The American Financial Services Association and five other trade associations are pushing back against a proposed statement of policy regarding prohibition on abusive acts or practices released by the Consumer Financial Protection Bureau this spring.

To recap, the bureau said an abusive act or practice either “materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service” or “takes unreasonable advantage of” a consumer in one of three ways, including:

—A lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service

—The inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service

—The reasonable reliance by the consumer on a covered person to act in the interests of the consumer

“Since the enactment of the Consumer Financial Protection Act of 2010 (CFPA), government enforcers and supervisory agencies have taken dozens of actions to condemn prohibited abusive conduct,” bureau officials said when releasing the policy statement in April.

“The CFPB is issuing this policy statement to summarize those actions and explain how the CFPB analyzes the elements of abusiveness through relevant examples, with the goal of providing an analytical framework to fellow government enforcers and to the market for how to identify violative acts or practices.”

However, AFSA senior vice president Celia Winslow contends that the bureau not only did not accomplish its goal with the policy statement, the regulator created more confusion. Winslow sent an eight-page letter to CFPB director Rohit Chopra on July 3.

Winslow indicated AFSA’s four primary concerns with this policy statement include:

—It is inconsistent with the statutory term it seeks to clarify

—It would make common business practices “abusive” and demonstrates a fundamental lack of understanding of consumer-credit businesses

—It is not sustainable

—It cannot be implemented in practice or with fairness

Winslow wrapped up her letter to Chopra explaining how policy seems to vary greatly depending on who the CFPB director is.

“If CFPB directors of the same party can’t provide definitions of ‘abusive’ that are in the same ballpark as each other, the only certainty industry participants can have is that the definition of abusive is subject to change every few years. That is not responsible governance,” Winslow wrote.

“Creating risk and uncertainty will only result in responsible entities doing less business or passing their cost of compliance on to consumers. The policy statement therefore defeats the CFPB’s supposed mission to ensure a fair, transparent, and competitive market for consumer credit,” she went on to say.

Dated the same day as Winslow’s letter, an even longer communication was sent to Chopra by AFSA along with five other organizations, including:

—Bank Policy Institute

—Center for Capital Markets Competitiveness, U.S. Chamber of Commerce

—Consumer Bankers Association

—Credit Union National Association

—Mortgage Bankers Association

Those groups elaborated more about the points Winslow raised, asking the CFPB to reconsider its statement.

“We appreciate the bureau’s effort to articulate what acts or practices it may view as abusive. However, the statement is too broad to provide guidance as to whether any specific practice is abusive, and, as currently drafted, positions standard and routine practices necessary to the functioning of markets for consumer financial products and services as potentially abusive,” the associations said in their 27-page letter.