The FTC recently released comments in response to a CFPB Request for Information (RFI) from earlier this year regarding the use of Civil Investigative Demands (CIDs) and related processes. The aim of the RFI was to solicit and obtain information to help reduce the burden of CIDs on their recipients while still meeting the Bureau’s statutory and regulatory obligations. The FTC comments explain the mechanics of and rationales for its use of CIDs in authorizing and collecting information, and are aimed at assisting the CFPB’s management of its own investigative processes.
For instance, several reforms already undertaken by the FTC and mentioned in its comments include: 1) providing companies with more scope and detail about the purpose of investigations; 2) limiting the relevant time periods for requests; 3) providing simplified instructions regarding the production of electronically stored data; and 4) increasing the response times for CIDs, where appropriate.
The comments also point out that the CFPB may wish to consider the FTC’s approach to delegating the authority to issue CIDs to a senior official not directly involved in investigations that require the issuance of CIDs. This helps the FTC ensure that a senior official makes the decision about whether to impose a potentially significant burden on a CID recipient, and that an independent assessment is made of the costs and benefits of the CID by someone who is not conducting the investigation.
Additionally, the FTC notes its effort to make the purpose of investigations more transparent by modifying the language used in CIDs to include specific, rather than general, investigation descriptions linking the information demanded by a CID to the conduct under investigation. The FTC comments suggest that doing so has improved its ability to meet its legal obligations without imposing additional costs, while also minimizing confusion and facilitating the ability of CID recipients to raise concerns about their compliance obligations.
The FTC’s full comments may be viewed here.