On November 29, the FHFA issued Advisory Bulletin 2024-06: “Regulated Entity Unfair or Deceptive Acts or Practices Compliance” to provide guidance to Fannie Mae, Freddie Mac, and the FHLBanks on adhering to UDAP prohibitions under Section 5 of the FTC Act.

The guidance highlighted activities that the institutions engaged in covered under Section 5 of the FTC Act, including purchasing loans, providing loans and financial assistance, participating in credit decisions, advertising, setting appraisal standards, servicing, and loss mitigation efforts, among others. The guidance addressed potential direct and vicarious liability, highlighting that the regulated entities are responsible for UDAP violations by employees, agents or third parties if they knew or should have known about the conduct. The bulletin also detailed how entities can identify and mitigate risks associated with unfair acts.

Finally, the bulletin identified common UDAP risk factors, such as a lack of board oversight and unreliable data. It stressed the importance of compliance controls to address these risks, urging regulated entities to establish clear policies and procedures.