CFPB Announces Change to CID Policy, Promotes Transparency in Investigations

The Consumer Financial Protection Bureau (CFPB or Bureau) announced today that it is changing its policy regarding Civil Investigation Demands (CIDs). 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 this policy change is made to reflect recent court decisions and comments received by the Bureau in the Request for Information about its investigative activities, which was issued in January 2018.

insideARM Perspective

The Bureau is consistently moving away from the old “regulation by enforcement” days and showing its commitment to ensuring the rules of the road are clear to give companies a fair shot at compliance. Last week, the Bureau announced that it would be hosting a symposium to clarify the meaning of “abusive acts or practices.” Any day now, the Bureau will release its Notice of Proposed Rulemaking for debt collection, which will provide a much-needed update to the outdated Fair Debt Collection Practices Act. And now, the Bureau with provide more clarity in its CIDs rather than going through what seem like fishing expeditions. It is difficult for businesses to comply with vague requirements or laws that have not modernized with the world; the Bureau's efforts will help alleviate some of this burden.