CFPB Director Kraninger has rejected the argument made by Equitable Acceptance Corp (EAC) that because the Bureau’s structure is unconstitutional, the civil investigative demand it received from the Bureau should be set aside or at least modified to stay the CID’s response deadlines pending the U.S. Supreme Court’s decision in Seila Law.

In her decision and order denying EAC’s petition to set aside or modify the CID, Director Kraninger stated that the Bureau “has consistently taken the position that the administrative process set out in the Bureau’s statute and regulations for petitioning to modify or set aside a CID is not the proper forum for raising and adjudicating challenges to the constitutionality of the Bureau’s statute.”  She also stated that should the Bureau seek a court order to compel compliance with the CID, EAC could raise its constitutional challenge as a defense before the district court.

Director Kraninger also rejected EAC’s argument that the CID was overly burdensome, stating that EAC had not established that it “meaningfully pursued” that objection with the Bureau’s enforcement staff during the meet-and-confer process.  While directing EAC to comply in full with the CID within 10 days of her order, Director Kraninger indicated that EAC “is welcome to engage with Bureau staff about any specific suggestions for modifying the CID…which may be adopted by the Assistant Director for Enforcement or Deputy Enforcement Director, as appropriate.”