WASHINGTON—A federal appeals court declined Friday to allow the Consumer Financial Protection Bureau to investigate an organization that accredits for-profit colleges, a new blow to the bureau from challenges to its authority.
Upholding a trial court decision from a year ago, the U.S. Court of Appeals for the District of Columbia Circuit rejected CFPB’s effort to gather information from the Accrediting Council for Independent…
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DC Circuit Rejects CFPB Subpoena Targeting For-Profit College Accreditor
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A Washington federal appeals court on Friday rejected the Consumer Financial Protection Bureau’s attempt to investigate an embattled accreditor of for-profit colleges, upholding a trial judge’s ruling that faulted the Obama-era agency for straying outside its jurisdiction.
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The agency “wholly fails” to state what sort of unlawful conduct it is investigating, the appeals court said.
That court last year said the CFPB, which is charged with enforcing consumer financial laws, didn’t have authority to question a school accrediting agency.
The CFPB never explained what “unlawful acts and practices” it suspected and merely repeated the same language in court filings.
A federal appeals court rejected the Consumer Financial Protection Bureau’s investigative fishing trip into the records of a leading accrediting agency for for-profit colleges, saying the bureau failed to explain what sort of illegal conduct it was looking into.
This appears to be the first time in decades that a federal appeals court rejected an agency’s civil investigative demand or administrative subpoena, said Allyson Baker, a partner in Venable’s Washington office who represented ACICS. A federal appeals court declined Friday to allow the Consumer Financial Protection Bureau to investigate an organization that accredits for-profit colleges .