Latest CFPB Request for Information Focuses on Enforcement Protocol

March 26, 2018 by David Basen

The Consumer Financial Protection Bureau (CFPB) is again seeking comment on its enforcement-related processes, as the bureau continues to revamp its policies and procedures under the new leadership of Acting Director Mick Mulvaney.

The CFPB issued a request for information (RFI) seeking input from regulated entities regarding the proficiency of its enforcement protocols and policy-related decisions. Specifically, the CFPB asks how it may reduce the burdens associated with enforcing its consumer protection regulations without neglecting the bureau’s statutorily-imposed oversight function and mission to increase overall market transparency.
This RFI is the third request circulated by Mulvaney over a relatively short time-period. It is considerably more expansive than the bureau’s two preceding RFIs, which were limited to specific enforcement details. Public comments in response to the RFI must be submitted within sixty days of its publishing in the Federal Register, which the CFPB anticipates being around mid-February. The examination of the bureau’s enforcement practices is a component of a comprehensive review of all agency procedures that Mulvaney implemented in early January.
Comments for the first RFI are due on March 27, 2018. The initial document requests input from stakeholders about the CFPB’s policies addressing civil investigative initiatives and associated hearings. Comments for the second RFI are due on April 6, 2018. This request is concerned with how the CFPB can augment its administrative adjudication framework to make it more efficient. The CFPB also stated its intentions to release a fourth RFI shortly which will seek suggestions on improving the entity’s supervisory protocol.
In the most recent RFI, the CFPB requests input regarding its enforcement policies as a whole. The document notes explicitly some issues that garnered criticism from both Congress and regulated organizations during former Director Richard Cordray’s tenure.
One aspect the CFPB hopes to receive feedback on is how to better coordinate enforcement efforts with other federal or state regulatory agencies that may have overlapping jurisdiction. Mulvaney publicly addressed this issue in a recent 45-minute discussion at CFPB headquarters with Comptroller of the Currency Joseph Otting. The meeting focused on methods to reduce the regulatory burden on financial firms, as well as how to better synchronize overall supervisory efforts of the financial industry.
The CFPB also seeks ways in which to improve communication between the bureau and entities being investigated. The bureau wants to clarify issues such as the timing and frequency of interchanges with these organizations. Another closely related issue is determining precisely what information the CFPB is obligated to provide concerning the status of ongoing investigations and the duration of these investigative efforts.
The third RFI addresses issues concerning the Notice and Opportunity to Respond and Advise (NORA) process. The CFPB seeks comment about if the NORA protocol should be mandatory instead of discretionary. The bureau also seeks input as to the appropriate scope and detail of information disclosed in letters the CFPB may send to potentially investigative subjects as part of the NORA process. Specifically, the CFPB poses the question of whether potential subjects of investigation should retain the right to provide an in-person presentation to the CFPB.
Other issues the RFI seeks comment on how civil penalties are calculated and whether the CFPB should implement a more consistent civil penalty matrix as well as standardized consent order provisions.