Consumer Financial Protection Bureau (CFPB) Defense – Investigations, CIDs & Subpoenas

The Consumer Financial Protection Bureau (CFPB) investigates banks, lenders, servicers, and other entities for a broad range of fraud-related offenses. If your business or institution is facing a CFPB investigation, here’s what you need to know.

Protecting U.S. consumers against financial fraud and predatory lending practices has long been a top federal law enforcement priority. The Consumer Financial Protection Bureau (CFPB) is the agency that holds primary responsibility for conducting investigations in this area, and it does so with substantial resources at its disposal. The CFPB routinely conducts large-scale and invasive investigations, and it relies on subpoenas to compel targeted entities to provide information in furtherance of its inquiries.

Consumer Financial Protection Bureau investigations have the potential to lead to substantial consequences. Banks, lenders, servicers, and others accused of fraudulent and predatory practices can face enormous fines and other penalties. In the most-severe cases, CFPB investigations can lead to criminal charges against entities, their owners and executives, board members, and others. But, while these are very possible outcomes, it is often possible to resolve CFPB subpoenas and investigations without liability as well; and, in many cases, a proactive defense strategy can result in a CFPB investigation being terminated without charges being filed.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Federal Defense Attorneys for CFPB CIDs, Subpoenas and Investigations

At Oberheiden P.C., we represent businesses and financial institutions across the county in matters involving the Consumer Financial Protection Bureau. Whether you have received a CFPB subpoena or your business or institution is facing a large-scale CFPB investigation, our federal defense attorneys can guide you safely through the process. Our attorneys have extensive experience in high-stakes federal investigations – including decades of prior experience as white-collar prosecutors with the U.S. Department of Justice (DOJ) – and we have resolved the substantial majority of our clients’ federal investigations without charges being filed.

In addition to representing our clients during CFPB inquiries, we also provide CFPB compliance representation. This among several factors that distinguish Oberheiden P.C. from other law firms, and it is important for two reasons: (i) since we serve as CFPB compliance counsel, we are intimately familiar with the laws that govern consumer finance transactions and the CFPB’s policies and procedures; and, (ii) in addition to providing defense representation for your CFPB investigation, we can simultaneously assist your business or institution with coming into compliance.

Understanding the Scope of the CFPB’s Investigative and Enforcement Authority

The CFPB’s enforcement authority encompasses a broad range of fraud-related offenses, and it extends to businesses and institutions of various sizes throughout the consumer lending industry. As the CFPB itself explains:

“We have supervisory authority over banks, thrifts, and credit unions with assets over $10 billion, as well as their affiliates. In addition, we have supervisory authority over nonbank mortgage originators and servicers, payday lenders, and private student lenders of all sizes.”

This list provides some insight into the types of fraudulent and predatory lending practices the CFPB investigates, but the agency’s reach is far more extensive than many people – including many bank and mortgage executives – realize. For example, CFPB investigations can target lenders’, servicers’, and other entities’ practices in the areas of:

  • Automotive finance
  • Consumer reporting
  • Credit card account management
  • Debt collection
  • Mortgage origination and servicing
  • Prepaid accounts
  • Payday loans
  • Reverse mortgage servicing
  • School loans

Within these areas (among others), the CFPB garners its investigative and enforcement authority from a laundry list of federal statutes. These statutes range from the Truth In Lending Act (TILA) and Fair Credit Reporting Act (FCRA) to the Gramm-Leach-Bliley Act (GLBA) and Real Estate Settlement Procedures Act (RESPA), and the CFPB relies on statutes such as the Electronic Funds Transfer Act (EFTA) to enforce consumer data protections as well.

Understanding the Risks of a CFPB Investigation

If your business or institution is being targeted in a CFPB investigation, what are the risks? In many cases, the risks can be substantial. The CFPB generally devotes its investigative resources to cases involving suspected large-scale consumer fraud, and this means that the entities and individuals targeted in CFPB investigations will frequently face exposure to substantial civil liability or criminal prosecution. Fines can easily reach into the tens of millions, if not hundreds of millions, of dollars, and investigations can also lead to penalties including injunctions (i.e. a prohibition against engaging in consumer lending practices), other business sanctions, and federal imprisonment.

Understanding What to Do When You Receive a CFPB Subpoena

Given the scope of the Consumer Financial Protection Bureau’s enforcement authority and the risks of being targeted in a CFPB investigation, what should you do when you receive a subpoena from the CFPB? Whether you learn of the CFPB’s investigation through the service of a subpoena or other means, when facing a CFPB inquiry, you should:

  • Make Sure You Know Your Obligations – Review the subpoena (or other means of inquiry) in detail. Identify the response deadline, and determine whether the CFPB is seeking testimony, records, or both.
  • Determine Whether You Have Grounds to Challenge the Subpoena, CID, or Other Inquiry – While the CFPB has broad authority to demand testimony and records, there are limits that apply. This is true for subpoenas, civil investigative demands (CIDs), and other means of inquiry.
  • Institute a “Legal Hold” and Begin Preparing Your Response – Upon receiving a formal inquiry from the CFPB, it is necessary to institute a “legal hold” in order to preserve all responsive records and data. Compliance with a subpoena or CID can present a substantial burden, so it will be necessary to promptly begin your response efforts as well.
  • Conduct an Internal Compliance and Risk Assessment – When facing a CFPB investigation, you need to know what the agency is going to find; and, if there are issues, you must address them proactively in order to facilitate a favorable result.
  • Engage Federal Defense Counsel – Due to the risks and challenges involved with defending against a CFPB investigation, it is essential to promptly engage experienced federal defense counsel. At Oberheiden P.C., our senior federal defense lawyers have extensive experience protecting clients during high-stakes federal investigations, and we are available to provide representation for CFPB matters nationwide.

FAQs: Responding to CFPB Subpoenas and Defending Against CFPB Investigations

Q: What are the grounds to challenge a CFPB subpoena or CID?

 

In general, the grounds for challenging a CFPB subpoena or CID focus on either (i) the scope of the request, or (ii) the manner in which the request was issued. Service can be made through various means; and, as a result, service issues rarely provide grounds for challenging a CFPB inquiry. Some examples of potential grounds for challenging a CFPB subpoena or CID include:

  • The information sought is irrelevant or already in the CFPB’s possession;
  • The request is overly broad or unduly burdensome; or,
  • The request reflects or constitutes an abuse of the judicial process.

Q: How likely is it for a challenge to a CFPB subpoena or CID to be successful?

 

The odds of success when challenging a CFPB subpoena or CID are heavily dependent upon the specific circumstances involved. Generally speaking, however, the courts are hesitant to second-guess the CFPB’s decision-making during the investigative process, and the CFPB’s internal regulations discourage even the granting of extensions to respond to investigative demands. Even if grounds to challenge a subpoena or CID exist, a successful challenge is likely to result in modification of the subpoena or CID rather than quashing it in full, so businesses and institutions targeted in CFPB investigations must generally be prepared to provide substantive responses to the agency’s demands.

Q: What are some examples of potential defense strategies during a CFPB investigation?

 

Defense strategies during CFPB investigations must be tailored to the specific allegations involved—and this can pose a significant challenge in light of the breadth of the CFPB’s enforcement jurisdiction. In broad terms, however, some examples of the types of defense strategies that can be utilized to avoid federal charges as the result of a CFPB investigation include:

  • Affirmatively demonstrating compliance with the applicable federal laws or regulations;
  • Demonstrating that there is not sufficient evidence to support civil or criminal enforcement action; and,
  • Engaging with the CFPB to work toward establishing compliance and take any other measures that are necessary in order to avoid enforcement action.

Q: Can I (or my company’s in-house counsel) correspond with the CFPB directly?

 

While your business’s or institution’s in-house counsel can choose to correspond with the CFPB directly, due to the unique nature of the issues investigated by the CFPB and the unique challenges presented by CFPB investigations, it is recommended that banks, lenders, servicers, and others engage outside defense counsel for all CFPB matters.

Q: What are the key factors to consider when choosing defense counsel for a CFPB investigation?

 

There are various key factors to consider when choosing defense counsel for a CFPB investigation. However, relevant experience is the most important factor by far. In order to avoid unnecessary consequences, you need to make informed decisions based on the advice of senior federal defense lawyers who have experience on both sides of federal consumer fraud investigations. At Oberheiden P.C., our career defense attorneys and former DOJ prosecutors bring centuries of combined federal experience to defending clients against CFPB subpoenas and investigations.


Speak with a Federal Defense Lawyer about Your CFPB Subpoena or Investigation

If your business or institution needs federal defense counsel for a CFPB subpoena or investigation, we encourage you to arrange a complimentary case assessment at Oberheiden P.C. To speak with one of our senior federal defense lawyers in confidence, call 888-680-1745 or tell us how we can help online now.

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