Consumer Financial Protection Bureau Director Kathy Kraninger is proving to be more aggressive than her predecessor, Mick Mulvaney. In recent weeks, Kraninger has issued seven orders strictly enforcing the Bureau’s civil investigative demands, or “CIDs,” demonstrating that she intends to be a vigorous consumer advocate:
- In re Synchrony Financial (May 31, 2019): Kraninger rejected a challenge asserting that a CID sought information that lacks “reasonable relevance to a legitimate investigative purpose,” noting that the petitioner’s arguments were “general” and went to whether the petitioner “complied with the law, not to whether the information” sought was relevant. Kraninger also rejected a challenge asserting a CID sought information regarding transactions that were outside the applicable limitations period, noting that the Bureau can seek information that is not “actionable.”
- In re Wall & Associates, Inc. (May 21, 2019): Kraninger rejected a challenge asserting that an entity did not provide financial advisory services and thus was not covered by the CFPB’s enforcement authority, noting that the CFPB is not required to accept as true an entity’s factual assertions regarding its business practices, and that “simultaneous agency investigation of jurisdictional facts and possible violations” has been approved in a long line of decisions.
- In re Fastbucks (April 25, 2019): Kraninger rejected a challenge asserting that a set of CIDs was issued for an improper purpose, noting that the CIDs had “been subject to multiple levels of review within the Bureau” which “ensured they were issued for a proper purpose and in accordance with all applicable regulations.”
- In re Kern-Fuller and Sutter (April 25, 2019): Kraninger rejected a challenge asserting that a set of CIDs issued to attorneys had to be modified to protect the attorney-client privilege and the work product privilege, noting that the attorneys’ “premature assertions” of privilege gave no grounds to set aside the CIDs. Kraninger also rejected a challenge to the constitutionality of the CFPB’s structure, stating that the “Bureau has consistently maintained that its statutory structure is constitutional under controlling Supreme Court precedents.”
- In re Amy Plummer (April 25, 2019): Kraninger rejected a challenge asserting that a CID exceeded the CFPB’s authority by attempting to regulate the practice of law, noting that an entity otherwise excluded from CFPB enforcement authority may still be required to respond to CIDs issued in the course of the CFPB’s execution of its enforcement responsibilities.
- In re Jawat Nesheiwat (April 25, 2019): Kraninger rejected a challenge asserting that a CID required redaction of the petitioner’s name, noting that the petitioner failed to articulate an argument as to why his name would be protected from disclosure under FOIA and had not sufficiently identified any harm he would suffer as a result of disclosure.
- In re Fair Collections and Outsourcing, Inc. (April 25, 2019): Kraninger rejected a challenge asserting that a set of CIDs was issued for an improper purpose because they were issued after an enforcement action had been authorized, noting that the petitioner had cited no “statutory or other restriction on the Bureau’s ability to issue a CID after an enforcement action is authorized but not filed.”
Troutman Sanders routinely assists clients in responding to CIDs issued by federal and state agencies, and will continue to monitor and provide updates regarding relevant enforcement trends.