CFPB Inspector General: Agency Isn’t Meeting Investigation Deadlines

Agency is not meeting self-imposed two-year deadline for probes

The Consumer Financial Protection Bureau is failing to meet its goal of filing or settling enforcement actions within two years of opening an investigation, the agency’s Inspector General said in a new report.

“The percentage of enforcement actions filed or settled within 2 years fluctuated during the period, with a high of 62 percent in FY 2018 and a low of 36 percent in FY 2019,” the Inspector General said.

The IG said that several factors affected the agency’s enforcement staff’s ability to complete probes on a timely basis.

The first factor was the multiple leadership transitions that occurred during that period. The IG cited the CFPB’s Annual Performance Report which said that the agency’s multiple leadership transitions resulted in a decline in the number of investigations being filed or settled within the two-year deadline. “Interviewees stated that changes in leadership have also caused enforcement’s processes to change, such as by adding more people to the review process, and that new leadership needs time to become familiar with enforcement activities, which may result in delays,” the IG said.

The IG’s report stated that the IG’s office analyzed documents related to 15 matters and found instances in which leadership changes affected the investigations’ timelines.

For instance, the IG said, the agency placed a hold on collecting data related to enforcement investigations at the direction of the acting director. “The purpose of the hold was to afford the acting director time to gain comfort with the CFPB’s data security protocols before the CFPB continued collecting data and information,” the IG said. The data hold was lifted after six months.

While the IG report does not specify who the acting director was, the timeframe corresponds to the term of Mick Mulvaney, who was placed in the position by President Trump, following the resignation of Director Richard Cordray, an Obama Administration nominee. Mulvaney was an avowed opponent of the CFPB and had supported abolishing the agency when he was a House member from South Carolina.

The second factor was delays on the part of those being investigated. The IG reported that several enforcement employees at the agency said they had problems interacting with companies under investigation. Some companies may not have had the needed information, while others did not cooperate, and some actively attempted to delay investigations.

The timelines varied tremendously, the IG said. For instance, one entity petitioned the CFPB to set aside a Civil Investigative Demand the agency had issued, resulting in a delay of 278 days.

The third factor was staffing issues. Staffing shortages caused delays in investigations, employees said, adding that litigation work took priority over investigations because cases in litigation had court-mandated deadlines.

“Insufficient enforcement resources can also prolong time frames for resolving investigations involving significant amounts of data,” the IG said, adding that since 2022, the enforcement division has added four economists. The IG said that in September 2023, the CFPB allocated 78 new positions to the enforcement division.

The IG recommended that the CFPB should incorporate expected timelines into the investigation process. CFPB officials agreed with the recommendation and said they will implement timeline requirements by the end of September 2024.