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10.22 Investigations and Enforcement Actions by the Bureau

<< Title X Overview

10.22 Investigations and Enforcement Actions by the Bureau

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10.22.   Investigations and Enforcement Actions by the Bureau.  The Bureau is authorized to conduct investigations and to take enforcement actions to enforce Title X and Federal consumer law.

10.22.1.            Investigations.  The Bureau is authorized to conduct investigations to determine whether any person is, or has been, engaged in a violation of Federal consumer financial law.  Such investigations may be conducted jointly with other regulators, and in the case of fair lending matters, may be conducted with HUD or the Department of Justice.  Investigations may include subpoenas for testimony or documents.[§ 1052]

10.22.2.            Enforcement Proceedings.  The Bureau may institute administrative enforcement proceedings.  The Act specifies the requirements applicable in connection with cease and desist proceedings.  The Bureau is authorized to seek a cease and desist order against a Covered Person or service provider that is subject to the jurisdiction of the Bureau, if the Bureau believes that such party is engaged in, or has engaged in, any activity that violates a law, rule, or any condition imposed in writing by the Board.  The Board may issue a temporary cease and desist authority if it believes that the continuance of such activity during the pendency of the cease and desist proceedings would cause the party to be insolvent or otherwise prejudice the interests of consumers.  The Act provides for an administrative process and judicial review similar to that available under the enforcement provisions of Section 8 of the FDI Act. [§ 1053]

10.22.3.            Civil Litigation Authority.  The Bureau may bring a civil action in an appropriate U.S. District Court against a person subject to its jurisdiction for the imposition of a civil penalty or other legal or equitable relief, including a temporary or permanent injunction. The Bureau is directed to coordinate such legal actions with the Department of Justice.[§ 1054]    

10.22.4.            Remedies.  The court in a civil action, or the Bureau in an administrative proceeding, may grant any appropriate legal or equitable relief in regard to a violation of Federal consumer law, including a rule issued thereunder.  This relief may include: (i) rescission or reformation of contracts; (ii) refunding money or returning real property; (iii) restitution; (iv) disgorgement or compensation for unjust enrichment; (v) payment of damages or other monetary relief; (vi) public notification regarding the violation; (vii) limits on the activities or functions of the person; and (viii) civil monetary penalties.  The Act does not, however, authorize punitive damages.

The Bureau, a State attorney general, or any State regulator may recover costs of litigation to enforce any Federal consumer financial law, if it is the prevailing party.

The relief granted by a court or in an administrative proceeding may include civil money penalties.  The Act establishes three tiers of civil money penalties ranging from $5,000 per day to $1,000,000 per day.  The Act also establishes mitigating factors to be considered in the assessment of such penalties.[§ 1055]

                        10.22.4.1.          Consumer Financial Civil Penalty Fund.  All civil penalties collected in an administrative proceeding or in a civil action will be deposited into the Consumer Financial Civil Penalty Fund.  The Bureau will use the funds for payments to victims of activities for which civil penalties have been imposed under the Federal consumer financial laws.  If it is not practicable to make payments to victims, the funds may be used for the purpose of consumer education and financial literacy programs.[§ 1017]

            10.22.5.            Criminal Referrals.  If the Bureau obtains evidence of conduct that may constitute a violation of Federal criminal law, it is required to transmit the evidence to the Attorney General.[§ 1056]