Enforcement attorneys for the Consumer Financial Protection Bureau (CFPB) are taking a pause in beginning new investigations so that they can address a backlog of pending cases—that resulted from their ramp up of investigatory efforts three years ago—according to several current and former agency officials who declined to speak on the record.

Agency spokesman Sam Gilford acknowledged that new investigations are decreasing, but tied that more to a natural progression since the pace in which they were addressing cases when the CFPB first opened in 2011. “We are also resolving more matters—completing the early, inherited work allows for more strategic and impactful decisions about what cases to pursue.”

However, some cases are more than two years old, which creates dilemmas for both the agency and the financial institutions involved in the matters. Cases that remain unresolved for more than two years must be reported to Congress, which adds a political dimension to the delays. Open investigations put companies at risk for added scrutiny from shareholders—and actions that could potentially interfere with mergers and acquisitions.

The push for CFPB enforcement attorneys to quickly resolve outstanding investigations puts the industry on high-alert as financial institutions closely watch enforcement actions to ensure they are not engaging in activities that may be targeted by the CFPB.

“For the industry, it means that there will be more consent orders and sources of guidance for them to follow,” said Christopher Willis, a partner at the Ballard Spahr office in Atlanta. “It seems like the CFPB is putting a high priority on bringing existing investigations to a close and pushing enforcement cases to a resolution. The pace of new investigations seems to have slowed.”

Related Practices

Consumer Financial Services
Litigation