Civil Penalty Fund
Congress established the Civil Penalty Fund through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to provide compensation to consumers who have been harmed by violations of federal consumer financial protection law.
When the Bureau collects a civil penalty through an enforcement action, that penalty is deposited into the Civil Penalty Fund. The money in the Fund is pooled and can be used to compensate victims who haven’t received full compensation for their harm through redress paid by the defendant in their case.
In accordance with the Dodd-Frank Act and the Bureau's Civil Penalty Fund rule, the Fund can only be used for two purposes: to compensate eligible harmed consumers and, to the extent that victim payments are not practicable, to provide funding for consumer education and financial literacy programs. If victims cannot be located or it is otherwise not practicable to pay victims, the Bureau may keep the money in the Fund for victims in future cases, or the Bureau may use money in the Fund for consumer education and financial literacy programs.
Our work
Victim payments
The Bureau may make Civil Penalty Fund payments to consumers who were harmed by a violation for which civil penalties were imposed, and who aren’t otherwise expected to get full compensation for their compensable harm, as described by the rule. The Bureau hopes to make payments to all such victims, but whether it will be able to will depend on the amount of money in the Fund and other factors.
Consumer education & financial literacy
When all eligible victims have already gotten full compensation (or when payments to victims otherwise aren’t feasible), the Bureau may use Civil Penalty Fund money for consumer education and financial literacy programs.
Governance
The rule that governs the Civil Penalty Fund explains which victims may receive payments and how much they may receive, outlines the process for allocating funds, and establishes requirements for public reporting. The Fund is managed by the Fund Administrator, who reports to the CFPB’s Chief Financial Officer and is advised by a Governance Board.
Allocation schedule
Every six months, the Fund Administrator will allocate funds for payments to particular classes of victims and/or to consumer education and financial literacy programs.