OIG Issues Report Concerning CFPB Enforcement Investigations

On January 8, 2024, the Office of Inspector General (OIG) issued an Evaluation Report (Report) concluding that the Consumer Financial Protection Bureau (CFPB or Bureau) should “enhance certain aspects of its enforcement investigations process.”  The Report focuses on the efficiency of the CFPB’s Office of Enforcement’s (Enforcement) process for carrying out investigations—specifically, the timing of those investigations and Enforcement’s practices for tracking and monitoring matters.

The Report first provides general background information on Enforcement and its investigation process.  Enforcement is responsible for investigating potential violations of federal consumer financial laws and initiating public enforcement actions when “appropriate.”  With respect to staffing, the Report states that “[l]itigation teams conduct investigations and obtain authorization from the CFPB director to settle with the subject or file suit, as appropriate.”  According to OIG, as of September 2023, Enforcement had four litigation teams, with each team led by a litigation deputy and four assistant litigation deputies.  The Report suggests that each team consisted of between 25 and 27 attorneys, 1 to 4 paralegals, and a litigation team analyst.

After describing the CFPB’s resources, the Report delves into the process for investigations and the phases of the Enforcement process according to Enforcement’s Policies and Procedures Manual.  The Report also covers statistics on Enforcement’s efficacy and the investigation timeline.  For example, OIG states that Enforcement has not met its goal to “file or settle 65 percent of its enforcement actions within two years of the investigation opening date in any of the 5 years since fiscal year 2017.”  Additionally, the percentage of enforcement actions filed or settled within a two-year period “fluctuated during the period, with a high of 62 percent in FY 2018 and a low of 36 percent in FY 2019.”

The Report also includes two findings and recommendations.  First, OIG found that Enforcement should “track the timing expectations described in its guidance,” and recommended that the CFPB incorporate these expectations “into the tracking and monitoring of matters.”  Second, the OIG recommended that the CFPB “[p]rovide training to Enforcement staff to reinforce the current guidance on the document maintenance and retention requirements for the matter management system.”

OIG expressly notes that the CFPB concurs with the recommendations set forth in the Report.