WASHINGTON—The CFPB is seeking to roll back its ability to fund consumer education and financial literacy programs, a move that would mark a significant shift in how the agency allocates civil penalty dollars, the Bureau announced.
Under a proposal announced this week, the CFPB would limit use of its Civil Penalty Fund strictly to compensating consumers harmed by companies found in violation of federal financial laws—scrapping a 2013 rule that allowed the agency to redirect funds to educational initiatives when direct restitution wasn’t feasible.
In the 12 years since that rule was adopted, the Bureau has allocated $3.6 billion to compensate victims, the agency stated.
The Bureau stated it “now believes that the procedures outlined in the rule provide neither adequate guardrails for the agency's exercise of its discretion nor adequate transparency to the public regarding a potentially significant expenditure.”