CBA, FSR Comment Letter on Administrative Adjudications

May 4, 2018


Consumer Financial Protection Bureau Attention: Monica Jackson

Office of the Executive Secretary 1700 G Street, NW

Washington, DC 20552



Re: Docket No. CFPB-2018-0002; Request for Information Regarding Bureau Rules of Practice for Adjudication Proceedings.



Dear Ms. Jackson:


The Financial Services Roundtable1 (“FSR”) and the Consumer Bankers Association2 (“CBA”) appreciate the opportunity to comment on the Bureau of Consumer Financial Protection’s (the “CFPB” or “Bureau”) Request for Information Regarding Bureau Rules of Practice for Adjudication Proceedings (“RFI”). This comment letter responds to the Bureau’s request for whether and how the Bureau might improve its administrative adjudication processes, while continuing to achieve its statutory purposes and objectives.


FSR and CBA’s positions are largely consistent with those expressed in our joint comment letter submitted in response to the Bureau’s Interim Final Rules of Practice Governing Adjudication Proceedings, Docket No. CFPB-2011-0006,3 which we have included as an Appendix to this letter.


I.            BACKGROUND


The Dodd-Frank Act created the Bureau to “regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws.”4 The Act requires the Bureau to prescribe rules establishing such procedures as may be necessary to carry out hearings and adjudications conducted pursuant to 12 U.S.C. § 5563. The Bureau noted that, in drafting the Rules of Practice for Adjudication Proceedings” (“Rules”), it “endeavored to create an adjudicatory process that provides for the expeditious resolution of claims while ensuring that parties who appear before the Bureau receive a fair hearing.”5


Although FSR and CBA recognize the importance of expeditious resolution, it urges the Bureau to look to the Federal Rules of Civil Procedure (“FRCP”) and the Federal Rules of Evidence (“FRE”) as benchmarks for specific timelines, breadth of relevant discovery, and other procedural standards. FSR and CBA believe that alignment between the Bureau’s rules on administrative adjudications with the FRCP and FRE would allow respondents to have more clarity regarding the manner in which these proceedings are organized, as most respondents have familiarity with these two standards, and also would provide respondents with more of an ability to appropriately respond to potential charges.


II.           Any Revised Rules Should Favor Fairness Over Expediency, in Order to Allow Respondents Additional Time to Prepare a Response to a Notice of Charges.


Consistent with its prior letter, FSR and CBA urge the Bureau to amend the Rules to provide respondents with more time to prepare a response to a notice of charges. Currently, Section 1081.201 requires a respondent to file an answer to a notice of charges that “specifically respond[s] to each paragraph or allegation of fact contained in the notice,” while also requiring them to do so within just fourteen days. As we stated in our previous comment letter, reviewing the notice of charges, investigating the factual and legal allegations, determining the appropriate response, and finally, drafting an answer, takes a considerable amount of time. The failure of a respondent to file a timely answer is deemed a waiver of the right to appear and consent to the entry of an order granting the relief sought by the Bureau, an outcome that is unduly harsh in light of the short timeframe for submitting an answer.


[ To read the complete text of this comment letter, please view the full PDF version here.]