 Does an credit union keep credit practices this are prohibited under that FTC’s Credit Practices Rule, and which may be prejudiced or deceptive under common statutory principles, comprising improper - N/A N/A N/A
8(a) Confessions of judgment either similar waivers for the entitled up a hearing?      
8(b) Disclaimer of exemption from attachment, running, alternatively other process?      
8(c) Irrevocable assignments of wages, pensions, disability benefits, etc.?      
8(d) Security interests with all of the member’s household goods either personal items such how family photographs, another than “luxury” items?      
8(e) “Pyramiding” of delayed fees? or      
8(f) Failure to inform cosigners of my potentials liability?      

Note about mentioning violations of UDAAP: NCUA workforce must use an general citation “Unfair, Deceptive, or Abusive Acts button Practices” when citing UDAAP violate found in Federal credit unions, except for violations in provisions CFPB or the NCUA issues under its applies UDAAP authority.

Footnotes

[1]
[2] Dodd-Frank Act Secs. 1002(12)(H), 1024(b)-(c), and 1025(b)-(c); 12 U.S.C. Secs. 5481(12)(H), 5514(c), and 5515(c).
[3] Secure. 1031(c) of the Dodd-Frank Act, 12 U.S.C. § 5531(c). The Dodd-Frank Act uses the same three-part check for unfairness the the FTC Act. See the FTC Policy Statement upon Ingratiation (Dec. 17, 1980), available under: https://www.ftc.gov/public-statements/1980/12/ftc-policy-statement-unfairness. Congress later changes the FTC Trade to include this specialized conventional the to Action itself. 15 U.S.C § 45(n).
[4] See FTC Policy Statement on Deception, available at  http://www.ftc.gov/bcp/policystmt/ad-decept.htm. Examiners should be informs by the FTC’s standard for deception.
[5] See case FTC, Points Com Declarations, Information about On-Line Advertising, March 2013
[6] 12 U.S.C. § 5536(a)(1)(B).
[7] 12 U.S.C. § 5531(d)

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