CFPB Denies Request to Modify or Set Aside Civil Investigative Demand

CFPB Acting Director Uejio issued an order denying a petition to modify or set aside a civil investigative demand (CID) filed by a consumer credit company, finding the CID’s notification of purpose adequately stated the conduct at-issue which was under investigation.  The order also denied the company’s request to treat the petition itself as confidential under the CFPB’s regulations.  

On February 5, 2021, the Bureau issued a CID to the consumer credit company, seeking documents, various data, written reports, and responses to interrogatories.  The company took issue with the CID’s notification of purpose, which among other things, stated that the CFPB was investigating whether the company “in connection with the extension of credit, servicing of loans, processing of payments, or collection of debt . . . made false or misleading representations or omissions to consumers, improperly contacted . . .and failed to provide disclosures to consumers[.]”  The CID stated the conduct was being investigated to determine whether the company violated the Consumer Financial Protection Act’s (CFPA) prohibition on unfair or deceptive practices and certain Regulation Z provisions implementing the Truth in Lending Act.

The CFPA mandates that CIDs issued by the CFPB must state “the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.”  12 U.S.C. § 5562.  The order denying the request to modify the petition found that the notification at-issue was adequate under requisite case law, including Consumer Fin. Prot. Bureau v. Accrediting Council for Indep. Colls. & Sch., 854 F.3d 683, 691 (2017) (“ACICS”).  In that case, the D.C. Circuit found that a notification of purpose was too broad because it gave “no description whatsoever of the conduct the CFPB is interested in investigating, [and] we need not and probably cannot accurately determine whether the inquiry is within the authority of the agency and whether the information sought is reasonably relevant.”  Id. at 691.  Acting Director Uejio found that the notification was more specific than that in ACICS and concluded that the “[n]otification provides ample information concerning the nature of the Bureau’s investigation under the law.”

The order also declined the company’s request to treat its petition as confidential because “[p]etitions to modify or set aside a CID are part of the public records of the Bureau unless the Bureau determines otherwise for good cause shown.” (internal citation omitted).  The order did, however, allow some redactions to exhibits attached to the petition under the Freedom of Information Act’s exemption for law enforcement-sensitive information.

The petition and order are available on the CFPB’s website.