This month the Consumer Financial Protection Bureau held an invitation-only teleconference and issued a press release announcing its "Early Warning Notice," which would allow banks the opportunity to respond to findings by the CFPB before commencing enforcement actions.  

That the CFPB thought it important enough to issue a press release announcing that it would adhere to the most basic due process tenet of bank regulation and law enforcement -- to allow the subject of an examination and/or investigation to explain its practices before filing an enforcement action -- raises serious fundamental concerns as to this new agency's intended approach to exercising its enormous regulatory and enforcement powers.  

One would certainly hope that an agency relying on hundreds of newly hired examiners (many with no prior regulatory experience) to assess compliance with a host of new rules and regulations (including the new statute on unfair, deceptive, and abusive acts and practices) might think it a first principle to engage in dialogue with a bank before declaring it subject to enforcement action.

Andrew L. Sandler is the chairman and executive partner at BuckleySandler LLP in Washington. He regularly represents financial services companies in state attorney general investigations, litigation and enforcement actions around the country and has been the lead defense counsel in more than 80 class action cases in federal and state courts.

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