November 19, 2018

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CFPB Requests Comments on its CID Process

On January 26, 2018, the CFPB published a “Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes” (“Request”) in the Federal Register. In the Request, the CFPB asks industry and attorneys who regularly practice before the Bureau to comment on its processes surrounding Civil Investigative Demands (“CID”) and investigational hearings. Comments are due by March 27, 2018 and can be submitted electronically, by email, by regular mail, or by hand-delivery. The Request indicates that all comments will be posted online without change.

The CFPB requested comments on several specific topics, but did not limit comments to them. The topics include:

  1. The process for issuing CIDs; the authority of CFPB personnel to issue them; how CIDs  can be made less burdensome; and the timeframes and processes for complying with or challenging them.
  2. The requirements for responding to CIDs, including certification requirements, and the CFPB’s document submission standards.
  3. Transparency with CID recipients as to the focus of the investigation and what information the CFPB needs to conduct its investigation.
  4. The process for dealing with the inadvertent production of privileged information and whether that process should more closely mirror the Federal Rules of Evidence.
  5. The process for conducting investigational hearings of business entities, including whether it should more closely mirror the Federal Rules of Civil Procedure and whether counsel should be able to offer objections at investigational hearings.

This Request is one of the CFPB’s first opportunities to receive official comments from industry on its enforcement process. While the CFPB has requested comments on its rules and processes before, some people in the industry felt their comments were ignored. With the recent change of leadership, we anticipate a CFPB that will be more receptive to the concerns of industry. We therefore view the Request as an important opportunity for the industry to argue for permanent changes to the CID process, and to make the CID process more efficient, less expensive, and fairer to the targets of investigations.

Copyright © by Ballard Spahr LLP

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About this Author

Christoper Willis, Partner, Ballard Spahr law firm, Consumer Financial Services Litigation attorney
Partner

Christopher J. Willis is Practice Leader of the firm's Consumer Financial Services Litigation Group. He devotes his practice to assisting financial services institutions facing government investigations and examinations, counseling them on fair lending risk and compliance assessments, and defending them in individual and class action lawsuits brought by consumers and enforcement actions brought by government agencies.

Mr. Willis also chairs the firm's Fair Lending Task Force. His clients span the financial services industry and include banks and...

678-420-9436
James Kim, Ballard Spahr Law Firm, Los Angeles, Financial Law Litigation Attorney
Of Counsel

Mr. Kim advises companies and individuals in matters involving financial regulation and litigation, and the myriad of federal consumer financial laws, such as Title X of Dodd-Frank (UDAAP), TILA, RESPA, EFTA, and the FDCPA. He has represented clients in examinations and investigations with the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), U.S. Department of Justice (DOJ), U.S. Securities and Exchange Commission (SEC), and various state and local agencies. His practice focuses on cutting-edge issues, including financial technology (FinTech), mobile financial services, and marketplace lending.

In addition to his regulatory work, Mr. Kim has tried, as first or second chair, more than 20 cases to verdict, and has briefed criminal and civil appeals before the U.S. Court of Appeals for the Second Circuit and the New York State Appellate Division.

646-346-8089
Flo, Washington DC, Ballard Spahr
Associate

A client-focused litigator and enforcement attorney, with extensive experience in the financial-services, technology, and real estate industries. Theodore R. ("Teddy") Flo represents lenders, technology companies, start-ups, corporate executives, and real estate service providers in local and national litigation, arbitration, and government investigations. While focused on investigations before the CFPB, he also represents clients before the SEC, DOJ, HUD, CFTC, and state regulators.

Teddy delivers practical cost-effective results for his clients through creative thinking and...

202-661-2259