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Financial Services Law Insights and Observations

CFPB denies debt collection company’s petition to set aside CID

Federal Issues CFPB FDCPA CIDs UDAAP CFPA

Federal Issues

On August 18, the CFPB denied a petition by a debt collection company to set aside a civil investigative demand (CID) issued by the Bureau in May. The CID requested information regarding whether debt buyers, debt collectors or persons associated with selling or collecting debt, have “made false or misleading representations to consumers or third parties in a manner that is unfair, deceptive, or abusive,” in violation of the CFPA, among other things. The company petitioned the Bureau on May 26 to set aside the CID, arguing, among other things, that the CID (i) “fails to identify sufficiently the nature of the conduct under investigation”; (ii) “fails to provide [the company] with any notice whatsoever of any potential witnesses or participants who may be necessary to respond to the CID”; and (iii) is overbroad and unduly burdensome.

In rejecting the company’s arguments described above, the Bureau found that: (i) “the Bureau’s notification of purpose identifies the nature of the conduct under investigation and is therefore not ‘too indefinite’”; (ii) it is not required that the Bureau provide any notice any potential witnesses or participants who may be necessary to respond to the CID; and (iii) the CFPB holds “broad authority to seek information which may be relevant to its investigations.”

 

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