On October 6, 2020, Jonathan Pompan was quoted in Law360 on the limited scope of the Consumer Financial Protection Bureau’s new policy that will allow entities to terminate consent orders against them.
According to the article, the consent orders — settlements between the CFPB and companies accused of federal consumer financial law violations — will be terminated in "exceptional circumstances" at the "discretion and sole authority" of Director Kathy Kraninger in consultation with her staff.
To be considered for early termination, entities must demonstrate they have corrected violations, paid any required civil penalties or other monetary relief, adopted procedures to ensure future compliance, submitted adequate reports, and maintained required records, the policy states.
The policy applies only to CFPB-issued administrative orders. It does not apply to individuals, only entities, nor does it apply to settlements approved and ordered by a court. Pompan noted that CFPB administrative orders make up only a fraction of all orders, significantly limiting the pool of eligible participants.
Among the eligible, he said, those with "robust compliance management systems and confidence in their execution" of orders may wish to file an application, but others may be leery of attracting additional CFPB scrutiny without guaranteed results. "Any company under an administrative consent order will need to determine whether the juice is worth the squeeze," he said. "It could be a very personalized decision."
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