By Nicole D. Prysby, J.D.
The Bureau announced three actions it is taking to prevent consumer harm: implementing an advisory opinion program, updating its responsible business conduct bulletin, and proposing awards for whistleblowers.
On March 6, 2020, the Consumer Financial Protection Bureau announced three steps it will begin implementing to help protect consumers. The Bureau will implement a program to provide clear guidance to assist companies in better understanding their legal and regulatory obligations through advisory opinions; amend and reissue its responsible business conduct bulletin; and engage with Congress to advance proposed legislation that would authorize the Bureau to award whistleblowers.
Under the advisory opinion program, parties will submit requests for an advisory opinion via the Bureau’s website. To increase transparency and to provide regulatory certainty to all regulated entities and other stakeholders, the Bureau will publish the responding advisory opinion in the Federal Register and on its website. The opinion will include an interpretation of the Bureau’s existing rules. Under a current guidance 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 amended business conduct bulletin is intended to clarify the Bureau’s approach to responsible business conduct and emphasize the importance of such conduct. Responsible conduct can improve the Bureau’s ability to promptly detect violations, increase the effectiveness of its supervisory and enforcement work, enable the Bureau to better focus its finite resources, and help more consumers get redress. The bulletin identifies four categories of responsible conduct: self-assessing, self-reporting, remediation, and cooperation, with several factors listed for each category. For example, the self-assessing category includes factors such as what resources are devoted to compliance, what steps have been taken for improvement, how the violation was detected, and what self-assessment mechanisms were in place to prevent the conduct that occurred. 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 Bureau’s proposed legislation to Congress would amend Title X of the Dodd-Frank Act and provide authority to establish a whistleblower award program. Under the proposed legislation, in cases where a whistleblower provides voluntary information that leads to a successful enforcement action, the Bureau will be able to pay an award. The award percentage would be between 10 and 30 percent of the monetary sanctions imposed in the action, if at least $1 million is collected. If the Bureau is unable to collect at least $1 million of the monetary sanctions imposed, an award equal to 10 percent of the amount collected or $50,000, whichever is greater, would be authorized. The maximum award to any single whistleblower is limited to $10 million.
MainStory: TopStory CFPB DoddFrankAct EnforcementActions
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