CFPB Investigation Defense Lawyer - Federal Lawyer

CFPB Investigation Defense Lawyer

Engage an Experienced CFPB Investigation Defense Lawyer to Protect Your Financial Institution or Business

John W. Sellers
Attorney John W. Sellers
SEC Defense Team Lead
Former DOJ Trial Attorney

Facing scrutiny from the U.S. Consumer Financial Protection Bureau (CFPB) is a serious matter that has the potential for significant legal, financial, and business implications. When CFPB investigations lead to enforcement action, targeted entities and individuals can face fines, restitution, injunctions, bars from the consumer finance industry, and other penalties.

With this in mind, if the CFPB is looking into your financial institution’s or business’s practices, it is imperative that you engage an experienced CFPB investigation defense lawyer promptly. It may not be too late to avoid penalties—but you will need to act quickly to assert a sound and strategic defense.

Experienced Federal Defense Counsel for CFPB Investigations

At Oberheiden P.C., our federal defense lawyers bring centuries of combined experience to representing financial institutions, businesses, businessowners, executives, and other entities and individuals in CFPB investigations. Since we also serve as CFPB compliance counsel to financial institutions and businesses, we have a comprehensive understanding of the issues that can lead to investigations—as well as the defense strategies that institutions and businesses can use to overcome them. We are able to provide representation for CFPB investigations nationwide; and, if you are in need of an experienced CFPB investigation defense lawyer, we encourage you to contact us immediately for a complimentary consultation.

Common Triggers for CFPB Investigations

A variety of issues can trigger CFPB investigations. As outlined by the CFPB, common triggers for investigations include:

  • CFPB audits and examinations
  • CFPB market intelligence
  • Consumer complaints
  • Whistleblower allegations
  • Referrals from other regulatory agencies

When facing scrutiny, understanding why the CFPB is investigating can be critical for formulating a targeted defense strategy. For example, while defense strategies for investigations triggered by referrals from other federal agencies will typically need to focus on the substance of the allegations at issue, effective defense strategies in whistleblower cases can involve questioning the whistleblower’s motives and trustworthiness. Understanding an investigation’s trigger can provide insight into the information the CFPB already has in its possession as well, and this can also be critical for structuring an effective defense.

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What It Means When the CFPB Launches an Investigation

The CFPB will only initiate an investigation if it has a reason to do so. It uses its resources judiciously, and it will only devote resources to an investigation if doing so “is consistent with [the CFPB’s] strategic planning and articulated priorities or warrants a conscious departure from those plans and priorities.”

Thus, while “[t]he existing of an investigation does not mean that the subject has violated the law,” it does mean that the CFPB has determined that there is reasonable cause to investigate. Generally, the CFPB will initiate an investigation only if:

  • “There is a plausible set of facts that, if proven, would amount to a violation of one or more federal consumer financial laws;”
  • “There is reason to believe that one or more specific entities may be engaging in the conduct described in those facts;” or,
  • “There is evidence of a magnitude of harm that justifies investment of resources.”

For entities and individuals targeted in CFPB investigations, this is critical to keep in mind. By the time a target learns of an investigation, the CFPB has already made a preliminary assessment of its likelihood of success in enforcement proceedings, and the target must present evidence that counters this preliminary assessment in order to avoid unnecessary liability (or other penalties).

Executing a Strategic CFPB Investigation Defense

Successfully defending against a CFPB investigation is a multi-step process, and the options that a targeted entity or individual has available depend heavily on the particular facts, circumstances, and allegations involved. With this in mind, our process for protecting our clients against unnecessary consequences broadly involves:

1. Identifying the Specific Statutory or Regulatory Issues Under Scrutiny

The CFPB’s enforcement authority covers an extremely broad range of statutes and regulations. As a result, when facing a CFPB investigation, a critical first step involves identifying the specific statutory or regulatory issues under scrutiny. Defending against allegations of equal credit opportunity violations and defending against allegations of violating consumers’ privacy to open sham accounts, for example, are two entirely different matters. To determine what defenses they have available, CFPB investigation targets first need to determine what allegations are on the table.

2. Conducting an Internal CFPB Compliance Audit

Once we determine what the CFPB is investigating, our next step is to work with our client to conduct an internal CFPB compliance audit. This will tell us both (i) whether the CFPB’s allegations are substantiated, and (ii) whether (and to what extent) our client has documentation on hand that we can use in the client’s defense.

3. Assessing Potential Defenses

With a clear and comprehensive understanding of the relevant facts and law, we can shift our focus to assessing potential defenses. From affirmatively demonstrating compliance to using privileges and other means to prevent the CFPB from gathering the evidence it needs to pursue enforcement, in most cases there will be a variety of options available.

4. Formulating a Cohesive and Strategic Defense

Even when a targeted entity or individual has a multitude of defenses available, it won’t necessarily make sense to assert all of these defenses in tandem. Oftentimes, a concise and focused defense strategy is best. Based on the circumstances at hand, our CFPB investigation defense lawyers will formulate a cohesive and strategic defense, and we will execute this defense with the goal of securing a favorable outcome as quickly as possible.

5. Working With (Rather Than Against) the CFPB

When it comes to efficiently securing a favorable outcome, it will often be in investigation targets’ interests to work with (rather than against) the CFPB. With that said, targeted entities and individuals must be very careful not to be overly cooperative to their detriment. When facing a CFPB investigation, achieving an amicable result requires a measured and balanced approach. Our lawyers have extensive experience tactfully steering federal government investigations in our clients’ favor while maintaining good working relationships with the investigating agencies involved.

6. Seeking a Favorable Pre-Enforcement Resolution

Achieving a favorable pre-enforcement resolution avoids both unnecessary risk and unwanted publicity. As a result, we seek to achieve these resolutions for our clients whenever possible. Our lawyers have a proven record of success at the investigative stage, and we have helped financial institutions, businesses, and individuals across the country avoid prosecution in numerous high-risk scenarios.

7. Administrative or Civil Litigation Defense

While it is ideal to avoid administrative or civil enforcement action when possible, in some cases litigation will be necessary. In addition to our success at the investigative stage, we have also had significant success defending clients in administrative and civil enforcement proceedings. If we ultimately need to take the CFPB’s allegations before an administrative law judge (ALJ) or fight to avoid sanctions in federal district court, we will be fully prepared to do so by all means available.

FAQs: Successfully Defending Against a CFPB Investigation

What Does the CFPB Investigate?

 

The CFPB investigates financial institutions and businesses for a broad range of consumer financing violations. This includes everything from disclosure violations to violations of consumers’ privacy rights, and from predatory lending and leasing practices to violations of the Real Estate Settlement Procedures Act (RESPA). When facing a CFPB investigation, identifying the focus of the investigation is critical for asserting an effective defense.

What Should I Expect During a CFPB Investigation?

 

When the CFPB launches an investigation, one of its first steps is usually to issue a civil investigative demand (CID). Once the CFPB issues a CID, agency personnel must “meet and confer” with the recipient within 10 days. The CFPB may also issue a Notice and Opportunity to Respond and Advise (NORA), and it may seek to conduct interviews along with gathering evidence through other means. Throughout the investigative process, targeted entities and individuals must be very careful to protect their interests, and they must work closely with their defense counsel to steer the inquiry toward a favorable resolution.

How Long Does a CFPB Investigation Typically Last?

 

The duration of a CFPB investigation depends on various factors. These include (but are not limited to) the nature and scope of the investigation, the seriousness of the allegations at issue, the number of consumer financing transactions involved, and the targeted entity’s or individual’s approach to its defense.

What Happens After a CFPB Investigation?

 

What happens after a CFPB investigation depends on what happens during the investigative process. If CFPB agents determine that they do not have enough evidence to substantiate charges, then the inquiry will simply end. But, if CFPB agents determine that enforcement action is warranted, the Bureau can either pursue administrative penalties through its own internal procedures, or it can initiate a civil enforcement action in federal district court.

Do Financial Institutions and Businesses Need to Engage Outside CFPB Investigation Defense Lawyers?

 

Financial institutions and businesses targeted in CFPB investigations need to engage experienced outside defense counsel. A team of experienced CFPB investigation defense lawyers will have the knowledge and insights required to identify the relevant facts and law, formulate a targeted and strategic defense, and minimize (if not avoid) fines and other penalties.


Speak with a CFPB Investigation Defense Lawyer in Confidence

If you need to speak with a CFPB investigation defense lawyer in confidence, we encourage you to contact us promptly. Call 888-680-1745 or get in touch online to arrange a complimentary initial consultation as soon as possible.

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