Adding to the growing body of cases disputing the Consumer Financial Protection Bureau’s (CFPB) authority to issue civil investigative demands (CID), a U.S. district court judge in the Central District of California, on May 17, rejected multiple challenges and ordered a company to comply with a CID within fifteen days of the decision. The defendant, Future Income Payments, previously attempted a John Doe challenge to the CID in the U.S. District Court for the District of Columbia. The district court rejected the challenge, and the D.C. Circuit rejected an emergency stay pending appeal. The CFPB filed a petition to enforce the CID in the Central District of California.
The opinion is a reminder of the CFPB’s broad authority to issue a CID and the heavy burden a recipient bears of challenging it. The court joined other courts in emphasizing that an agency subpoena is valid unless jurisdiction is “plainly lacking.” Under this standard, a CID will be upheld if “there is some plausible ground for jurisdiction.” The court reasoned that the defendant’s income-stream-advance product may be sufficiently similar to a loan for the CFPB to have plausible jurisdiction. The product essentially consists of an advance on a pension or other income stream, which the individual repays from the future income.
