The CFPB recently posted to its website a petition filed by Checksmart Financial Company to modify or set aside a civil investigative demand it received from the Bureau.
According to the petition, the CID was issued in connection with a nonpublic investigation launched by the CFPB “to determine whether payday lenders, check cashers, their affiliates, or other unnamed persons have been or are engaging in unlawful acts or practices in connection with the origination of payday loans and the cashing of payday loan proceeds” in violation of the Consumer Financial Protection Act. The petition challenges the CID on various grounds, including that it (1) is overbroad because it seeks information unrelated to originating payday loans and cashing proceeds checks, (2) fails to adequately identify the nature of the conduct under investigation, and (3) demands materials pre-dating the Dodd-Frank Act.
The CFPB’s rule relating to investigations (12 C.F.R. Section 1080.6(g)) provides that “[a]ll such petitions [to set aside CIDs] and the Director’s orders in response to those petitions are part of the public records of the Bureau unless the Bureau determines otherwise for good cause shown.” The Bureau does not appear to have a consistent practice as to when it makes petitions to set aside CIDs public. Although it has made Checksmart’s petition public in advance of issuing an order ruling on the petition, it has waited to make other petitions public until it issued its rulings on the petitions.