This week the Consumer Financial Protection Bureau announced a policy change for the agency’s Civil Investigative Demands, or “CIDs.”

The CFPB is authorized by statute to issue CIDs. These updated policy changes address what may be included in those CIDs, specifically in the “notification of purpose” section. The CFPB has stated that going forward CIDs will contain:

  • More information about the provisions of law that might have been violated;
  • More information about the business activities that are subject to CFPB authority; and
  • Whether determining the extent of the CFPB’s authority over the business activities is one of the “significant” purposes of the investigation.

The “notification of purpose” section is the subject of recent court decisions, and the CFPB’s announcement states that these changes are also in response to comments the agency received from several Requests for Information the CFPB issued in 2018, seeking feedback about its enforcement operations. Many industry groups and businesses expressed a need for greater information and transparency in the CID process, which can be confusing and challenging for businesses to navigate. This policy change appears to be a step toward addressing those concerns.

Troutman Sanders routinely assists clients in responding to CIDs, from both state and federal regulators. We will continue to monitor the CFPB’s changes to the CID and investigative process in general.