CFPB Seeks Comments on Investigation Process

January 25, 2018

The Consumer Financial Protection Bureau (CFPB) published a request for information (RFI) on Jan. 24 seeking comment on the bureau's process for investigating companies that face possible enforcement actions.

The comment period is open for 60 days. ALTA plans to submit comments.

Comments received in response to this RFI will help the bureau evaluate existing CID processes and procedures, and to determine whether any changes are warranted. This is the first of a series of RFIs that the CFPB will publish in the Federal Registry to help the bureau determine if it’s fulfilling its proper and appropriate functions to best protect consumers.

During its investigatory activities, the bureau issues CIDs to entities and persons whom the CFPB has reason to believe may have information relevant to a violation of the laws the bureau enforces. These demands require recipients to provide the Bureau with information in varying forms: most frequently some combination of written answers to interrogatories, written reports, documents, tangible things, and testimony. Recipients are required to produce the requested information to the Bureau, which uses such information to further investigations of potential violations of federal consumer financial laws.

"Responding to a CID can impose burdens on the recipients," the agency said. "Entities who have received one or more CIDs, members of the bar who represent these entities, and members of the public are likely to have useful information and perspectives on the benefits and burdens of the bureau’s existing processes related to CIDs."

A day after issuing the RFI, CFPB Acting Director Mick Mulvaney laid out the bureau’s new governing philosophy in a staff memo. Mulvaney said the bureau works for everyone, including the companies it regulates.

“There is a reason that Lady Justice wears a blindfold and carries a balance, along with her sword,” Mulvaney wrote. "When it comes to enforcement, we will be focusing on quantifiable and unavoidable harm to the consumer. If we find that it exists, you can count on us to vigorously pursue the appropriate remedies. If it doesn’t, we won’t go looking for excuses to bring lawsuits."

The memo said that the businesses regulated by the bureau should have the right to know the rules before being charged. “This means more formal rulemaking on which financial institutions can rely, and less regulation by enforcement,” Mulvaney wrote.

Mulvaney took issue with the leadership of his predecessor, Richard Cordray, writing that "the days of aggressively 'pushing the envelope' of the law in the name of the 'mission' are over."

“In fact, the entire governing philosophy of pushing the envelope frightens me a little bit,” Mulvaney said. “I would hope it would bother you as well.”

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