NAICU Washington Update

CHEA and National Accreditors File Motion in CFPB Case

January 28, 2016

On January 14, 2016 the Council for Higher Education Accreditation (CHEA) and a group of national accreditors filed a legal brief seeking to submit an amicus brief supporting the Accrediting Council for Independent Colleges and Schools (ACICS) in its impending case against the Consumer Financial Protection Bureau (CFPB). ACICS has argued that the CFPB’s dalliance into accreditation affairs represents significant federal overreach. Standards governing institutional quality and integrity lie solely with the Department of Education. Such an effort on the part of the CFPB is a departure from the consumer agency’s historical agenda and outside the agency’s jurisdiction.

This is the latest development in a story that has been unfolding over several months:

  • In August 2015, the CFPB issued a civil investigative demand to ACICS seeking information from the accreditor in order to “determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting for-profit colleges.” ACICS, the accreditor responsible for the accreditation of nearly 1,000 proprietary colleges has recently come under fire on Capitol Hill for allowing several financially imperiled institutions, such as Corinthian Colleges and ITT Tech, to remain accredited. ACICS has defended its actions to continue the accreditation of these institutions by citing the agency’s quality assurance role, rather than the financial compliance role played by the Department of Education.
  • ACICS filed a request with the CFPB in September 2015, seeking to have the civil investigative demand order dropped. The CFPB denied that request.
  • In October 2015, the CFPB filed a formal petition in District Court asking the court to compel ACICS to turn over the information requested by the CFPB in its original civil investigative demand. In December 2015, ACICS responded to the CFPB’s petition by rejecting the CFPB’s claims and requesting an oral hearing before the court.

In filing its request to submit an amicus brief, CHEA and the group of national accreditors claims that the CFPB’s actions against ACICS will “interfere with the long-standing and already heavily-regulated accreditation system” and “threatens the viability of the long-standing peer review process.”

This case is ongoing and NAICU will continue to monitor it closely.