The Consumer Bankers Association (CBA) and Financial Services Roundtable (FSR) are urging the Bureau of Consumer Financial Protection (BCFP) to reform its civil investigative demand (CID) processes.
“At times, the Bureau has wielded its considerable investigation powers without first considering alternative and more tailored approaches and without sufficient regard for the impact on regulated entities, the long-term impact on the consumer financial marketplace, or the opportunity costs of the Bureau’s use of enforcement resources,” officials from the two organizations wrote in a letter to the BCFB, formerly known as the Consumer Financial Protection Bureau. “We believe that each of these factors should be weighed in the Bureau’s strategy.”
The BCFP issued a Request for Information (RFI) about the bureau’s Civil Investigative Demands (CID) process in January, seeking suggestions on how to improve outcomes for both consumers and covered entities during these investigations.
CBA and FSR outlines several recommendations that will maintain the bureau’s ability to provide consumer protection oversight and use its enforcement powers in a manner that that they believe is fair to all parties.
“The Bureau has used civil investigative demands in a manner that has been opaque, burdensome, and often unfair to providers of financial services. By implementing our suggested reforms, institutions will know the ‘rules of the road’ and will be confident the Bureau stands ready to supervise, interpret, and enforce those rules consistently across the industry,” Rich Foster, FSR’s senior counsel for regulatory and legal affairs, said.
Steve Zeisel, CBA’s general counsel, said their reforms seek to ensure rules and regulations are enforced appropriately.
“Banks place a premium on serving customers but the issuance of CIDs and so-called ‘regulation by enforcement’ muddies the waters by moving the goal posts on financial regulations,” Zeisel said.