Join BearingPoint Managing Director Chris Estes and Manager Eileen Perrin in understanding the UDAP Legislation. In May 2008, the Federal Reserve, OTC and NCUA proposed a regulation under section 5(a) of the Federal Trade Commission Act, affectionately known as UDAP (Unfair and Deceptive Acts and Practices). The proposed regulation addresses overdraft processing and credit card activities.
This regulation will ultimately create pressure on financial institution profitability, resulting in lost fee and interest revenue and increased risk management challenges. UDAP will also require costly modifications to systems and processes throughout the account lifecycle. The financial impact on each institution depends on existing policies & practices. If a financial institution has not yet calculated the financial impact of this regulatory change on their income statement, BearingPoint has created a proprietary model to perform a high level calculation that is directionally accurate.
BearingPoint has created an organizational impact assessment tool to assists our clients in identifying the processes that impact them specifically. Organizations need to align their budgets and their resources to be prepared to support UDAP compliance efforts in 2009. Every institution should start investigating revenue enhancement opportunities and BearingPoint is here to ensure you’re fully equipped when this regulation becomes law.
