Senator Cortez Masto Introduces Bill Incentivizing Whistleblowers to Report Consumer Fraud to CFPB
U.S. Senator Catherine Cortez Masto (D-Nev.) recently introduced legislation to allow the Consumer Financial Protection Bureau (CFPB) to reward whistleblowers—whose statutes protect consumers from abuse, fraud, and unfair practices—with financial compensation when they report wrongdoing to the CFPB. The legislation is cosponsored by Sen. Sherrod Brown (D-Ohio), who serves as Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, as well as 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,” Cortez Masto said in a press release announcing the bill’s introduction. “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.”
The Financial Compensation for Consumer Financial Protection Bureau Whistleblowers Act would let the CFPB reward whistleblowers from the Civic Penalty Fund for anywhere from 10⎯30 percent of a settlement award. It also allows a whistleblower to retain independent counsel, protects their identity, and does not enforce a contract between the whistleblower and the CFPB.
Reports have found that financial compensation provides incentives for whistleblowers to report wrongdoing, and the threat of penalties often deters them from doing so. Additionally, pre-dispute arbitration agreements cannot prevent a whistleblower from contacting the CFPB with a concern.
“Whistleblowers are essential to our democracy,” Sen. Brown said. “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.”