The Court of Appeals for the Fifth Circuit has reversed a lower court’s ruling that had required an entity to comply with a Civil Investigative Demand letter it had received from the Bureau of Consumer Financial Protection.
The BCFP was not specific enough in detailing the alleged violations performed by the accused, the Source for Public Data, when it sent the company the CID, the appeals court ruled.
A copy of the ruling in the case of Consumer Financial Protection Bureau v. The Source for Public Data can be accessed by clicking here.
A District Court judge had ordered the defendant — which provides public records via Internet searches — to comply with the CID, which sought information “to determine whether consumer reporting agencies, persons using consumer reports, or other persons have engaged or are engaging in unlawful acts and practices in connection with the provision or use of public records information in violation of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et. seq., Regulation V, 12 C.F.R. Part 1022, or any other federal consumer financial law. The purpose of this investigation is also to determine whether Bureau action to obtain legal or equitable relief would be in the public interest.”
During a meet-and-confer session with the bureau, the defendant argued the notification was inadequate and asked to have the petition set aside. Richard Cordray, who was the director of the BCFP at the time, denied the petition. The defendant said it would not comply, at which point the BCFP filed a motion in federal court to compel Public Data to comply with the CID.
“Simply put, this Notification of Purpose does not identify what conduct, it believes, constitutes an alleged violation,” wrote Judge Jennifer Elrod in her opinion. “Providing and using public records are not violations of federal law, and the CFPB fails to explain how these activities violate federal consumer law.”
The CID, as well, did not mention “the provision of law applicable to such violation.” By including such generic language as “any other federal consumer law,” the CID’s use of an “uninformative catch-all phrase defeats any specificity provided by the reference to the FCRA.”
