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Version 00 · Introduced in House · Feb 27, 2025
Rectifying Undefined Descriptions of Abusive Acts and Practices Act or the Rectifying UDAAP Act
This bill restricts the Consumer Financial Protection Bureau’s (CFPB’s) authority to deem a financial act or practice abusive for purposes of enforcement activities. Currently, the CFPB may take enforcement action against a financial product or service provider in connection with any transaction with a consumer for a consumer financial product or service that is unfair, deceptive, or abusive.
Specifically, the bill prohibits the CFPB from including discrimination as an abusive practice. Further, the bill revises what an abusive practice is, including by additionally requiring the practice to intentionally interfere with the ability of a consumer to understand a term or condition.
Showing the opening paragraphs of the official summary.
The bill also establishes additional criteria for abusive practices. Particularly, a practice is considered abusive if (1) it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers, where timely disclosed conduct is presumed to be reasonably avoidable; or (2) the substantial injury is not outweighed by countervailing benefits to consumers or to competition.
The bill also eliminates the CFPB’s ability to seek monetary relief for unfair, deceptive, or abusive practices if the provider establishes a good faith effort to comply with requirements.
The bill establishes rulemaking requirements, including requiring a cost-benefit analysis for a rule relating to unfair, deceptive, or abusive practices.
Finally, the bill establishes the right for providers to cure violations if they self-report and limits the CFPB’s use of alternative claims in court.
People & committees
Rep. Barr, Andy [R-KY-6] · R–KY
Legislative record
A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.
Referred to the House Committee on Financial Services.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: Dec 16, 2025. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-02-27 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
This bill proposes changes to how the Consumer Financial Protection Bureau regulates consumer financial products and services. It would require a rule defining abusive practices and new procedures for financial penalties. It would also limit penalties for older violations while preserving some other remedies. These changes would affect financial providers subject to the law and consumers who use their products and services.
The Bureau shall, not later than 180 days after the date of the enactment of this subsection, issue a rule that defines the term abusive act or practice for the purposes of this section.
The Bureau shall, not later than 180 days after the date of the enactment of this paragraph, issue a rule that establishes policies and procedures relating to the imposition of civil monetary penalties sought under this subsection, including the application of the mitigating factors described in paragraph (3).
When enforcing Federal consumer financial laws, the Bureau may not seek a civil money penalty for any violating conduct that occurred prior to the most recent assignment of a consumer compliance rating.
This limitation described in subsection (a) may not be construed to restrict the ability of the Bureau to seek other forms of legal or equitable relief available under subparagraphs (A) through (G) of section 1055(a)(2)
Section 2 would require the Bureau to issue a rule governing civil financial penalties within 180 days after enactment. That rule must address existing mitigating factors—circumstances relevant to reducing a penalty—but the bill does not reproduce those factors.
The Bureau shall, not later than 180 days after the date of the enactment of this paragraph, issue a rule that establishes policies and procedures relating to the imposition of civil monetary penalties sought under this subsection, including the application of the mitigating factors described in paragraph (3).
Section 3 would authorize, but not require, rules identifying unlawful unfair, deceptive, or abusive practices by covered providers and service providers in consumer financial transactions or offerings. Those rules could include requirements intended to prevent such practices.
The Bureau may prescribe rules applicable to a covered person or service provider identifying as unlawful unfair, deceptive, or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service. Rules under this section may include requirements for the purpose of preventing such acts or practices.
Every final Bureau rule relating to abusive, unfair, or deceptive practices would have to include an analysis of costs and benefits.
Any final rule issued by the Bureau relating to abusive, unfair, or deceptive acts or practices shall include a cost-benefit analysis.
Within 180 days after enactment, the Bureau would have to issue a rule defining an abusive act or practice for purposes of section 1031.
The Bureau shall, not later than 180 days after the date of the enactment of this subsection, issue a rule that defines the term abusive act or practice for the purposes of this section.
Within 180 days after enactment, the Bureau would have to allow public comments about confusion over how it uses its authority concerning unfair, deceptive, or abusive practices. The text does not specify how long that comment opportunity must remain open.
The Bureau of Consumer Financial Protection shall, not later than 180 days after the date of the enactment of this subsection, allow the public to submit comments with respect to any confusion about how the Bureau of Consumer Financial Protection uses its authority with respect to unfair, deceptive, or abusive acts or practices.
Section 4 would prohibit the Bureau from interpreting its section 1031 authority over unfair, deceptive, or abusive practices to include discriminatory practices. This restriction concerns that specified authority; the text does not describe other discrimination laws.
The Bureau of Consumer Financial Protection may not interpret the authority of the Bureau of Consumer Financial Protection relating to unfair, deceptive, or abusive acts and practices, as such term is used in section 1031 of the Consumer Financial Protection Act of 2010, to include discriminatory practices.
Section 5 would replace the statutory abusive-practices standard. Its first threshold would prohibit the Bureau from declaring a covered provider's conduct abusive unless it either intentionally and materially interferes with a consumer's understanding of a product or service term, or meets the separate unreasonable-advantage test.
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:
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—
The unreasonable-advantage test would require both a consumer's lack of understanding about specified product consequences and the consumer's reasonable reliance on a provider's affirmative action or representation intended to induce that reliance.
(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.
A separate paragraph would say conduct is abusive if it causes or is likely to cause substantial consumer injury that consumers cannot reasonably avoid, or if such injury is not outweighed by benefits to consumers or competition. The text connects these alternatives with “or”; their relationship to the preceding threshold is not expressly explained.
(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.
If a practice was disclosed to consumers in a timely, clear, and conspicuous way, the proposed abusive-practices standard would presume that consumers could reasonably avoid the injury. The provision creates a presumption, rather than expressly declaring all disclosed conduct lawful.
provided, however, that if the act or practice was timely, clearly and conspicuously disclosed to consumers, the injury is presumed to be reasonably avoidable
Section 5 would generally prevent the Bureau from seeking monetary relief under section 1031 when a covered provider proves a good-faith effort to comply by a preponderance of the evidence—meaning more likely than not. The following paragraph would preserve certain remedies for consumer injury, although its cross-reference is unclear.
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.
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.
The remedies paragraph would preserve authority to seek remedies such as damages and restitution—compensation and repayment—for identifiable consumer injury caused by abusive practices. However, it refers to a “subparagraph (A)” that does not appear in the proposed good-faith subsection, leaving the cross-reference unclear.
(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.
Section 6 would require written notice within 90 days after a covered provider identifies its own potentially unfair, deceptive, or abusive practice. The notice must give the provider 180 days from receipt to correct the potential practice before the Bureau may pursue other legal action.
If a covered person self-identifies a potential unfair, deceptive, or abusive act or practice carried out by such covered person, the Bureau shall, not later than 90 days after such self-identification, provide a written notice in the form of a potential action and request for response letter or a notice and opportunity to respond and advise letter of the potential unfair, deceptive, or abusive act or practice to such covered person and inform the covered person that such person has 180 days after the date the covered person receives such notice to cure such potential unfair, deceptive, or abusive act before the Bureau may pursue other legal action.
For conduct receiving notice and an opportunity to correct it, section 6 says the applicable legal filing deadline “shall not toll until” the provider corrects the practice and notifies the Bureau, says it will not correct it, or the 180-day period ends. Tolling means pausing a deadline's running. The wording does not establish a pause during the correction period or specify how long any later pause would last.
Any applicable statute of limitations that applies to conduct under which the Bureau has given notice and an opportunity to cure shall not toll until— (A) the covered person cures the potential abusive, unfair, or deceptive act or practice and notifies the Bureau that such act or practice has been cured; (B) the covered person notifies the Bureau that such covered person will not cure the act or practice; or (C) the 180-day period to cure ends.
Section 7 would require Bureau enforcement actions under section 1031 to be brought in federal district court either where the covered provider has its headquarters or in the District of Columbia.
Enforcement actions brought by the Bureau under section 1031 under this title shall be brought in— (1) the United States district court located where the covered person has its headquarters location; or (2) the United States District Court for the District of Columbia.
In section 1031 enforcement actions, the Bureau would have to describe specifically the circumstances it alleges constitute a violation.
If the Bureau brings an enforcement action under this section, the Bureau shall state with particularity the circumstances that the Bureau alleges constitute violation of this section.
The Bureau could not allege that the same activity was abusive as an alternative to alleging it was unfair or deceptive, or make the reverse alternative claim. This addresses alternative legal grounds for challenging the same activity.
If the Bureau brings an enforcement action under this section— (A) claiming that an activity is unfair or deceptive, the Bureau may not claim in the alternative that the activity is abusive; and (B) claiming that an activity is abusive, the Bureau may not claim in the alternative that the activity is unfair or deceptive.
Section 8 would prohibit the Bureau, when enforcing federal consumer financial laws, from seeking civil financial penalties for violations occurring before the most recent assignment of a consumer compliance rating. The cutoff would depend on that rating event, rather than a fixed number of years.
When enforcing Federal consumer financial laws, the Bureau may not seek a civil money penalty for any violating conduct that occurred prior to the most recent assignment of a consumer compliance rating.
The older-conduct penalty restriction would preserve the Bureau's ability to seek other remedies listed in section 1055(a)(2)(A)–(G) for the same conduct. Those remedies are referenced but not reproduced in the supplied bill.
This limitation described in subsection (a) may not be construed to restrict the ability of the Bureau to seek other forms of legal or equitable relief available under subparagraphs (A) through (G) of section 1055(a)(2) for any violating conduct that occurred prior to the most recent assignment of a consumer compliance rating.
The supplied official-actions snapshot, updated December 16, 2025, records introduction in the House and referral to the House Committee on Financial Services on February 27, 2025. It supplies no later legislative action; that does not establish whether the bill subsequently advanced or became law.
Source snapshot updated 2025-12-16T20:21:49Z. 2025-02-27: Referred to the House Committee on Financial Services. 2025-02-27: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-02-27. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy attachment to appropriations was identified in the complete supplied introduced text. This conclusion applies only to that version and does not establish the absence of riders in other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified in the complete supplied introduced text. This conclusion applies only to that version; the bundle does not establish formal earmark status in other versions or accompanying materials.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
None identified in the reviewed text
No materially narrow carve-out, special exemption, or preferential treatment was identified in the complete supplied introduced text. Generally applicable protections do not become targeted benefits solely because eligibility is conditional. This conclusion applies only to the supplied introduced version and does not establish the absence of targeted benefits in other versions or accompanying materials.
Full text preserved for this analysis. Legislative record snapshot: Dec 16, 2025. How PlainBill uses AI