The Director of the Consumer Financial Protection Bureau has denied a petition from a credit repair organization to set aside a civil investigative demand it received from the Bureau, disagreeing with the premise that the CFPB’s request is unlawful because it could not bring an enforcement action against the company.
A copy of the denial, issued by CFPB Director Kathleen Kraninger, was released this week and can be accessed by clicking here.
In April, the CFPB send a CID to Daniel A. Rosen, Inc., d/b/a Credit Repair Cloud, seeking information to help the Bureau determine if the company “requested or received prohibited payments from consumers,” which may have violated the Telemarketing Sales Rule, and “provided substantial assistance in such violations,” which may have violated the Consumer Financial Protection Act.
The CFPB sought responses to interrogatories as well as the production of documents. The CFPB’s rules require a meeting between the recipient of the CID and an investigator from the CFPB, and during that meeting, the company announced its intention not to respond to the CID and to file a petition to set aside the request.
In the petition, the company argued that the CID was unlawful because “could not bring an enforcement action against it under either the Telemarketing Sales Rule (TSR) or the CFPA.”
But Kraninger quickly pointed out that the CFPB’s investigation authority is broader than its enforcement authority. As well, the company made a number of fact-based claims, such as it “does not interact with consumers,” and “has no role in facilitating or assisting a credit repair company requesting or receiving any payment.” But fact gathering is the purpose of the CID, Kraninger pointed out. “CRC is asking me to resolve factual issues based on its assertion while the Bureau is still in the process of gathering relevant information,” she wrote. “That is not a basis for setting the CID aside.”
