Payments Law Tool Kit

Venable / 18 17 / Venable Government Inquiries and Investigations If your payments-related activities have triggered a government inquiry or investigation – whether by the prudential banking regulators, the Department of Justice (DOJ), Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), a state attorney general, or a state financial services regulator – you need a plan for handling what comes next. An investigation normally kicks off with the receipt of a civil investigation demand (CID), subpoena, or other request for information. While every situation is unique and every strategy fact dependent, here are some points to consider as you develop your defense strategy: • This isn’t private litigation, and a scorched‑earth strategy likely will backfire. Know that the government can play the roles of investigator, prosecutor, and judge. Carefully review the CID’s instructions and defined terms; they contain important information about your procedural rights, relevant deadlines, and the scope of the investigation • Before negotiating with government staff on modifications to the CID and a schedule of productions, bring all relevant stakeholders at your company together to carefully assess the volume and nature of the documents, information, and data sought by the CID. The earlier you involve your IT professionals, the better • Provide written advocacy when producing information or documents in response to a CID to properly frame the materials • The government staff’s goal is to determine whether a violation of law has occurred and how to remedy any resultant harm to consumers. Keeping the lines of communication with government staff open from the outset provides the opportunity to correct any staff misimpressions before they solidify and will help you better understand staff’s concerns and frame your response • Consider whether to take steps to remedy the problem the government believes may exist, or to put in place a more rigorous compliance program. Although there are countervailing considerations relating to admitting “guilt,” dealing early with a possible problem may yield benefits later on • If you are facing related or overlapping legal problems on multiple fronts (e.g., class actions, state attorneys general), consider a strategy to coordinate a resolution that minimizes redress and fees, and avoids inconsistent injunctive provisions Having good counsel who understands the dynamics, personalities, and current law enforcement priorities of the agency or office investigating your company can be a key tool for managing the situation. For example, it is important to know when – and when not – to go over the head of staff to raise concerns with senior agency personnel, given that staff are the frontline enforcement personnel whom you will have to deal with on a daily basis.