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.  In addition to myself, the Ballard Spahr attorneys who participated in drafting our comment letter are Alan Kaplinsky, Chris Willis, Theodore Flo, Daniel Delnero, and Eleanor Bradley-Huyett.

As we observe in our letter, the CFPB has a history of using CIDs for broader purposes that are not authorized by the Dodd-Frank Act but rather are more akin to an extensive, unfocused supervisory examination in order to uncover potential violations.  Our proposals are intended to restrict the CID process to its proper role, namely the investigation of suspected violations of specific consumer financial protection laws.

Our letter includes the following proposed modifications to the CID process:

  • Requiring a CID to contain a more definite “statement of purpose” that identifies the precise law at issue and the conduct the CFPB believes violates the law
  • Adding a relevancy standard for CID information requests
  • Requiring a minimum response time of 30 days from receipt of a CID
  • Allowing a longer deadline for filing a petition to modify or set aside a CID
  • Making petitions to modify or set aside a CID, and rulings thereon, non-public
  • Making the process for resolving petitions to set aside or modify a CID more transparent
  • Permitting objections at investigational hearings
  • Allowing investigational hearing witnesses to automatically receive copies of transcripts and exhibits
  • Creating a rule prohibiting CFPB examination staff from sharing attorney-client privileged documents with enforcement staff
  • Modifying the form of certifications required by CID recipients
  • Abandoning the CFPB’s proposal to prohibit CID recipients from disclosing the CID’s existence

Our full comment letter is available here.