Another scathing report originating out of the U.S. House Financial Services Committee again chastised the Consumer Financial Protection Bureau while reminding the agency to consider what it’s like for finance companies that comply with the CFPB’s civil investigation demands, also known as CIDs.
Majority members charged CFPB director Richard Cordray for contempt of Congress due to his default in providing requested information associated with the bureau’s new arbitration rule set to go into effect on Sept. 18. The report claims lawmakers’ requests have been “burdensome” as the agency has provided thousands of pages of documents.
Republican lawmakers on the committee replied back in part charging that the CFPB now has a sense of the ordeal finance companies face.
“As part of its rules relating to investigations the CFPB can issue CIDs, which are similar to a subpoena in that they are a form of legal compulsion,” the report said. “The CFPB’s rules allow a recipient of a CID to petition the director to modify or set aside the CID. The rules require that these petitions ‘shall set forth all factual and legal objections to the civil investigative demand, including all appropriate arguments, affidavits, and other supporting documentation.’
“Director Cordray himself rules on these petitions. What is conspicuous about the CFPB’s claims of burden is that in director Cordray’s rulings he holds the recipients of the CFPB’s CIDs to the same or higher standards than the committee applies here — a standard that requires a detailed explanation of burden,” the report continued.
“Director Cordray routinely denies lengthy petitions alleging that CFPB CIDs are burdensome, and yet in response to the (requests) he has provided only limited data,” the report went on to say.
The lawmakers’ report goes on to mention that the CFPB’s production of 2,362 pages of records (or even potential review of 10,000 discrete records) “pales in comparison to what the CFPB regularly requires of its CID recipients.”
The report also noted, “… in any event, the CFPB has never suggested that it does not understand what has been called for; it simply deems the articulated interest too broad and hence burdensome.”
This 36-page report, which is available here, arrived a little more than a week after the House approved resolution leveraging authority provided under the Congressional Review Act (CRA) to stop the bureau’s final rule prohibiting the use of class action waivers in arbitration clauses.
In order for the rule to be stopped, the Senate must approve a similar action, but that chamber has yet to take a vote on its proposal.