CFPB Issues Rule Changing Enforcement Proceedings

The Consumer Financial Protection Bureau has issued a rule that will make it easier for engaging in enforcement actions via administrative proceedings — similar to how the Federal Trade Commission operates — rather than having to pursue enforcement actions in federal court, according to a published report. The change also expands the opportunities for entities involved in enforcement actions to conduct depositions.

The Bureau published a notice in the Federal Register in late February regarding the change, and although the rule went into effect upon it being published, the Bureau is still accepting comments on the change until April 4.

“Overall, the amendments will provide the parties with earlier access to relevant information and also foster greater procedural flexibility, which should ultimately contribute to more effective and efficient proceedings,” the Bureau said in its notice.

Given the ambitious agenda that the CFPB has set under new Director Rohit Chopra, the procedural changes that it announced could be used to more efficiently pursue enforcement actions while also giving the director broader powers to make decisions on how to handle dispositive motions that the agency is considering.

The changes will make discovery “faster and less expensive” than had the case gone to federal court, the CFPB said.

“The Rules of Practice amended by this rule are intended to provide an expeditious decision-making process. An expeditious decision-making process may benefit both consumers and covered persons to the extent that it is used in lieu of proceedings initiated in federal district court. A clear and efficient process for the conduct of adjudication proceedings benefits consumers by providing a systematic process for protecting them from unlawful behavior. At the same time, a more efficient process affords covered persons with a cost-effective way to have their cases heard.”

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