On Friday, August 3, I had the pleasure of speaking on a panel at the ABA Annual Meeting with Meredith Fuchs, General Counsel of the CFPB, and Michael Gordon, Senior Counselor to the Director of the CFPB. Also on the panel were Mark Metz from Bank of America, Jean Noonan from Hudson Cook, and Reginald Brown from Wilmer Hale, who did a great job moderating.
A few interesting comments were made by our CFPB representatives that I had not heard (or perhaps focused on) before:
— the Bureau believes, based on its experience, that the presence of enforcement lawyers in examinations does not chill communications during the exam process, and it was noted that the enforcement lawyers were there as part of the “integration” of the Bureau’s supervision and enforcement processes
— the senior leadership of the CFPB reads the submissions on the “Tell Your Story” part of the CFPB website regularly.
— the Bureau is trying to work with supervised entities to find alternatives to the turnover of privileged documents, and is being restrained in its requests for such documents.
— the “larger participant” rule relating to debt collectors will be finalized in “a couple of months.”
— the Bureau is working on adding a search function to its website. (In the meantime, just use Google and restrict the search to consumerfinance.gov, like this: “qualified mortgage site:consumerfinance.gov”).
I made two suggestions to the Bureau during the panel. First, as I have commented on this blog before, the strict time limitations and disfavored status of extensions of time to file a Petition to challenge a Civil Investigative Demand, and the similar focus on speed in the Bureau’s administrative enforcement rules are not only unfair to the subjects of these proceedings, they make it much more difficult for parties to cooperate and resolve disputes. The absence of time for both sides to gather information and talk about a resolution means that both sides are at risk of being needlessly pushed into disputes. I believe experience will show that the emphasis on speed in these proceedings will work to the Bureau’s detriment, not advantage.
Second, I suggested that in addition to gathering information through its complaint process, the Bureau should also gather information from consumers who have not complained in order to understand the market before engaging in rukemaking. Complaints can be a valuable data point, but regulatory and policy decisions should also take into account the experiences of the majority of consumers who haven’t chosen to complain. Basing decisions on complaints alone risks acting on a self-selected, non-representative group of consumers, and creating problems for the non-complaining majority.
Anyway, thanks very much to the ABA and my co-panelists for a great discussion.