Principles-based guidance is particularly useful when dealing with practices that may be inappropriate in some circumstances but appropriate in others. An example of this is the guidance concerning unfair and deceptive acts or practices ("UDAPs") issued jointly by the Board and FDIC in 2004.
The UDAP guidance outlines the legal standards the Board and FDIC use in carrying out their responsibilities for enforcing the FTC Act's prohibition of unfair or deceptive acts or practices. These standards are consistent with those articulated by the OCC and with long-established standards articulated by the FTC in enforcing the FTC Act for non-bank entities.