FTC Files Comment to CFPB on CID Processes

The Federal Trade Commission’s Bureau of Consumer Protection (BCP) has filed a comment to the Bureau of Consumer Financial Protection in response to that agency’s request for information to help it assess the process it uses to issue Civil Investigative Demands (CIDs).

CIDs are a key tool in investigating potential law violations and bringing enforcement actions to stop illegal conduct and provide relief to consumers. A CID from either the FTC or the Bureau of Consumer Financial Protection may seek written answers to interrogatories, documents, tangible things, oral testimony, or some combination of all of these.

In particular, the Bureau of Consumer Financial Protection sought input “on how best to achieve meaningful burden reduction or other improvements” . . . while continuing to achieve its statutory and regulatory objectives. The FTC’s comment describes its experience with CIDs, including recent reforms.

“We applaud the Bureau of Consumer Financial Protection for undertaking a critical assessment of its investigative processes,” stated Thomas B. Pahl, Acting Director for BCP. “We hope our comment describing BCP’s experience with CIDs, including recent reforms, is valuable to the Bureau in making its investigative processes efficient and effective. We look forward to a continued partnership with the Bureau on this and other issues in pursuing the agencies’ shared goal of protecting American consumers.”

In response to the request for comment, the FTC’s Bureau of Consumer Protection explained its procedures for issuing consumer protection CIDs, provided feedback on Bureau of Consumer Financial Protection processes in response to specific requests for information, and outlined generally reforms that the FTC’s Bureau of Consumer Protection implemented in July 2017 related to consumer protection CIDs. Those include (1) adding more detail about the scope and purpose of investigations to give companies a better understanding of the information sought, (2) limiting the relevant time periods to minimize undue burden on companies and focus the Commission’s finite resources on investigating harms that have an immediate impact on consumers, (3) shortening and simplifying the instructions for providing electronically stored data, and (4) increasing response times for CIDs, where appropriate.

The Commission vote approving the comment was 2-0.