Republican Congressman Jeb Hensarling, who chairs the House Financial Services Committee, has established a new policy for using his authority to issue subpoenas to the CFPB and other agency’s subject to the Committee’s oversight.  According to a letter from Mr. Hensarling to Democratic Congresswoman Maxine Waters, the Committee’s ranking member, an agency will have “two weeks to produce documents requested by the Committee and, if no responsive documents are received, a follow-up letter providing the agency with two additional weeks to comply will be sent.”  Mr. Hensarling further states in the letter that while “this policy does not preclude good faith negotations between the Committee and the relevant agency,” he “will not hesitate to issue a subpoena if after a month or more there has been no meaningful effort by the agency in question to comply with the Committee’s request.”

This past January, the Committee amended its rules to give its chairperson unilateral authority to issue subpoenas without the need for a vote from other Committee members.  The chair must give the Committee’s ranking member written notice at least 48 hours in advance of authorizing and issuing a subpoena, except when “exigent circumstances” exist.

In his letter to Ms. Waters, Mr. Hensarling references a letter sent by the Committee to Director Cordray on March 2 listing “at least ten requests” for documents to which the CFPB has failed to respond, with the oldest request 378 days old and the most recent 82 days old.  Mr. Hensarling’s letter to Director Cordray states that Mr. Hensarling plans to authorize and issue subpoenas to the CFPB unless the CFPB complies with the outstanding requests within two weeks.

Mr. Hensarling’s letter was sent in response to a letter to him from Ms. Waters  in which she expresses her “alarm with respect to the new policy.”  In her letter, Ms. Waters states her “strenuous objection to the idea that an agency’s production of documents necessary to avoid the issuance of a subpoena is to be determined by an arbitrary standard on a case-by-case basis, with no clear threshold as to what will preclude or warrant issuance.”  She also asserts that this “may or may-not issue standard” fails to comply with the requirement to give the ranking  member 48-hours advance notice of the issuance of a subpoena.

Rejecting Ms. Waters’ assertion, Mr. Hensarling states in his letter that his discretion not to issue subpoenas to the CFPB after two weeks “does not in any way negate the fact that [she] received proper notice [of his plans to issue subpoenas to the CFPB].”  He also states that if he decides not to issue the subpoenas, he intends to give Ms. Waters further notice consistent with the Committee’s rules should he subsequently decide to issue subpoenas.