Will the CFPB follow the SEC’s policy shift on “neither admit nor deny” settlements?


Last week, the Securities and Exchange Commission announced a policy shift concerning settled enforcement actions. The SEC has indicated that it will more frequently require an admission of wrongdoing from defendants as a condition of settlement. For more on the SEC’s policy shift, see our legal alert.

Like the SEC, the CFPB has allowed defendants in enforcement actions to enter into settlements “without admitting or denying” wrongdoing. It is possible the CFPB could make a similar change in its policy. Indeed, the fact that  Senator Elizabeth Warren was a leading critic of the SEC’s “neither admit nor deny” policy could make the CFPB more favorably disposed to making such a change. Because of the difficulty that defendants in enforcement actions may face by admitting any wrongdoing, a change in CFPB policy could preclude many companies from settling with the CFPB.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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