NAFCU's Steve Van Beek had a chilling blog post last week about the CFPB's Civil Investigative Demand (CID) power. While it's a common theme in some quarters to pooh-pooh the authority of the CFPB to directly supervise community banks and other institutions under $10 billion, Steve correctly points out that CIDs aren't just for the big boys.
Even if your credit union is less than $10 billion in assets - the CFPB could issue you a CID. Here is from a September CFPB blog post:
"The mission of the CFPB is to ensure compliance with federal consumer financial laws through effective enforcement of those laws. When the Office of Enforcement needs to gather information, it may issue a Civil Investigative Demand (CID) to people and institutions that may have materials relevant to an investigation. The law that created the CFPB gives us the authority to gather information this way, and several other federal agencies have similar processes.
We carefully consider what to request in each Civil Investigative Demand. A recipient of a CID may challenge a CID by petitioning the CFPB’s Director. The Director can respond in three ways: he can reaffirm our decision to obtain the information, modify the demand, or set it aside altogether."
As Steve also notes, the "appeal" right is of cold comfort to recipients of a CID, because the "appellate court" is the Director of the CFPB. Thus far, only two appeals have been made and Recess Richie Cordray has denied both appeals. Like Captain Renault, I'm shocked, SHOCKED!
The time frames for appeal are short (10 days). I suppose if you're going to be hosed in any event, getting the hosing accomplished quickly saves wear and tear on the nether regions. Moreover, since the CFPB also thinks it has the right to compel institutions to turn over attorney-client privileged information, you know that you're not going to be dealing with bureaucrats who give a flying fig in a rolling donut about actual due process or fundamental fairness. They're the good guys, you're the bad guys, they're on a mission from God, and in a battle of good-against-evil, the ends justify the means. The denial of the appeal is a foregone conclusion, so why waste a lot of time (and rack up even more billable hours in attorneys' time in a futile endeavor)?
I know I recently expectorated the notion that the CFPB was (like the common cold) here to stay, but on general principles, I simply must reinstate my closing motto to every CFPB-realted post, if only for the purposes of sustaining the morale of those of us who toil in the trenches. After all, 2016 is right around the corner, historically speaking.
CFPB delenda est!