Washington, DC – On Friday, U.S. Representatives Andy Barr (R-KY-06) and Vicente Gonzalez (D-TX-34) introduced the Civil Investigative Demand Reform Act of 2024. This bipartisan legislation would reform the process the Consumer Financial Protection Bureau (CFPB) uses when issuing civil investigative demands (CIDs) to financial services providers to ensure these industry participants are given due process. Through the extortionary CID request, the CFPB issues broad information requests that amount to a fishing expedition without specific evidence of wrongdoing. This legislation would require the CFPB to explicitly reference any alleged violations as well as allow companies the ability to raise concerns such as vagueness or undue burden of CIDs. The CFPB would then have 20 days to narrow or justify their CID. Additionally, financial firms would be able to bring CIDs to federal court for relief if the CFPB denies a reasonable petition to modify or set aside a demand. Finally, the legislation would impose a 6-year statute of limitations on CIDs.
“Recent activity shows that the CFPB has abused its ability to examine consumer financial services providers through CIDs by producing vague statements of purpose without specifying alleged wrongful conduct; ultimately limiting procedural relief available to respondents,” said Congressman Barr. “The financial services industry needs to comply with the CFPB’s CIDs, but they also have the right to know what the CFPB is asking for and what it is pursuant to a stated violation. The Civil Investigative Demand Reform Act of 2024 will give industry the regulatory clarity they deserve.”
“Small financial institutions are vital to our local economies as they provide greater loan access and financial stability to many,” said Congressman Gonzalez. “I’m proud to join Congressman Barr and introduce the Civil Investigative Demand Reform Act of 2024. This bipartisan legislation will ensure that our financial institutions can provide important services to our communities by reducing burdensome bureaucratic barriers while still prioritizing consumer safety.”
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