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#1714898 - 06/27/12 05:36 PM UDAAP Examples
Happy Birthday Skittles Offline
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I am working on bank wide training for UDAAP to make everyone aware of what the regulators are focusing on. I have printed out several articles from the Internet, but if anyone has any real-life examples (either from your institution or another) I'd like to hear about it please. I have some for loans and deposits, but the more the merrier.

Thanks for any help you can provide!
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#1714919 - 06/27/12 06:04 PM Re: UDAAP Examples Skittles
rlcarey Offline
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A checking account package is offered that indicates if you open this account you get a bonus (.10%, .25%, or whatever) on any CD rates. The catch is the customer had to remind the bank that they had this account when they opened new CDs or existing CDs renewed at current market rates. 5-year look back and retoractive interest payments required.
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#1714922 - 06/27/12 06:05 PM Re: UDAAP Examples Skittles
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Here is the CFPB's narrative on the whole topic. I'm sure you started here, but just in case you didn't... It spells out rather clearly what they are looking for.

CFPB talks UDAAP
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#1714930 - 06/27/12 06:12 PM Re: UDAAP Examples Skittles
Happy Birthday Skittles Offline
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Thanks - and Randy that one is really good. I do have the information from the CFPB but putting some of that into language that all employees can understand.
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#1714955 - 06/27/12 06:26 PM Re: UDAAP Examples Skittles
AFaquir Offline
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Yea... I sent you a PM.
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#1723097 - 07/25/12 03:15 PM Re: UDAAP Examples Skittles
bisco Offline
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Great question. I have a scenario I would love to get everyone's thoughts on. UDAAP is fairly vague and interpretations can vary greatly.

This question is in regards to late fees for commercial lending/loans. Currently we have a late fee cap of $2500 (late fee is based on % of loan amount). There are discussions going on to possibly completely lift the cap. Depending on the loan amount, late fees would vary greatly (up to five figures).

What UDAAP implications do you think this presents? How do you think the CFPB would react?

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#1723115 - 07/25/12 03:26 PM Re: UDAAP Examples Skittles
rlcarey Offline
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As long as it is properly covered in your contract, I doubt that you would see any sort of UDAAP findings involving anything with commercial lending. Those transactions are contractually based and are not afforded protection under the typical Federal consumer protection laws.
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#1724715 - 07/30/12 01:42 PM Re: UDAAP Examples rlcarey
sooner_bourne Offline
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rlcarey-
Did this happen at a specific institution or is it a potential example? Either way I agree, I was just wondering if this is a "real life" example.
Thank you!

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#1724736 - 07/30/12 02:15 PM Re: UDAAP Examples AFaquir
nbk2yj2 Offline
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If you don't mind could you send me info as well? I anticipate needing to train this as well.

Thanks

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#1725084 - 07/31/12 12:57 AM Re: UDAAP Examples Skittles
rlcarey Offline
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It was handled through the ROE and is not publicly available information.
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#1725087 - 07/31/12 01:14 AM Re: UDAAP Examples Skittles
Kathleen O. Blanchard Offline

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I am familiar with one where customers who had the " over 50" account were supposed to get perks (free cashiers checks, etc) but had to ask. Bank had to conduct multi year lookback and find all customers who did not receive their free perks. Customers are not required to remember. The bank sold the product, the bank must manage the product.
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#1725135 - 07/31/12 12:51 PM Re: UDAAP Examples Skittles
sooner_bourne Offline
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Thank you rlcarey and Kathleen. I appreciate the info!

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#1725188 - 07/31/12 02:09 PM Re: UDAAP Examples Skittles
Gotwood Offline
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So using the above logic should a merchant be required to tell every customer that if they had a coupon from the local paper they could save money?

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#1725364 - 07/31/12 04:17 PM Re: UDAAP Examples Gotwood
Milby Offline
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Originally Posted By: Gotwood
So using the above logic should a merchant be required to tell every customer that if they had a coupon from the local paper they could save money?
No - the local business does not have a contract with their customers that says they will get a discount on their product... banks do. Banks have a contract that says "open this account and we will give you an extra .10% on all your CDs" - banks are obligated to make sure that happens.

Now I must admit, I think the "Guaranteed Lowest Price" that you see at grocery stores and home improvement stores should be a UDAAP violation... it isn't my job to make sure I am actually paying the lowest price if they are guaranteeing that it is. And don't get me started on car dealerships - I don't see how they get away with half of what they do. I mean...
only $599/month for an E-class Mercedes, just pay TT&L and a $5,000 down payment for 24 months and then another $40,000 at lease end to purchase the vehicle or $500 return fee. (font embelishment is intentional) If it is "only" $599/month, how can you be charged everything else?

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