CFPB to give more information to firms under investigation

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The Consumer Financial Protection Bureau will provide more information to companies subject to enforcement investigations about what conduct the agency is targeting and what legal provisions a firm may have violated.

The CFPB announced the changes Tuesday on how it handles so-called civil investigative demands that are issued to companies under the agency's microscope. When issuing CIDs, the CFPB said it will specify the relevant business activities that fall under the bureau’s authority.

The CFPB said it made the changes in part in response to a request for information issued last year by then-acting CFPB Director Mick Mulvaney — now the acting White House chief of staff — who had asked for public input on the CID process as part of a full review of all the CFPB’s processes.

“The new policy takes into account recent court decisions about notifications of purpose, and is consistent with a 2017 report by the Bureau’s Office of Inspector General that emphasized the importance of updating Office of Enforcement policies to reflect such developments,” the CFPB said in a statement.

Former CFPB Director Richard Cordray was criticized for how he used CIDs to uncover potential wrongdoing. Lawyers for firms that have received CIDs have claimed the agency did not provide a "statement of purpose" identifying the precise law at issue and the conduct the bureau believed was in violation of the law.

CFPB-supervised entities that receive civil investigative demands are required to comply as they would with a subpoena, by providing written answers, documents, reports and testimony.

The American Bankers Association urged the bureau last year to consider the cost burdens that CIDs create for companies.

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Enforcement actions Compliance Regulatory relief Mick Mulvaney Kathy Kraninger Richard Cordray CFPB
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