The Consumer Financial Protection Bureau has filed a motion in federal court to compel a company to comply with a Civil Investigative Demand it has received from the Bureau, but the company is seeking to stay the proceedings until after the Supreme Court issues its ruling in CFPB v. Community Financial Services Association.
A copy of the petition filed by the CFPB in its investigation of Community Loans of America can be accessed by clicking here.
At some point late in 2022 or early in 2023, the CFPB notified Community Loans of America, a small-dollar lender that originates, services, and collects on automobile title loans, that it intended to hold an investigational hearing and wanted the testimony of a corporate representative on 12 topics. The company refused to engage in such discussions, according to the petition, on the grounds that the investigation be stayed until the ruling in the Supreme Court case be released. Nonetheless, the Bureau served the CID on the company in February and scheduled the hearing for late March. The lender notified the Bureau that it would not comply with the CID because of the reasons it had already mentioned.
The pending challenge before the Supreme Court over the Bureau’s funding mechanism does not permit the company to ignore a CID, the CFPB argued in its petition — one of several reasons it put forth why the lender should be forced to comply with the investigation. The Bureau is statutorily authorized to regulate the financial services industry and the lending practices of the company being investigated “fall squarely within the Bureau’s broad investigative authority,” it said in its petition.
