CFPB Warns on ‘Revolving Door’ Misconduct

Some interesting news for any compliance professionals who recently worked at the Consumer Financial Protection Bureau: the agency’s new director is warning current employees to be more cautious about talking with former employees and to watch for “revolving door misconduct.” 

The message came from Rohit Chopra, the CFPB’s decidedly enforcement-minded director, who took office last month. Chopra published a statement on the agency’s blog promising to be more vigilant against former employees trying to exploit their knowledge of the CFPB improperly; and followed up with guidance to current employees that they should report any improper actions by former colleagues promptly.

“We are concerned that some former employees may have a financial incentive to exploit confidential information to which they may have had access,” Chopra said in his statement. “In some cases, this behavior may even violate criminal law … For former government attorneys engaging in violations, we will also make referrals to state licensing bodies and bar associations that may wish to consider disciplinary proceedings.”

Hmmm. We can all applaud Chopra for wanting to hold the CFPB to high ethical standards. At the same time, however, one also can’t help but wonder why Chopra felt it necessary to issue this public warning in the first place. Does he believe ex-CFPB employees from the Former Guy Administration are having improper communications with current employees right now? Or is Chopra just planting an ethical flag to set the tone for his tenure? 

Probably both, when you think about it. But you ex-government employees still under the one-year prohibition against close contact with your former agency know who you are. If you’re shameless enough to violate that rule, Chopra wants to know who you are too. 

Indeed, Chopra went on to say that he’ll be enhancing the CFPB’s ethics program in the future, and contacts with former staffers will go under the microscope:

We will be applying heightened scrutiny to matters and decisions where a party has employed or retained the services of a former employee to ensure that the CFPB is meeting the highest standards of ethics and integrity … This guidance is the first step of several that the CFPB will undertake to further strengthen the Bureau’s Ethics Program, demonstrate the Bureau’s commitment to a standard of exemplary integrity, and ensure that our work serves the American people first and foremost. 

CFPB Rules to Follow

To complement Chopra’s public statement, the agency also followed up with internal guidance for current employees that outlined several expectations Chopra has for the 1,500+ staff. The main points (which broadly apply to anyone who worked at any federal agency) are as follows:

Protect confidential CFPB information. Once an employee submits paperwork to leave the agency, other employees should not share any confidential or nonpublic information with that person.

No preferential treatment for former federal employees. Former federal employees must be treated in the same manner as all other members of the public who have business pending before the CFPB. 

Report potentially unlawful communications by former agency employees. If a former employee shows up working on a specific matter that he or she also worked on while employed by the CFPB, current employees are supposed to report that communication to the ethics office immediately.

Report any suspected disclosure of confidential information by the former employee. This one is pretty self-explanatory. 

Report any communication with the CFPB during former employees’ first year. If a former employee contacts the agency on behalf of any third party within the first year of the employee’s departure, current employees have to report that to the ethics office. 

Obviously government attorneys, compliance officers, and the like are in high demand in the private sector given their expertise; but we sticklers for good conduct do need to remember that improperly leveraging your government contacts and experience is, you know, illegal. 

The CFPB is now on alert for such misconduct. Somehow I suspect it won’t be the last agency doing so.