No enforcement action. No consent order. No settlement. No public allegation of wrongdoing. No announced violation of law.
Yet a federal financial regulator recently chose to publicly discuss a matter involving remediation, consumer outcomes, and regulatory engagement.
That communication is interesting not because remediation is a novel concept. Regulators have long considered corrective action, consumer redress, and other remedial efforts when evaluating matters. Rather, it is notable because the communication focused on those issues in the absence of a traditional enforcement outcome.
Viewed alongside the Consumer Financial Protection Bureau's (CFPB) published Enforcement Principles, the communication may provide one of the first public examples that appears broadly consistent with the framework the Bureau has articulated for the exercise of its enforcement discretion.
A Framework Hiding in Plain Sight
Much of the discussion surrounding the CFPB has focused on questions concerning the Bureau's priorities, structure, staffing, and future direction. Comparatively less attention has been paid to the CFPB's Enforcement Principles, which provide one of the clearest public statements regarding how the Bureau currently describes its enforcement objectives.
Among other things, the Principles emphasize tangible consumer harm, consumer remediation, due process, and the efficient use of agency resources. They also recognize that not every matter requires an adversarial process and identify corrective action and efforts to make consumers whole as considerations that may be relevant when evaluating potential matters.
None of those concepts is particularly new. What is noteworthy is their inclusion in a formal statement describing how the Bureau views the exercise of its enforcement discretion. The Principles are therefore useful not because they create new legal standards, but because they provide insight into the factors the CFPB has identified as relevant when assessing potential matters and determining appropriate regulatory responses.
An Early Public Example
Against that backdrop, the CFPB recently issued a public communication discussing a matter involving remediation and consumer outcomes without simultaneously announcing a lawsuit, consent order, settlement, penalty, supervisory finding, or allegation of wrongdoing.
The significance of that communication lies less in the underlying matter than in its apparent consistency with themes reflected in the Enforcement Principles. The communication focused on remediation, corrective action, and consumer outcomes rather than a formal enforcement result. At a minimum, it demonstrates that the Bureau is willing to publicly highlight those considerations in at least some circumstances.
At the same time, caution is warranted before drawing broader conclusions. One communication does not establish a pattern, and one example is not sufficient to determine how the Bureau will apply its Enforcement Principles across future matters. It remains unclear whether similar examples will follow or whether the communication will prove unique to its particular facts and circumstances.
Even so, the communication is noteworthy because it provides a practical reference point against which the CFPB's Enforcement Principles can be evaluated. The Principles describe a framework that places meaningful emphasis on remediation, corrective action, and the proposition that not every matter requires an adversarial process. The recent communication appears broadly consistent with that framework.
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