CFPB proposes legislation to pay whistleblowers who tip off agency
The Consumer Financial Protection announced Friday three initiatives to advance its strategy of preventing consumer harm, including a proposal to pay whistleblowers whose tips result in enforcement actions.
The steps also include an advisory opinion program to provide interpretations of existing rules to companies that submit requests to the bureau. The CFPB also announced changes to its responsible business conduct bulletin.
The bureau said the proposed whistleblower award program would be an incentive for employees of businesses to report wrongdoing that will assist it in advancing enforcement cases “especially as it relates to fair lending violations.”
Kathy Kraninger, the director of the CFPB, said it has submitted proposed legislation to Congress to amend Title X of the Dodd-Frank Act to establish a program in which the bureau would be able to pay an award to a whistleblower who provides voluntary information that leads to a successful enforcement action.
The bureau plans to publish more information about the advisory opinion program in the Federal Register.
The agency has also updated a 2013 bulletin that identifies four categories of responsible conduct that could result in credit for a company under an enforcement investigation: self-assessing, self-reporting, remediating and cooperating.
“These steps reinforce the Bureau’s commitment to preventing consumer harm,” Kraninger said. “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."
On the subject of responsible conduct, Kraninger said that if an entity meaningfully engages with the bureau, it will "favorably consider it, along with other relevant factors," in addressing violations of federal consumer financial law in supervisory and enforcement matters.
“Responsible conduct is in the public interest,” Kraninger said. “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.”