Alert July 09, 2013

CFPB Issues Guidance Bulletin on Responsible Conduct in Enforcement Investigations

The CFPB issuedbulletin detailing certain actions by those subject to its enforcement authority that the CFPB will take into consideration in the exercise of its enforcement discretion. These actions, collectively referred to as “responsible conduct,” include self-policing, self-reporting, remediation and cooperation. Responsible conduct requires a party to substantially exceed the standard of what is required by law in its interactions with the CFPB and the bulletin includes questions the CFPB will consider in each of the four categories of conduct to determine whether to take certain actions into account. The bulletin explains that there is no precise formula for assessing the impact responsible conduct by a party may have on the enforcement proceedings and even if all of the elements are met, it will not foreclose the CFPB from pursuing any particular remedy available to it. However, responsible conduct by a party could lead the CFPB to resolve an investigation with no public enforcement action, treat conduct as a less severe type of violation, reduce the number of violations pursued or reduce the sanctions or penalties sought; provided, any such remedy is in the best interests of consumers. In announcing the guidance bulletin, the CFPB noted that it will take into account “significant responsible conduct…when deciding which cases to pursue and how to resolve the ones we do pursue.”