CFPB Issues a Request for Information Regarding Administrative Adjudications

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The CFPB has issued a Request for Information, seeking comments from the public regarding how it might better improve its administrative adjudication processes, including the Rules of Practice for Adjudication Proceedings (the “Rules”), while still achieving the statutory purpose and objectives of the CFPB.

The Rules were established in 2014 per the requirements of the Consumer Financial Protection Act of 2010.  Since the implementation of the Rules there have been eight administrative adjudication proceedings that were not immediately resolved by the issuance of a consent order.  Of those, six were settled during the course of adjudication, one is still pending, and one has resulted in a final decision.

The CFPB stated in its Request for Information that it understands that the administrative adjudication process can result in undue burdens, impacts, and costs to parties subject to the proceedings.  Therefore, it is interested in receiving comments regarding whether it should use the administrative adjudication process, and if so whether and how the Rules should be updated, streamlined, or revised to better meet the CFPB’s objectives, which include minimizing burdens and impacts on parties subject to the proceedings, aligning the CFPB’s Rules more closely with those of other agencies, and providing fair and efficient processes to individuals involved by ensuring that, among other things, those persons and entities have a full and fair opportunity to present evidence and arguments related to the proceedings.

The Request for Information indicates that the CFPB is seeking feedback on all aspects of the administrative adjudication process, including but not limited to the following:

  • Whether the CFPB, as a matter of policy, should pursue contested matters only in federal court instead of through the administrative process;
  • The limitation in 12 CFR 1081.210(b) to call a specific number of expert witnesses at a hearing, absent “extraordinary circumstances;”
  • The evidentiary rules of 12 CFR 1081.303(b)’s pertaining to admissibility in administrative adjudications, including: whether the CFPB should expressly adopt the Federal Rules of Evidence; and whether, if it does not adopt the Federal Rules of Evidence, the acceptance of prior testimony hearsay evidence pursuant to 12 CFR 1081.303(b)(3) should comply with the Federal Rule of Evidence 804(b)(1);
  • The Rules’ lack of authorization for parties to conduct certain discovery, including deposing fact witnesses or serving interrogatories; and
  • Whether respondents should be afforded the opportunity to stay a decision of the Director of the CFPB pending appeal by filing a supersedeas bond, consistent with the Federal rule of Civil Procedure 62(d).

All comments must be received by April 6, 2018.

More information regarding the CFPB’s Request for Information can be found here: https://www.federalregister.gov/documents/2018/02/05/2018-02208/request-for-information-regarding-bureau-rules-of-practice-for-adjudication-proceedings.

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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