The Consumer Bankers Association (CBA) and Financial Services Roundtable (FSR) stressed to the Consumer Financial Protection Bureau (CFPB) the importance of expeditious resolution on administrative adjudications.
The comments are in response to the CFPB’s recent request for information on how it should amend the Rules of Practice for Adjudication Proceedings. The administrative adjudication process is an internal proceeding before an administrative law judge. It is considered an alternative to the bureau filing a civil action in federal district court.
CBA and FSR urged the bureau to use the Federal Rules of Civil Procedure (FRCP) and the Federal Rules of Evidence (FRE) as benchmarks for procedural standards.
“Aligning the Bureau’s rules on administrative adjudications with existing and well-defined federal guidelines would provide clarity regarding the manner in which these proceedings are organized,” Steve Zeisel, CBA general counsel, said. “It would offer the proceedings additional legitimacy by adhering to recognized standards and provide the ability for regulated institutions to appropriately respond to potential charges, benefitting consumers, and the industry.”
The groups recommend that the Bureau allow respondents more time to prepare a response to a notice of charges, as well as investigate and prepare a well-informed submission. They also request that they amend the “affirmative disclosure” process for discovery and withdraw its policy of disfavoring requests for extensions. Also, they urge the bureau to produce documents in electronic form to respondents and amend the rules to provide respondents with more expansive discovery.
“The accelerated and arbitrary procedures of the Bureau’s administrative adjudication proceedings should be revised to mirror the Federal Rules of Civil Procedure & Federal Rules of Evidence, such that the Bureau ensures fairness to all, including institutions that provide financial services and products to consumers,” Rich Foster, senior counsel for regulatory and legal affairs at FSR, said.