CFPB Announces Rules Governing Investigations

Shortly before the Consumer Financial Protection Bureau (CFPB) revealed the details of its first enforcement action, a $210 million settlement with Capital One Bank on July 18, 2012, the Bureau announced that it had adopted broad rules outlining how it will investigate potential violations of consumer financial laws and regulations. These rules, which are expressly modeled on procedures that have been utilized previously by the Federal Trade Commission, the U.S. Securities and Exchange Commission and other bank regulators, have eight major components:

1. Non-Public with a Caveat.  Although CFPB investigations are generally non-public, they may be conducted jointly with other state and federal regulators.  Regulated entities undoubtedly are concerned that information provided to the CFPB could be shared with states' attorneys general and eventually find its way to plaintiffs' lawyers and fuel class action litigation.