The Consumer Financial Protection Bureau has announced the terms under which a company may seek to terminate a consent order before the original expiration date, as a means of easing the burdens that the orders can place on those companies.
Consent orders are agreements or settlements that often impost injunctive relief, such as monetary penalties, along with reporting, record-keeping, and cooperation requirements. Generally, consent orders issued by the CFPB have five-year terms, although that can be extended when circumstances warrant it.
Acknowledging that complying with the terms of a consent order — especially the reporting and record-keeping requirements — may be costly, and that open consent orders may keep companies from being able to expand or participate in mergers or acquisitions, the CFPB has laid out conditions that must be met in order for a company to be eligible to request the early termination of a consent order.
Only companies are allowed to apply for early termination of a consent order, according to the CFPB. Individuals are not allowed to do so. Companies are not allowed to apply within the first year of a consent order or until six months after all the requirements have been fully implemented, whichever is later. Companies that are banned from certain activities, such as debt collection, are not allowed to apply for early termination of a consent order, nor are they when criminal activity is involved, or they have been accused of violating an earlier consent order.
If eligible, companies must demonstrate compliance with the terms of the consent order and show that it has a “satisfactory,” or the equivalent of a “2” rating under the Uniform Interagency Consumer Compliance Rating System.
