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The CFPB yesterday announced changes, many of which take into account NAFCU suggestions, to policies regarding Civil Investigative Demands (CIDs). The proposed changes – which better align with requirements set forth under the Dodd-Frank Act – ensure that CIDs provide more information about the potentially wrongful conduct under investigation.

"The CFPB's policy changes to its CIDs procedures is welcomed news as credit unions will no longer be subject to ambiguous and vague requests for information," said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. "We appreciate the Bureau listening to our concerns and committing itself to providing relevant parties with additional information on the purpose and scope of an investigation. Going forward, we will continue to work with the Bureau to improve confidentiality protections and allotted response time for CID recipients."

CIDs are issued by the CFPB when the bureau suspects a financial institution is violating consumer protection laws. Under the updated policy, CIDs will include more information about potentially applicable provisions of law that may have been violated and specify the business activities that are subject to the bureau's authority. In the interest of further transparency, CFPB staff may also specify relevant business activities that fall under its authority.

The changes were incited, in part, by comments received following a request for information (RFI) issued by the bureau last year and a report published by the CFPB's Office of Inspector General.

In response to the RFI issued by the bureau last year, NAFCU sent a letter to the CFPB recommending that the bureau specify and limit the scope of CIDs. Based on analysis and feedback from member credit unions NAFCU provided detailed recommendations on three categories of the CID process:

• specific information on purpose and scope;
• appeals and modifications of CIDs; and
• bolster meet-and-confer processes.

NAFCU will continue to review and provide updates on the CFPB's new policy.