CFPB Redoubling Efforts to Clear Investigation Backlog

According to American Banker, the CFPB has its hands full with so many existing investigations that it has had to pull back on diving into new ones.

Multiple officials -- both current and former -- of the Consumer Financial Protection Bureau have told AB that a backlog of cases has built up over the last three years. A decision has apparently been made at the organization to slow down its rate of beginning new cases until a sufficient portion of the existing caseload has been cleared.

The AB story points out that a number of investigatory cases at the CFPB are more than two years old, thus exceeding the time limit that the agency normally assigns itself to complete investigations. It is likely, therefore, that those cases two years and older will take precedence as the CFPB attempts to clear its backlog.

A former CFPB employee who spoke to American Banker on the condition of anonymity told the outlet that, in 2014, the bureau "started slowing down in a sense that they're trying to bring down the cases to a more manageable level. And it's good that they're trying to recalibrate that. They took on too much in the beginning and it became difficult to get through those investigations in a reasonable amount of time. They overestimated what the staff was capable of handling."

Sam Gilford, a CFPB spokesman who spoke on the record with AB, acknowledged that the organization is slowing down on new investigations. He claimed, however, that the reasoning behind the shift is not so much the volume of cases that the CFPB initiated but more so of the ones that it inherited when the agency was first formed in 2011.

"Because we have transitioned out of that initial start-up phase," Gilford told AB, "we are necessarily opening new investigations at a slower pace than we did during our first couple of years. We are also resolving more matters — completing the early, inherited work allows for more strategic and impactful decisions about what cases to pursue."

The AB story notes that the CFPB's redoubling of its efforts related to older investigations has aroused interest throughout the financial industry, as institutions want to make sure that they are not presently engaged in any activities for which the CFPB may be on the lookout.

"For the industry, it means that there will be more consent orders and sources of guidance for them to follow," Chris Willis, a partner at the Ballard Spahr office in Atlanta, told American Banker.

Sources who spoke to AB provided a number of factors that may have contributed to the investigation at the CFPB, including: the rapid pace at which investigations were launched when the agency opened in 2011, before its systems were fully established; an increase in referrals from CFPB examiners over the last two years; and staffing shortages.

Gilford confirmed to American Banker that the CFPB currently has more than 100 open investigations on its docket. It is notable that the aforementioned two-year time frame for closing cases was not established by the CFPB until 2014, and some sources who spoke to AB seem to suggest that might have been too late.

"[The CFPB has] so many [investigations] outstanding right now that it's difficult to tell whether they will close them in any reasonable amount of time," commented another anonymous source. "I've seen companies that have cooperated and sent the CFPB everything on time, under the bureau's very strict time frames, and then the bureau has responded quite slowly."



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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