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CFPB issues bulletin on appeals procedure

Posted in CFPB Exams, Fair Lending

Yesterday, the Bureau released a Bulletin outlining a procedure for supervised entities to appeal certain conclusions and findings made during the examination process.  The appeal procedure is somewhat unclear, since the Bulletin is not very specific about the personnel who will decide the appeal or the standard of review that they will use.  Indeed, with regard to personnel, the Bulletin discusses various permutations of persons in various areas of the CFPB, suggesting that the lineup of decision-makers will be different for appeals of different types of issues. 

There are a couple of other notable points about the Bulletin.  First, in the context of a petition to set aside or modify a civil investigative demand, the Director of the Bureau ultimately decides those petitions, while a lower-level official decides supervisory appeals as set forth in the Bulletin. It seems anomalous that the scope of a discovery request would warrant review by the Director, but an examination finding that might require far-reaching changes in an entity’s operations is handled at a lower level within the organization.  Also, a petition to modify or set aside a CID will be made public unless good cause is shown (and two of them have already been made public), while the supervisory appeal process will be confidential, according to the Bulletin. 

The other really notable thing about the supervisory appeal process is its special emphasis on fair lending issues.  Fair lending is mentioned three times in the Bulletin, while no other substantive area is mentioned. The Bulletin goes out of its way to state that a supervisory appeal will not delay or impact the Bureau’s decision to bring an enforcement action or refer a case to the DOJ, and then later makes specific reference to the involvement of persons from the Bureau’s Office of Fair Lending and Equal Opportunity.  

Does all of this suggest that the Bureau is anticipating appeals from fair lending-related supervisory actions?  That is the message that these references seem to convey, and of course that message would be consistent with the separate tracking of fair lending supervisory actions in the Bureau’s Five-Year Plan.  But although we will have to wait and see what develops with regard to fair lending in the supervision context, one thing is certain: the constant emphasis on fair lending by the Bureau continues.