The Consumer Financial Protection Bureau is working on legislation to authorize payments to whistleblowers who report violations of Federal consumer financial law.
The agency submitted the proposed legislative language to U.S. House Speaker Nancy Pelosi and U.S. Senate President Mike Pence, as well as the chairs and ranking members of the authorizing committees in both chambers.
It would amend Title X of the Dodd-Frank Act and provide authority to establish a whistleblower award program. The incentive created for employees to report wrongdoing to the CFPB will assist in advancing enforcement cases, especially as it relates to fair lending violations.
Under the proposed legislation, in cases where a whistleblower provides voluntary information that leads to a successful enforcement action, the CFPB will be able to pay an award based on a percentage of the monetary sanctions collected in the action.
The CFPB also will launch an advisory opinion program to assist companies in understanding their legal and regulatory obligations through advisory opinions. Companies will submit requests via the bureau website, and the agency will publish its response in the Federal Register and on its website. The opinion will include an interpretation of existing rules.
Under the current process, responses to individual regulatory inquiries are generally available to the individual requestor. That process will remain available alongside the advisory opinion program, as will the bureau’s other efforts to provide clear guidance to the public.
The CFPB also is updating its responsible business conduct bulletin, originally issued in June 2013, to clarify its approach and emphasize the importance of responsible business conduct.
The bulletin identifies four categories of responsible conduct: self-assessing, self-reporting, remediation and cooperation. If an entity meaningfully engages in these activities, the bureau will favorably consider it, along with other relevant factors, in addressing violations of Federal consumer financial law in supervisory and enforcement matters, the CFPB said.
“These steps reinforce the bureau’s commitment to preventing consumer harm. Advisory opinions will ensure that companies know what compliance entails and what constitutes a violation. We also want to incentivize whistleblowers to contact us if they believe their employer is not complying with the law,” said CFPB Director Kathy Kraninger. “Entities that build a culture of compliance and engage in responsible conduct support consumer protection and the bureau’s efforts to both prevent harm to consumers and enforce the law against bad actors.”