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Yesterday, the Consumer Financial Protection Bureau (CFPB) announced plans to provide advance notice of possible enforcement action to financial institutions, allowing individuals and firms to respond to potential violations before legal action begins. Individuals and firms that are targeted for enforcement action will receive Early Warning Notices informing them that they may have violated consumer protection laws. Recipients will have 14 days to submit a written counter-argument focusing on relevant legal and policy matters.
“The Early Warning Notice announced today strikes a balance between the goal of fairness to those being investigated and our mission to protect consumers,” said Raj Date, the Treasury Secretary’s special adviser for the CFPB. “This process will help us fulfill our commitment to transparency in enforcing the law.”
The advance notice is not required by law, but the CFPB has said it believes it will “promote even-handed enforcement of consumer financial laws.” The decision whether to provide notice is discretionary and will depend on factors such as whether “prompt action” is necessary. The process will be similar to successful procedures at other federal agencies.
More information about the Early Warning Notice can be found here.
AFSA is concerned that notices could be sent when any investigation is launched, possibly without corroborating evidence of a violation. AFSA will be addressing this issue with the Bureau.
For more information, contact AFSA Executive Vice President Bill Himpler at bhimpler@afsamail.org or 202-466-8616.
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