Sen. Catherine Cortez Masto [D-Nev.] last week introduced the S. 2429, the Stop the Scammers Act, a bill that would restore funding to the Consumer Financial Protection Bureau and establish a whistleblower incentive program aimed at rooting out financial misconduct. The legislation comes in response to a Republican-led tax bill that sharply reduced the CFPB’s funding and curtailed its enforcement capabilities.
“The CFPB has proven to be a champion for everyday Americans, protecting them from scammers and predatory business practices,” said Cortez Masto in a statement. “Slashing the CFPB’s funding is a short-sighted decision that will have long-lasting effects on working families and our financial markets.”
What it does: The Stop the Scammers Act does two primary things:
- Restores funding to the CFPB: The bill would raise the CFPB’s budget cap from 6.5% to 12% of the Federal Reserve’s operating expenses, essentially doubling its available funds and reversing recent budget cuts.
- Creates a CFPB whistleblower program: The bill would authorize the CFPB to financially reward whistleblowers who voluntarily provide original information leading to enforcement actions that result in monetary sanctions over $1 million. Awards would range from 10% to 30% of the penalties collected, paid from the CFPB’s Civil Penalty Fund. Whistleblowers would also be allowed to retain independent legal counsel and receive strong confidentiality protections, with exceptions only in specific legal circumstances. The legislation ensures the Bureau has broad discretion to evaluate award amounts based on the quality and usefulness of the information provided.
Importantly, the bill bars whistleblower awards for individuals who were involved in or initiated the misconduct, or who fail to follow submission protocols. The bill also prohibits companies from using arbitration clauses or employment agreements to block whistleblower rights.
