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Creates a CFPB whistleblower rewards and protection framework that pays awards from the Consumer Financial Civil Penalty Fund when tipsters provide original information that leads to successful enforcement of consumer-finance rules. The measure requires the Bureau to adopt rules, protect certain whistleblower information, provide an appeals route, publish annual reports to Congress, and prevents employment agreements from waiving whistleblower rights. Also amends the statute that sets the CFPB's funding cap, striking and replacing the existing language; the uploaded text does not show the new cap language, so the effect on the Bureau's funding level is not specified in this file.
Defines “administrative proceeding or court action” as any CFPB judicial or administrative action that results in monetary sanctions exceeding $1,000,000.
Defines “Fund” as the Consumer Financial Civil Penalty Fund established under section 1017(d)(1).
Defines “monetary sanctions” to include monies such as penalties, disgorgement, restitution, interest, and other amounts of relief obtained under section 1055(a)(2).
Defines “original information” as information that (A) comes from the whistleblower’s independent knowledge or analysis, (B) is not known to the Bureau from another source unless the whistleblower is the original source, (C) is not exclusively from public hearings/reports/media unless the whistleblower is the source, and (D) is not exclusively derived from an audit, examination, or investigation.
Defines “whistleblower” as any individual (or two or more individuals acting jointly) who provides original information about a violation of Federal consumer financial law, consistent with Bureau rules.
Who is affected and how:
Whistleblowers and employees: Individuals who report violations of consumer-finance law to the CFPB become eligible for monetary awards when their original information leads to successful enforcement; they also gain statutory protection against contractual waiver of those rights. Confidentiality rules and an appeal process give claimants procedural protections, but final award amounts and eligibility rules will depend on CFPB regulations.
Consumers: American consumers could benefit indirectly if increased reporting results in more enforcement of consumer-protection rules, deterrence of unlawful practices, and recovery of monetary sanctions that may be used for consumer relief or deposited in the civil penalty fund.
Financial firms and other regulated entities: Banks, lenders, servicers, fintechs, and other entities supervised by the CFPB may face more whistleblower tips and investigations. Firms will need to review employment contracts, non-disclosure language, and internal reporting channels to ensure compliance and to avoid prohibited waiver clauses.
Employers generally: Beyond financial firms, employers who include NDAs or similar agreements that could be read to waive whistleblower rights will need to revise those agreements to avoid conflicts with the new statutory prohibition.
CFPB operations and budgetary effects: The Bureau must expend administrative resources to run the award program, investigate tips, adopt rules, and produce annual reports. Awards are drawn from the Consumer Financial Civil Penalty Fund (penalty-derived), so direct appropriations are not required, but budgetary effects could include administrative costs and changes in Fund inflows/outflows. The statutory change to the CFPB funding cap could materially affect the Bureau’s overall funding level or flexibility, but the provided text omits the new cap language so the fiscal impact is unclear.
Legal and litigation risk: Firms or employers may challenge aspects of confidentiality, award determinations, or the scope of the prohibition on waiver clauses; the operational details set by CFPB rulemaking will likely shape future litigation and compliance costs.
Overall, the bill primarily affects individuals who report violations, the CFPB’s enforcement program and internal operations, and firms subject to CFPB oversight; the funding-cap amendment could have broader budgetary consequences but cannot be evaluated here because the new statutory text is not provided.
Amends section 1017(a)(2)(A)(iii) of the Consumer Financial Protection Act (12 U.S.C. 5497(a)(2)(A)(iii)) by striking the existing provision and inserting new text (new text not provided in the section).
Amends section 1017(d)(2) of the Consumer Financial Protection Act (first sentence) by inserting additional text before the period at the end of that sentence.
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Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced July 24, 2025 by Catherine Marie Cortez Masto · Last progress July 24, 2025
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced in Senate