On April 23, 2019, the CFPB announced that it will provide more transparency to recipients of Civil Investigative Demands (“CIDs”) on what the investigation is about. The CFPB’s press release stated that “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.”
This change brings the CFPB’s CID policy more in line with what is required by the Consumer Financial Protection Act of 2010, which requires CFPB CIDs to “state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.”
As the CFPB acknowledged in its press release, the updated policy also addresses at least two adverse rulings the CFPB received on the adequacy of its notifications of purpose as well as an Office of Inspector General finding that the CFPB needed to improve its notifications of purpose. The CFPB also noted that the policy comes, in part, as a result of responses it received to requests for information on the CFPB’s CIDs, to which Ballard Spahr submitted extensive comments.
In an interview with Law360, Ballard Spahr’s own Alan Kaplinsky reminded the industry that this move towards transparency is not an indication that the CFPB’s enforcement efforts are dormant. “While the number of investigations has declined, they are still happening and we are defending many new investigations brought by the CFPB under Mulvaney and Kraninger.”