What is Regulation AA

Regulation AA – Unfair or Deceptive Acts or Practices was a regulation designed to address practices by banks that were perceived as unfair by consumers. Regulation AA established the procedures used to process complaints registered by bank customers. This regulation applied to state member banks only. It was adopted in 1985 and repealed in 2016.


Regulation AA was created in response to numerous consumer complaints that were not being addressed in an orderly manner. Consumers who had complaints about their bank were directed to send them to the director of the Division of Community Affairs at the Board of Governors in Washington, D.C.

Practices Prohibited by Regulation AA

Two subparts composed Regulation AA. Subpart A outlined the Federal Reserve’s procedures for processing and responding to consumer complains about unfair and deceptive banking practices. Subpart B prohibited the use by banks of certain practices, used to enforce credit obligations, in their contracts. The types of contract provisions prohibited under Subpart B included:

Banks were also prohibited from misrepresenting the extent or nature of a co-signer’s potential liability for a debt, and from failing to inform a co-signer of this liability prior to the incursion of the debt. Furthermore, Regulation AA prohibited banks from using pyramided late fees.

Repeal of Regulation AA

The Dodd-Frank Wall Street Reform and Consumer Protection Act ended the Federal Reserve Board’s power to make rules regarding deceptive or unfair banking practices, and thus Regulation AA was repealed with the passage of the Dodd-Frank Act.

However, the Dodd-Frank Act transferred this rulemaking authority to the Consumer Financial Protection Bureau (CFPB). The CFPB has issued the Interagency Guidance Regarding Unfair or Deceptive Credit Practices, which served “to clarify that the repeal of the credit practices rule [as outlined in Regulation AA] … should not be construed as a determination by the Agencies that the credit practices described in these former regulations are [now] permissible.” As a result, any financial institution that engages in the credit practices formerly prohibited under Regulation AA may still be cited for statutory violations. Consumer complaints against such practices can still be filed on the CFPB’s website.