Senator Lamar Alexander and Representative John Kline sent a letter to Director Cordray on October 23, 2015 requesting that he “immediately rescind the issuance of a civil investigative demand to the Accrediting Council for Independent Colleges and Schools (ACICS) and halt any other planned investigatory actions regarding accreditors or the accreditation of institutions of higher education.” Mssrs. Alexander and Kline are, respectively, the Chairs of the Senate Committee on Health, Education, Labor and Pensions and the House Committee on Education and the Workforce.
On October 8, the CFPB issued a decision and order denying the petition of ACICS to modify or set aside the CID. Among the objections to the CID raised by ACICS were that the Department of Education is its sole regulator and that it was not subject to the CFPB’s enforcement jurisdiction as a “covered person,” “service provider,” or “person who knowingly or recklessly provides substantial assistance to a covered person or service provider.”
In rejecting ACICS’ objection regarding the Department of Education, the CFPB indicated that ACICS had provided “no support for the proposition that the Department of Education’s authority to determine compliance with the [Higher Education Act] somehow affects the Bureau’s independent authority to determine compliance with the CFPA [UDAAP prohibition].” The CFPB also rejected ACICS’s objection regarding the CFPB’s enforcement authority, stating that such contentions did not relate to the scope of the CFPB’s investigative authority and instead “constitute potential substantive defenses that could be raised to claims the Bureau has yet to assert, and may never assert.”
In their letter, the lawmakers assert that the CFPB’s issuance of the CID to ACICS represents an “unprecedented overreach” by the CFPB that “raises serious concerns regarding jurisdiction.” They note that as recently as 2013, the Department of Education had determined that ACICS “is a reliable authority with respect to the quality of education or training offered by the institutions of higher education they accredit.” They claim that the CFPB’s action “is an unprecedented intrusion by [the CFPB] into higher education and undermines the process Congress created to assess institutional quality.”
Since opening its doors for business, the CFPB has been aggressively testing the limits of its jurisdiction. The CID issued to ACICS appears to be another example of the CFPB’s “jurisdiction creep.”