A bipartisan bill has been introduced in the House of Representatives to reform the Civil Investigative Demand process used by the Consumer Financial Protection Bureau. Rep. Andy Barr [R-Kent.] and Rep. Vicente Gonzalez [D-Texas] introduced the Civil Investigative Demand Reform Act of 2024. The proposed legislation aims to ensure due process for financial services providers subject to the CFPB’s Civil Investigative Demands (CIDs), which are often criticized for being overly broad and burdensome.
H.R. 10036, The Civil Investigative Demand Reform Act of 2024 would require the CFPB to explicitly reference any alleged violations in CIDs, providing more clarity to financial institutions about the specific conduct under investigation. Additionally, the legislation would allow companies to raise concerns, such as vagueness or undue burden, and would require the CFPB to respond within 20 days, either narrowing the scope of the CID or justifying its original demands. If the CFPB denies a reasonable petition to modify or set aside a CID, the bill would give financial firms the ability to seek relief in federal court. The legislation also imposes a six-year statute of limitations on CIDs, further restricting the CFPB’s ability to investigate historical conduct without limitation.
“Recent activity shows that the CFPB has abused its ability to examine consumer financial services providers through CIDs by producing vague statements of purpose without specifying alleged wrongful conduct; ultimately limiting procedural relief available to respondents,” said Rep. Barr. “The financial services industry needs to comply with the CFPB’s CIDs, but they also have the right to know what the CFPB is asking for and what it is pursuant to a stated violation. The Civil Investigative Demand Reform Act of 2024 will give industry the regulatory clarity they deserve.”
Congressman Gonzalez added, “Small financial institutions are vital to our local economies as they provide greater loan access and financial stability to many. I’m proud to join Congressman Barr and introduce the Civil Investigative Demand Reform Act of 2024. This bipartisan legislation will ensure that our financial institutions can provide important services to our communities by reducing burdensome bureaucratic barriers while still prioritizing consumer safety.”
