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A Nevada federal district court has stayed an action filed by the CFPB to enforce a civil investigative demand (CID) issued to a small-dollar lender pending the U.S. Supreme Court’s decision in Community Financial Services Association of America Ltd. v. CFPB.  The issue in CFSA  v. CFPB is whether the CFPB’s funding mechanism violates the Appropriations Clause of the U.S.… Continue Reading

CFPB Director Kraninger has rejected the argument made by Equitable Acceptance Corp (EAC) that because the Bureau’s structure is unconstitutional, the civil investigative demand it received from the Bureau should be set aside or at least modified to stay the CID’s response deadlines pending the U.S. Supreme Court’s decision in Seila Law.… Continue Reading

In this podcast, we discuss the recently-announced changes to the CFPB’s CID policies, how those changes reflect recent court decisions, and the practical implications of the changes (including their utility to companies in responding to CIDs).

Ciick here to listen to the podcast.… Continue Reading

On April 23, 2019, the CFPB announced that it will provide more transparency to recipients of Civil Investigative Demands (“CIDs”) on what the investigation is about. The CFPB’s press release stated that “CIDs will provide more information about the potentially applicable provisions of law that may have been violated. CIDs will also typically specify the business activities subject to the Bureau’s authority.”… Continue Reading

The BCPB has historically taken the position that it can use investigations to conduct compliance “sweeps” of entire industries. Indeed, a version of the BCFP’s Enforcement Policies and Procedures Manual made available to the public through a FOIA request in 2016 stated that: “It is not necessary to have evidence that a law has in fact been violated before opening a formal investigation.… Continue Reading

Ballard Spahr attorneys have submitted comments to the CFPB in response to its Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.

Based on the extensive experience of Ballard Spahr attorneys in representing bank and non-bank clients in connection with more than 50 CFPB investigations, our comment letter include proposals to address the lack of basic procedural safeguards in the CFPB’s current CID process and help alleviate the unreasonable burdens that the current process imposes on CID recipients. … Continue Reading

The FTC has filed comments on the CFPB’s Request for Information regarding its civil investigative demands and investigational hearings.

In the RFI, the CFPB requested feedback on various aspects of the CFPB’s processes and requirements for issuing CIDs, responding to CIDs, and conducting investigational hearing.  The FTC’s comments primarily describe the FTC’s comparable processes and requirements and highlights changes made in 2017 to the CID process used by the FTC’s Bureau of Consumer Protection (BCP). … Continue Reading

On September 20, 2017, the Federal Reserve’s Office of Inspector General (“OIG”) issued a report on the CFPB’s process for issuing Civil Investigative Demands (“CID”). The OIG found that the CFPB “generally complied” with requirements for issuing CIDs, with two exceptions. First, the CFPB failed to use notifications of purpose that adequately informed recipients about the nature of the investigation.… Continue Reading

The CFPB is asking a Michigan federal district court to hold two companies in contempt for failing to comply with civil investigative demands.  While the CFPB has filed numerous petitions to enforce a CID, the contempt motion is reported to represent the first time that the CFPB has sought to have a CID recipient held in contempt for failing to comply.… Continue Reading

The CFPB’s petition filed in a Pennsylvania federal district court last June to enforce a CID issued to J.G. Wentworth, LLC, a purchaser of structured settlements and annuities, was denied by the court last week as moot.  The order denying the petition was entered after the CFPB filed a Notice in which it indicated that it had withdrawn the petition on June 1, stated that “because the CID is no longer active, the Bureau intends to soon dismiss the Petition,” and asked the court to refrain from ruling on the petition. … Continue Reading