5th Circuit Rejects BCFP’s Bid to Enforce Civil Investigative Demand

On September 6, 2018, the U.S. Court of Appeals for the Fifth Circuit refused to enforce the Bureau of Consumer Financial Protection’s civil investigative demand (CID) for documents and other information from a Texas-based public records search company because it found that the Bureau failed to provide fair notice of the subject of its investigation.

The Bureau’s governing statute requires each CID to have a notification of purpose that “states the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.”

The Bureau’s CID in this case stated that it was investigating “unlawful acts and practices in connection with the provision or use of public records information” and included references to the Fair Credit Reporting Act (FCRA) and “any other federal consumer financial law.” However, the Fifth Circuit’s three-judge panel found the reference to the FCRA too indefinite to provide fair notice of what activity was under investigation, given the breadth of activity covered by the statute. The latter reference was found by the court to be a catch-all phrase that did not meet Congress’s directive to specify which law was at issue. Without more specificity, the court held it could not apply the reasonable relevance standard used by courts to enforce an administrative subpoena, like the CID in this case. The court therefore refused the Bureau’s request to enforce the CID.

This decision comes a year after the U.S. Court of Appeals for the D.C. Circuit in another case refused to enforce a CID because the Bureau there similarly did not narrowly tailor the notification of purpose to adequately state what activity and law were at issue in the investigation.

The case is titled Consumer Financial Protection Bureau v. The Source for Public Data, L.P.  The full opinion may be found here.

Click here for WBK’s previous summary of the DC Circuit’s opinion in CFPB v. Accrediting Council for Independent Colleges and Schools.