The Consumer Financial Protection Bureau has been actively engaged in investigations of banks and nonbanks since it was established nearly three years ago. To further its mission “to ensure that consumer financial markets actually work for people,” the bureau has stated that it will use “strong and vigilant enforcement” to “root out unfair, deceptive, or abusive acts or practices in connection with consumer financial products or services.” The recent proliferation of public enforcement actions demonstrates that the CFPB is putting words into action.
Like many government agencies before it, the CFPB has relied heavily on the use of Civil Investigative Demands (“CIDs”) in its investigations to carry out its mission. Although the final rules relating to investigations, including those related to CIDs, were drawn from investigative procedures used by other government entities, most heavily the Federal Trade Commission, the CFPB’s execution of these rules can be quite different in a number of important ways.
The process for investigative hearings, which are noticed through CIDs and used to take oral testimony during the bureau’s investigations, is another instance in which the CFPB’s rule of the road diverges from those of many other government agencies. Thus, enforcement lawyers and the institutions they represent are working within a new rubric in many ways. This article provides an overview of the CFPB’s rules relating to investigational hearings and practical tips for preparing and defending such hearings.