CFPB finalizes updates to adjudication procedures

The Consumer Financial Protection Bureau on Friday finalized updates for administrative adjudication proceedings after recently soliciting public comment about the revisions. Among other things, the updated procedures give parties the flexibility to conduct depositions of potential witnesses, and they allow a proceeding to be divided into two or more stages. The agency also made changes regarding timing and deadlines, the content of answers, the scheduling conference, the process for deciding dispositive motions, requirements for issue exhaustion, and other technical changes.

The American Bankers Association and other trade groups have raised concerns that updates would expand the powers of the agency’s already-powerful director and reduce protections for defendant companies. In a letter last year, when the updates were first proposed, they noted that concentrating adjudicative authority in the CFPB director creates legal uncertainty and risks depriving defendants of due process, and that the implementation of the revised rules could unfairly favor the bureau in many cases. They also urged the bureau to revert back to prior rules while it considers further changes to its adjudication processes.