June 1, 2016
Associate Donnelly McDowell was quoted in the Legal NewsLine article “Court Checks CFPB's Authority to Investigate For-Profit College Accreditation.” In its April 21 opinion, the U.S. District Court for the District of Columbia held that the Consumer Financial Protection Bureau (CFPB) -- established by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 and tasked with overseeing the financial services industry -- did not have the authority to issue a civil investigative demand to the Accrediting Council for Independent Colleges and Schools (ACICS). Mr. McDowell noted that this case marks the first time a respondent has challenged the scope of a CFPB CID through litigation. He further stated the court’s decision ruling in favor of ACICS could potentially embolden other groups to challenge broad-sweeping CIDs issued by the CFPB in the future, or at least result in the CFPB acting more cautiously when issuing CIDs. “The decision may cause the CFPB to tread a little more carefully when it describes the scope and purpose of CIDs, particularly in investigations that relate to conduct that may be in a gray area of the bureau’s jurisdiction,” Mr. McDowell said.
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