Prior restraints on speech are highly disfavored and presumptively unconstitutional. See Tory v. Cochran, 544 U.S. 734, 738 (2005) (“Prior restraints on speech and publication are the most serious and the least tolerable infringement on First Amendment rights.”). Yet the Consumer Financial Protection Bureau (CFPB) proposed exactly that in its Proposed Rule Relating to Disclosure of Records and Information (Proposed Rule), CFPB-2016-0039, 81 Fed. Reg. 58310 (Aug. 24, 2016). CFPB seeks to prohibit the recipient of a civil investigative demand (CID) or letter from the agency providing notice and opportunity to respond and advise (NORA letters) from disclosing the CID or NORA letter to third parties without prior written consent of a high-ranking CFPB official. In effect, this would constitute a “gag” rule that would stifle constitutionally protected speech.
The proposed gag rule is not only ill-advised as a matter of public policy, it is also unconstitutional both as a prior restraint on speech and a content-based restriction. It would be subject to strict scrutiny, and the CFPB would have to show a compelling government interest to justify it, which it could not. Indeed, CFPB has not claimed, nor could it claim, that the absence of a similar gag rule since the creation of CFPB has hindered or impaired its effectiveness. Continue reading “CFPB Proposal Unconstitutionally Imposes Prior Restraint on Regulated Entities’ Speech”