Financial Compensation for CFPB Whistleblowers Act

I 118TH CONGRESS 1ST SESSION H. R. 2465 To amend the Consumer Financial Protection Act of 2010 to provide for whistleblower incentives and protection. IN THE HOUSE OF REPRESENTATIVES APRIL 3, 2023 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 of 2010 (12 U.S.C. 5481 et seq.) is amended by 9 inserting after section 1017 the following: 10 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2465 IH ‘‘SEC. 1017A. WHISTLEBLOWER INCENTIVES AND PROTEC- 1 TION. 2 ‘‘(a) DEFINITIONS.—In this section: 3 ‘‘(1) ADMINISTRATIVE PROCEEDING OR COURT 4 ACTION.—The term ‘administrative proceeding or 5 court action’ means any judicial or administrative 6 action brought by the Bureau that results in mone- 7 tary sanctions exceeding $1,000,000. 8 ‘‘(2) FUND.—The term ‘Fund’ means the Con- 9 sumer Financial Civil Penalty Fund established 10 under section 1017(d)(1). 11 ‘‘(3) MONETARY SANCTIONS.—The term ‘mone- 12 tary sanctions’ means, with respect to any adminis- 13 trative proceeding or court action, any monies, in- 14 cluding penalties, disgorgement, restitution, interest, 15 ordered to be paid or other amounts of relief ob- 16 tained under section 1055(a)(2). 17 ‘‘(4) ORIGINAL INFORMATION.—The term 18 ‘original information’ means information that— 19 ‘‘(A) is derived from the independent 20 knowledge or analysis of a whistleblower; 21 ‘‘(B) is not known to the Bureau from any 22 other source, unless the whistleblower is the 23 original source of the information; 24 ‘‘(C) is not exclusively derived from an al- 25 legation made in a judicial or administrative 26 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2465 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 who provides, or 2 or 13 more individuals acting jointly who provide, original 14 information relating to a violation of Federal con- 15 sumer financial law, consistent with any rule or reg- 16 ulation issued by 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 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2465 IH ment of the covered administrative proceeding or 1 court action in an aggregate amount equal to— 2 ‘‘(A) not less than 10 percent, in total, of 3 the civil money penalties collected by the Bu- 4 reau in the action; and 5 ‘‘(B) not more than 30 percent, in total, of 6 the civil money penalties collected by the Bu- 7 reau in the action. 8 ‘‘(2) PAYMENT OF AWARDS.—Any amount paid 9 under paragraph (1) shall be paid from the Fund. 10 ‘‘(3) AWARD MINIMUM.—If the Bureau collects 11 less than $1,000,000 in civil money penalties in the 12 action, the Bureau shall provide for an award to any 13 single whistleblower equal to the greater of— 14 ‘‘(A) 10 percent of the civil money pen- 15 alties collected; or 16 ‘‘(B) $50,000. 17 ‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DE- 18 NIAL OF AWARD.— 19 ‘‘(1) DETERMINATION OF AMOUNT OF 20 AWARD.— 21 ‘‘(A) DISCRETION.—The determination of 22 the percentage amount of an award made under 23 subsection (b) shall be in the discretion of the 24 Bureau. 25 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2465 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. 23 ‘‘(2) DENIAL OF AWARD.—No award under 24 subsection (b) shall be made— 25 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2465 IH ‘‘(A) to any whistleblower who is, or was at 1 the time the whistleblower acquired the original 2 information submitted to the Bureau, a mem- 3 ber, officer, or employee of an entity described 4 in subclauses (I) through (V) of subsection 5 (h)(1)(C)(i); 6 ‘‘(B) to any whistleblower who is convicted 7 of a criminal violation related to the adminis- 8 trative proceeding or court action for which the 9 whistleblower otherwise could receive an award 10 under this section; 11 ‘‘(C) to any whistleblower who is found to 12 be liable for the conduct in the administrative 13 proceeding or court action, or a related action, 14 for which the whistleblower otherwise could re- 15 ceive an award under this section; 16 ‘‘(D) to any whistleblower who planned 17 and initiated the conduct at issue in the admin- 18 istrative proceeding or court action for which 19 the whistleblower otherwise could receive an 20 award under this section; 21 ‘‘(E) to any whistleblower who submits in- 22 formation to the Bureau that is based on the 23 facts underlying the administrative proceeding 24 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2465 IH or court action previously submitted by another 1 whistleblower; and 2 ‘‘(F) to any whistleblower who fails to sub- 3 mit information to the Bureau in such form as 4 the Bureau may, by rule or regulation, require. 5 ‘‘(d) REPRESENTATION.— 6 ‘‘(1) PERMITTED REPRESENTATION.—Any 7 whistleblower who makes a claim for an award under 8 subsection (b) may be represented by counsel. 9 ‘‘(2) REQUIRED REPRESENTATION.— 10 ‘‘(A) IN GENERAL.—Any whistleblower 11 who anonymously makes a claim for an award 12 under subsection (b) shall be represented by 13 counsel if the whistleblower submits the infor- 14 mation upon which the claim is based. 15 ‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 16 the payment of an award, a whistleblower shall 17 disclose the identity of the whistleblower and 18 provide such other information as the Bureau 19 may require, directly or through counsel of the 20 whistleblower. 21 ‘‘(e) NO CONTRACT NECESSARY.—No contract or 22 other agreement with the Bureau is necessary for any 23 whistleblower to receive an award under subsection (b), 24 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2465 IH unless otherwise required by the Bureau by rule or regula- 1 tion. 2 ‘‘(f) APPEALS.— 3 ‘‘(1) IN GENERAL.—Any determination made 4 under this section, including whether, to whom, or in 5 what amount to make awards, shall be in the discre- 6 tion of the Bureau. Any such determination, except 7 the determination of the amount of an award if the 8 award was made in accordance with subsection (b), 9 may be appealed to the appropriate court of appeals 10 of the United States not more than 30 days after 11 the determination is issued by the Bureau. 12 ‘‘(2) SCOPE OF REVIEW.—The court shall re- 13 view the determination made by the Bureau in ac- 14 cordance with section 706 of title 5, United States 15 Code. 16 ‘‘(g) REPORTS TO CONGRESS.—Not later than De- 17 cember 31 of each year, the Bureau shall transmit to the 18 House Committee on Financial Services and the Senate 19 Committee on Banking, Housing, and Urban Affairs a re- 20 port on the Bureau’s whistleblower award program under 21 this section, including a description of the number of 22 awards granted and the types of cases in which awards 23 were granted during the preceding fiscal year. 24 ‘‘(h) PROTECTION OF WHISTLEBLOWERS.— 25 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 2465 IH ‘‘(1) CONFIDENTIALITY.— 1 ‘‘(A) IN GENERAL.—Except as provided in 2 subparagraphs (B) and (C), the Bureau and 3 any officer or employee of the Bureau, shall not 4 disclose any information, including information 5 provided by a whistleblower to the Bureau, 6 which could reasonably be expected to reveal 7 the identity of a whistleblower, except in ac- 8 cordance with the provisions of section 552a of 9 title 5, United States Code, unless and until re- 10 quired to be disclosed to a defendant or re- 11 spondent in connection with a public proceeding 12 instituted by the Bureau or any entity described 13 in subparagraph (C). For purposes of section 14 552 of title 5, United States Code, this para- 15 graph shall be considered a statute described in 16 subsection (b)(3)(B) of such section 552. 17 ‘‘(B) EFFECT.—Nothing in this paragraph 18 is intended to limit the ability of the Attorney 19 General to present such evidence to a grand 20 jury or to share such evidence with potential 21 witnesses or defendants in the course of an on- 22 going criminal investigation. 23 ‘‘(C) AVAILABILITY TO GOVERNMENT 24 AGENCIES.— 25 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 2465 IH ‘‘(i) IN GENERAL.—Without the loss 1 of its status as confidential in the hands of 2 the Bureau, all information referred to in 3 subparagraph (A) may, in the discretion of 4 the Bureau, when determined by the Bu- 5 reau to be necessary or appropriate, be 6 made available to— 7 ‘‘(I) the Department of Justice; 8 ‘‘(II) an appropriate department 9 or agency of the Federal Government, 10 acting within the scope of its jurisdic- 11 tion; 12 ‘‘(III) a State attorney general in 13 connection with any criminal inves- 14 tigation; 15 ‘‘(IV) an appropriate department 16 or agency of any State, acting within 17 the scope of its jurisdiction; and 18 ‘‘(V) a foreign regulatory author- 19 ity. 20 ‘‘(ii) MAINTENANCE OF INFORMA- 21 TION.—Each of the entities, agencies, or 22 persons described in clause (i) shall main- 23 tain information described in that clause 24 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 2465 IH as confidential, in accordance with the re- 1 quirements in subparagraph (A). 2 ‘‘(2) RIGHTS RETAINED.—Nothing in this sec- 3 tion shall be deemed to diminish the rights, privi- 4 leges, or remedies of any whistleblower under section 5 1057, any other Federal or State law, or under any 6 collective bargaining agreement. 7 ‘‘(i) RULEMAKING AUTHORITY.—The Bureau shall 8 have the authority to issue such rules and regulations as 9 may be necessary or appropriate to implement the provi- 10 sions of this section consistent with the purposes of this 11 section. 12 ‘‘(j) ORIGINAL INFORMATION.—Information sub- 13 mitted to the Bureau by a whistleblower in accordance 14 with rules or regulations implementing this section shall 15 not lose its status as original information solely because 16 the whistleblower submitted such information prior to the 17 effective date of such rules or regulations, provided such 18 information was submitted after the date of enactment of 19 this section. 20 ‘‘(k) PROVISION OF FALSE INFORMATION.—A whis- 21 tleblower who knowingly and willfully makes any false, fic- 22 titious, or fraudulent statement or representation, or who 23 makes or uses any false writing or document knowing the 24 same to contain any false, fictitious, or fraudulent state- 25 VerDate Sep 11 2014 22:16 Apr 12, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2465.IH H2465 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 2465 IH ment or entry, shall not be entitled to an award under 1 this section and shall be subject to prosecution under sec- 2 tion 1001 of title 18, United States Code. 3 ‘‘(l) UNENFORCEABILITY OF CERTAIN AGREE- 4 MENTS.— 5 ‘‘(1) NO WAIVER OF RIGHTS AND REMEDIES.— 6 Except as provided under paragraph (3), and not- 7 withstanding any other provision of law, the rights 8 and remedies provided for in this section may not be 9 waived by any agreement, policy, form, or condition 10 of employment, including by any predispute arbitra- 11 tion agreement. 12 ‘‘(2) NO PREDISPUTE ARBITRATION AGREE- 13 MENTS.—Except as provided under paragraph (3), 14 and notwithstanding any other provision of law, no 15 predispute arbitration agreement shall be valid or 16 enforceable to the extent that the agreement re- 17 quires arbitration of a dispute arising under this 18 section. 19 ‘‘(3) EXCEPTION.—Notwithstanding paragraphs 20 (1) and (2), an arbitration provision in a collective 21 bargaining agreement shall be enforceable as to dis- 22 putes arising under subsection (a)(4), unless the Bu- 23 reau determines, by rule, that such provision is in- 24 consistent with the purposes of this title.’’. [Text truncated for display. Full text available on Congress.gov.]