CFPB's New Rule Explains Civil Penalty Fund Allocations

The Consumer Protection Bureau's final rule issued Friday is meant to explain how the agency would use its Civil Penalty Fund, which holds money collected as a result of fines against financial institutions.

"The Dodd-Frank Act required the CFPB to form the fund from money penalties against financial companies and use it to compensate victims of fraud and support consumer education and financial literacy programs. But there was little detail given in how the agency would manage or distribute the proceeds," writes American Banker's Rachel Witkowski.

After lawmakers and financial industry experts voiced concerns on how the agency would distribute the funds, the CFPB created the rule in hopes to address who will be compensated, how and when.

The rule requires the CFPB to issue regular reports on the fund to lawmakers.

For the full piece see "CFPB Clarifies How it Will Use Civil Penalty Fund" (may require subscription).