The Consumer Financial Protection Bureau (CFPB) has teed up another D.C. Circuit battle regarding the scope of its authority. On Monday, June 13, the CFPB filed a notice of appeal of the district court’s decision to dismiss the CFPB’s petition to enforce a Civil Investigative Demand (CID) issued to the Accrediting Council for Independent Colleges and Schools (ACICS). A CID is akin to an administrative subpoena, which the CFPB is authorized to issue as part of its investigative authority. The CFPB had issued a CID to ACICS as part of an investigation whose purpose was to determine whether any person (presumably including ACICS) had engaged in unlawful practices “in connection with accrediting for-profit colleges” in violation of the Dodd-Frank Act’s prohibition on unfair, deceptive and abusive acts and practices (UDAAP). The UDAAP prohibition, however, is generally only applicable to those persons who provide consumer financial products or services, or those who knowingly or recklessly provide substantial assistance to a UDAAP violation. ACICS moved to dismiss the petition, arguing that the CFPB’s investigation was outside the agency’s jurisdiction, since ACICS did not provide consumer financial products or services. The CFPB argued that ACICS’ accreditation of for-profit schools may have substantially assisted those schools in committing unfair, deceptive or abusive acts or practices in connection with their lending programs. The district court agreed with ACICS, finding that the CFPB’s investigation of the accreditation process was outside the scope of the agency’s authority, and dismissed the petition. Now that the CFPB has appealed the district court’s decision, the D.C. Circuit will have an opportunity to opine both on the scope of the agency’s investigative authority and its jurisdiction.
