---
kind: "section"
citation: "12 U.S.C. § 5531"
title: "12"
title_heading: "Banks and Banking"
number: "5531"
heading: "Prohibiting unfair, deceptive, or abusive acts or practices"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5531"
units:
  - "Chapter 53 — Wall Street Reform and Consumer Protection"
  - "Subchapter V — Bureau of Consumer Financial Protection"
  - "Part C — Specific Bureau Authorities"
---

# §5531. Prohibiting unfair, deceptive, or abusive acts or practices

- (a) **In general—** The [Bureau](/usc/12/5301.md?p=4) may take any action authorized under part E to prevent a [covered person](/usc/12/5481.md?p=6) or [service provider](/usc/12/5481.md?p=26-A) from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a [consumer](/usc/12/5481.md?p=4) for a [consumer financial product or service](/usc/12/5481.md?p=5), or the offering of a [consumer financial product or service](/usc/12/5481.md?p=5).
- (b) **Rulemaking—** The [Bureau](/usc/12/5301.md?p=4) may prescribe rules applicable to a [covered person](/usc/12/5481.md?p=6) or [service provider](/usc/12/5481.md?p=26-A) identifying as unlawful unfair, deceptive, or abusive acts or practices in connection with any transaction with a [consumer](/usc/12/5481.md?p=4) for a [consumer financial product or service](/usc/12/5481.md?p=5), or the offering of a [consumer financial product or service](/usc/12/5481.md?p=5). Rules under this section may include requirements for the purpose of preventing such acts or practices.
- (c) **Unfairness—**
  - (1) **In general—** The [Bureau](/usc/12/5301.md?p=4) shall have no authority under this section to declare an act or practice in connection with a transaction with a [consumer](/usc/12/5481.md?p=4) for a [consumer financial product or service](/usc/12/5481.md?p=5), or the offering of a [consumer financial product or service](/usc/12/5481.md?p=5), to be unlawful on the grounds that such act or practice is unfair, unless the [Bureau](/usc/12/5301.md?p=4) has a reasonable basis to conclude that—
    - (A) the act or practice causes or is likely to cause substantial injury to [consumers](/usc/12/5481.md?p=4) which is not reasonably avoidable by [consumers](/usc/12/5481.md?p=4); and
    - (B) such substantial injury is not outweighed by countervailing benefits to [consumers](/usc/12/5481.md?p=4) or to competition.
  - (2) **Consideration of public policies—** In determining whether an act or practice is unfair, the [Bureau](/usc/12/5301.md?p=4) may consider established public policies as evidence to be considered with all other evidence. Such public policy considerations may not serve as a primary basis for such determination.
- (d) **Abusive—** The [Bureau](/usc/12/5301.md?p=4) shall have no authority under this section to declare an act or practice abusive in connection with the provision of a [consumer financial product or service](/usc/12/5481.md?p=5), unless the act or practice—
  - (1) materially interferes with the ability of a [consumer](/usc/12/5481.md?p=4) to understand a term or condition of a [consumer financial product or service](/usc/12/5481.md?p=5); or
  - (2) takes unreasonable advantage of—
    - (A) a lack of understanding on the part of the [consumer](/usc/12/5481.md?p=4) of the material risks, costs, or conditions of the product or service;
    - (B) the inability of the [consumer](/usc/12/5481.md?p=4) to protect the interests of the [consumer](/usc/12/5481.md?p=4) in selecting or using a [consumer financial product or service](/usc/12/5481.md?p=5); or
    - (C) the reasonable reliance by the [consumer](/usc/12/5481.md?p=4) on a [covered person](/usc/12/5481.md?p=6) to act in the interests of the [consumer](/usc/12/5481.md?p=4).
- (e) **Consultation—** In prescribing rules under this section, the [Bureau](/usc/12/5301.md?p=4) shall consult with the [Federal banking agencies](/usc/12/5301.md?p=10-B), or other Federal agencies, as appropriate, concerning the consistency of the proposed rule with prudential, market, or systemic objectives administered by such agencies.
- (f) **Consideration of seasonal income—** The rules of the [Bureau](/usc/12/5301.md?p=4) under this section shall provide, with respect to an extension of [credit](/usc/12/5481.md?p=7) secured by residential [real estate](/usc/12/1707.md?p=g) or a dwelling, if documented income of the borrower, [including](/usc/12/5301.md?p=18-A) income from a small business, is a repayment source for an extension of [credit](/usc/12/5481.md?p=7) secured by residential [real estate](/usc/12/1707.md?p=g) or a dwelling, the creditor may consider the seasonality and irregularity of such income in the underwriting of and scheduling of payments for such [credit](/usc/12/5481.md?p=7).

## Source credit

(Pub. L. 111–203, title X, § 1031, July 21, 2010, 124 Stat. 2005.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 111–203, title X, § 1037, July 21, 2010, 124 Stat. 2011, provided that: “This subtitle [subtitle C (§§ 1031–1037), enacting this part] shall take effect on the designated transfer date.”

[The term “designated transfer date” is defined in section 5481(9) of this title as the date established under section 5582 of this title.]