Page 13 - The GSE Report March-April 2018

TRUMP ADMINISTRATION MJARN.U-ARPYR.20210818
Improving CID Recipients’ Understanding of Investigations
The Associations believe there are a number of steps the Bureau can take to improve
a CID recipients’ understanding of an investigation. First, the Bureau should enhance communication with the CID recipient by improving the information set forth in the Notification of Purpose (NOP). The NOP should include: (i) the specific conduct being investigated; (ii) the specific laws and regulations at issue and, where the law is broad, the relevant legal theory; (iii) how the specific conduct may violate the specific laws; and (iv) whether the recipient is the subject of the investigation or a third-party recipient in possession of relevant information.
Second, the Bureau should discuss the basis and nature of the investigation with the CID recipient at the outset and at periodic touchpoints as the investigation progresses, not less than once a quarter. Third, Bureau investigators should be required to revisit the scope of an investigation if the nature of the investigation evolves and update the NOP accordingly. Fourth, Bureau investigators should seek tolling agreements after sufficient fact-finding and when an enforcement action appears inevitable or a statute of limitations is going to expire imminently and the parties need additional time to reach a consensual resolution.
Nature and Scope of Requests
The Associations believe that CIDs and the requests contained therein should be proportional to the potential harm being investigated. In order to reduce burden and ensure narrowly tailored CIDs, the Associations recommend that the Bureau update its procedures to ensure that the relevant time period for responsive materials is tailored to the relevant statute of limitations, ensure that all relevant terms are defined and that all definitions are consistent with their use by the industry and not overbroad in their scope, limit the definition of “Company” to the CID recipient institution absent compelling reasons otherwise, narrowly tailor any requests for emails by both timeframe and subject matter, and adopt a standard protocol in connection with the CID recipient’s use of alternative document review protocols. With respect to data requests, the Associations recommend issuing targeted data requests once the scope of the investigation is more readily understood and limiting data requests to data reasonably maintained in the normal course of business and readily extractable. With respect to interrogatories, the Associations recommend that the Bureau draft interrogatories in order to learn facts as opposed to a manner that assumes facts that may not exist. The Associations also suggest incorporating a rule similar to Federal Rule
of Civil Procedure 33(d) to allow a CID recipient to produce business records in lieu of a response and adopting new protocols, which will allow the Bureau or institutions to point to publicly available information.
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