By Jeff Bater
The Consumer Financial Protection Bureau will review its procedures for investigating financial firms as part of a top-to-bottom examination of agency functions ordered by acting Director Mick Mulvaney. The CFPB is seeking comment on its civil investigative demand (CID) procedures, which the financial services industry has criticized for being “unnecessarily burdensome” and not providing recipients with “a meaningful understanding of why the information is needed,” Benjamin Olson, a partner at Buckley Sandler, told Bloomberg Law.
The CFPB also said it plans future public notices on enforcement, supervision, rulemaking, market monitoring, and education activities. The announcement comes one day after the CFPB said it plans to revisit a rule targeting high-interest payday loans and is the latest sign of how the Trump administration plans to shift the agency’s focus.
“It is natural for the bureau to critically examine its policies and practices to ensure they align with the bureau’s statutory mandate,” Mulvaney, who was appointed by President Donald Trump in November, said in a statement Jan. 17.
Targets of bureau investigations have often challenged the CFPB over its use of CIDs. The agency said the comments received “will help the bureau evaluate existing CID processes and procedures, and to determine whether any changes are warranted.”
The CFPB’s CID procedures may be revised significantly as a result of the review, Quyen Truong, a partner at Stroock & Stroock & Lavan in Washington and a former CFPB assistant director and deputy general counsel, told Bloomberg Law.
“Potential changes could run the full range from providing more specific disclosure of the legal authority and potential claims supporting individual CIDs, to changing requirements for certification of responses to the CIDs,” she said in an email. The agency could also modify the processes for companies to obtain modifications or to quash the requests for information, Truong added.
Olson said, “It’s not a surprise that new CFPB leadership would seek to address these concerns, but it is unexpected that they are seeking to do so through a public process where all sides can provide feedback,” he told Bloomberg Law.
Richard Hunt, president of the Consumer Bankers Association, said in a statement many actions conducted previously by the CFPB “certainly warrant a thorough review.”
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