UDAAP controls for managing risk

Barbara Boccia

Journal of Financial Compliance, 2019, vol. 2, issue 3, 271-283

Abstract: Compliance with unfair, deceptive or abusive acts or practices (UDAAP) principles is a complicated matter for most financial institutions (FIs), large or small. In the USA, UDAAP regulations are broadly defined and fairly subjective in interpretation, especially when applied by regulators with the benefit of hindsight. An allegation of ‘unfair’, ‘deceptive’ or ‘abusive’ can arise in any aspect of the FI’s retail footprint, from the initial development and marketing of products and services, through to management of complaints and servicing. The increased complexity of financial products and services, along with a myriad of communication and delivery methods, has made the compliance task more daunting in terms of preventing UDAAPs from occurring. This paper is intended to help identify potential UDAAP risks and provide practical guidance for mitigating those risks with strong controls as part of a comprehensive compliance management system (CMS).

Keywords: UDAP; UDAAP; unfair; abusive; deceptive (practices); compliance management system (CMS); risk assessment (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2019:v:2:i:3:p:271-283

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