Last month, in its enforcement action against Capital One, the Consumer Financial Protection Bureau collected the first money going into the Civil Penalty Fund.
"Now the CFPB must decide how to implement the mere two sentences in Dodd-Frank that govern its use of the fund," writes American Banker’s Kevin Wack.
Is the agency going to use it to compensate victims? Spend it on financial education causes? Republicans in Congress are watching closely. "This consumer bureau, as now structured, is allowed to dole out money it collects from fines and penalties to liberal consumer groups," said Sen. Richard Shelby in speech.
The CFPB issued "a three-page fact sheet that announced the formation of an internal board to oversee the fund" last month. And in response to questions from American Banker "the bureau did not give any more detail than Dodd-Frank itself does about how officials will determine when money should go to individuals who suffered harm, and when it should be used for other purposes," writes Wack.
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