CFPB Issues Rules Governing Use Of Civil Penalty Funds

One of the most intriguing aspects of the new Consumer Financial Protection Bureau is the agency's novel power not only to assess civil penalties against those entities that violate its rules and federal consumer laws, but also to keep these monetary penalties and put them directly into its own war chest for use in future campaigns against other prospective violators. To date, the CFPB has collected nearly $58 million in civil penalties from respondents in eight different administrative enforcement actions.

Unlike the Federal Trade Commission and other regulators, which are bound either to distribute funds obtained from violators to harmed consumers or deliver those funds into state or federal coffers when consumers cannot reasonably be reimbursed, the CFPB is permitted to keep and use the civil penalties it takes from violators.