Individuals and companies fined by the Consumer Financial Protection Bureau can expect to pay a little bit more starting last week, after the annual inflationary increase for civil money penalties went into effect.
The CFPB and other federal agencies were to increase their fine limits by 1.7% to adjust for inflation, which gives the bureau a slightly larger financial hammer with which to hit companies deemed to have violated financial services laws.
A Tier 3 penalty under the Consumer Financial Protection Act will now cost violators up to $1,176,138 per violation, up from $1,156,242 last year. Tier 2 penalties will cost $29,416 per violation, up from $28,906, and Tier 1 fines will cost up to $5,883 per violation, up from $5,781.
The CFPB also increased fine amounts for violations of the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), the SAFE Act, and the Interstate Land Sales Full Disclosure Act. Each penalty was adjusted by the same 1.7% inflationary multiplier.
The 1.7% annual increase marks the smallest year-over-year jump in three years. The past two years had seen annual increases north of 2%.
In four years, the cap on a Tier 3 fine for a violation of the Consumer Financial Protection Act has increased to $1,176,138 per violation from $1,087,450. For Tier 2 violations, the maximum fine has jumped to $29,416 per violation, from $27,186, and the cap on Tier 1 violations has increased to $5,883, from $5,437.
While it is able to charge more for violations, the CFPB has come under pressure from lawmakers for not being more aggressive and proactive in fining companies deemed to have violated consumer protection laws.