On April 21, 2016, Judge Richard J. Leon of the United States District Court for the District of Columbia ruled on the first judicial challenge to the Consumer Financial Protection Bureau’s (“CFPB,” or “Bureau”) authority to issue and enforce a civil investigative demand (“CID”). The Bureau had issued to the Accrediting Council for Independent Colleges and Schools (“ACICS”) a broad-ranging CID, which the respondent first challenged before the Bureau. As has been the case with all such challenges, the Director rejected the respondent’s arguments and upheld the agency’s issuance of the CID. ACICS then filed suit in the Federal District Court in Washington, D.C. to challenge the CID. The Court held that the CFPB did not have the authority to issue a CID regarding “the process for accrediting for-profit schools.”

CIVIL INVESTIGATIVE DEMAND -

Procedurally, this case began on August 25, 2015, when the CFPB issued its CID to ACICS, the stated purpose of which was to “determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting for-profit colleges. . . .”