Cortez Masto Introduces Bill to Incentivize Whistleblowers to Report Consumer Fraud to the Consumer Financial Protection Bureau
Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) introduced legislation to authorize the Consumer Financial Protection Bureau (CFPB) to reward whistleblowers who report wrongdoing to the CFPB with financial compensation. Whistleblower statutes protect people from unfair practices, fraud, and abuse. The bill is cosponsored by Chairman of the Senate Banking, Housing, and Urban Affairs Committee Senator Sherrod Brown (D-Ohio) and Senators Dick Durbin (D-Ill.), Elizabeth Warren (D-Mass.), Jeff Merkley (D-Ore.), Richard Blumenthal (D-Conn.), and Tina Smith (D-Minn.).
“Whistleblowers play a vital role in protecting consumers from exploitation, risking their careers and livelihoods to report corrupt and unethical business practices,” said Senator Cortez Masto. “Protecting consumers from fraud has been a top priority for me throughout my career, and we’ve got to do more to help vulnerable Nevadans. This legislation will not only make it safer for whistleblowers to report wrongdoing, it will also protect Nevada consumers from bad actors and discourage future misconduct by holding companies accountable.”
“Whistleblowers are essential to our democracy,” said Senator Brown. “Whistleblowers risk their career and their reputation to reveal corruption and bad actors seeking to exploit consumers and our government. We must do more to protect them during and after the pandemic to ensure that whistleblowers feel safe coming forward. This legislation does just that by protecting whistleblowers from retaliation and incentivizing them to come forward with their information.”
Numerous reports have found that financial rewards provide incentives for potential whistleblowers to come forward. Attorneys for whistleblowers have also noted that the threat of penalties for whistleblowers deters people from reporting misconduct. This legislation would encourage reporting by enabling the CFPB to offer compensation to whistleblowers.
Specifically, the Financial Compensation for Consumer Financial Protection Bureau (CFPB) Whistleblowers Act would allow the CFPB to reward whistleblowers from the Civil Penalty Fund for between 10 – 30% of a particular settlement award. In cases involving monetary penalties of less than $1 million, the CFPB would be able to award any single whistleblower 10% of the amount collected or $50,000, whichever is greater. The proposal allows for a whistleblower to retain independent counsel, does not require the whistleblower to enter a contract with the Consumer Bureau, and protects a whistleblower’s identity. In addition, pre-dispute arbitration agreements cannot prevent a whistleblower from contacting the CFPB staff with a concern.
Senator Cortez Masto has led efforts to protect consumers throughout her career and worked closely with CFPB during her tenure as Attorney General of Nevada. During the Trump era, she spoke out frequently about his nominees’ efforts to weaken the CFPB and leave consumers without restitution. She has led legislation to encourage whistleblowers to report fraud to the CFPB and to restore HMDA public data to help protect homeowners.
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