Abusive: Dodd-Frank Section 1031 and the Continuing Struggle to Protect Consumers

Abstract

Section 1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act fundamentally reshaped the consumer protection landscape. Beyond empowering the new Consumer Financial Protection Bureau (CFPB) to address unfair and deceptive practices, Section 1031 established a broad new consumer protection doctrine to reach abusive practices. This Note first contextualizes the need for Section 1031 by examining the roots and shortcomings of existing consumer protection law as embodied in unfairness, deception, and unconscionability doctrines. Next, it chronicles Section 1031's enactment, paying close attention to the Obama Administration's proposed definitions for unfairness, deception, and abusive, along with Congress's replies. Finally, it applies the enacted definition of abusive to several widespread practices in the consumer credit market and urges the CFPB to adopt a broad interpretation of the term as consistent with Congress's long-standing intent to protect consumers.