“A Bridge Too Far:” CFPB’s Authority Grab Rejected by Federal Judge
By Soyong Cho and Ted Kornobis
Judge cautions new agency against “plow[ing] head long” beyond its jurisdiction
On April 21, 2016, the Consumer Financial Protection Bureau’s investigatory powers and civil investigative demand (“CID”) authority were soundly checked by federal district court judge Richard J. Leon. The Court denied the CFPB’s petition to enforce a CID issued to the Accrediting Council for Independent Colleges and Schools (“ACICS”) seeking information regarding accreditation of for-profit colleges, because the subject of the CID fell squarely outside of the CFPB’s enforcement authority.  Judge Leon’s ruling demonstrates that the right to judicial review can provide a backstop to an overly-aggressive and broad investigation.