A new decision and order from Director Kraninger that, with minor changes, strictly enforces another CFPB civil investigative demand is a further indication that the CFPB’s enforcement activities remain robust under her leadership.  The new order and decision follows five decisions and orders issued by Director Kraninger on April 25 in which she also, with minor changes, strictly enforced five CIDs.

Like her April 25 orders, Director Kraninger granted the petition to modify or set aside the CID as to its challenge to the sufficiency of the CID’s notification of purpose but only as to that challenge.  As she did in her April 25 decisions and orders, Director Kraninger modified the notification consistent with the Bureau’s April 23 announcement that it would provide more specific information in CID notifications of purpose but denied the petition as to all other challenges.

The challenges rejected by Director Kraninger were:

  • The Bureau did not have statutory authority to investigate the petitioner’s business. The CFPB’s modified notification of purpose states that the purpose of the Bureau’s investigation “is to determine whether providers of tax debt relief products or services are offering or providing financial advisory services to consumers on individual financial matters.” The petitioner argued that it is not a “covered person” subject to the Bureau’s enforcement authority because it does not provide a “financial product or service.”  Specifically, it denied that it provides “financial advisory services” which the CFPA expressly identifies as a “financial product or service.”  In rejecting this argument, Director Kraninger called the petitioner’s assertions “fact-based arguments about whether it is subject to substantive provisions of the CFPA.”  She stated that the Bureau “is not required to accept as true [the petitioner’s] factual assertions concerning the limits or scope of its business conduct and may investigate whether it has enforcement authority over [the petitioner].”
  • Even if the Bureau can conduct some investigation, the investigation should initially be limited to investigating whether the petitioner’s business is subject to the Bureau’s enforcement authority.  In rejecting this argument, Director Kraninger stated that the argument “ignores the longstanding line of decisions approving simultaneous agency investigation of jurisdictional facts and possible violations.”