WASHINGTON (4/29/13)--The Consumer Financial Protection Bureau Friday proposed a rule to establish a "Consumer Financial Civil Penalty Fund," which was created under the Dodd-Frank Wall Street Reform Act.
The proposal, in effect, would lay out procedures for allocating funds the bureau collects as fines from financial institutions for faulty products or services to consumers who were harmed by them. It also interprets what kinds of payments to victims are appropriate.
To the extent that such victims cannot be located or "such payments are otherwise not practicable," the rule would allow the CFPB to use the civil penalty funds for consumer education and financial literacy programs. However, the proposal notes that, in the future, the bureau may limit the amount of funds that the fund administrator may allocate to consumer education and financial literacy programs.
Also under the proposed rule, the administrator would allocate funds from the Civil Penalty Fund on a six-month schedule.
Use the resource link to access the CFPB proposal document.