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New rules governing the CFPB’s enforcement work

Today, the CFPB is posting three final rules and one interim final rule that we have sent to the Federal Register for publication. The rules deal with our procedures and practices related to enforcing federal consumer financial law. These rules allow the agency to stay abreast of developments in consumer financial law, investigate possible violations of these laws, and bring actions to enforce these laws, helping us better serve our mission of protecting American consumers.

The three final rules deal with the agency’s investigative and adjudicative processes and our interactions with state law enforcement authorities. We published interim versions of these rules in July of 2011. During an extensive comment period that followed, we received and evaluated public input on the interim rules, and we have made certain changes to improve and clarify the rules.

Rule Relating to Investigations: This rule describes the CFPB’s procedures for investigating whether persons have engaged in conduct that violates federal consumer financial law. Similar to rules used by other regulators, it lays out an efficient and fair process for conducting CFPB investigations. This rule sets forth our authority to conduct investigations, including the procedures for issuing civil investigative demands. It also describes the rights of persons from whom the CFPB seeks to compel information in investigations.

Rule of Practice for Adjudication Proceedings: Under this rule, the CFPB can conduct administrative adjudications (hearings) to ensure or enforce compliance with federal laws and regulations. In developing this rule, we leveraged the experiences of other regulators and reviewed the public comments on the interim rule to create a fair and expeditious process for resolving administrative enforcement actions. The result is an adjudication process that is streamlined and protects parties’ rights to fair and impartial proceedings.

State Official Notification Rule: This rule is designed to help the CFPB stay informed about state-level legal developments relating to the Dodd-Frank Act. It describes the process through which state officials update the agency on certain legal actions they bring to enforce compliance with certain provisions of the Dodd-Frank Act and regulations the CFPB may issue. Proper notification will help ensure that the law is being enforced in a consistent manner.

The last rule is an interim final rule that implements the Equal Access to Justice Act (EAJA). We are now asking for public input on this interim final rule.

EAJA Implementation Rule: This rule implements the Equal Access to Justice Act. The Act provides that certain prevailing parties in administrative proceedings can recover attorney fees and expenses. The rule sets forth who can seek to recover these costs and how to do so. It is based on model rules and rules used by other agencies. The public can comment on the interim final rule for 60 days after its publication in the Federal Register.

These rules will be published in the Federal Register in the near future and will be effective immediately upon publication. The versions linked in this post contain the text as we submitted them.

Ori Lev is the CFPB’s Deputy Enforcement Director for Litigation.

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