CFPB Issues Guidelines for "Responsible Conduct" of Enforcement Targets

The Consumer Financial Protection Bureau (CFPB) Tuesday announced the publication of a bulletin with details about what kind of “responsible conduct” it generally looks for by those subject to enforcement investigations.

“If providers of financial products and services show significant responsible conduct in our enforcement investigations, we will take that into account when deciding which cases to pursue and how to resolve the ones we do pursue,” the CFPB wrote on its blog.

The purpose of the bulletin is to encourage providers of consumer financial products and services to do certain things that have real consumer benefits and contribute to the CFPB’s mission.

The Bureau considers many factors in the exercise of its enforcement discretion. These include, for example: (1) the nature, extent, and severity of the violations identified; (2) the actual or potential harm from those violations; (3) whether there is a history of past violations; and (4) a party’s effectiveness in addressing violations.

But it wanted companies under its purview to know that there are additional activities firms can engage in that enforcers may “favorably consider” when determining whether to pursue enforcement or even which penalties to levy.

Specifically, the bulletin outlines and elaborates on four major factors the CFPB will take into consideration when deciding on enforcement actions against a company:

• Self-policing
• Self-reporting
• Remediation
• Cooperation

The CFPB did caution in the bulletin that “this guidance, and its description of activities that may warrant favorable consideration, is not adopting any rule or formula, or making a promise to any person about any specific case.”