Certified Regulatory Compliance Manager (CRCM) Practice Exam 2025 - Free CRCM Practice Questions and Study Guide

The correct choice reflects a fundamental aspect of the UDAAP (Unfair, Deceptive, or Abusive Acts or Practices) framework established by the Dodd-Frank Act. Under UDAAP, a practice is deemed "unfair" if it causes substantial injury to consumers, the injury is not reasonably avoidable, and any countervailing benefits that might exist do not outweigh the injury caused.

Option B suggests that a practice is associated with being "prohibited by regulation." However, UDAAP is concerned primarily with the impact of a practice on consumers, rather than whether it is explicitly prohibited by a regulation. The statute focuses on the harm caused to consumers and whether that harm is justified by any benefits. Therefore, simply being prohibited by regulation without considering the context of consumer harm and benefits does not directly correlate with the evaluation of unfairness under UDAAP.

Understanding that unfair practices under UDAAP must align with the criteria of consumer harm provides clarity on why option B does not fit within the framework.