Consumer Bureau Must Ease Disclosure of Probe-Gained Information

By Chris Bruce

The Consumer Financial Protection Bureau may find it harder to shield information it receives in response to civil investigative demands (CIDs), under a Dec. 14 ruling.

The ruling by Judge Christopher R. Cooper of the U.S. District Court for the District of Columbia involves Frank LLP, a New York consumer class action law firm that submitted several Freedom of Information Act (FOIA) requests to the CFPB. The decision may assist Frank LLP in ongoing class suits against Midland Funding, and Midland Funding’s parent company, Encore Capital Group, that allege deceptive debt collection practices. Encore Capital reached a 2015 consent order with the CFPB in connection with claims of misleading affidavits filed in debt collection actions.

The case at issue in the Dec. 14 decision arose after the CFPB denied several FOIA requests submitted by Frank LLP. The CFPB justified its action in one instance by saying the information sought was given to the CFPB voluntarily in response to a CID. That finding — that the information was produced voluntarily — makes it easier for the agency to shield it from disclosure.

Cooper disagreed and granted Frank LLP’s motion for summary judgment on its claim that the CFPB’s stance violated FOIA. “The Court agrees that the Bureau’s formal authority to issue CIDs and, if need be, to obtain judicial enforcement, means that the submissions it receives in response to a CID should be treated as mandatory,” Cooper said. He also ordered the agency to abandon that policy going forward, which could ease FOIA requests in the future in connection with CID-related information.

CIDs are important in the CFPB’s enforcement program, and often form a basis for agency action. The exemption at issue in the case — FOIA Exemption 4 — protects confidential trade secrets and commercial or financial information.

Despite that ruling, however, Cooper ruled for the CFPB on most of Frank LLP’s claims. It’s not clear whether or how Cooper’s treatment on those other questions might affect Frank LLP’s request on the CID-related information. Among other points, Frank LLP also challenged the CFPB’s interpretation of Exemption 8, which protects records “contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.”

Frank LLP said the agency’s interpretation of the term “financial institutions” to cover debt collectors is inconsistent with FOIA. Cooper, while saying Frank LLP had standing to make its challenge, held in favor of the CFPB.

Encore Capital didn’t immediately respond to a request for comment on the ruling. Frank LLP also didn’t respond. CFPB spokesman David Mayorga declined to comment.

Case: Frank LLP v. Cons. Fin. Protection Bureau , D.D.C., 16-cv-00670, 12/14/17 .

To contact the reporter on this story: Chris Bruce in Washington at

To contact the editor responsible for this story: Michael Ferullo at

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