New Audit Shows Where CFPB Civil Penalty Funds Are Going

Since its inception, the Consumer Financial Protection Bureau (CFPB) has regularly issued enforcement actions in the form of Consent Orders intended to set industry-wide precedents; many of these orders include a penalty to be paid by the company. These penalties are deposited into the Bureau’s Civil Penalty Fund (Fund), which was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In these consent orders, the way the CFPB uses the Fund is generally described in vague terms. An example from a Consent Order issued in October 2016 against Navy Federal Credit Union, which required them to pay $5,500,000 to the Civil Penalty Fund, reads as follows:

Respondent must treat the civil money penalty paid under this Consent Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Respondent may not:

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