Abusiveness: Statutory Text, Not Rorschach Test — Taking Surplusage Seriously

Stephen Van Meter served as Deputy General Counsel of the Consumer Financial Protection Bureau, leading the Office of Law and Policy, until his retirement from public service in 2021.  He also served as Acting General Counsel of the agency at various times, most recently from April to November of 2021, and served at the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System. 

The Dodd-Frank Act’s prohibition on abusive conduct¹ has been in effect for almost 15 years. In that span, little progress has been made in developing a sustained and coherent theory of abusiveness, by which I mean a relatively rich, layered, and stable understanding that garners broad and lasting acceptance, akin to those we have for the kindred concepts of unfairness and deception.²  That sort of understanding, or even meaningful progress in that direction, has eluded us.  

Perhaps worse, we do not even seem to have any common agreement on how to talk constructively about abusiveness — a policy-neutral set of legal or other principles that can ground a conversation across different perspectives. In the face of this mire, the Consumer Financial Protection Bureau (CFPB) has recently indicated interest in substantive rulemaking on the topic.³ Clearly, it is time to start getting serious about abusiveness. 

This brief article is an effort in that direction. It will not attempt to explain why any particular practice is abusive (or not), or even how the four different parts of the abusiveness provision should be understood. Before we can turn fruitfully to those sorts of issues, I think, we first need to wrestle with a preliminary question:  what should even count as a viable theory of abusiveness — one warranting serious consideration — in the first place? This question, in turn, demands that we attend to a second one:  are there principles or standards we can point to that both (1) are not dependent upon particular policy commitments (and thus should be widely accepted), and (2) provide us with tests by which to compare the relative merits of competing interpretations and to separate viable theories from unworkable ones.  

Fortunately, there are such principles and standards. In particular, when well-established canons of statutory construction are applied to the text and structure of the abusiveness prohibition and related provisions in Dodd-Frank, it becomes clear that there are four distinct variants of abusive conduct, that each must have independent power, that each is subject to meaningful constraint, and, as a result, that there are important limits on both how broadly and how narrowly each variant can be interpreted.⁴ This meta-theory of abusiveness can provide us with minimum criteria we can use to separate viable from unworkable interpretations and, I hope, can be the start of forming a common language with which to talk about the prohibition. 

The Discourse to Date

We may live in a hyper-polarized age, but if you consider how right and left have talked about abusiveness, you might well infer their agreement that the concept is subject to little in the way of constraint.  

Among conservatives and industry representatives, this claim is made fairly expressly,⁵ and has produced both calls to excise the abusiveness provision from the U.S. Code⁶ and the issuance, during the first Trump Administration, of a policy statement containing limitations that — appropriately⁷  — did not even purport to interpret or be derived from the statute.⁸ Firms facing CFPB claims of abusive conduct have gone even further, challenging the prohibition in court — unsuccessfully — as unconstitutional on non-delegation or vagueness and due process grounds.⁹ All of these sources bespeak a fear that abusiveness could mean whatever the Bureau — or a particular Director — might say it did.

Among progressives, the lack of constraint claim has been made more implicitly: it might be inferred from their declining either to enunciate meaningful limiting principles or to disavow any use the CFPB might make of its abusiveness authority. Most significantly, this approach can be seen in a second CFPB policy statement on abusiveness, issued during the Biden Administration.¹⁰ There seems to be an inability — or at least an unwillingness — to specify anything that abusiveness would not cover. The limited academic discussion of the prohibition seems to confirm the amorphous nature of the concept,¹¹ with commentators seeing in abusiveness and its variants everything from the encoding of behavioral economics or unconscionability principles¹² to its redundancy with unfairness.¹³ Legal practitioners advising clients, sensibly, have tried to derive from CFPB enforcement actions some sound rules of thumb for avoiding regulatory attention and criticism, but these practical rules of thumb typically are not grounded in the text or structure of the statute.¹⁴

In other words, people talking about abusiveness often tend to see in it what they would like (or fear) to see there: it becomes a sort of Rorschach test for one’s own policy goals, projects, and concerns. This tendency depreciates how much the text of the statute, especially in combination with common canons of statutory construction, can tell us about the meaning of abusiveness.  

The Meta-Theory in Three Canons

Established Meaning Canon

The established meaning canon (sometimes called the prior construction canon) tells us that if a statute uses words or phrases that have already received authoritative construction by a jurisdiction’s highest court, or even uniform construction by inferior courts or a responsible administrative agency, those words or phrases are to be understood according to that construction.¹⁵  In other words, when a statute uses a term with a well-established legal meaning, that term should be understood, in the new statute, to have carried that established meaning along with it.  

For present purposes, this matters not because of anything in the abusiveness prohibition itself, but because right alongside that prohibition, Congress also prohibited unfair and deceptive conduct in the Dodd-Frank Act. At the time of Dodd-Frank’s enactment, unfairness and deception were terms that had established meanings under the Federal Trade Commission Act:  they were governed by principles enunciated in FTC policy statements that had endured for over a quarter-century, and been adopted by other agencies and by the courts (and, in the case of unfairness, by Congress).¹⁶

So, this tells us that unfairness and deception should be understood to mean the same things in Dodd-Frank that they do under the FTC Act. That should not be a controversial proposition. But why does this matter?

Canon Against Surplusage

The surplusage canon tells us that, if possible, every word and every provision of a statute is to be given effect. None should be ignored, and none should needlessly be given an interpretation that causes it to duplicate another provision or to have no consequence.¹⁷ Or, more colloquially, Congress does not waste its breath.  

So, when Congress wrote Dodd-Frank to outlaw not only unfairness and deception but also abusiveness, it told us that — while some overlap may be permitted and perhaps expected — abusiveness must have some force outside of the established meanings for deception and unfairness. The Venn diagram would look like this:

This observation is not a new one: many commenters have pointed out that, under the surplusage canon, abusiveness must cover something beyond unfairness and deception; even skeptics of the Bureau’s past approach to abusiveness seem to have acknowledged as much.¹⁸ So this observation, too, should not be a controversial one.  

But this observation does not go nearly far enough. The diagram above fails to appreciate both the full force of the canon in showing us the robustness of abusiveness and the canon’s ability to delineate limiting principles for the prohibition.

Conjunctive/Disjunctive Canon

The conjunctive/disjunctive canon tells us that the word “and” generally joins a conjunctive list, while “or” generally joins a disjunctive list. In other words, Congress follows basic rules of language and logic. (Odd that we need a “canon” for this, I think, but there seems to be one.¹⁹ ) The text of the abusiveness standard, of course, is not a conjunctive multi-part test (like those for its cousins unfairness and deception); rather, it is a disjunctive list of variants. So, while common parlance may have us talk about “the abusiveness prohibition,” the conjunctive/disjunctive canon confirms that Congress enacted four new and separate conduct prohibitions, all of which fall under the umbrella of abusiveness.  

The Venn diagram of Unfairness, Deception, and Abusiveness, accordingly, is not a set of three interlocking circles. It looks more like this:

Consequences

There are four significant consequences to taking these observations — centered around the surplusage canon — seriously:

First, each variant of abusiveness must cover ground that is not occupied by either unfairness or deception. It is not just “abusiveness writ large” that has to cover something new.  

Second, each variant of abusiveness has to cover ground not occupied by the other three variants. As a result, there is a diverse range of new territory that abusiveness must cover.

Third, an alternative way of stating the second consequence is that no variant or variants of abusiveness can be interpreted so broadly that it (or they) swallow some other variant. Thus, the second consequence is not just an empowering observation for abusiveness; it is also an interpretive limit for each of its variants. 

Fourth, no variant of abusiveness, either alone or together with other variants, can completely occupy the ground covered by either unfairness or deception.²⁰ The surplusage canon cuts both ways here. Along with the abusiveness provision, Congress in Dodd-Frank also enacted prohibitions against unfair or deceptive conduct that the CFPB can regulate or prosecute. Thus, the canon against surplusage tells us that unfairness and deception also get to claim their own space — Congress does not waste its breath in that way, either — so no variant(s) of abusiveness can swallow up either of them.

This fourth consequence may provoke both surprise and objections. It seems broadly accepted that abusiveness must extend beyond unfairness and deception — perhaps because there was a general understanding, based on the context and history of Dodd-Frank, that it was meant to be additive to those concepts.²¹ But it might be maintained that this gives us no reason to think that unfairness and deception must have independent force. After all, there is no legislative context or history telling us that. The problem with that view is that nothing limits the scope or operation of the surplusage canon to those situations in which legislative context or history confirm it:  the canon applies independently as a means of interpreting statutory text. As Scalia and Garner explain:

If a provision is susceptible of (1) a meaning that gives it an effect already achieved by another provision, or that deprives another provision of all independent effect, and (2) another meaning that leaves both provisions with some independent operation, the latter should be preferred.²²  (Emphasis added.)    

So, whether we regard abusiveness as a new provision added to unfairness and deception, or instead (and more accurately in the case of Dodd-Frank) as a related provision enacted together with those prohibitions, the canon insists on operating in both directions — on both empowering and constraining abusiveness.²³ The only constraint on the operation of the surplusage canon is that there must, in fact, be a viable interpretation of the statutory text that satisfies the canon:  as noted earlier, the surplusage canon tells us that, if possible, every word and every provision of a statute is to be given effect.  

Conclusion

These observations lead to two important conclusions.  

First, for much the same reasons that the first two consequences noted above establish the power and reach of each abusiveness variant, the third and fourth consequences establish significant limits. While the argument is relatively abstract at this point, the power of these consequences should not be underestimated: they ensure that abusiveness has varied reach beyond unfairness and deception and they constrain viable interpretations of abusiveness (and each of its variants). In this way, the four consequences constrain both how abusiveness can be employed to declare conduct unlawful and to what extent abusiveness can be legitimately narrowed or diluted by regulatory (or judicial) interpretation.  

To provide one somewhat concrete example: if a proposed or implicit²⁴ interpretation of the material interference variant would engulf deception — e.g., by declaring all deceptive conduct to constitute material interference, or by encircling all circumstances in which consumers, reasonable or not, are misled to their detriment — it would be too broad. At the same time, an interpretation that would render material interference a subset of deception — for example, by interpreting its terms to carry requirements of consumer reasonableness and consumer harm — would be impermissibly narrow.   

Second, and relatedly — and so long as there exists a viable interpretation of the abusiveness prohibition that would satisfy the surplusage canon — these observations establish conditions that every proffered interpretation of abusiveness should have to meet. My bold contention here is simply that we should not take seriously any interpretation of abusiveness that does not satisfy them (at least if one or more alternative interpretations would do so).  

This approach can establish a shared playing field on which contrasting interpretations can compete: a framework for constructive engagement among differing views that establishes both standards for judging one view of abusiveness to be superior to another and — perhaps more important, from my perspective — a way to start speaking in a common language, rather than past one another. Such a framework seems necessary for us to develop a coherent and sustainable theory of abusiveness that — like those we have for deception and unfairness — can garner some measure of acceptance both in the courts and across Administrations. In other words, we can start getting serious about abusiveness.

This does not mean, of course, that within these constraints there is not ample room for debate among competing ideas. There are enough vague or general terms in the statutory provision, and enough variance in policy preferences, to make that likelihood almost certain. But that debate — and the work of developing interpretations that meet the conditions outlined above — needs to begin. Abusiveness is not an inkblot for our policy preferences and concerns; it is a law, much like other laws. We should start treating it as such.

The opinions shared in this article are the author’s own and do not reflect the views of any organization they are affiliated with.

^[1]  See 12 U.S.C. §§ 5531(a) and 5536(a)(1)(B).  Section 5531(d) states that: The Bureau shall have no authority under this section to declare an act or practice abusive . . . , unless the act or practice— (1) materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or (2) takes unreasonable advantage of— (A) a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service;(B) the inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service; or (C) the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.

^[2]  Of course, this is not to say that there are no disagreements about how the principles of unfairness and deception should be applied in particular cases, but instead that the principles themselves are broadly accepted and sufficiently intelligible to guide both the conduct of market actors and legal judgments about that conduct.

^[3]  See generally https://www.consumerfinance.gov/rules-policy/regulatory-agenda/ (materials related to the Bureau’s Spring 2025 Unified Agenda).

^[4]  For example — as will be explained further below — the material interference variant of abusiveness should not be interpreted so broadly as to encompass all of deception; likewise, material interference should not be interpreted so narrowly as to become a subset of deception.

^[5]  See, e.g., CFPB Symposium: Abusive Acts or Practices (June 25, 2019) (2019 Symposium), Written Statements of Panelists, available at https://www.consumerfinance.gov/about-us/events/archive-past-events/cfpb-symposium-abusive-acts-or-practices/.

^[6]  See, e.g., Executive Summary of the Financial Choice Act (June 7, 2016), available at https://financialservices.house.gov/uploadedfiles/financial_choice_act-_executive_summary.pdf.

^[7]  To be clear, by “appropriately” I do not mean to endorse the policies expressed in the document.  I mean only to approve the choice of vehicle and the absence of interpretive work as matters of administrative law:  it is appropriate for a policy statement to focus on agency priorities — how the agency intends to use its authorities — rather than the legal limits of those authorities.  That is precisely what the document did.  Further, it was appropriate — on the basic metric of honesty — that the document did not pretend to be interpretive of the statute, as it clearly was not.  

^[8]  See generally Statement of Policy Regarding Prohibition on Abusive Acts or Practices (January 24, 2020), available at https://files.consumerfinance.gov/f/documents/cfpb_abusiveness-enforcement-policy_statement.pdf.

^[9]  See, e.g., Community Financial Services Association v. CFPB, 51 F.4^th 616, 633-635 (5^th Cir. 2022); CFPB v. ITT Educational Services, 219 F.Supp.3d 878, 899-906 (S.D. Ind. 2015).

^[10]  See generally Statement of Policy Regarding Prohibition on Abusive Acts or Practices (April 3, 2023), available at https://files.consumerfinance.gov/f/documents/cfpb_statement-of-policy-regarding-prohibition-abusive-acts_2023-03.pdf.  Like its predecessor, this policy statement was swiftly rescinded by the next Administration.  See Statement of Policy Regarding Prohibition on Abusive Acts or Practices; Rescission (March 8, 2021), available at https://files.consumerfinance.gov/f/documents/cfpb_abusiveness-policy-statement-consolidated_2021-03.pdf; Withdrawal of Bureau guidance, interpretive rules, policy statements, and advisory opinions (May 12, 2025), available at https://www.federalregister.gov/documents/2025/05/12/2025-08286/interpretive-rules-policy-statements-and-advisory-opinions-withdrawal.  For a detailed analysis and critique of the 2023 policy statement, see E. Mogilnicki, The Consumer Financial Protection Bureau’s Abusive Policy Statement, 140 Banking L.J. 377 (2023).

^[11]  There is at least one significant exception to this pattern.  In his written submission to the 2019 Symposium, “Abusive” Acts and Practices:  Towards a Definition? (available at https://files.consumerfinance.gov/f/documents/cfpb_levitin-written-statement_symposium-abusive.pdf), Professor Adam Levitin presented a close textual analysis of both the abusiveness provision overall and each of its variants, exploring in some detail what sorts of conduct abusiveness could be read to cover.  Though I do not mean to endorse every proposition in his essay, Professor Levitin’s submission at least represents the sort of analysis we need, and stands, in my view, as the best discussion of abusiveness we have.

^[12]  See, e.g., P. Corrigan, “Abusive” Acts and Practices:  Dodd-Frank’s Behaviorally Informed Authority Over Consumer Credit Markets and its Application to Teaser Rates, 18 N.Y.U. J. Legis. & Pub. Pol’y 125 (2015); C. Alexander, Abusive:  Dodd-Frank Section 1031 and the Continuing Struggle to Protect Consumers, St. John’s University School of Law Legal Studies Research Paper Series, Paper #10-193 (March 2011), available at http://ssrn.com/abstract=1719600.  See generally N. Silber, Reasonable Behavior at the CFPB, 7 Brook. J. Corp. Fin. & Com. L. 87 (2012).

^[13]  See J. Roquemore, The CFPB’s Ambiguous “Abusive” Standard, 22 N.C. Banking Inst. 191 (2018).

^[14]  See, e.g., E. Mogilnicki and E. Moran, The CFPB’s Enforcement of the Prohibition on Abusive Acts and Practices, BNA Banking Report, 104 BNKR 236 (Feb. 3, 2015); O. Lev and C. Shelton, An Analysis of the CFPB’s Abusiveness Claims:  Part 2, Law360 (Mar. 21, 2016), available at https://www.mayerbrown.com/-/media/files/news/2016/03/an-analysis-of-the-cfpbs-abusiveness-claims-part-2/files/ananalysisofthecfpbsabusivenessclaimspart2/fileattachment/ananalysisofthecfpbsabusivenessclaimspart2.pdf.

^[15]  See generally A. Scalia and B. Garner, Reading Law:  The Interpretation of Legal Texts, at 322-326 (2012).

^[16]  See, e.g., 15 U.S.C. 45(n) (Congressional adoption in FTC Act of standards in FTC Policy Statement on Unfairness); OCC Advisory Letter 2002-3, Guidance on Unfair or Deceptive Acts or Practices (March 22, 2002); Board of Governors of the Federal Reserve System and Federal Deposit Insurance Corporation, Guidance on Unfair or Deceptive Acts or Practices (May 30, 2022); American Financial Services Association v. FTC, 767 F.2d 957 (1985); Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152 (2012).  The unfairness standards articulated in the FTC Act are substantively similar to those in Dodd-Frank.

^[17]  See generally A. Scalia and B. Garner, Reading Law:  The Interpretation of Legal Texts, at 174-179 (2012).

^[18]  See, e.g., T. Zywicki, Statement Prepared for Consumer Financial Protection Bureau Abusive Acts or Practices Symposium, available at https://files.consumerfinance.gov/f/documents/cfpb_zywicki-written-statement_symposium-abusive.pdf.

^[19]  See generally A. Scalia and B. Garner, Reading Law:  The Interpretation of Legal Texts, at 116-125 (2012).

^[20]  This proposition actually understates the constraint. The separate ground allowed to unfairness — the ground not occupied by any of the abusiveness variants — must also extend beyond deception, and vice versa.

^[21]  See S. Rep. No. 111-176, at 172 (2010) (“Current law prohibits unfair or deceptive acts or practices. The addition of ‘abusive’ will ensure that the Bureau is empowered to cover practices where providers unreasonably take advantage of consumers.”)

^[22]  A. Scalia and B. Garner, Reading Law:  The Interpretation of Legal Texts, at 176 (2012). 

^[23]  Note that this can be contrasted with the concept of lesser-included offenses in criminal law. In those cases, the lesser-included offense is not deprived of effect by the greater offense, because it makes unlawful and punishes conduct that may not satisfy all the elements of the greater offense; and the greater offense both requires more egregious conduct and carries more severe penalties. UDAAP, by contrast, consists of three co-equal prohibitions in the Dodd-Frank Act, enacted together and each carrying the same consequences for those who violate them.

^[24]  For example, a particular application of the material interference prohibition — say, in an enforcement action — may necessarily imply an interpretation of the provision so broad that it leaves no independent territory for deception.

Open Banker curates and shares policy perspectives in the evolving landscape of financial services for free.

If an idea matters, you’ll find it here. If you find an idea here, it matters. 

Interested in contributing to Open Banker? Send us an email at [email protected].

OPEN BANKER SALON - JUNE 5, 2026

We started Open Banker to raise the quality of financial policy debate. Now, we are bringing the newsletter to life with our first ever event: Open Banker Salon. This isn't a typical conference. No 40-minute talking-head panels. No bland keynotes. The Salon is designed for real intellectual engagement with in-depth debate-style discussions.

Location: The Aspen Institute, Washington, DC

Standard pricing ends on Monday. Pay just $795. Register here today!