The consumer finance sector touches the lives of almost everyone by providing products that allow millions of people to purchase assets and manage their finances. When companies in this sector engage in fraud against customers or shareholders, their wrongdoing can often be difficult for regulators to detect. Employees who act as whistleblowers in this field perform a crucial function by protecting the economic interests of customers, as well as the corporate well-being of their employers.

What Laws Protect Consumer Finance Whistleblowers?


The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 provides incentives for certain whistleblower activity and protects whistleblowers from retaliation for reporting information, either internally or to an appropriate government agency such as the Consumer Financial Protection Bureau (CFPB), that the employee reasonably believes to be a violation of any consumer finance laws that are under the CFPB’s jurisdiction. Dodd-Frank also protects employees from retaliation for refusing to assist in the violation of these laws. Under the law, “covered employees” are “any individuals performing tasks related to the offering or provision of a consumer financial product or service.”

Consumer financial products or services include:

  • extending credit and servicing loans;
  • extending or brokering certain leases of personal or real property;
  • providing certain real estate settlement services;
  • engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer;
  • selling, providing, or issuing certain stored value or payment instruments;
  • providing certain check cashing, check collection, or check guaranty services;
  • providing certain payments or other financial data processing products or services to a consumer by any technological means;
  • providing certain financial advisory services to consumers on individual financial matters or relating to proprietary financial products or services;
  • collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service;
  • collecting debt related to any consumer financial product or service.

False Claims Act

Whistleblowers who witness fraud related to economic stimulus programs or any other government spending can blow the whistle under the False Claims Act. The FCA prohibits false or fraudulent claims made to the government, and information provided by a whistleblower is often critical to the U.S. Attorney General’s decision to file an FCA lawsuit. Additionally, whistleblowers can file qui tam lawsuits, which private individuals bring in the name of the government. Under the FCA, whistleblowers are entitled to between 15% and 30% of any settlement or judgment won on behalf of the government.

Financial Institution Reform Recovery and Enforcement Act and Financial Institutions Anti-Fraud Enforcement Act

The Financial Institutions Reform Recovery and Enforcement Act of 1989 (“FIRREA”), provides incentives to employees in the financial industry to blow the whistle on violations, including money laundering, wire fraud, embezzlement, and much more. FIRREA empowers the U.S. Attorney General to civil actions for various criminal violations of banking law.

The Financial Institutions Anti-Fraud Enforcement Act (“FIAFEA”) allows a whistleblower to provide information regarding banking law violations to the AG and Department of Justice. If the information leads to liability under FIRREA, the whistleblower may be eligible for a reward of 20 percent to 30 percent of the first $1,000,000 recovered, 10 percent to 20 percent of the next $4,000,000 recovered, and 5 percent to 10 percent of the next $5,000,000 recovered, up to a maximum of $1.6 million.

The anti-retaliation provision of FIAFEA prohibits depository banks and federal banking regulators from discharging or otherwise retaliating against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee engaged in protected activity.

Why Hire Katz Banks Kumin For Your Consumer Finance Whistleblower Case?

Whether to report consumer finance law violations — and, if so, when, how and to whom — can be a very difficult decision for an employee, as blowing the whistle about an employer’s unlawful practices has the potential to be a career-ending move if not handled carefully and strategically. The Dodd-Frank Act and the CFPB provide strong legal protections, and employees who raise concerns about consumer finance violations can look to a number of resources for assistance. If you are thinking about reporting such concerns, or if you already have and are facing retaliation, contact the experienced whistleblower lawyers at Katz Banks Kumin. Your communications with us are confidential and without charge or further obligation.

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