Mick Mulvaney. Credit: Gage Skidmore via Wikimedia Commons

Consumer Financial Protection Bureau lawyers on Monday agreed to temporarily suspend an investigation into a bail bond company that caters to undocumented immigrants as a judge in Washington weighs whether the agency has authority to conduct the probe.

The move comes as White House budget director Mick Mulvaney, in his role as the Trump-appointed acting director of the CFPB, reviews the agency's pending court cases. In remarks Monday, Mulvaney said he remains in the early stages of that review but said he was “triaging” to prioritize cases that have time-sensitive deadlines or hearings.

Mulvaney noted that a hearing was scheduled for Monday afternoon in the CFPB's pending case against the bail bond company Libre by Nexus. CFPB attorney David Wall said at the hearing, in front of U.S. District Judge Amy Berman Jackson of the District of Columbia, that the agency would “suspend” its investigation pending the judge's review.

Jackson used the hearing to sort out scheduling in two pending cases that involve Libre by Nexus. The CFPB is a defendant in one. In the other, the agency is seeking to enforce a civil investigative demand.

Libre by Nexus, represented by the firms Gentry Locke and Gorby Peters & Associates, sued in late October to challenge a subpoena the CFPB issued as part of the probe. The company argued that the agency was straying outside its jurisdiction and seeking a “breathtakingly large number of documents and information” concerning the company's operations. The CFPB's subpoena was premised on the “mistaken belief” the Libre by Nexus extends credit to consumers, the company's defense lawyers argued.

Libre by Nexus noted in its initial court filings that the CFPB had yet to take the company to court to enforce its investigative demand. Instead, the company argued, the agency was “boldly circumventing judicial scrutiny” by going to third parties, including Libre by Nexus customers and a bondsman, and issuing a separate subpoena to lawyers in a pending class action against the company.

“The CFPB has used a number of inappropriate, nefarious tactics to obtain the information it sought in the Nexus [civil investigative demand] by any means,” the company's lawyers argued in the U.S. District Court for the District of Columbia.

The CFPB's petition to enforce the subpoena was filed on Oct. 30, five days after Libre by Nexus filed suit. CFPB enforcement attorney Benjamin Konop urged a federal judge to order the company to comply with the subpoena.

“The CID seeks information to determine whether persons who provide products or services related to bonds posted on behalf of detainees have been extending credit or offering to extend credit and whether they engaged in acts or practices that violate the [Consumer Financial Protection Act's] proscription against unfair, deceptive and abusive acts or practices,” Konop argued. “Nexus provides such products or services, making it a person that may have information relevant to a violation of the CFPA, and Nexus therefore falls squarely within the scope of the bureau's investigative authority.”

Under the tenure of former CFPB Director Richard Cordray, defense lawyers often declined to challenge subpoenas through the agency's in-house process. Cordray routinely denied such appeals, and any challenge to a CFPB subpoena came with the possibility that a company would disclose a pending investigation sooner rather than later.

Mulvaney on Monday said he was “just learning about the civil investigative demand process” but appeared to welcome the prospect of bringing a new perspective to those administrative appeals.

“I'm really looking forward to those,” Mulvaney said. “This place will be different under my leadership and under whoever follows me, the permanent appointment of President Trump.”

Mulvaney said CFPB investigative demands can often be “fairly broad” and “fairly burdensome.” “If you don't like that, if your company got a letter from the CFPB saying, 'Hi, we hereby demand all this information under penalty of law and perjury,' and you don't like that, you can appeal. You know who you appeal to? The director—the guy who approved sending it to you in the first place.”

“It sounds to me like maybe there's a lack of checks and balances in that process,” Mulvaney added. “Yes, I will look upon the appeals process, my guess is, differently than Mr. Cordray would.”

Read more:

Companies Plot New Approaches to CFPB as Trump's Team Takes Control

Judge Upholds Trump's Designation of Mick Mulvaney as Acting CFPB Head

CFPB's Deputy Director Sues Trump to Shut Out Pick for Interim Leader

Who's Hiring from the CFPB? These Law Firms Showed Interest.

The CFPB, Often a Winner in Court, Hit a Rough Patch This Summer

Mick Mulvaney. Credit: Gage Skidmore via Wikimedia Commons

Consumer Financial Protection Bureau lawyers on Monday agreed to temporarily suspend an investigation into a bail bond company that caters to undocumented immigrants as a judge in Washington weighs whether the agency has authority to conduct the probe.

The move comes as White House budget director Mick Mulvaney, in his role as the Trump-appointed acting director of the CFPB, reviews the agency's pending court cases. In remarks Monday, Mulvaney said he remains in the early stages of that review but said he was “triaging” to prioritize cases that have time-sensitive deadlines or hearings.

Mulvaney noted that a hearing was scheduled for Monday afternoon in the CFPB's pending case against the bail bond company Libre by Nexus. CFPB attorney David Wall said at the hearing, in front of U.S. District Judge Amy Berman Jackson of the District of Columbia, that the agency would “suspend” its investigation pending the judge's review.

Jackson used the hearing to sort out scheduling in two pending cases that involve Libre by Nexus. The CFPB is a defendant in one. In the other, the agency is seeking to enforce a civil investigative demand.

Libre by Nexus, represented by the firms Gentry Locke and Gorby Peters & Associates, sued in late October to challenge a subpoena the CFPB issued as part of the probe. The company argued that the agency was straying outside its jurisdiction and seeking a “breathtakingly large number of documents and information” concerning the company's operations. The CFPB's subpoena was premised on the “mistaken belief” the Libre by Nexus extends credit to consumers, the company's defense lawyers argued.

Libre by Nexus noted in its initial court filings that the CFPB had yet to take the company to court to enforce its investigative demand. Instead, the company argued, the agency was “boldly circumventing judicial scrutiny” by going to third parties, including Libre by Nexus customers and a bondsman, and issuing a separate subpoena to lawyers in a pending class action against the company.

“The CFPB has used a number of inappropriate, nefarious tactics to obtain the information it sought in the Nexus [civil investigative demand] by any means,” the company's lawyers argued in the U.S. District Court for the District of Columbia.

The CFPB's petition to enforce the subpoena was filed on Oct. 30, five days after Libre by Nexus filed suit. CFPB enforcement attorney Benjamin Konop urged a federal judge to order the company to comply with the subpoena.

“The CID seeks information to determine whether persons who provide products or services related to bonds posted on behalf of detainees have been extending credit or offering to extend credit and whether they engaged in acts or practices that violate the [Consumer Financial Protection Act's] proscription against unfair, deceptive and abusive acts or practices,” Konop argued. “Nexus provides such products or services, making it a person that may have information relevant to a violation of the CFPA, and Nexus therefore falls squarely within the scope of the bureau's investigative authority.”

Under the tenure of former CFPB Director Richard Cordray, defense lawyers often declined to challenge subpoenas through the agency's in-house process. Cordray routinely denied such appeals, and any challenge to a CFPB subpoena came with the possibility that a company would disclose a pending investigation sooner rather than later.

Mulvaney on Monday said he was “just learning about the civil investigative demand process” but appeared to welcome the prospect of bringing a new perspective to those administrative appeals.

“I'm really looking forward to those,” Mulvaney said. “This place will be different under my leadership and under whoever follows me, the permanent appointment of President Trump.”

Mulvaney said CFPB investigative demands can often be “fairly broad” and “fairly burdensome.” “If you don't like that, if your company got a letter from the CFPB saying, 'Hi, we hereby demand all this information under penalty of law and perjury,' and you don't like that, you can appeal. You know who you appeal to? The director—the guy who approved sending it to you in the first place.”

“It sounds to me like maybe there's a lack of checks and balances in that process,” Mulvaney added. “Yes, I will look upon the appeals process, my guess is, differently than Mr. Cordray would.”

Read more:

Companies Plot New Approaches to CFPB as Trump's Team Takes Control

Judge Upholds Trump's Designation of Mick Mulvaney as Acting CFPB Head

CFPB's Deputy Director Sues Trump to Shut Out Pick for Interim Leader

Who's Hiring from the CFPB? These Law Firms Showed Interest.

The CFPB, Often a Winner in Court, Hit a Rough Patch This Summer