Metro Lex News

U.S. Representatives Andy Barr and Vicente Gonzalez have introduced the Civil Investigative Demand Reform Act of 2024, a bipartisan effort aimed at reforming the process used by the Consumer Financial Protection Bureau (CFPB) when issuing civil investigative demands (CIDs) to financial services providers. The proposed legislation seeks to ensure due process for industry participants by requiring the CFPB to explicitly reference any alleged violations in their CID requests.

The bill addresses concerns that current CID requests are overly broad and lack specific evidence of wrongdoing. It would allow companies to raise issues such as vagueness or undue burden of CIDs, with the CFPB having 20 days to narrow or justify their demands. Additionally, it grants financial firms the ability to seek relief in federal court if reasonable petitions to modify or set aside a demand are denied by the CFPB. A six-year statute of limitations on CIDs is also included in the proposal.

Congressman Barr stated, “Recent activity shows that the CFPB has abused its ability to examine consumer financial services providers through CIDs by producing vague statements of purpose without specifying alleged wrongful conduct; ultimately limiting procedural relief available to respondents.” He emphasized that while compliance with CIDs is necessary, financial services should be aware of what is being requested and under what allegations.

Congressman Gonzalez highlighted the importance of small financial institutions, saying, “Small financial institutions are vital to our local economies as they provide greater loan access and financial stability to many.” He expressed pride in collaborating with Congressman Barr on this legislation, which aims to reduce bureaucratic barriers while maintaining consumer safety.