WASHINGTON –The Consumer Financial Protection Bureau announced it is making changes to policies regarding Civil Investigative Demands (CIDs) to ensure they provide more information about the potentially wrongful conduct under investigation.
“Consistent with the updated policy, CIDs will provide more information about the potentially applicable provisions of law that may have been violated. CIDs will also typically specify the business activities subject to the Bureau’s authority. In investigations where determining the extent of the Bureau’s authority over the relevant activity is one of the significant purposes of the investigation, staff may specifically include that issue in the CID in the interests of further transparency,” the Bureau said.
In response to the CFPB announcement, NAFCU EVP/General Counsel Carrie Hunt said, “The CFPB’s policy changes to its CIDs procedures is welcomed news as credit unions will no longer be subject to ambiguous and vague requests for information. We appreciate the Bureau listening to our concerns and committing itself to providing relevant parties with additional information on the purpose and scope of an investigation. Going forward, we will continue to work with the Bureau to improve confidentiality protections and allotted response time for CID recipients.”
Recent Court Decisions
The new CFPB 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 new policy is also consistent with comments the Bureau received in response to the Requests for Information it issued in 2018, seeking feedback about various aspects of its operations, including its use of CIDs in enforcement investigations, the agency said.
The Bureau noted the Consumer Financial Protection Act of 2010 authorizes the agency to issue investigational subpoenas known as CIDs when looking into potential violations of law.
“The Act provides that each CID ‘shall state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.’ CIDs issued by the Bureau set out this information in a section known as the ‘notification of purpose,’” the agency said.