November 25, 2024
Volume XIV, Number 330
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CFPB Seeks Contempt Order against Investigation Target
Friday, June 23, 2017

On June 21, 2017, a federal district court judge referred to a magistrate the Consumer Financial Protection Bureau’s (“CFPB”) first attempt to obtain a contempt finding against a subject who allegedly failed to comply with a civil investigative demand (“CID”).

The matter arrived in district court in November 2016, when the CFPB first sought judicial intervention in the Eastern District of Michigan to compel National Asset Companies (consisting of Harbour Portfolio Advisors, LLC, National Asset Advisors, LLC, and National Asset Mortgage, LLC) to respond to the Bureau’s September 2016 CIDs. In February, the court ordered National Asset Companies to comply with the CIDs within 30 days, a deadline the court later extended by a week. Then, in May, the Bureau filed a new motion to hold National Asset Companies in contempt, asserting that the National Asset Companies had still failed to comply with the CIDs in multiple respects, including by failing to produce available audio files, providing incomplete audio metadata, and other inadequacies. The CFPB is seeking monetary fines of $5,000 per day for each of the companies in question until they comply with the court’s prior orders.

The CFPB’s contempt motion indicates that the agency does not intend to back off of its investigative agenda amidst demonstrated interest by the administration and some members of Congress to significantly curtail its power (which we have previously discussed here and here, among other posts). Instead, the Motion serves as a useful, if extreme, reminder that the CFPB will not let civil investigative demands go unanswered.

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