The CFPB's Early Warning Notice: The Devil's in the Details

Thomson Reuters
9 minute read | January.30.2012

The Consumer Financial Protection Bureau continues to bring its enforcement infrastructure to life, announcing Nov. 7 that in some circumstances it will issue “early-warning notices” to investigation targets before initiating enforcement proceedings.1 The CFPB’s early-warning notice bulletin offers a measure of welcome guidance to the financial services industry regarding at least some of the pre-enforcement procedures that the CFPB will implement.

But with certain details of the early-warning process still unclear, and others potentially troubling, it remains to be seen whether investigation subjects will take advantage of the opportunity to present their views to the enforcement staff prior to the recommendation of formal proceedings.

Most notably, the requirement that “[a]ny factual assertions relied upon or presented in the written statement [to] be made under oath by someone with personal knowledge of such facts” could dissuade targets under investigation from providing submissions because of the potential collateral consequences of swearing under oath to the facts contained in the statement.2

Published by Thomson Reuters, 2011. Reprinted with permission.