This article was authored by Jonathan Pompan, Alexandra Megaris, and Jennifer Talbert. It was previously posted on Venable.com and is re-published here with permission.
Despite facing significant legal challenges and a shifting political landscape, the Consumer Financial Protection Bureau (CFPB) is virtually unrestrained in its ability to launch investigations and threaten enforcement actions. We've obtained through a Freedom of Information Act (FOIA) request the most recent official CFPB Enforcement Policies and Procedures Manual Version 2.0. The Enforcement Policies and Procedures Manual "is the source for policies governing the work of the Consumer Financial Protection Bureau Office of Enforcement." As a result, it is the agency's playbook for investigations and enforcement actions that continue to make headlines and reverberate through the consumer financial services legal and regulatory landscape.
The document, available for download here, represents the most concrete and definitive statement of the CFPB Office of Enforcement's views on the agency's jurisdiction, authority, and strategy and tactics for launching investigations and bringing enforcement actions. The manual is important reading for anyone responding to a CFPB Civil Investigative Demand (CID), preparing to respond to a Notice of Opportunity to Respond and Advise (NORA) letter, litigating with the CFPB, advocating for the close of an investigation, or even preparing for or responding to an examination or Potential Action and Request for Response (PARR) letter.
Table of Contents
Here's a sample from the table of contents.
Part 1: Office Policies
- Document Maintenance and Retention Policies, including sections on maintenance of documents collected during an investigation or discovery
- Investigative Policies, including sections on CIDs, taking testimony, no targets of investigations, NORA, and closing an enforcement matter
- Litigation Policies, including sections on statutes of limitations and tolling agreements, notice and ex parte preliminary relief, and procuring an expert/consulting witness
- Remedies Policies
- Adjudicative Proceedings Policies
- Law Enforcement Partners Policies, including sections on working with criminal law enforcement partners, exchanging confidential information with law enforcement agencies, civil referrals (incoming and outgoing), and Section 1042 Notices: state action under the CFPA
Part 2: Practice Guidance
Includes sections with a timeline cheat sheet, timeline flowchart (with diagrams for matters that originate from investigations, examinations), and ethical guidance related to obtaining information from consumer response.
Part 3: Administrative Policies
Enforcement Timeline Guidance
A significant addition from an earlier version of the enforcement manual we posted here is the inclusion that is referred to as the "ENF Timeline." The timeline provides guidelines to staff regarding how much time should elapse before a research matter or investigation should evolve into an enforcement action (or be closed). Notably, the timelines are only suggestions and not concrete rules for enforcement staff.
The charts provide details on how much time staff have to close or settle the case or bring an enforcement action—depending on where the action originated. For example, matters originating from Open Research Matters or a CFPB-created Research Assignment Memo typically open within 3 months, whereas open investigations typically are expected to move to a suit or settlement within 18 months of opening of the investigation (if not closed).
Suits and settlements originating from determinations made by the internal Action Review Committee (ARC) are given much shorter suggested timelines, ranging between 5 business days from the date the memo is finalized by supervision to 60 calendar days for additional fact gathering. The ARC makes a recommendation to the CFPB director on whether an enforcement action or a supervisory response is the appropriate reaction to a specific violation of consumer financial law.
Revision History and Disclaimer
While the manual cover has a "September 2015" date, internal sections list more recent revision dates, including June 2016. There is a blanket disclaimer stating that the manual "does not bind the CFPB and does not create any rights, benefits, or defenses—substantive or procedural—that are enforceable by any party in any manner."