Bills have been introduced in the House of Representatives and the Senate aimed at providing financial compensation to individuals who report wrongdoing to the Consumer Financial Protection Bureau about issues at companies in the financial services industry.
S. 1124 was introduced last week by Sen. Catherine Cortez Masto [D-Nev.] and H.R. 2465 was introduced by Rep. Al Green [D-Texas] earlier this week. The Senate bill is co-sponsored by Sen. Sherrod Brown [D-Ohio], the chair of the Senate Banking Committee, and Sen. Elizabeth Warren [D-Mass.] to name a few.
This is not the first time that members of Congress have attempted to legislate the creation of a whistleblower program at the CFPB. The CFPB itself announced a plan back in 2020 to reward whistleblowers, and asked Congress for help creating the program.
While the full text of either the new House or Senate bills were not immediately available, if they are anything like the previous versions that Sen. Cortez Masto introduced back in 2021, the plan would be to reward whistleblowers with up to 30% of a settlement award or a flat fee of $50,000 if the settlement is less than $1 million. Whistleblowers would be rewarded with between 10% and 30% of a settlement, with the funds coming from the CFPB’s Civil Penalty Fund. In cases where the fine is less than $1 million, the CFPB will pay out 10% of the amount collected or $50,000, whichever is greater.
The one thing that the prior legislation did not cover was how whistleblowers would actually go about reporting wrongdoings to the CFPB.
“I am proud to reintroduce the Financial Compensation for Consumer Financial Protection Bureau (CFPB) Whistleblowers Act together with Senator Catherine Cortez Masto” said Rep. Green in a statement. “The recent bank failures and volatility in our financial system have reaffirmed the importance of transparency and accountability in our economy. This legislation would create a powerful reward program that will help the CFPB uncover malpractice and reward those who come forward with evidence of fraud. I am honored to partner with Senator Cortez Masto once more on this legislation, and I look forward to its enactment.”