• CFPB Announces Early Warning Notice Process
  • November 14, 2011 | Authors: David N. Anthony; Virginia Bell Flynn; Alan D. Wingfield
  • Law Firm: Troutman Sanders LLP - Richmond Office
  • On November 7, 2011, the Consumer Financial Protection Bureau (CFPB) announced that it will provide advance notice to financial institutions before pursuing legal action against them. This advance notice is outlined in a process called the “Early Warning Notice,” and allows the subject of an investigation to respond to potential violations before the legal action is commenced.

    Raj Date, Special Advisor to the Secretary of the Treasury for the CFPB, emphasized that the purpose of this process was to reassure financial institutions that the CFPB is “commit[ted] to transparency in enforcing the law.”

    The first in a series of bulletins was issued by the CFPB’s Office of Enforcement in an attempt to clarify what the procedure for the Early Warning Notice will look like. The bulletin states that subjects of investigations will receive a telephone call from the Office of Enforcement, followed by a letter, explaining that a potential violation has occurred.  A sample notice letter was included in the bulletin.  The individual or institution will have 14 days after the telephone call to respond in writing.  Any factual assertions relied upon by the institution in its letter must be made under oath by someone with personal knowledge of such facts.

    The Early Warning Notice process is discretionary, and the CFPB reserves the right to not provide notice in certain circumstances, such as ongoing fraud or where prompt action is needed.

    For more information on the Early Warning Notice Process, go to:

    http://www.consumerfinance.gov/pressrelease/consumer-financial-protection-bureau-plans-to-provide-early-warning-of-possible-enforcement-actions/.