Consumer bureau to give firms more info about investigations

Consumer bureau to give firms more info about investigations
© YouTube/RT America

The Consumer Financial Protection Bureau (CFPB) said Tuesday it will share more information with banks and lenders about potentially illegal actions when the agency begins investigating those firms.

The CFPB intends to give banks and lenders under investigation by the bureau a better sense of what activities prompted the agency’s scrutiny when asking for information about that conduct.

ADVERTISEMENT
Banks and lenders facing CFPB investigations receive civil investigative demands (CIDs) from the bureau. Firms are legally required to respond to these formal requests for information, which includes documents, records, oral and written testimony and other material relevant to a potential CFPB probe.

Firms under CFPB supervision have long complained about the sheer amount of information sought by the bureau through CIDs and the costly process of fighting these requests. The CFPB said Tuesday that the changes are meant to ease concerns of industry advocates raised through a process initiated by Mick MulvaneyJohn (Mick) Michael MulvaneyOn The Money: Judge rules banks can give Trump records to House | Mnuchin pegs debt ceiling deadline as 'late summer' | Democrats see momentum in Trump tax return fight | House rebukes Trump changes to consumer agency House rebukes Mulvaney's efforts to rein in consumer bureau The Hill's Morning Report - Pelosi remains firm despite new impeachment push MORE, the bureau’s former acting director.

Mulvaney, acting CFPB chief from November 2017 through December 2018, asked firms to share their concerns with every aspect of bureau oversight, including CIDs. The bureau kicked off a formal comment process that laid the groundwork for Mulvaney’s pullback of CFPB enforcement operations.

Mulvaney, who is now the White House chief of staff, often said banks and lenders should be made aware of their potential legal missteps before facing consequences for those actions, panning what he called "regulation by enforcement."

“Regulation by enforcement is done,” Mulvaney said last April. “Financial services providers should be allowed to know what the law is before being accused of breaking it.”

CFPB Director Kathy Kraninger, his successor, also expressed support for boosting the bureau's transparency with the firms it regulates.

The CFPB said Tuesday that the changes to CID policy also reflect suggestions made by the bureau’s inspector general (IG) in a 2017 report. The IG said the CFPB should regularly update banks and lenders on the scope of information sought by the agency as their investigations evolve.