On January 24, the Consumer Financial Protection Bureau (CFPB) published a request for public comments on its use of Civil Investigative Demands or "CIDs". The CFPB expects the request to be published in the Federal Register on January 26, and public comments will therefore be due on or around March 27.
The CFPB's use – and, according to some, abuse – of CIDs has been a hot topic.
In February 2017, the D.C. Circuit rejected a petition filed by the CFPB to enforce one of its CIDs. See CFPB v. Accrediting Council for Indep. Colls. & Schs., 854 F.3d 683, 685 (D.C. Cir. 2017). The D.C. Circuit held that the CFPB had failed to meet its statutory obligation to "state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation." Id. at 685.
Then, in June 2017, the U.S. Department of Treasury issued a report that chastised the CFPB for ignoring the congressionally imposed limits on its jurisdiction and investigatory powers. See U.S. Dep't of Treasury, A Financial System that Creates Economic Opportunities (June 12, 2017). Addressing the agency's use of CIDs, Treasury's report noted that the "CFPB's process for issuing CIDs . . . is fraught with risks for abuse" and "should be reformed to ensure subjects of an investigation receive the benefits of existing statutory protections." Id. at 86, 91.
A few months later, in September 2017, the Office of Inspector General (OIG) for the Federal Reserve System and the CFPB issued a report that struck a similar note. See Off. of the Inspector Gen., 2017-SC-C-015, Evaluation Report (Sept. 20, 2017). The OIG's report noted that the CFPB "can improve its guidance for crafting notifications of purpose associated with CIDs." Id. at 7.
The CFPB's request for public comments on its use of CIDs is a clear signal that, under the leadership of acting director Mick Mulvaney, the agency intends to reform many of the policies and practices implemented under the agency's former director, Richard Cordray. Indeed, the request specifically asked for "comments and information" about "potential changes that can be implemented" to the agency's use of CIDs.
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