United States Court of Appeals, District of Columbia Circuit
February 2, 2017
from the United States District Court for the District of
Columbia (No. 1:15-cv-01838)
Lawrence DeMille-Wagman, Senior Litigation Counsel, Consumer
Financial Protection Bureau, argued the cause for appellant.
With him on the briefs was John R. Coleman, Deputy General
Allyson B. Baker argued the cause for appellee Accrediting
Council For Independent Colleges and Schools. With her on the
brief were Andrew Hernacki, Benjamin E. Horowitz, Kimberly
Culp Cloyd, and Kenneth J. Ingram.
J. Pincus, Ori Lev, Stephen C.N. Lilley, Matthew A. Waring,
Kathryn Comerford Todd, and Steven P. Lehotsky were on the
brief for amicus curiae The Chamber of Commerce of the United
States of America in support of appellee.
Michael C. Gartner was on the brief for amicus curiae
Accrediting Council for Continuing Education & Training,
Inc. ("ACCET"), et al. in support of appellee.
Before: Henderson and Wilkins, Circuit Judges, and Sentelle,
Senior Circuit Judge.
Sentelle Senior Circuit Judge.
Consumer Financial Protection Bureau ("CFPB" or the
"Bureau") issued a civil investigative demand to
the Accrediting Council for Independent Colleges and Schools
("ACICS"), a non-profit organization that accredits
for-profit colleges. The civil investigative demand's
"Notification of Purpose" stated that the CFPB
sought information relating to "unlawful acts and
practices in connection with accrediting for-profit
colleges." When ACICS refused to comply, the CFPB filed
a petition to enforce the civil investigative demand. The
district court denied the petition. Because the civil
investigative demand did not comply with the governing
statute, see 12 U.S.C. § 5562(c)(2), we affirm.
the Department of Education does not accredit for-profit
colleges, the Secretary of Education recognizes national
accrediting agencies that set accreditation standards for
those for-profit institutions. See Prof'l Massage
Training Ctr., Inc. v. Accreditation All. of Career Schs.
& Colls., 781 F.3d 161, 171 (4th Cir. 2015);
Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1044
(11th Cir. 2015); see also 20 U.S.C. § 1099b;
34 C.F.R. §§ 602.1-602.50. Indeed, the term
"[a]ccredited" is defined in the Department's
regulations as "[t]he status of public recognition that
a nationally recognized accrediting agency grants to an
institution or educational program that meets the
agency's established requirements." 34 C.F.R. §
600.2; see also id. § 602.3. Recognized
accrediting agencies are intended to be "reliable
authorities regarding the quality of education or training
offered by the institutions or programs they accredit."
Id. § 602.1(a); see also 20 U.S.C.
§§ 1001(c), 1099b(a). Importantly, students at
accredited for-profit colleges are eligible to receive
federal student aid funding. See 20 U.S.C. §
1002(b)(1)(D); 34 C.F.R. § 600.5(a)(6); Career
Educ., Inc. v. Dep't of Educ., 6 F.3d 817, 817-18
(D.C. Cir. 1993); see also Urquilla-Diaz, 780 F.3d
is a non-profit organization that accredits for-profit
colleges in the United States. A council consisting of
fifteen commissioners carries out the organization's
accreditation functions, while the organization's
president, who also serves as the Chief Executive Officer,
oversees the day-to-day operations. The Secretary has
recognized ACICS as a national accreditor since 1956,
although the Secretary withdrew ACICS's status as a
recognized accreditor in 2016.
most important aspect of ACICS's accreditation process is
the "peer review" component, which involves
volunteer evaluators from ACICS member institutions and
non-member institutions reviewing other institutions. The
confidential accreditation process includes a self-evaluation
by the institution, an on-site visit, a review of the
institution's operations, and a written report from the
evaluators. After determining whether the institution
complies with ACICS's accrediting standards, the council
makes a final accrediting decision. Relevant to this
litigation, ACICS asserts that, as an accrediting agency, it
plays no role in the student loan process.
CFPB has investigated for-profit colleges for deceptive
practices in connection with their student-lending
activities. See, e.g., CFPB v. Corinthian
Colls., Inc., No. 1:14-cv-7194, 2015 WL 10854380 (N.D.
Ill. Oct. 27, 2015); CFPB v. ITT Educ. Servs., Inc.,
No. 1:14-cv-292, 2015 WL 1013508 (S.D. Ind. Mar. 6, 2015). On
August 25, 2015, the CFPB issued a civil ...