A lead generation company and its employee recently filed a petition with the CFPB to modify or set aside a civil investigative demand (CID).
Among the arguments made in the petition for why the CID should be set aside is that the company is neither a “service provider” nor “covered person.” The company argues that it is not a “covered person” because it does not offer or provide a “financial product or service” as defined in Dodd-Frank.
The company also asserts that it is not a “service provider” as defined in Dodd-Frank. Under Dodd-Frank, a “service provider” is a person who provides a “material service” to a covered person in connection with the offering of a financial product or service, including a person that “participates in designing, operating or maintaining the consumer financial product or service” or “processes transactions relating to the consumer financial product or service [other than unknowingly or incidentally transmitting or processing undifferentiated financial data].” The definition includes an exception for providers of a “support service of a type provided to businesses generally or a similar ministerial service.”
The company argues that it does not provide any “material service” to covered persons nor does it provide services that fall within the specific examples contained in the statutory “service provider” definition. It asserts that lead generation services instead fall within the exception for services “provided to businesses generally.” According to the petition, lead generation services “are no different than advertising agency services, public relations services, marketing consultants and strategists and any other of the numerous support services which are now inextricably woven into the fabric of the American business model. They have nothing to do with core financial services functions.”