by Amanda M. Raines and A.J. Dhaliwal
Amanda M. Raines and A.J.
Dhaliwal, of BuckleySandler LLP, discuss how the power of civil investigative
demands (CIDs) has been brought into focus by two Consumer Financial Protection
Bureau (CFPB) decisions denying petitions to modify or set aside CIDs and how
those decisions provide guidance for parties assessing whether to challenge the
CFPB's request for documents and responses. Topics include the importance of
Since the Consumer Financial
Protection Bureau (CFPB or Bureau) came on line in July 2011, it has been
aggressively investigating whether financial institutions and service
providers, among others, have been engaging in conduct that, if proven,
violates a Federal consumer financial law. Among the many tools in the CFPB's
investigative arsenal are civil investigative demands (CIDs).
While the use of CIDs in regulatory investigations is nothing new, the power of
CIDs has been brought into focus by two recent CFPB decisions denying petitions
to modify or set aside CIDs. These decisions provide guidance for parties
assessing whether to challenge the CFPB's request for documents and responses.
In this article, we analyze the reasoning behind these decisions and identify
issues that companies must be cognizant of while navigating the investigation
and petitioning phases.
The CFPB's Rules Regarding CIDs
Section 1052 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 (Dodd-Frank Act) and the CFPB's final Rules Relating to Investigations
(Final Rules) set forth the parameters that govern the Bureau's investigations.
Under Section 1052(c), "[w]henever the Bureau has reason to believe that
any person may be in possession, custody, or control of any documentary
material or tangle things, or may have any information, relevant to a
violation," the Bureau may issue a CID. CIDs can be issued to compel
documentary material, tangible things, written reports, answers to questions,
and oral testimony.
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Amanda M. Raines
represents financial services industry clients in federal and state enforcement
agency investigations and litigation, as well as in private civil and class
action litigation. She has represented clients in investigations by the
Department of Justice, the SEC, the FDIC, and state attorneys general, as well
as in private class action litigation involving securities fraud, tax fraud,
the Fair Housing Act, the Equal Credit Opportunity Act, the Civil Rights Act,
and unfair and deceptive trade practices statutes. Ms. Raines received her J.D.
from Case Western Reserve University School of Law, where she was the managing
editor of the Case Western Law Review.
Amanjot ("A.J.") Singh Dhaliwal is an associate in the
Washington DC, office of BuckleySandler LLP. He assists financial services
clients in litigation, regulatory and compliance matters, and counsels clients
on federal laws including the Fair Credit Reporting Act, the Fair Debt
Collections Practices Act, the Real Estate Settlement Procedures Act, and the
Truth in Lending Act. He is the Immediate Past-President of the South Asian Bar
Association of Washington DC (SABA-DC). He received his LL.M. from The George
Washington University Law School, where he focused on international business
transactions and trade law.