CFPB Announces Change to CID Policy, Promotes Investigations Transparency

The Consumer Financial Protection Bureau (CFPB or Bureau) announced that it is changing its policy regarding Civil Investigation Demands (CIDs).

The CFPB is authorized by statute to issue investigational subpoenas known as CIDs when looking into potential violations of law. By law, 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 Bureau will aim to provide clarity within the CIDs regarding what provisions of law may have been violated and which business activities are subject to the CID. Additionally, “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 interest of further transparency.”

The Bureau mentions 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 emphasized the importance of updating Office of Enforcement policies to reflect such developments. The CFPB also incorporated feedback received in response to its 2018 Request for Information (RFI) on CIDs, which was issued as part of Acting Director Mulvaney’s call for evidence on the Bureau’s policies and procedures.

Last week, the Bureau also announced that it would be hosting an upcoming May 8 Town Hall in Philadelphia, PA,  featuring remarks from Director Kraninger as well as comments from community groups, industry representatives, and members of the public.

The agency will release its Notice of Proposed Rule-making for debt collection, which will provide a much-needed update to the outdated Fair Debt Collection Practices Act.