Screen a consumer financial contract against the unfairness and abusive tests
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the consumer financial contract, quote each term that sets a fee, a default consequence, a unilateral change, or an exit or cancellation limit, and record the product the file says is being offered. Do not mark a term unfair, deceptive, or abusive.
- What the lawyer must review
- The lawyer applies 12 USC 5531. The Bureau may act to prevent a covered person or service provider from an unfair, deceptive, or abusive act or practice in connection with a transaction with a consumer for a consumer financial product or service, or the offering of one. Under subsection (c), the Bureau has no authority to declare an act or practice unfair unless it has a reasonable basis to conclude that the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers, and that the injury is not outweighed by countervailing benefits to consumers or to competition. Public policy may be evidence. It may not be the primary basis. Under subsection (d), the Bureau has no authority to declare an act or practice abusive unless it materially interferes with the ability of a consumer to understand a term or condition, or takes unreasonable advantage of a lack of understanding of the material risks, costs, or conditions, of the inability of the consumer to protect the consumer's interests in selecting or using the product or service, or of the consumer's reasonable reliance on a covered person to act in the consumer's interests. The statute does not say that a listed contract term is void. The GovInfo page is the 2023 edition. The unfairness and abusive tests on that page match the text used here.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Open each relied-on authority independently. Confirm its existence, current status, proposition and any quotation or pinpoint reference.
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.