Chamber of Commerce Calls (Yet Again) for Improvements in the CFPB’s Supervision and Authority Processes

Chamber of Commerce Calls (Yet Again) for Improvements in the CFPB’s Supervision and Authority Processes

by Richard E. Gottlieb and Jeffrey E. Jamison

For the second time in eight months, the U.S. Chamber of Commerce has called for the CFPB to take action to "eliminate the uncertainty and lack of clarity that continues to cloud the Bureau's activity and therefore imposes significant costs on the huge number of businesses subject to the Bureau's jurisdiction." In a February 14, 2013 letter, David Hirschmann, the Chamber's senior vice president, addressed the Bureau's supervision and regulatory processes. Hirschmann warned that "continued uncertainty and inefficiency [in those processes] is not simply to impose excessive, unjustified costs on legitimate businesses seeking to comply with the law-it directly constrains the lending, especially lending to small businesses that our economy desperately needs in order to grow and create jobs for the millions of Americans who remain unemployed."

 In its first letter dated July 2, 2103, the Chamber offered a dozen suggestions for improving the CFPB's supervision and regulatory processes, which suggestions the Chamber claims were virtually ignored. In its February 14, 2013 letter, the Chamber renewed its call for improvements in connection with its supervision and investigatory processes and "suggests several additional steps that the Bureau could take to eliminate inefficiency and unjustified burdens in connection with its supervision and investigatory processes." The This time around the Chamber claims that it based its suggestions on the actual experiences of "numerous individual businesses."

The Chamber asks the CFPB to do the following:

  • Improve the training of supervision staff;
  • Apply a consistent approach to examinations;
  • Should establish an "end point" for its examinations and institute a sensible, uniform closing letter process;
  • Reduce the involvement of enforcement attorneys during the examination process to improve communication during the process;
  • Constrain the amount of data requested to reduce the burden and costs for the responding parties;
  • Limit use of the supervision process to provide guidance regarding its view of statutory requirements or to impose non-public interpretations of statutory requirements.

Of the list, the most controversial will be those tied to the use of supervision as a substitute for regulation, and the attendance of enforcement attorneys during exams.  Many industry groups have expressed concern about both these approaches.  Likewise, the Chamber questioned the Bureau's "practice of issuing extremely expansive requests for information." The Chamber warned, using a specific example, that this practice "effectively gives carte blanche to Bureau investigators to impose huge financial burdens on companies at the outset of an investigation." The Chamber suggested that the CFPB adopt the more restrictive approach employed by the Federal Trade Commission and other federal regulatory agencies to request only those "'[d]ocuments sufficient to' provide the relevant information, and focus requests for 'all' documents on the specific area under investigation."

Stay tuned to the CFPB-Lawblog as we follow the CFPB's response to this letter.

Read more articles about the Consumer Financial Protection Bureau at Dykema's CFPB Blog

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