Federal Reserve Board Request Comment on Proposed Repeal of Regulation AA

The Federal Reserve Board (FRB) has requested comment on a proposal to repeal its Regulation AA, 12 CFR part 227, which was issued pursuant to its
rule writing authority under section 18(f)(1) of the Federal Trade Commission Act. Section 1092(2) of the Dodd-Frank Act repealed section 18(f)(1) of the FTC Act, thus
eliminating the Board’s authority to write rules that address unfair or deceptive acts or practices, which are contained in Regulation AA.  Regulation AA includes the Board’s “credit practices rule,” which prohibits banks from using certain remedies to enforce consumer credit obligations and from including these remedies in their consumer credit contracts.

In connection with the Fed proposal, interagency guidance was issued clarifying that the repeal of the credit practices rules applicable to banks, savings associations, and federal credit unions is not a determination that the prohibited practices contained in those rules are permissible. The regulators believe the practices described in the former credit practices rules could potentially violate the prohibition against unfair or deceptive practices under the Federal Trade Commission Act and Dodd-Frank Act, even in the absence of a specific regulation governing the conduct.

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