The Consumer Financial Protection Bureau (CFPB) has reshaped the regulatory framework for financial institutions, touching nearly every aspect of consumer finance in the years since its creation under the Dodd-Frank Act. The CFPB has the most expansive jurisdiction of any federal financial regulator, covering virtually all consumer financial products and services available to the American consumer, the infrastructure and technologies that enable those offerings, and practically all financial institutions, including banks with assets of more than $10 billion, credit card-issuing banks, emerging fintechs, marketplace lenders and platforms, payment processors, credit reporting agencies, remittance providers, and mortgage, auto, and student loan originators and servicers. The CFPB enforces 18 enumerated consumer financial statutes, as well as the Consumer Financial Protection Act, under which it has authority to investigate and prosecute any conduct that the CFPB determines to constitute an unfair, deceptive, or abusive act or practice (also known as UDAAP), regardless of whether the conduct also violates one of its enumerated statutes.

The CFPB has independent litigating authority and the ability to enforce the law in federal courts and through administrative proceedings. It has the ability to seek civil monetary penalties, consumer redress, disgorgement, restitution, damages, and wide-ranging injunctive relief. The CFPB routinely brings actions against both financial service providers and their executives, suing individuals in their personal capacities. It coordinates closely with the U.S. Department of Justice, referring potential criminal action to the Consumer Protection branch or the Criminal Division, and partnering with the Civil Rights Division to investigate and litigate Fair Lending and Equal Credit Opportunity Act violations.

It is now more important than ever to closely follow the work of the CFPB, as new leadership has taken over and looks to significantly change the direction and focus of the agency.

Sidley is able to offer representation and counseling on all facets of the CFPB’s jurisdiction, including enforcement, supervision, regulation, and Fair Lending. We represent clients across the financial services industry that are subject to the CFPB’s jurisdiction. Working seamlessly across the firm’s many legal disciplines, our lawyers stay ahead of evolving regulatory and enforcement developments, counseling financial institutions on emerging trends and CFPB priorities. If investigations and supervisory actions arise, we work closely with clients to evaluate and enhance compliance methods, meet the demands of an examination, and adapt business practices to new or proposed rules.

We bring value to our clients in the following ways:

In-depth enforcement experience: We count among our partners Thomas Ward, who is the only CFPB Enforcement Director in private practice, the only Enforcement Director to serve as a career employee under both Republican and Democratic administrations, and the only one who served as a Deputy Assistant Attorney General at the U.S. Department of Justice leading Consumer Protection branch matters, which is the CFPB’s partner for criminal referrals arising from consumer financial cases and investigations. During his tenure at the CFPB, Tom commissioned a comprehensive effort to centralize the Office of Enforcement’s investigative, litigation, and negotiation processes and best practices; the critical thinking about each of the 18 enumerated consumer financial statutes that the CFPB enforces and the Consumer Financial Protection Act; the thinking about the Consumer Financial Protection Act’s expansive UDAAP authority; and how the Office of Enforcement thinks about and calculates remedies, penalties, redress, and injunctive relief. The result was a centralized and comprehensive roadmap of Enforcement’s practice that did not exist under prior Enforcement Directors or administrations. Tom also oversaw the setting of the CFPB’s enforcement priorities under both Republican and Democratic administrations, which gives him unique insight into how both parties approach consumer financial enforcement, and led the first restatement of the CFPB’s Responsible Business Conduct bulletin, which allows companies to mitigate or obviate enforcement matters altogether.

Sidley is uniquely situated to help clients navigate CFPB enforcement matters from inception to resolution, including responding to Civil Investigation Demands (CIDs), representing current and former employees in investigational hearings, drafting responses to Notice and Opportunity to Respond and Advise (NORA) letters, negotiating appropriate resolutions, litigating enforcement actions in federal court or administrative proceedings, and handling all post-settlement matters.

Proactive approaches to supervision and compliance management: The CFPB’s Office of Supervision has broad authority to examine banks with assets of over $10 billion, nonbank mortgage originators and servicers, payday lenders, and private student lenders of all sizes, and larger participants in the areas of consumer reporting, consumer debt collection, student loan servicing, international money transfer, and automobile financing. We work with these clients to identify and address potential compliance gaps and program enhancements in order to mitigate the impact of supervisory actions. Our assistance includes conducting mock CFPB examinations, directing comprehensive risk assessments and institution-wide audit assessments, monitoring the flow of information during the exam process, crafting appropriate responses to notice of Potential Action and Request for Response (PARR) letters and Reports of Examination, and addressing any items that require corrective action.

Expansive regulatory capabilities: Our lawyers assist clients with new and innovative products and services that do not fit neatly into existing regulations, the development of policies and programs in connection with enterprise-wide compliance, vendor management, and best practices for consumer products and services. In addition, clients seek our advice on interpreting rule amendments, legislative and regulatory proposals, and comment letters. Our team engages regularly with senior CFPB staff in the Division of Research, Markets, and Regulations to understand the impact of new and existing rules. We also communicate on a confidential basis with CFPB staff to seek guidance with respect to particular products or services.

Results-driven transactional advice: Applying our extensive knowledge of CFPB activity, we help clients gauge the risk of exposure to supervisory and enforcement measures associated with all types of transactions. For example, we assess the business and reputational consequences associated with acquisitions of loan portfolios and institutions subject to the CFPB’s jurisdiction. Harnessing our global network of resources, we provide tailored advice on structuring transactions and investments that achieve our clients’ strategic business objectives.

Representation in states attorneys general actions: States attorneys general, as well as state financial regulators, will also be active in the consumer financial enforcement space both on their own and in partnering with the CFPB in the years to come. While the New York Attorney General, the California Attorney General, the New York State Department of Financial Services and the California Department of Financial Protection and Innovation will be leaders in the consumer financial protection space, all states are aggressively pursuing actions on their own and in partnership with the CFPB and multi-state law enforcement groups. Consumer financial services providers need to be aware of, and in compliance with, state consumer financial laws, in addition to the federal consumer financial laws. We represent businesses in all facets of stand-alone state consumer financial enforcement agency and states attorneys general matters or in matters carried out jointly with the CFPB.