A new rule proposed by the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) could mean the difference between clemency and punitive measures for firms and financial institutions, which would receive two weeks' notice and the chance to explain their purported infractions before the bureau takes action.
[IMAGE]The so-called _Early Warning Notice_, ""published"":http://www.gpo.gov/fdsys/pkg/FR-2011-07-28/pdf/2011-19035.pdf by the bureau in the _Federal Register_, would supply firms and institutions with cause for enforcement action and allow their counsel to submit a written rebuttal in defense.
The interim final rule derives authority from a section under the Dodd-Frank Act. The CFPB published a ""separate"":http://www.consumerfinance.gov/wp-content/uploads/2011/11/EarlyWarningNotice.pdf
[COLUMN_BREAK]""bulletin"":http://www.consumerfinance.gov/wp-content/uploads/2011/11/EarlyWarningNotice.pdf that specifies how those it warns can submit statements in their defense.
""The _Early Warning Notice_ announced today strikes a balance between the goal of fairness to those being investigated and our mission to protect consumers,"" Raj Date, de facto acting director for the bureau, said in a ""statement"":http://www.consumerfinance.gov/pressrelease/consumer-financial-protection-bureau-plans-to-provide-early-warning-of-possible-enforcement-actions/.
""This process will help us fulfill our commitment to transparency in enforcing the law,"" he added.
The CFPB said in the statement that an enforcement office would distribute the notices to firms and institutions within 14 days before it takes punitive action.
Those under review by the bureau would have the opportunity to submit ""any relevant legal or policy arguments and factors"" in support of their actions and against punitive action.
The bureau made sure to note that the notice, although not required by law, ""will promote even-handed enforcement of consumer financial laws.""
The CFPB described the decision-making process it will deploy as ""discretionary"" and subject to a variety of factors internal to the bureau.
The rule is currently open to commentary from the public.