FOIA Request Seeks Names of Organizations That Have Received Payments from CFPB’s Civil Penalty Fund

Ballard Spahr LLP

Ballard Spahr LLP

Federal News Wire – a non-partisan news group focusing on the activities of federal agencies – has issued a Freedom of Information Act (“FOIA”) request to the Consumer Financial Protection Bureau, seeking a list of all organizations who have received payments from the Bureau’s “Civil Penalty Fund” (“CPF”) since the Bureau’s formation in 2011.

The CPF, which was established by section 1017 of the Dodd-Frank Act, collects funds received from the Bureau’s enforcement actions. Under the Dodd-Frank Act, funds in the CPF may be used for payments to the victims of activities for which civil penalties have been imposed under Federal consumer financial laws. In addition, to the extent that such victims cannot be located or such payments are otherwise not practicable, the Bureau may use funds in the CPF for consumer education and financial literacy programs. The Bureau reported that the CPF collected $1.9 billion in FY2023, which exceeds the total collected in the decade prior ($1.49 billion collected between FY2012 and FY2022). Currently, the Bureau only reports the names of companies subjected to enforcement actions and the amounts collected, but does not specify who receives payments from the CPF for consumer education or financial literacy purposes.

There have long been concerns, notably raised in 2014 by the Government Accounting Office, regarding the lack of transparency in how the Bureau determines the amount of funding allocated to consumer education and financial literacy. Federal News Wire’s FOIA request demonstrates the persistence of these transparency concerns.

The CFPB aims to respond to FOIA requests within twenty business days, or approximately one month, after the request is made. Federal News Wire’s request was made on February 16, 2024, so responsive information could be provided as early as mid-March.

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