WASHINGTON–The CFPB has published a proposed rule that seeks to rescind its authority to use money from the Civil Penalty Fund for consumer education and financial literacy initiatives. 

The Bureau said the proposed changes would amend the CFPB’s 2013 rule implementing the Civil Penalty Fund provisions of the Consumer Financial Protection Act (CFPA) and restrict the Fund’s use exclusively to harmed consumers.

The Civil Penalty Fund, created by Section 1017(d) of the CFPA, pools civil money penalties collected in CFPB enforcement actions. While the statute allows the Bureau to use remaining funds for consumer education “to the extent victims cannot be located or such payments are otherwise not practicable,” the new proposal would strip all such references from the implementing rule and eliminate the mechanism entirely. 

Little Use of Funds

The CFPB has not used its discretionary authority extensively, allocating $28.8 million for consumer education since its inception, compared to $3.6 billion it has disbursed to harmed consumers.

The move follows an April 2025 internal memorandum by Chief Legal Officer Mark Paoletta who stated the Bureau “will focus on redressing tangible harm by getting money back directly to consumers, rather than imposing penalties on companies in order to simply fill the Bureau’s penalty fund.” (