On October 25, 2024, a bill was introduced in the House of Representatives by sponsors from both parties that would impose heightened requirements and procedural protections for civil investigative demands (CIDs) issued by the Consumer Financial Protection Bureau (CFPB or Bureau). The Civil Investigative Demand Reform Act of 2024 (CID Reform Act), introduced by Representatives Andy Barr (R-K.Y.) and Vicente Gonzalez (D-Texas), would require CIDs to include “specific reference to particular facts” leading to the investigation, provide additional grounds for setting aside a CID, create a mechanism for follow-up questions to the Bureau and establish a limitations period for issuing CIDs.1 Given the results of the 2024 election and the bipartisan nature of the legislation, the bill could have a viable path forward to address long-standing criticisms of the CFPB’s investigative process.
The Civil Investigative Demand Process
The Consumer Financial Protection Act (CFPA) provides the CFPB broad authority to issue civil investigative demands to any person. CIDs issued by the Bureau are often expansive, calling for interrogatory responses, the production of documents, data reports and investigative hearings covering a period of several years.2 The CFPA provides little specificity regarding the circumstances under which the Bureau can issue a CID, permitting the issuance of a CID whenever the Bureau has “reason to believe” that a person has information or material relevant to a violation of federal consumer financial law.3 The CFPA also provides that a CID “shall state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.”4 This information is provided under the notification of purpose section of a CID.
Recipients of CIDs have raised a number of challenges, arguing that the CIDs are overly broad, exceed the CFPB’s jurisdiction, do not provide adequate notice of the subject matter of the investigation and seek information beyond applicable statutes of limitations, for example. These challenges, however, have rarely been successful. Of the 52 published petitions to set aside or modify a CID, only six were granted in part, and none resulted in the CID being set aside.5 In denying these petitions, the CFPB has made sweeping assertions, such as “[t]he CFPB is entitled to investigate to determine whether [an entity] is subject to [the Bureau’s] authority,”6 and “the Bureau is not limited to gathering information only from the time period in which conduct may be actionable.”7 Similarly, when courts have adjudicated whether CFPB CIDs are enforceable, they have held that the CIDs are fully enforceable in nine of 12 (75%) such cases.8 Those few challenges that have succeeded in court have focused on the adequacy of the CID notification of purpose.9
While most challenges to CIDs have failed, the Bureau’s expansive use of CIDs has drawn prior criticism from legislators, and in some instances courts have rebuffed broad assertions of jurisdiction by the CFPB.10
The CID Reform Act – Proposed Reforms and Takeaways
The CID Reform Act’s sponsors seek to address instances of the Bureau “abus[ing] its ability to examine consumer financial services providers through CIDs by producing vague statements of purpose without specifying alleged wrongful conduct,” and to “reduc[e] burdensome bureaucratic barriers while still prioritizing consumer safety.”11 As described in more detail below, the bill would require more information in the CID notification of purpose, allow broader challenges to CIDs, provide for judicial review of denied petitions to modify or set aside CIDs, impose a statute of limitations on the issuance of a CID, require prompt responses to inquiries about the CID and maintain confidentiality of petitions to modify or set aside CIDs.
- Notification of Purpose. In addition to the existing requirement to state the nature of the conduct under investigation,12 the bill would require the Bureau to include in the CID notification of purpose “specific reference to particular facts” that led to the Bureau’s investigation. This requirement would provide increased transparency regarding investigations and better inform decisions to challenge a CID.
- Grounds for Challenges to a CID. Courts have historically allowed agencies broad latitude to issue administrative subpoenas, and held that CIDs can be set aside only if they do not comply with the statutory requirement to “state the ‘conduct constituting the alleged violation which is under investigation’” or do not “identify ‘the provision of law applicable to such violation.’”13 The CID Reform Act would clarify or add grounds to challenge a CID, i.e., when the CID: (i) fails to comply with law; (ii) violates a “constitutional or other legal right or privilege”; (iii) is “unduly burdensome, disproportionately expensive, and outside the scope of the inquiry”; or (iv) calls for information that is “unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.”14 These proposed clarified and expanded grounds for challenging a CID would potentially lead to more targeted CID requests and higher likelihoods of success in court for CID challenges.
- Judicial Review. Under current law, CIDs are not self-executing. Rather, the CFPB must bring a petition to enforce the CID in a federal district court to compel compliance. The proposed bill would provide a clearer mechanism for institutions to affirmatively challenge CIDs, rather than waiting for the Bureau to bring a petition to enforce the CID.15 This process could lead to more timely resolution of disputes regarding enforceability of CIDs. Moreover, coupled with the clarified and additional grounds for challenging CIDs, the bill’s judicial review mechanism could eventually lead to a more robust body of case law clarifying the circumstances under which CIDs can be issued.
- Statute of Limitations. The CFPA currently contains no limitations period on the issuance of a CID, and the Bureau has issued CIDs to address conduct going back nine years or more.16 The CID Reform Act would limit the timeframe in which a CID could be issued to “not later than 6 years after the date” of the conduct that is the subject of the investigation.
- Requests for Additional Details on CIDs. The CID Reform Act would allow CID respondents to “submit to the Bureau questions related to the scope or breadth of the demand.”17 The bill would require the CFPB to respond within 20 days and provides that the Bureau can extend the deadlines for compliance with the CID. It is unclear, however, whether this provision would actually result in more information being provided regarding CIDs, as counsel already can — and frequently do — request additional information during the meet and confer process. Moreover, the bill does not provide a standard, beyond the enhanced notification of purpose specificity requirement discussed above, for what additional information regarding the “scope and breadth” of the CID that the Bureau would be required to provide. Nonetheless, it is possible that the formal mechanism for allowing requests for additional details could result in greater transparency regarding the scope of Bureau investigations.
- Confidentiality. The bill would extend confidential treatment18 to “the contents of any petition” to modify or set aside a CID. Current regulations provide that petitions to modify or set aside a CID are public, and such petitions are typically made available on the CFPB’s website after a decision has been rendered by the Bureau.19 The public nature of such petitions is an important consideration for respondents (and, as a practical matter, a source of leverage for the Bureau) in efforts to negotiate scope and limitations of CIDs during the meet and confer process. Accordingly, the bill would significantly change some of these considerations.
Looking Ahead
During the first Trump administration, the Bureau had taken steps to provide greater transparency in the CID process, pledging to provide more information about the potentially wrongful conduct under investigation.20 The CID Reform Act would represent significant further changes in that direction and enhance procedural protections for CID recipients. Congress may also revise prior CFPB reform proposals, such as changes to the Bureau’s leadership structure and funding sources.21_______________
1 Civil Investigative Demand Reform Act of 2024, H.R. 10036, 118th Cong. (2024).
2 12 U.S.C. § 5562(c)(1).
3 Id.; 12 U.S.C. § 5561(5).
4 12 U.S.C. § 5562(c)(2).
5 CFPB, “Petitions To Modify or Set Aside,” last visited Nov. 6, 2024.
6 CFPB, “Decision and Order on Petition by MV Realty PBC, LLC To Modify or Set Aside Civil Investigative Demand,” 2023-MISC-MV Realty PBC, LLC-0001, Feb. 20, 2024.
7 CFPB, “Decision and Order on Petition by Law Offices of Crystal Moroney, P.C. To Set Aside or Modify Civil Investigative Demand,” 2019-MISC-Law Offices of Cystal Moroney, P.C.-0001, Feb. 10, 2020.
8 Compare CFPB v. Source for Pub. Data, L.P., 903 F.3d 456 (5th Cir. 2018); CFPB v. Accrediting Council for Indep. Colls. and Schs., 854 F.3d 683 (D.C. Cir. 2017); CFPB v. Ctr. for Excellence in Higher Educ., No. 2:19-cv-00877-RJS-CMR, 2022 WL 4182301 (D. Utah Sept. 13, 2022) with CFPB v. Law Offices of Crystal Moroney, P.C., 63 F.4th 174 (2d Cir. 2023); Seila Law v. CFPB, 591 U.S. 197 (2020), on remand 997 F.3d 837 (9th Cir. 2021); CFPB v. Heartland Campus Sols., 747 F. App’x 44 (3d Cir. 2018); CFPB v. Great Plains Lending, LLC, 846 F.3d 1049 (9th Cir. 2017); John Doe Co. v. CFPB, 849 F.3d 1129 (D.C. Cir. 2017); CFPB v. Block, Inc., No. 22-mc-80214-SK (N.D. Cal. Nov. 30, 2022); CFPB v. Educ. Credit Mgmt. Corp., No. 21-mc-00019 (SRN/DTS), 2022 WL 102275 (D. Minn. Jan. 11, 2022); CFPB v. Future Income Payments, LLC, 252 F. Supp. 3d 961 (C.D. Cal. 2017); CFPB v. Harbour Portfolio Advisors, LLC, No. 16-14183, 2017 WL 631914 (E.D. Mich. 2017).
9 See CFPB v. Source for Pub. Data, L.P., 903 F.3d 456 (5th Cir. 2018); CFPB v. Accrediting Council for Indep. Colls. and Schs., 854 F.3d 683 (D.C. Cir. 2017).
10 See “Letter from Representatives McHenry, Emmer, & Luetkemeyer to Director Chopra,” July 28, 2022); “Letter from Senators Toomey, Shelby, et al. to Director Chopra,” Sept. 12, 2022.
11 U.S. Congressman Andy Barr Press Releases, “Barr, Gonzalez Introduce CFPB CID Reform Legislation,” Oct. 29, 2024.
12 12 U.S.C. § 5562(c)(2).
13 CFPB v. Source for Pub. Data, L.P., 903 F.3d 456, 458–59 (5th Cir. 2018) (quoting 12 U.S.C. § 5562(c)(2)).
14 12 U.S.C. § 5562(f); H.R. 10036 § 2(e).
15 CFPB, “Petitions To Modify or Set Aside,” last visited Nov. 6, 2024).
16 CFPB, “Decision and Order on Petition by ACTIVE Network, LLC to Set Aside Civil Investigative Demand,” 2020-MISC ACTIVE Network, LC-0001 (Sept. 28, 2020); CFPB v. Harbour Portfolio Advisors, LLC, No. 16-14183, 2017 WL 631914, at *5 (E.D. Mich. Feb. 16, 2017).
17 H.R. 10036 § 2(c).
18 12 U.S.C. § 5562(d).
19 CFPB, “Petitions To Modify or Set Aside,” last visited Nov. 6, 2024.
20 CFPB Newsroom, “CFPB Announces Policy Change Regarding Bureau Civil Investigative Demands,” Apr. 23, 2019.
21 Financial Services and General Government Appropriations Act, 2025, H.R. 8773, 118th Cong. (2024).
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