The adjustments are part of an annual requirement and rulemaking process to review and update civil penalties related to bureau enforcement actions.
01/10/2024 1:35 P.M.
2 minute read
The Consumer Financial Protection Bureau has updated its civil penalties for statutes it enforces.
The changes are outlined in a final rule posted on the Federal Register and are based on a “cost-of-living-adjustment,” which is defined as the percentage increase (if any) in the Consumer Price Index (CPI) for the month of October preceding the date of the adjustment over October of the prior year.
The CPI “is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services,” according to the Department of Labor.
The director of the Office of Management and Budget is required to issue guidance to federal agencies on implementing the annual civil penalty inflation adjustments.
According to an article from Ballar Spahr, the adjustments include penalties the CFPB may use for violations of consumer financial protection laws under the Dodd-Frank Act.
According to the article:
- “For any violation of a law, rule, or final order or condition imposed in writing by the CFPB, a civil money penalty of up to $5,000 for each day during which such violation or failure to pay continues.
- For any person that recklessly engages in a violation of a federal consumer financial law, a civil penalty of up to $25,000 for each day during which such violation continues.”
Civil penalties collected from the bureau’s regulated entities are deposited into its Civil Penalty Fund, which is used for consumer redress, ACA International previously reported.
“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,” according to the CFPB. “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.”
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