What to Expect When You're Under a CFPB Investigation
– Negotiating the Scope of the CID
The Consumer Financial Protection Bureau ("CFPB") has
investigations underway that span the full breadth of the
Bureau's enforcement authority over providers of financial
products and services and their vendors. Venable
attorneys Jonathan L.
Pompan and Alexandra
Megaris write in a recent piece that if your company is the
recipient of a civil investigative demand ("CID") from
the CFPB the process is not an easy one. When a CID is
received, the recipient first must decide whether to (1) petition
the CFPB for an order modifying or setting aside the CID, or (2)
negotiate the scope of the CID. These decisions must be made
quickly. Pompan and Megaris walk through the early decisions
that companies under CFPB investigation need to consider and
several key steps involved in negotiating the scope of a CID.
Click here to read the full article and
click here for information about a panel session on Consumer
Financial Protection Investigations and Enforcement at the ABA
Antitrust Fall Forum.
CFPB's Start-Up Style Is No Laughing Matter
"What do The Daily Show, The Colbert Report, and the CFPB
have in common?" asks Venable attorney Jonathan L. Pompan in a
recent article at www.Venable.com/cfpb/publications.
While executives at the broad array of companies now subject to
oversight by the agency may hope the answer is a sense of humor,
Pompan, citing a recent Washington Post story, says the answer is
that there is at least one Web designer who has worked at all three
places. That designer is indicative of the unusual team of
government employees at the CFPB.
The article, Pompan writes, details the CFPB's use of a
"classic start-up style" and attributes the CFPB's
"beta" projects to an approach that encourages staff to
work quickly and make corrections later. The approach, he
says, is as good an explanation as any for the CFPB's practice
of often placing proposals on its website without always
simultaneously utilizing the Federal Register and the notice and
comment process provided for in the Administrative Procedures
Pompan writes that the CFPB website provides a window into an
area that matters very much but is easily underestimated. For
affected companies and other stakeholders, the "beta"
approaches and CFPB website are no laughing matter.
Turning its focus from mortgage regulation to its enforcement
authority, last month the CFPB announced yet another significant
penalty against a credit card issuer related to the sale of
"add on" products. Additionally, the CFPB held the
first meeting of its Consumer Advisory Council, issued examination
guidelines for credit reporting agencies and announced its
five-year strategic plan.
CFPB Exam Procedures for Consumer Reporting Companies
The Consumer Financial Protection Bureau continues to move
forward with implementation of its nonbank supervision program by
releasing the procedures it will use in examining credit bureaus
and other consumer reporting companies. According to the
Bureau, "these procedures are a field guide for CFPB examiners
looking to check that these companies are following the
law." The CFPB's authority to supervise consumer
reporting companies took effect September 30, 2012. According
to the CFPB, its supervisory authority will cover an estimated 30
companies that account for about 94 percent of the market's
The Consumer Financial Protection Bureau announced that it had settled enforcement actions against four insurance companies in connection with alleged improper payments between the insurance companies and mortgage lenders.