Banking and Finance Law Daily CFPB asks for enforcement of CID against law firm
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Monday, June 26, 2017

CFPB asks for enforcement of CID against law firm

By Colleen M. Svelnis, J.D.

The Consumer Financial Protection Bureau has filed a petition to enforce the Civil Investigative Demand (CID) it had issued to Seila Law with the U.S. District Court for the Central District of California. The CID was issued for the purpose of determining whether debt relief providers or lead generators "were engaging in unlawful acts or practices in the advertising, marketing, or sale of debt relief services or products." According to the bureau’s petition, Seila law has "failed to comply with the CID duly served upon it." The bureau asks that the court direct Seila Law to show cause why it should not be required to comply with the CID and asks for an order directing Seila Law to comply, after giving the law firm an opportunity to respond.

Partial response to CID. The CFPB denied Seila Law’s petition to set aside the CID, stating that none of the objections raised by the law firm warrant setting aside or modifying the CID (see Banking and Finance Law Daily, April 19, 2017). Following this, bureau enforcement staff granted Seila Law’s request for an extension of the deadline to respond to the CID, which it did on April 27, 2017. The bureau then sent Seila Law a letter explaining that the response to the CID was incomplete, and detailing other deficiencies in the production, "including Seila Law’s unsupported assertions of the attorney-client privilege and its withholding of materials that plainly do not fall within the protections of the attorney-client privilege or any other privilege." The bureau also stated that Seila Law’s claims of confidentiality were not a basis for withholding responsive materials.

In response, Seila Law disputes the enforceability of the CID and the bureau’s authority and stated that it would not provide any further documentation in response to the CID.

Covered under CID. Under the CID, the law firm is asked to produce documents and provide answers to interrogatories relating to debt negotiation, debt elimination, debt settlement, and credit counseling in violation of Sections 1031 and 1036 of the Consumer Financial Protection Act of 2010, the Telemarketing Sales Rule, or any other "Federal consumer financial law."

Companies: Seila Law, LLC

MainStory: TopStory CFPB UDAAP

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