Financial Compensation for CFPB Whistleblowers Act

I 116TH CONGRESS 2D SESSION H. R. 7793 To amend the Consumer Financial Protection Act of 2010 to provide for whistleblower incentives and protection. IN THE HOUSE OF REPRESENTATIVES JULY 27, 2020 Mr. GREEN of Texas introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Consumer Financial Protection Act of 2010 to provide for whistleblower incentives and protection. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Financial Compensa- 4 tion for CFPB Whistleblowers Act’’. 5 SEC. 2. BUREAU WHISTLEBLOWER INCENTIVES AND PRO- 6 TECTION. 7 (a) IN GENERAL.—The Consumer Financial Protec- 8 tion Act (12 U.S.C. 5481 et seq.) is amended by adding 9 at the end of section 1017 the following: 10 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7793 IH ‘‘SEC. 1017A. WHISTLEBLOWER INCENTIVES AND PROTEC- 1 TION. 2 ‘‘(a) DEFINITIONS.—In this section: 3 ‘‘(1) ADMINISTRATIVE PROCEEDING OR COURT 4 ACTION.—The term ‘administrative proceeding or 5 court action’ means any judicial or administrative 6 action brought by the Bureau that results in mone- 7 tary sanctions greater than or equal to $500,000. 8 ‘‘(2) FUND.—The term ‘Fund’ means the Con- 9 sumer Financial Civil Penalty Fund established 10 under section 1017(d)(1). 11 ‘‘(3) MONETARY SANCTIONS.—The term ‘mone- 12 tary sanctions’ means, with respect to any adminis- 13 trative proceeding or court action, any monies, in- 14 cluding penalties, disgorgement, restitution, dam- 15 ages, interest, ordered to be paid or other amounts 16 of relief obtained under section 1055(a)(2). 17 ‘‘(4) ORIGINAL INFORMATION.—The term 18 ‘original information’ means information that— 19 ‘‘(A) is derived from the independent 20 knowledge or analysis of a whistleblower; 21 ‘‘(B) is not known to the Bureau from any 22 other source, unless the whistleblower is the 23 original source of the information; 24 ‘‘(C) is not exclusively derived from an al- 25 legation made in a judicial or administrative 26 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7793 IH hearing, in a governmental report, hearing, or 1 from the news media, unless the whistleblower 2 is a source of the information; and 3 ‘‘(D) is not exclusively derived from an al- 4 legation made in an audit, examination or in- 5 vestigation. 6 ‘‘(5) SUCCESSFUL ENFORCEMENT.—The term 7 ‘successful enforcement’ includes, with respect to 8 any administrative proceeding or court action 9 brought by the Bureau, any settlement of such pro- 10 ceeding or action. 11 ‘‘(6) WHISTLEBLOWER.—The term ‘whistle- 12 blower’ means any individual, or 2 or more individ- 13 uals acting jointly, who provides original information 14 relating to a violation of Federal consumer financial 15 law, consistent with any rule or regulation issued by 16 the Bureau under this section. 17 ‘‘(b) AWARDS.— 18 ‘‘(1) IN GENERAL.—In any administrative pro- 19 ceeding or court action the Bureau, subject to regu- 20 lations prescribed by the Bureau and subject to sub- 21 section (c), shall pay an award or awards to 1 or 22 more whistleblowers who voluntarily provided origi- 23 nal information that led to the successful enforce- 24 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7793 IH ment of the covered administrative proceeding or 1 court action in an aggregate amount equal to— 2 ‘‘(A) not less than 10 percent, in total, of 3 what has been collected of the monetary sanc- 4 tions imposed in the action; and 5 ‘‘(B) not more than 30 percent, in total, of 6 what has been collected of the monetary sanc- 7 tions imposed in the action. 8 ‘‘(2) PAYMENT OF AWARDS.—Any amount paid 9 under paragraph (1) shall be paid from the Fund. 10 ‘‘(3) AWARD MINIMUM.—If the Bureau is un- 11 able to collect at least $1,000,000 of the monetary 12 sanctions imposed in the action, the Bureau shall 13 provide for an award to any single whistleblower 14 equal to the greater of— 15 ‘‘(A) 10 percent of the amount collected; or 16 ‘‘(B) $50,000. 17 ‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DE- 18 NIAL OF AWARD.— 19 ‘‘(1) DETERMINATION OF AMOUNT OF 20 AWARD.— 21 ‘‘(A) DISCRETION.—The determination of 22 the percentage amount of an award made under 23 subsection (b) shall be in the discretion of the 24 Bureau. 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7793 IH ‘‘(B) CRITERIA.—In determining the per- 1 centage amount of an award made under sub- 2 section (b), the Bureau shall take into consider- 3 ation— 4 ‘‘(i) the significance of the informa- 5 tion provided by the whistleblower to the 6 successful enforcement of the administra- 7 tive proceeding or court action; 8 ‘‘(ii) the degree of assistance provided 9 by the whistleblower and any legal rep- 10 resentative of the whistleblower in an ad- 11 ministrative proceeding or court action; 12 ‘‘(iii) the programmatic interest of the 13 Bureau in deterring violations of Federal 14 consumer financial law (including applica- 15 ble regulations) by making awards to whis- 16 tleblowers who provide information that 17 leads to the successful enforcement of such 18 laws; and 19 ‘‘(iv) such additional relevant factors 20 as the Bureau may establish by rule or 21 regulation, including the amount available 22 in the Fund for prioritizing restitution to 23 affected consumers. 24 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7793 IH ‘‘(2) DENIAL OF AWARD.—No award under 1 subsection (b) shall be made— 2 ‘‘(A) to any whistleblower who is, or was at 3 the time the whistleblower acquired the original 4 information submitted to the Bureau, a mem- 5 ber, officer, or employee of an entity described 6 in subclauses (I) through (V) of subsection 7 (h)(1)(C)(i); 8 ‘‘(B) to any whistleblower who is convicted 9 of a criminal violation related to the adminis- 10 trative proceeding or court action for which the 11 whistleblower otherwise could receive an award 12 under this section; 13 ‘‘(C) to any whistleblower who is found to 14 be liable for the conduct in the administrative 15 proceeding or court action, or a related action, 16 for which the whistleblower otherwise could re- 17 ceive an award under this section; 18 ‘‘(D) to any whistleblower who planned 19 and initiated the conduct at issue in the admin- 20 istrative proceeding or court action for which 21 the whistleblower otherwise could receive an 22 award under this section; 23 ‘‘(E) to any whistleblower who submits in- 24 formation to the Bureau that is based on the 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7793 IH facts underlying the administrative proceeding 1 or court action previously submitted by another 2 whistleblower; and 3 ‘‘(F) to any whistleblower who fails to sub- 4 mit information to the Bureau in such form as 5 the Bureau may, by rule or regulation, require. 6 ‘‘(d) REPRESENTATION.— 7 ‘‘(1) PERMITTED REPRESENTATION.—Any 8 whistleblower who makes a claim for an award under 9 subsection (b) may be represented by counsel. 10 ‘‘(2) REQUIRED REPRESENTATION.— 11 ‘‘(A) IN GENERAL.—Any whistleblower 12 who anonymously makes a claim for an award 13 under subsection (b) shall be represented by 14 counsel if the whistleblower submits the infor- 15 mation upon which the claim is based. 16 ‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 17 the payment of an award, a whistleblower shall 18 disclose the identity of the whistleblower and 19 provide such other information as the Bureau 20 may require, directly or through counsel of the 21 whistleblower. 22 ‘‘(e) NO CONTRACT NECESSARY.—No contract or 23 other agreement with the Bureau is necessary for any 24 whistleblower to receive an award under subsection (b), 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 7793 IH unless otherwise required by the Bureau by rule or regula- 1 tion. 2 ‘‘(f) APPEALS.—Any determination made under this 3 section, including whether, to whom, or in what amount 4 to make awards, shall be in the discretion of the Bureau. 5 Any such determination, except the determination of the 6 amount of an award if the award was made in accordance 7 with subsection (b), may be appealed to the appropriate 8 court of appeals of the United States not more than 30 9 days after the determination is issued by the Bureau. The 10 court shall review the determination made by the Bureau 11 in accordance with section 706 of title 5. 12 ‘‘(g) REPORTS TO CONGRESS.—Not later than Octo- 13 ber 30 of each year, the Bureau shall transmit to the 14 House Committee on Financial Services and the Senate 15 Committee on Banking, Housing, and Urban Affairs a re- 16 port on the Bureau’s whistleblower award program under 17 this section, including a description of the number of 18 awards granted and the types of cases in which awards 19 were granted during the preceding fiscal year. 20 ‘‘(h) PROTECTION OF WHISTLEBLOWERS.— 21 ‘‘(1) CONFIDENTIALITY.— 22 ‘‘(A) IN GENERAL.—Except as provided in 23 subparagraphs (B) and (C), the Bureau and 24 any officer or employee of the Bureau, shall not 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 7793 IH disclose any information, including information 1 provided by a whistleblower to the Bureau, 2 which could reasonably be expected to reveal 3 the identity of a whistleblower, except in ac- 4 cordance with the provisions of section 552a of 5 title 5, United States Code, unless and until re- 6 quired to be disclosed to a defendant or re- 7 spondent in connection with a public proceeding 8 instituted by the Bureau or any entity described 9 in subparagraph (C). For purposes of section 10 552 of title 5, United States Code, this para- 11 graph shall be considered a statute described in 12 subsection (b)(3)(B) of such section 552. 13 ‘‘(B) EFFECT.—Nothing in this paragraph 14 is intended to limit the ability of the Attorney 15 General to present such evidence to a grand 16 jury or to share such evidence with potential 17 witnesses or defendants in the course of an on- 18 going criminal investigation. 19 ‘‘(C) AVAILABILITY TO GOVERNMENT 20 AGENCIES.— 21 ‘‘(i) IN GENERAL.—Without the loss 22 of its status as confidential in the hands of 23 the Bureau, all information referred to in 24 subparagraph (A) may, in the discretion of 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 7793 IH the Bureau, when determined by the Bu- 1 reau to be necessary or appropriate, be 2 made available to— 3 ‘‘(I) the Department of Justice; 4 ‘‘(II) an appropriate department 5 or agency of the Federal Government, 6 acting within the scope of its jurisdic- 7 tion; 8 ‘‘(III) a State attorney general in 9 connection with any criminal inves- 10 tigation; 11 ‘‘(IV) an appropriate department 12 or agency of any State, acting within 13 the scope of its jurisdiction; and 14 ‘‘(V) a foreign regulatory author- 15 ity. 16 ‘‘(ii) MAINTENANCE OF INFORMA- 17 TION.—Each of the entities, agencies, or 18 persons described in clause (i) shall main- 19 tain information described in that clause 20 as confidential, in accordance with the re- 21 quirements in subparagraph (A). 22 ‘‘(2) RIGHTS RETAINED.—Nothing in this sec- 23 tion shall be deemed to diminish the rights, privi- 24 leges, or remedies of any whistleblower under section 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 7793 IH 1057, any other Federal or State law, or under any 1 collective bargaining agreement. 2 ‘‘(i) RULEMAKING AUTHORITY.—The Bureau shall 3 have the authority to issue such rules and regulations as 4 may be necessary or appropriate to implement the provi- 5 sions of this section consistent with the purposes of this 6 section. 7 ‘‘(j) ORIGINAL INFORMATION.—Information sub- 8 mitted to the Bureau by a whistleblower in accordance 9 with rules or regulations implementing this section shall 10 not lose its status as original information solely because 11 the whistleblower submitted such information prior to the 12 effective date of such rules or regulations, provided such 13 information was submitted after the date of enactment of 14 this section. 15 ‘‘(k) PROVISION OF FALSE INFORMATION.—A whis- 16 tleblower who knowingly and willfully makes any false, fic- 17 titious, or fraudulent statement or representation, or who 18 makes or uses any false writing or document knowing the 19 same to contain any false, fictitious, or fraudulent state- 20 ment or entry, shall not be entitled to an award under 21 this section and shall be subject to prosecution under sec- 22 tion 1001 of title 18, United States Code. 23 ‘‘(l) UNENFORCEABILITY OF CERTAIN AGREE- 24 MENTS.— 25 VerDate Sep 11 2014 20:40 Aug 15, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7793.IH H7793 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 7793 IH ‘‘(1) NO WAIVER OF RIGHTS AND REMEDIES.— 1 Except as provided under paragraph (3), and not- 2 withstanding any other provision of law, the rights 3 and remedies provided for in this section may not be 4 waived by any agreement, policy, form, or condition 5 of employment, including by any predispute arbitra- 6 tion agreement. 7 ‘‘(2) NO PREDISPUTE ARBITRATION AGREE- 8 MENTS.—Except as provided under paragraph (3), 9 and notwithstanding any other provision of law, no 10 predispute arbitration agreement shall be valid or 11 enforceable to the extent that it requires arbitration 12 of a dispute arising under this section. 13 ‘‘(3) EXCEPTION.—Notwithstanding paragraphs 14 (1) and (2), an arbitration provision in a collective 15 bargaining agreement shall be enforceable as to dis- 16 putes arising under subsection (a)(4), unless the Bu- 17 reau determines, by rule, that such provision is in- 18 consistent with the purposes of this title.’’. 19 (b) [Text truncated for display. 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